Hidden in Plain Sight: Across the country, Americans in all walks of life are creating companies with business models driven by social purpose, not just their own pocketbook priorities. Frances Moore Lappé, Common Dreams, January 19, 2019
Cooperative Home Care Associates (CHCA) honored by NYC Dominican Parade Association and CHCA workers march in the parade on August 14, 2016.
In our capitalist economy, business enterprise is controlled by capitalists, of course, and structured to bring highest return to shareholders. We’re all supposed to love this set-up because competition among companies gives us ever cooler products and always better deals. Right?
But, wait a minute…where is the competition?
Over just the last 15 years, mergers have proliferated so quickly that in twelve major industries just two companies now control more than half the market. Economists warn us this level of concentration kills competition — not to mention bringing with it an erosion of wages, as monopoly weakens competition for workers too.
Since monopoly power compromises capitalism’s supposed virtues, it’s time we ask: Are there better ways to structure business? Clearly, business driven by highest return to existing wealth leads inevitably to concentration and, consequently, to ever-worsening inequality. In America today, three people control as much wealth as the bottom half of us, says Forbes.
So, are we stuck in this deadly spiral toward ever greater concentration of economic power?
No, we can do better. We know we can because some of us already are.
Americans in all walks of life are creating companies with business models driven by social purpose, not just their own pocketbook priorities.
Sixty-four thousand companies in the U.S., for example, are structured as “cooperatives” set up to benefit workers, members, consumers, and the broader society.
In early 1993, for example, I interviewed one such “cooperator,” Florinda DeLeon, who just a few years earlier had been a single parent raising three children in the Bronx on welfare benefits. Then, her life changed radically: DeLeon became one of 170 co-owners of a then-new cooperative called Community Home Care Associates (CHCA). Soon thereafter she enjoyed decent pay, health benefits, and paid vacation.
“Being a worker-owner means we decide what’s best for us,” she told me.
I’ve never forgotten DeLeon’s story, and certainly have hoped all these years that her coop had survived. Then, last week in Wisconsin I was treated to a huge surprise.
At a gathering focused on the value of cooperatives, I met CHCA’s current director, Adria Powell. I learned that her home care coop now has over 2,000 workers, making it the largest worker-owned cooperative in the country. I was amazed.
Other CHCA brag points?
Not only do CHCA’s workers earn superior wages (roughly twice the market rate)compared to employees of private home-care agencies, but they hold on to their jobs longer, as turnover is only 15 percent, compared to the industry average of 40 percent. Clearly, home health care is a tough job, especially without adequate pay and benefits.
At the same gathering in rural Wisconsin, I was reminded a second time of my failure to foresee the breakthrough success of another non-capitalist enterprise: Organic Valley dairy cooperative, the organizer for the event.
In the 1980s, many Midwest farms were going under and there had been a rash of farmer-suicides. In 1988, near where we were meeting last week, I’d huddled with a handful of farmers who wanted to help themselves and their struggling neighbors. The goal? A dairy cooperative that could help extend organic farming practices while helping buffer farm families from the ravages of the farm economy.
I thought, “Oh, how sweet…these guys care enough to help their neighbors in trouble.”
A bit condescending? Yeah, I’ll admit it.
Now, three decades later, I feel downright silly. I failed to imagine what this cooperative would become. The courage, compassion, and vision of these determined dairy farmers would build a billion-dollar business, today benefiting more than 2,000 family farms in thirty-five U.S. states, and beyond.
Many people reading this might think that cooperatives are positive but almost irrelevant in light of the power of the dominant capitalist model. To those people, I urge you: Don’t fall into the trap I did.
Worldwide, one in ten employed people works in coops; and one billion in ninety-six countries are members of coops–no doubt a number greater worldwide than those who own shares in publicly traded companies. Or consider that the total sales of co-operatives worldwide comes to about $3 trillion, a sum that is equal to the total equity ownership of the five global tech giants: Apple, Google, Microsoft, Amazon, and Facebook.
In one of Italy’s most prosperous regions, Emilia Romagna, roughly 30 percent of the economy is generated by cooperatives. With almost 4.4 million people, this region enjoys one of the highest per capita GDPs in Italy.
Co-ops are hardly niche.
Beyond cooperatives, US entrepreneurs are creating additional forms of values-driven enterprise. For instance, roughly 5,400 companies are now incorporated under a new legal structure, the “Benefit Corporation,” committed to generating a public benefit beyond profit — from environmental sustainability to employee healthcare.
Outdoor clothing giant Patagonia is an example. While Americans throw out 81 pounds of clothing each year–almost all of which could be reused–Patagonia commits to repairing and taking back any item it sells.
Of course, I’m not suggesting that these emerging businesses will end the devastation of brutal capitalism, now leaving 1 in 5 Americans with no net worth to fall back on. We must reclaim the lost tradition of “trust busting” and enforce other anti-monopoly rules, remove obstacles to union organizing, seriously address tax-law injustices and much, much more.
What I am suggesting is that we celebrate that the profit-driven-only capitalist enterprise is not the only game in town. And, in our economic lives, we can actively support those enterprises accountable not to wealthy shareholders, but to their workers, the environment, and the community. As citizens we can step up to ensure changes in the rules that govern our economy, enabling the possibility of an economic democracy.
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2006, when Kathleen Vohs, at the University of Minnesota’s Carlson School of Management, and her colleagues published an article titled “The Psychological Consequences of Money” in the journal Science.
In one study, participants were primed by the presence of a large pile of Monopoly money. Those exposed to the play money were less willing to help someone who “accidentally” spilled a box of pencils. In another scenario, participants were asked to fill out questionnaires while seated in front of a computer monitor with a screen saver that depicted either money floating or fish swimming. Exposure to the floating cash reduced participants’ willingness to work in a team and resulted in their seeing themselves as having less in common with the other participants. Vohs and her collaborators even tried having their subjects unscramble phrases that included words such as “salary” while a control group worked with nonmonetary terms. These seemingly mundane tasks reproduced similar outcomes. The nonmoney group spent an average of three minutes on a difficult puzzle before reaching out for help, while members of the money group plodded away for more than five minutes. Those who unscrambled nonmonetary phrases also spent, on average, roughly twice as much time helping a struggling peer with the puzzle than did those who had been primed to think about money. These findings have since been replicated through a number of other experimental designs.
Arlene again: “It isn’t money per se that’s alienating but how it tends to be exchanged in today’s economy. Money has become a proxy, a substitute, for social relationships, whereas with peer-to-peer lending it is a vehicle that amplifies community engagement.” Arlene was speaking to points made earlier about the creation of an economy that takes care of its entire household—oikonomika. This stands in contrast to conventional markets, which turn you into … well, you know.
Arlene spent a lot of time talking about her experiences with peer-to-peer lending and why she would have “gladly” left her job as a financial planner for a career in crowdfunding small businesses. She also told me stories from her financial planning days—four, actually. While the characters differed, the story arc was always the same. An individual with high-minded aspirations visits her office to plan for his or her retirement and expresses clear wishes about which sectors to avoid investing in. She mentioned one guy, for instance, who was “initially gung-ho about social justice” and gave her clear directions to avoid making investments in Big Food and Big Pharma companies. But after a year or two, the clients all started leaving those convictions at the door. “It doesn’t take long for someone to look at their statements and start seeing only money. Injustices aren’t exactly spelled out in annual investment reports.” Sounding incredulous, Arlene added, “I was helping people sell out.”
With that, she looked me squarely in the eyes. Shrugging her shoulders as if to say, “I told you so,” she continued, “That’s what happens when people get close to money and not to the people behind it.”
Lenders rallying their Facebook friends to eat at the establishment their loan is helping to support; lenders and borrowers with pictures on their desks or in their wallets of peers at the other “end” of the exchange, all smiles, positioned next to school photos of their kids; people with annual incomes well south of the nation’s average (the average income in the United States in 2016 was $50,756) participating in these arrangements; businesses in search of social dividends and not just financial rewards: that’s community lending.
Lending that comes from a community never stops being part of that community, you see? I do now, Arlene.
Excerpted from The Food Sharing Revolution: How Start-Ups, Pop-Ups, and Co-Ops Are Changing the Way We Eat by Michael Carolan. Copyright © 2018 Michael Carolan. Reproduced by permission of Island Press, Washington, D.C.