Coops strengthen America’s economy, grow economies around the world

Cooperative businesses’ uncanny ability to promote economic and social development, not to mention the empowerment of civil society, has been proven in development projects around the world. In East Timor, considerably impoverished compared to many of its neighbors in south east Asia, small stake coffee farmers have harnessed the power of cooperation. Through scale of economy, their coop now provides them with state of the art agricultural inputs and storage facilities, earns them an above average price for their coffee on the international market, and is even helping them to build schools for their children and health facilities for their communities.

But we are remiss to relegate cooperatives to the realm of developing countries and a path to supply services and employment to the under privileged. The development of the Unites States as the most powerful economy in the world would have been unthinkable without the wide spread application of the cooperative business model. Large swathes of rural America, for example, would not have received electricity were it not for the government’s harnessing of rural electrical coops in the critical moments of the industrial revolution, and the economy would never have achieved either its scale or scope were it not for the participation and development of those parts of the country.

That cooperatives are useful only in bettering the lives of people living in developing countries is, indeed, a fallacy. They can be used to achieve the goals of any group of people with a common vision who want to be their own boss and have a say in the running of their organization. Coops thrive in our open market economy for several reasons – cooperation creates larger scales of economy, for one, and individual people and entities can overcome the inefficiencies of imperfect knowledge, lack of communication and mistrust, instead profiting together. The outputs of the coop are both profitable and equitable.

Take, for example, the case of a group of immigrant women working independently as child care professionals in the District of Columbia. Many of these women are working as nannies or day care workers through corporately owned child care centers or referral services, losing large portions of their salaries to the agencies that supply them with work. Other women are operating their own child care services, often out of their own homes – they are unable to grow their businesses, however, despite a huge demand for their services in Washington, limited by their personal resources as well as by the laws governing how many children independent businesses can accommodate.

The realization that the challenges faced were shared by a large number of women in this community and that the goals aspired to were limited by a failure to work together, the appropriateness of a cooperative was obvious. A child care cooperative owned and run by the women that worked there would solve a number of problems. The workers would be their own bosses, and would not be paying portions of their salaries to an outside third party or boss. As the owners as well as members of the coop, they would be fully in charge of the teaching philosophy and methodology offered. The child care and child education would be a direct reflection of the value of the community, able to address problems and offer services, such as bilingual education, that are otherwise largely unaddressed in the market today.

As I have worked with these women over the past few weeks, one thing has struck me more than any other. Any lingering perception that I may have had of the cooperative as a tool only of social workers and charity organizations has been washed away – these women are business people, savvy, intelligent, and experienced entrepreneurs through and through. They are coming together because they recognize the opportunity to grow their businesses, increase their incomes, and be in charge of their economic fortunes, as well as have a positive impact on their community.