Cooperativism: A Sustainable and Empowering Alternative
In 1959, seven impoverished women from the Girgaum region of Mumbai came together and borrowed 80 rupees — the equivalent of $1.50 — to go into business together making papads, a kind of crispy bread that is a popular snack in India. Many people in India’s patriarchal society thought they were doomed to failure, and their business was initially laughed off.
Today, however, the women’s detractors are singing a different tune. The business, called Shri Mahila Griha Udyog Lijjat Papad (or simply Lijjat for short), didn’t just grow — it blew up. Today, they generate over 200 million dollars in sales and employ over 40,000 women across India. What’s the secret to their success? The answer — a cooperative business model. Any woman in India, especially those from impoverished regions, can join as sister-members, who share in the profits (98 percent of the profits in a given year are distributed among the workers, while the other 2 percent covers expenditures) and elect the executive management democratically. This emphasis on people over profit has allowed the company to survive even in the face of stiff competition from large corporations, and the success shows no signs of stopping.
What is a worker cooperative? At its core, it is a business enterprise founded on the principles of economic democracy. What that means in practice is that rather than an external set of shareholders and directors, the enterprise is owned and managed by the workers themselves. Decisions are made democratically — some cooperatives, usually smaller ones, choose to use direct democracy with no hierarchy and every worker having equal say, and others choose to retain a more traditional business structure where management is democratically elected on the principle of one-worker-one-vote. Profits are shared among the workers, either equally or proportionally according to some commonly-agreed-upon measure.
As it turns out, cooperativism has tangible economic benefits — the International Labour Organization estimates that cooperatives, worker and otherwise, provide over 100 million jobs worldwide. These jobs have higher wages and are longer-term than their counterparts in traditional businesses, and studies have found that they tend to have greater productivity and higher survival rates than traditional businesses. Because cooperatives are usually rooted in local communities and are governed democratically, their social and economic benefits are much more sustainable as they are far less likely to close down and relocate to boost the bottom line at the expense of community wealth.
The United Nations and various global labor organizations are in agreement that cooperatives are the business model best suited to alleviate poverty worldwide. This is because they place a distinct emphasis on collective empowerment of every worker, rather than encouraging individuals to push each other back down in a race to the the top. By ensuring every worker a share of the profits, community wealth is quickly and sustainably generated.The other uniquely beneficial aspect of cooperative enterprise is the notion of economic democracy. One-person-one-vote participatory democracy in a business setting gives individuals in countries where democracy may be weak or nonexistent a sense of political empowerment and self-agency. Countries with greater democracy tend to have less poverty, so inspiring a democratic sentiment among citizens helps fight poverty in an indirect way as well as a direct one.
The benefits of cooperativism in terms of empowering women are significant. The fundamentally democratic nature of cooperatives make them uniquely capable of empowering women by giving them a fair say, free from the constraints of the patriarchy. Because coops are founded on the notion of membership, it is easy to construct them such that they provide communities of women working together for a common cause. This is what we see with Lijjat Papad in India, which operates as a women’s cooperative, and it is currently replicated in towns and villages all over the developing world.
Not only do cooperatives ensure women have access to sustainable employment, but it ensures they have access to self-employment. The fact that all members have a stake in the success of the enterprise promotes collective bargaining, which provides a way for women to stand in solidarity with one another against the forces of male-dominated society. This has positive psychological effects on women, cementing their status as productive members of the community and inspiring the confidence necessary to take on leadership roles that extend far beyond the workplace. This is why 80 percent of those surveyed agree that cooperatives are better than traditional businesses at promoting gender equality. Large percentages agreed that one-member-one-vote participatory management was key to the success of cooperatives in this regard.
There are obstacles that hinder the ability of cooperatives to succeed on a large scale, as well as to empower women — namely, difficulty in securing access to capital, and the current underrepresentation of women in cooperative management. However, when paired with other concepts currently being put into use, these obstacles can be overcome. For example, although microfinance has many flaws in its current form, microcredit institutions can make it a point to lend to cooperative businesses at favorable rates, thereby alleviating the problems of unjust lending and unsustainable investment on the part of credit institutions, as well as the problem of capital access on the part of cooperatives. Likewise, if more energy and resources are devoted to promoting girls’ education worldwide, this will inspire a new generation of women in developed and developing nations alike to step up and become leaders. As this education and empowerment helps women gain representation in both the government and the private sector, we will see the issue of female representation in cooperative management be resolved over time.
We don’t have to live in a world where in the wealthiest period in human history, billions of people suffer in poverty and 22,000 children die each day as a result. We don’t have to live in a world where 8 people own as much wealth as half the world’s population. We certainly don’t have to live in a world where people are hit especially hard by this poverty and inequality simply because they are women. A better world is possible. By championing a radical vision of economic democracy that prioritizes collective achievement and sustainable community wealth over the success of a few individuals at the expense of everyone else, we can make this dream of a better world into a reality. For both men and women alike.
