A Step Away From Capitalism: Part 1
As a disclaimer for this series of articles, on how to transition away from capitalism. I will focus on certain avenues of various alternative institutions. With that said, not one of these is the complete answer, rather a part of a network to build the kind of alternative institutions that need to be developed.
Some of them do involve capitalism to a point. It is possible to inject radical ideals and aims into these models, plus turn current business practices on its head to advance the kind of organization you would like to see.
And more importantly. If one does not apply respective principles and values into these alternative institutions, then it does not make them an alternative to capitalism. Just because you call something like a “coop” or “community organization” and still apply conventional models to those entities, then they really do not serve the purpose for the people or the area. So it begins.
Business Insider published a figure that the Gross Domestic Product (GDP) is forecast to be around 3% this year. The US Department of Labor reported that 142,000 new jobs were created in September of last year. And an article in the Huffington Post published that 88% of employees do not have the passion for their work, along with 83% said they don’t have a compelling and engaging employment brand.
This numbers are not only depressing but speak to the pulse of the United States when it comes to the current conventions of conducting business. It is also depressing when you have business leaders, who have a broadcast platform, that has expressed the following
“Business is war. I go out there, I want to kill the competitors. I want to make their lives miserable. I want to steal their market share. I want them to fear me and I want everyone on my team thinking we’re going to win.”
These Trump-like words were expressed by Kevin O’Leary, venture capitalist on the TV show Shark Tank. Unfortunately, this is not a one-off instance. There are many other business leaders, plus business schools advocate the notion that a business is like a shark. It keeps moving forward to attain a goal.
Which is why this and many capitalist aims denigrate cooperation within the organization. Requiring workers to solely become the cogs in a giant profit-making machine. The vast majority of us who work for a living are daily asked to uncritically follow orders, to act as if we are machines, and limit our creativity to what profits our bosses. Which is destroying our freedom and individualism? But I digress.
We need to transition out of capitalism and move towards a model that is about cooperation, being sustainable as an organization while providing something for the greatest number. And there is. They are called cooperatives.
The history of cooperative date back to 1761 with Fenwick Weavers’ Society in Scotland, a consumer cooperative that foster high standards in the craft of weaving. Fast forward to 1810, where Scotsman Robert Owen moved to the United States in an area known today as Indiana. Where he developed a community called New Harmony. This physical community would be one of the first intentional communities in the United States. From these two points in history sparked the idea and the evolution on the philosophy of cooperatives.
Cooperatives are based on seven principles known as the Rochdale Principles that were formed in 1844. These principles are as follows: Voluntary and Open Membership, Democratic Member Control, Member Economic, Participation, Autonomy and Interdependence, Education, Training, and Information; Cooperation Among Cooperatives, and Concern for the Community.
To this day contemporary cooperatives use these principles as their guide to advance the organization. Like conventional businesses, cooperatives can take form into a large or small organization. With that said, unlike conventional businesses. Cooperative are not driven by the valuation of their organization. Most businesses are given a valuation of what their organization is worth. There are three approaches to determine this. Asset-based (reproduction), market-based (substitution), and earnings-based (anticipation). No matter the approach. The direction of the organization is determined by one or all approaches. But not cooperatives.
George Siemon, CEO Organic Valley, whose company became the first and only organic company to pass the $1 billion in revenue in 2015. Said the following during an interview “ A co-op is a different beast. You don’t deal with valuation. We don’t know what our company’s worth. There is no valuation number. We really don’t want to know. We just worry about ‘Are we fulfilling our mission?’.”
What if all businesses were like that? Instead of worrying about what their financial bottom line is, that their only bottom line is to make sure they are providing the best service, or product, to those that need it. Organic Valley is not the only mainstream company that is a cooperative business. Land O’Lakes, REI, Sunkist Growers, Ace Hardware, and Do It Best Hardware are some known businesses that we have come into contact with in our daily lives.
But there are more cooperatives that span coast to coast and border to border. Look at the state of Wisconsin. Overall there are 29,2984 cooperatives. Of which brings in $652 billion in revenue for the state, plus producing 2 million plus jobs. Also, think about it in these terms. In Wisconsin 30,000 full-time jobs have been generated with $1 billion in total income for the state. To put it in another way. There are two counties that draw in 45% or better, of the state’s income. Those counties are Dane, where Madison is located, and with the same name of the city, Milwaukee.
Cleveland is currently looking at the cooperative business model. As a way to bring the city from the brink of economic collapse. Community residents wanted to implement an alternative model to create more jobs in the city. So they looked at an organization called Mondragon in the Basque region of Spain. I will address Mondragon in a future article. So the residents searched for funding opportunities, then created a board of directors for the project known as Evergreen. Also known as the Cleveland Model, this has been able to produce four businesses with employees. Along with creating entities that further the project’s aim.
Since 1761, cooperatives have been on the forefront what is known in the business world to be sustainable. Fiscally, cooperatives have been able to be flexible. When it comes to profit objective and to maintain that as a surplus, not revenue. Plus conduct the practice of ‘first cash and then only carry’ system. Socially, cooperatives are the best way to have worker and member control. As a way to have democratic management. Along with members to have one share, one vote to have equal representation. Unlike shareholders in conventional businesses that can buy up more shares to have a greater voice. Finally on the environmental front. Cooperatives have been focused on how to have ecological harmony while being future focused as an organization.
Let’s build a future worthy of our dreams
