As of late I've become really interested in cooperatives, probably due to my very soon move to Austin and the fact that cooperatives seem to be normal in the city. I've always (with a six month exception) banked at a credit union, so I've always been down with exploring the cooperative concept. My interest of late though does not concern cooperatives that will provide me with services but instead revolves around worker's cooperatives.
The worker's cooperative seems to me like a great idea. Workers own the business and have a say in how the business operates. Great. While there are a few successful workers cooperatives (Mondragón, for instance), one area that there would be a significant hardship would be the raising of capital. If only workers own the company, then there can be no investment except through workers. The whole reason the incorporated joint-stock company model has been so successful (besides the incorporation part) is its ability to quickly raise capital by selling shares.
If such a model were introduced into workers cooperatives (what I would then call business cooperatives), what would be the result? Obviously, investors can't have the same sort of control in the cooperative as in a joint-stock company, but shouldn't they have some sort of control? Would each group elect half of the board? How would this dynamic affect the corporation's governance? Would this overly politicize the board?
Anyway, just some late night speculation.
5 comments:
i blogged!
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(this comment is from soren)
I'm glad to see that Soren is so interested in business cooperatives.
oh man, paul... it was all i could to last night to get soren to stop talking about business cooperatives. every five minutes he's waking me up, asking me stuff... i kept telling him that we had to wait until you came back to MO, but that wasn't good enough for him. i had to wake up and start googling things. crazy cat. look what you've started.
Good news - worker co-ops CAN raise outside capital, and maintain both their legal co-op status and their co-op principles. The key is that the control must remain with the worker-owners.
We do it at Equal Exchange. We now have 90 employees, 70 members (the other 20 are "in the pipeline to member status), and about $4,000,000 in outside equity. We have also started to raise debt financing through innovative ways such as our own certificate of deposit. see: http://www.equalexchange.com/eecd
To all of that we also use conventional loans and lines of credit, and self-finance by plowing most of our profits back in to the business. see: http://www.equalexchange.com/investing-in-fair-trade
You'll also probably like to hear that there may be more worker cooperatives than you think (300 in the US, another 300 in Canada) plus maybe 1000 in northern Italy). For a good relatively local example look at Quebec, where in a province of about 6 million they have about 150 worker co-ops.
see: www.usworker.coop
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