The People’s Business

I get tired of hearing that everything should be run like a business.

Government? Should be run like a business! Education? Run it like a business! As if the world and everything we do in it were so simple that one particular way of, well, “doing business” would be applicable in every single situation one could possibly think of.

There is a reason that institutions like public education and government are recognized as operating in a different sector than business (and aren’t, so far as I know, announcing IPOs). Because they aren’t businesses, and running them like most businesses (that is, on the basis of profit) isn’t an effective way to deliver the things they’re mandated to deliver.

As a friend of mine wisely quipped, schools don’t have the luxury of “firing” their under-performing students–the ones that may put a drag on test scores and achievement rates. I’d add that governments, even when they’re tightening their budget belts, don’t have the option of doing away entirely with expensive basic services. Moving overseas might be a little tricky, too.

Certainly, government and public education need fiscal oversight. But, in the end, their mandate isn’t about making money for their shareholders, it’s about providing specific services to the citizens who pay for those services through their tax dollars.

But, the idea that everything should be run like a business is pretty entrenched among a particular set.  So, if we’re not going to get everyone over that idea, perhaps we just need to suggest different business models.  The models endorsed by most people I’ve heard making this comment seem to be either the single or partnership models or the S or C corp models. That is, all the profits (rewards, services, etc.) end up in the hands of the owners and/or the shareholders who’ve invested the most to begin with.

This might seem fair and just in much of the business world, but what happens when we apply these models to governments and education? Suddenly, the road by so-and-so’s house gets plowed, but not ours. The new confinement dairy operation locates next to (and stinks up) the old neighborhood. The school in the less affluent part of town is falling apart, but the one in the more moneyed area is sparkling new. Social unrest increases due to cronyism and favoritism.

I’d like to suggest that, if a segment of the population is going to continue insisting that our public endeavors should be run like businesses, there is a business model that works better for ensuring democracy and equity in those endeavors. That model is the cooperative.

According to the International Cooperative Alliance, “A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.”

Granted, not all of our citizens would admit that they’re “united voluntarily”–but then some people who steadfastly refuse to be part of society move off to the wilderness to create their own. The rest of us, when it comes down to it, realize that we’re in this thing together–sink or swim. And because we pay our taxes and call someplace home (however temporarily), we’re participating more-or-less actively in our shared, democratically-controlled enterprises of government and public education.

But maybe you’re not that familiar with cooperative businesses. Maybe you think this is a low-rent model that works only on a small scale or is just an agriculture or health-food related venture? Allow me to school you:

Values-based, community-supported and member-controlled, modern cooperatives have grown steadily since their inception in the late 1800s. Today, the top 300 cooperatives, or Global 300, generate as much revenue as the world’s ninth largest economy, or the economy of Spain. Meanwhile, new research shows that cooperatives worldwide have three times as many members as traditional businesses have shareholders — and provide 20% more jobs. [Reeder, Jessica. “Co-ops are Big: Charles Gould on the Int’l Year of the Co-op.” Shareable: Work & Enterprise, 2-13-12.]

Coops are not just farmers’ elevators, rural utilities, and grocery stores. They’re also banks (credit unions, that is), retailers (who work together with other retailers to maximize their wholesale purchasing power–like IPC pharmacies, True Value Hardware, and Best Western hotels), and worker-owned coops such as Arizmendi Bakery, Isthmus Engineering & Manufacturing, Citybikes, and Equal Exchange.

There are producer and distributor coops, housing coops, local newspapers run as cooperatives, and even parks that are cooperatively-owned and operated (right here in Minnesota!).

Cooperatives, like good government and education systems, run on principle before (no, not necessarily instead of) profit.

And what are those principles? Glad you asked!

  1. Voluntary and Open Membership: “Co-operatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.”
  2. Democratic Member Control: One member; one vote–sound familiar?
  3. Member Economic Participation: “Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative.”
  4. Autonomy and Independence: “If they enter to agreements with other organizations, including governments, or raise capital from external sources, [cooperatives] do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.”
  5. Education, Training, and Information: “Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.”
  6. Cooperation Among Cooperatives: “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.”
  7. Concern for Community: “Co-operatives work for the sustainable development of their communities through policies approved by their members” [quoted material taken from the ICA’s Statement on the Co-operative Identity].

As much as I’m sick of the simplistic, “run everything like a business” credo, I guess if we must operate our public endeavors as such, this looks like a pretty decent model to me–notwithstanding the “voluntary membership” principle in the face of death-and-taxes inevitabilities.

So, the next time you encounter the, we-should-be-running-our-[insert public institution here]- more-like-a-business ideology, say, “Yes! You’re absolutely right! We should run it like a cooperative!”

And then be prepared to teach them what that means. After all, cooperation is about education, training, and information, isn’t it?

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3 responses

  1. Whew! No wonder you have to get up early and stay up late-and you must be tired out from all of that strenuous ‘thought’. Certainly good and useful thought and information(your English teacher is showing). I appreciate that the information you share serves as a good starting point; whether people agree or disagree they can continue on from here.

    Fingerling potatos make wonderful roasted ‘potato chips’. Thanks for sharing them!

  2. I’m employed by a Labor Union. The most effective Unions are also the ones that are operated democratically, provide effective training for their members, and are deeply concerned for all of the members of their community. Sounds like a Coop to me! Keep up the great work!

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