YOU have an idea for an activity, but are terrified to do it alone. You may doubt whether you have the nerves, the qualifications, or the money. You’re ‘chickening-out’ as it’s called. No need to! Here is solution for you: a cooperative. It is a jointly owned enterprise, operated by members for their mutual benefit. Cooperatives tend to have a longer life than other types of enterprise, and thus a higher level of entrepreneurial sustainability. Keeping that in mind, rather than going on your own on a tough path through a jungle of individual entrepreneurship, you may want to consider creating a cooperative. That particular path will not necessarily being an enjoyable beach walk at sunrise, but the concept has a lot going for itself. So, let’s give it a shot and take a look at it.
One perspectives of the cooperative concept is that there is a connection between poverty and dependency. In order to fight poverty one should fight dependency first. With that philosophy in mind, a formula was created characterized by three elements: self-help, self-governance and self-responsibility. And so, you would be setting up a jointly owned enterprise, operated by members for their mutual benefit of members. Members is a keyword. There are no shareholders. A cooperative has different characteristics than a company. Before any wrong ideas come up, a Worker’s Cooperative is not a Worker’s Union! So, completely forget the word union in this context.
There are a variety of cooperatives for different purposes. An agricultural cooperative could be for collectively bringing the products to the market or for sharing equipment which an individual farmer could not afford. There are financial cooperatives, sometimes called Credit ….s (I don’t want to use the U-word). There artist cooperatives and they have a joint gallery to exhibit and sell their art pieces. Keep in mind the willingness and ability to work with others and involving mutual assistance in working towards a common goal. Another principle to express the difference between a company of one or more owners/shareholders and a Workers Cooperative of members. The Worker’s Cooperative is a firm in which labour hires capital, rather than capital hiring labour as in a conventional firm. And listen to this: generally, evidence indicates that Worker’s Cooperatives have higher productivity than conventional companies although. The motivation and passion for the common goal may be higher.
Some words of caution! Cooperatives sound very democratic. Democracy maybe a most favoured way to go as it is supposed to be the power of the people. But within the category democracy there are some variations. I’ll give you an example. Experts claim that due to human nature being essentially faulty, every government system in the beginning of its development has been a Kakistocracy, or rule by the stupid; a form of governance where the worst or least-qualified citizens are in control. Common non-experts believe that such still applies to the political situation in many countries worldwide. Thus loosely using the term democracy can be dangerous even in a Worker’s Cooperative. I’ll give you another misconception related to democracy. Democracy often implies that there will be a number of parties. Some people abroad actually consider the Caribbean islands to be ‘party islands’. The islanders are real party animals. They like partying and they party everywhere and pretty much all the time. How wrong those foreigners can be!
Don’t think that the cooperative is a poor man’s solution; it is an empowering solution. Thinking of benefits and profits? Companies aim to earn profit for owners, and to increase value of shares. Worker’s Cooperatives aim to maximize net and real worth for all members. By the way members, a cooperative is not a structure where one can buy in, and exchange money for a number of shares. There is no such a thing as buying or selling of shares. Each cooperative member has one share. It gives one right to vote. Voting rights are not tied to an investment or patronage amount, and only worker-owners can vote on decisions that affect them. Membership needs to be applied for and often a committee decides on the admittance of new members. There may even be a period of time on probation, usually so the new candidate can be evaluated. Why? Remember the principles of working together, common ownership, and a common cause?
Again a word of caution as another characteristic may slip into the honourable intention of creating a cooperative. It is called adhocracy and a laid-back approach. This philosophy is typified by aversion to planning, tendency to respond only to the urgent as opposed to the important, and focus on ‘firefighting’ rather than on establishing systems and procedures through goal setting and long term planning. Adhocracy is flexible and non-permanent and can respond faster to a changing environment and circumstances, and it can be a thriving factor for the wellbeing of the business activities. However, a cooperative startup needs be taken very serious and all options and conditions need to be considered to become successful. Optimizing the benefits only comes with full collective commitment to work on it.
When a cooperative is set up there are various options that may be considered for fine-tuning the structure for its particular purpose. There is an International Organization of Industrial, Artisanal and Service Producers’ Cooperatives (CICOPA). It gives an 8-page definition of worker’s cooperatives. You didn’t expect me to print it all for you, did you? I simply will not do it, or else this issue of THE VOICE by the length if this article will be protected from being read. Curious? Okay, I’ll just give you the first of the definitions because it is really appealing: ‘The Worker’s Cooperatives have the objective of creating and maintaining sustainable jobs and generating wealth, to improve the quality of life of the worker-members, dignify human work, allow workers’ democratic self-management and promote community and local development.’ How about that for solving an unemployment problem?