A Conversation with Steve Dubb of Nonprofit Quarterly (Part Two)
I want to ask a question about the effort we’re seeing now to try to scale up to a higher level of infrastructure in the solidarity economy. I’m thinking of hybrid or federated organizations like the Arizmendi Association, the Industrial Commons, Obran, the Main Street Phoenix Project, the new fund from Mission Driven Finance. We need to see these, do we not? Although for now, there’s lots of experimentation, no one model really emerging.
Ha, I love your neutral questions! But yes, the need for secondary and tertiary organizations, obviously, is critical. I think, if we’re honest, we’re still at fairly early days with this work. I’ve written about New York City’s $5 million dollar commitment to technical assistance for co-ops. Sounds great but it’s less than $1 per resident.
Meanwhile, how much was Amazon supposed to get for their proposed headquarters? A billion or so? Versus $5 million — as they say, you do the math.
If you look at the economic development industry in the U.S. today, with all these tax incentives, property abatements, and so on for our “friends” like Amazon, Walmart, Tesla getting these huge subsidies, it really adds up. At just the state and local levels alone — forget the feds — it comes out to something like $70 billion a year.
And if you add up all the co-op support — mainly the rural cooperative development block grant program at the federal level and the various city-based programs like New York’s, you get to about $10–15 million. Far from the billions that corporations receive.
But while financially the gap is enormous, at the level of discourse, there has been tremendous progress. Terms like community wealth building, the solidarity economy, and so on — at least within movement circles, they’re pretty widespread now. Politicians use them, and there are even cities now that have departments of community wealth-building.
What are your thoughts on the obstacles facing worker co-op formation in particular? What comes to mind first?
Well, one challenge is the challenge of building internal democracy capacity. This becomes especially challenging in larger organizations. Take Cooperative Home Care Associates, the largest worker co-op in the country. They have 2,000 care workers but half of them have not opted to become worker owners. And this is a company that has a lot of really good things going — in terms of creating a more humane business.
And there’s Mondragon, which is even larger, with 81,000 workers. When you look under the hood there, they have some history of oppressing unions at times. As they famously say, we’re not angels. Democracy is difficult. Collective decision making in large groups is difficult.
Another large challenge to me — and it’s an overused phrase that I hate — is entrepreneurship.
Meaning, most people are not entrepreneurial, they’re risk averse, actually.
Right. But what the co-op form allows is co-ownership of a business — often for people who would otherwise never have a chance to become an owner. That’s huge. It’s an actual asset and helps people diversify their assets.
Most people still believe that homeownership is the path to wealth. There’s lots of problems with that concept — often people who build wealth are really just incidental beneficiaries of rising land values (a kind of land speculation, really). Of course, homeownership has healthy aspects. The effect of forced savings that occurs when you’re paying down a mortgage, for example.
But the average return on homeownership after adjustment for inflation is 2% a year. Which is decent, if not as good as the stock market or some other ways of investing.
But housing we know also carries risk. In the housing crisis of 2008, households of color lost over a trillion dollars of wealth. Many people lost their only nest egg. So co-ops represent another path to building wealth, rather than just gambling in the stock market, or owning a home, which can be a way to build wealth, but, as we have seen, carries its own level of risk.
But when I say worker co-ops face a challenge with entrepreneurship, what I mean by that is that with worker co-ops it is often difficult to come up with new business ideas, in part, because you are working with a whole group of people, which doesn’t necessarily lead to risk taking. Could Silicon Valley have arisen through worker co-ops? Probably not.
It’s true that Mondragon has R & D capacity. They’ve developed businesses, so there are ways to work around this. But there’s a tendency in groups to go towards the known, not the unknown. Will co-ops come up with more efficient methods of clean energy production, say, new photovoltaic tech? I haven’t seen that. Not that it couldn’t happen.
Maybe a public R & D fund could help facilitate this kind of experimentation. Right now, this work is largely left to the VCs which is extractive and horrific. But how do we collectively manage our planetary home with a solidarity economy? We need some groups asking new questions and continuing to challenge things.
What are some interesting and hopeful projects you’re watching currently?
I just wrote about Co-op Dayton’s new multi-stakeholder food co-op, the Gem City Market, which recently opened. Okay, a food co-op, that’s not new. So what’s new about it? For one thing, it’s building off a failed experiment in Greensboro, North Carolina called the Renaissance Community Cooperative. It was the first major attempt in recent years to develop a food co-op that wasn’t second wave in approach — meaning, counter-cultural, natural food, organic food. (The first wave of co-ops were Depression-era.)
But a co-op doesn’t really mean “a place where you buy organic food”! It should mean a place where the community comes together, in this case, a market that provides healthy food for the community — in the West Dayton case, a Black community.
What’s more, in Dayton, like in Greensboro, this whole effort came out of community organizing, continual community organizing. Similar to how the Greensboro group began in resistance to a local incinerator project, West Dayton’s group formed around 2014 in the aftermath of the shooting of a Black man in a Walmart, around the same time as Ferguson (MO). Out of those meetings about community needs, food and community health came up. It took them several years to raise six or seven million dollars and to sign up 4,000 members. But now they’ve launched, the result of a sustained effort by a movement to build ownership over the long haul. That’s the kind of visionary development that I look for.