Cooperative Ventures Can Reverse Decreasing Confidence in Institutions
For generations, says Doug O’Brien, President and CEO of the National Cooperative Business Association CLUSA International (NCBA), Americans have relied on cooperative businesses to take control of their economic lives.
Beginning in the 1930s, cooperatives brought electricity to farms and rural communities across the nation.
Today, cooperative financial institutions (credit unions) serve over 140 million Americans.
Today, says O’Brien, it is again time for people and policymakers to trust the cooperative business model to provide economic opportunity and resilience.
The world — and the global economy — is undergoing rapid changes, from technology and digitization to shifting global markets and geopolitical threats to business consolidations, that impact the way people engage with the marketplace.
Those left behind by this economic and geopolitical whirlwind, including millions harmed by the COVID-19 pandemic, are finding it increasingly difficult to thrive.
Big business can buy and sell cheaper, even in the residential real estate market — making it tough for the unconnected to build toward a secure tomorrow.
Cooperatives, says O’Brien, take the long view on behalf of their members — just as did Jimmy Stewart’s George Bailey in the celebrated classic "It’s a Wonderful Life," (RKO, 1946).
The 2024 election, says O’Brien, turned on public dissatisfaction and concern over the economy and the direction of the nation. O’Brien urges Americans to increase their reliance on cooperative ventures in farming, manufacturing, housing, and other areas to meet their needs and aspirations.
And Americans should continue to promote cooperative enterprises abroad.
O’Brien has called upon the Trump Administration and Congress, while addressing reforms to foreign assistance programs, to look at the full balance sheet, noting that NCBA’s work to expand the cooperative movement globally has a track record of building economic and political stability in nations and augmenting America’s access to the world’s goods.
The cooperative spirit was introduced in colonial America as people worked together to build houses and raise barns for new residents of their communities.
Formal cooperative enterprises, according to the International Cooperative Alliance, are autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
Co-ops, says the ICA, are based on the values of "self-help, self-responsibility, democracy, equality, equity, and solidarity."
Like the rural electric cooperatives which thrive even today, credit unions are cooperatives whose members own the board of directors and whose boards focus on members in hiring management and making business decisions.
Giant companies like Burger King, Best Western, and Ace Hardware have survived, even thrived, in the U.S. as cooperative enterprises whose individual stores gather to help each other compete against the corporately owned big box stores.
While NCBA since 1985 has been the primary voice for cooperatives in the United States, its predecessor, the Cooperative League of the USA(CLUSA), was birthed 1921 out of the
Cooperative League of America, which began operations in 1916.
One of the CLA’s first efforts was a collaboration with W.E.B. Du Bois to promote cooperative development within the African American community.
Less than two decades after President Franklin D. Roosevelt created the Rural Electrification Administration, electric co-ops by 1953 had brought electricity to 90% of U.S. farms. In 1950, The National Rural Electric Cooperative Association (NRECA) joined up with CLUSA.
Also in the 1930s, farm purchasing cooperatives joined CLUSA, changing the membership base and philosophical approach to consumer cooperative education to be more inclusive of marketing cooperatives.
These co-ops brought with them Farm Bureau Mutual Auto Insurance Company (now Nationwide Insurance), which by 1935 was also selling fire and life insurance.
During World War II, CLUSA began organizing educational institutes that by the early 1960s had morphed into the Association of Cooperative Educators (ACE).
But CLUSA’s greatest contribution to the war effort was its 1944 launch of the Cooperative Development Foundation (initially the Freedom Fund of CLUSA).
A year later, the foundation issued its first grant of $30,000 to help launch Cooperative of American Remittances to Europe (CARE).
Co-founders Arthur Ringland and Dr. Lincoln Clark convinced multiple charities and government agencies to cede possession of 2.8 million military food rations left over from the war effort and let CARE send them to the needy in war-torn Europe.
America’s co-ops helped create the CARE package.
In 1923, CLUSA had participated in the inaugural International Day of Cooperatives, but not until 1953 did CLUSA begin its international mission.
In response to a request from the Indian Cooperative Union, CLUSA opened an office in New Delhi to help develop and strengthen dairy, fertilizer, farm machinery, and other co-ops across India.
Sparked by decades of success in India, NCBA began working in Indonesia in 1977 to support agricultural cooperatives, and that work has expanded across Southeast Asia.
These small-holder farm cooperatives have become regional leaders in processing and exporting spices and coffee to major retailers globally.
In 1978, NCBA CLUSA launched the Egypt Small and Micro Enterprise Credit Project, which over 16 years lent more than $810 million to low-income clients and their businesses with a 99-plus% percent repayment rate.
These and other projects, domestically and globally, have won NCBA federal government support since 1962.
They have advanced our own national interest by building democratic institutions and economic stability especially in regions in the greatest need and that are at risk of anti-American, anti-Western, or terrorist influence.
This international work has also kept prices affordable for goods supplied by cooperative enterprises halfway around the world.
NCBA sees its mission as developing, advancing, and protecting cooperative enterprises both at home and abroad. O’Brien points out that co-ops last longer and have a lower range of bankruptcies, largely because their organizational structure focuses on service to the members and to the communities in which those members live and work.
O’Brien recently expressed concern that the dismantling of USAID might have negative consequences for its assistance to developing cooperative enterprises in foreign nations.
There they help farmers and others to increase the incomes, open markets to U.S. businesses who buy their products, and increase the household and national stability.
Recent research has shown that Central American households that include co-op members are 40 to 60 times wealthier than those not connected to cooperative enterprises.
That kind of financial stability makes staying home far more attractive to most than traveling north in search of economic freedom.
Co-ops, O’Brien says, are "an essential component of free market economics," as they set the direction of their farms or other businesses squarely on their common interests rather than on risky, often divisive ventures.
While people globally have decreasing confidence in large institutions — big business, big government, even big religion — cooperatives instill confidence that they have the common good in mind.
Co-ops, therefore, are as American as apple pie and Sunday brunch.
Duggan Flanakin worked for Barry Goldwater, and has written for the Washington Free Press, and Christian Restoration Ministries. He's also edited environmental policy newsletters. A senior fellow at the Texas Public Policy Foundation, he is also a policy analyst for CFACT (Committee for a Constructive Tomorrow). Additionally, Mr. Flanakin is a poet, music promoter, and Sunday school teacher. Read Flanakin's reports — More Here.
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