What the heck is a cooperative?

A cooperative is a type of company that is collectively owned and democratically governed. There are many ways this can look in practice, but the simplest form is a worker co-op where all the employees of a company own their organization together and apply some form of workplace democracy to make decisions.

Posted on Oct 22, 2022; updated on Oct 24, 2022

This structure provides a different way to do business, rooted in solidarity, democracy, equity and self-responsibility. We wrote down what this means at Village One in this article on why we’re a co-op.

This structure, along with its set of values, usually has many tangible consequences for daily work; among them:

  • full transparency around strategy, decisions and financials
  • democratic decision-making (one member = one vote)
  • everybody’s voice carries the same weight, issues can’t be swept under the rug
  • a smaller wage-ratio between highest and lowest salary
  • fewer managers and hierarchical theater, in favor of self-management
  • a more equitable organization because power is far less concentrated
  • higher levels of motivation and identification because it’s also your company
  • prioritzing cooperation and community over competition
  • a world view of interconnectedness, rejecting individualism
  • studies show that cooperatives are the most resilient company form in times of crisis

This stands in stark contrast to traditionally hierarchical companies where power and financial gains are usually very concentrated at the top and a formal hierarchy is baked in. At its core cooperatives are also more optimistic about human beings: Workers aren’t treated as lazy cogs in a machine or as resources, who need to be supervised and given orders, but as intelligent, motivated people who can be trusted to make smart decisions. That doesn’t mean all traditionally hierarchical companies are evil, but by concentrating power at the top they act as benevolent autocracies at best.

“It’s easier to imagine the end of the world than the end of capitalism”

In that light cooperatives are the closest real-world model we have to look beyond capitalism and to actively reject the inequality and environmental destruction our current economic system inevitably creates. “It’s easier to imagine the end of the world than the end of capitalism” is a popular saying, but cooperatives are a real path we can choose to transcend capitalism today. Co-ops provide a different blueprint for business: One which is more democratic, more equitable, more respectful of people, communities and the environment.

Co-ops exist as a legal form in most jurisdictions and aren’t a new idea (the first was founded in 1844 in Rochdale in England), but rather an idea whose time has come. To act with some coherence and fill the cooperative model with meaning, there are seven universally agreed-upon co-op principles:

  1. Open and voluntary membership
  2. Democratic member control
  3. Members’ economic participation
  4. Autonomy and independence
  5. Education, training, and information
  6. Cooperation among cooperatives
  7. Concern for community

You can read more about these principles at the International Cooperative Alliance. We also have more resources (links, podcasts, …) about co-ops in our library section.

#GenoDigitalJetzt

Unfortunately, founding a cooperative is a comparatively complicated process, so we support GenoDigitalJetzt in Germany to remove some of the barriers and hopefully pave the way for more co-ops going forward!

Read more about why we chose to become a cooperative with Village One.

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