Editorial: What Is Our Job Here?

I spent quite a few years living and working in Chicago, a city I still love despite everything. Even after this July 4 weekend’s 95 shootings there. (Nationwide more than 540 shootings were reported for the weekend.)

Chicago, which two decades ago still felt like a comfortably middle-class metropolis (if you were white and employed), now resembles most if not all other major cities in its bifurcation. On the one hand, there’s the Lakefront / Michigan Avenue playground, the Northside, booming Pilsen, the Hyde Park / University of Chicago enclave . . . and then there’s miles and miles of everything else.

We know much more now about why and how this bifurcation occurred. It turns out Chicago played an important role in creating the 1% economy, if you think about the Chicago School economists and their impact on neoliberalism as well as the extreme financialization of the U.S. economy. The world’s two largest futures exchanges — where financial derivatives were invented — were located in the city’s downtown. (I worked for a time for one of them.)

In addition to what we know about this macro history of rising inequality, we also know more now about the history of structural racism, thanks to books like The Color of Law, which lays out clearly that structure as it was built into neighborhoods of the city of Chicago. In this case, we’re speaking of structures of law, real estate codes and covenants, operating at all levels of government.

Then for us promoters and builders of economic democracy, what’s our job here?

First to learn from each other as we try to build new structures within the old ones. Personally, I also learn from authors such as Naomi Klein, Marjorie Kelly, Anand Giridharadas, Jessica Gordon Nembhard, Steve Dubb, Nathan Schneider, and Isabel Wilkerson, among many others. We are also fortunate to have committed organizational leaders like Melissa Hoover, Doug O’Brien, Esteban Kelly, Sonja Novkovic, Paul Bradley, and numerous others.

And second, our job is to hold up each other’s work in solidarity on this vast building site of the economy we need. We are in a creative moment like the early days of the Internet except that our project is not to invent an industry: it is to reinvent an entire economy, as well as the thinking and the way of life around it.

As we’re tempted to wonder at times whether we’re succeeding at this work, the writer Arundhati Roy’s oft-quoted line comes to mind: “Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing.”

— Elias Crim

Fund Profile: Obran Cooperative

A conversation with the co-founder of Obran Cooperative, Joseph Cureton, following on our June 15 webinar (co-hosted by Zebras Unite) on “Co-op Strategies for Reclaiming Human-Centered Healthcare”, at which Adam Rose, Obran’s COO, spoke.

Greg Brodsky on How to Invest in Cooperatives (Part 2)

Different ownership creates different incentives

As we talked about in Part 1, while the need for financing in a cooperatively owned business is very much the same as a traditional business, investment can look really different.

When investing in a cooperative, the biggest difference is that investor repayment generally has to happen out of company revenue or profit, not an increase in the share price. To understand why, we need to look more closely at what has to happen to make a share appreciate in price and why it often isn’t the right fit for cooperative ownership.

In any business, there are generally only three ways for investors or lenders earn a return on their investment:

1. The company’s share price goes up
2. The company pays back investors out of revenue
3. The company pays back investors out of profit or dividends

(To keep things simple, we’re ignoring refinancing which can function as another source of investor repayment.)

People are generally most familiar with #1, because that’s how the stock market works and where gains in a typical retail investor’s portfolio come from. You buy a share of stock in a publicly listed company and then later sell that stock to someone else. In doing so, you are exiting your position, in what is called a secondary market, such as the New York Stock Exchange or NASDAQ.

Investors, like angel investors and venture capital funds, who typically invest in early-stage, non-public companies, also hope the value of their investment — the position they take in the company — will increase. However, very few secondary markets exist for companies that are not publicly traded. So these investors are looking to exit via slightly different strategies: a) the company goes public, b) the company is acquired, or c) the shares can be resold to another investor.

“Who can I sell this company to?”

Early-stage investors want to make sure they can get their money back by selling or liquidating their share. So right from the very start when they evaluate an investment opportunity, they are asking themselves “who can I sell my share of company ownership to?” And some of these investors — specifically equity funds — need to harvest returns within the 10-year period of most funds, in order to repay their investors within the agreed upon timeline. As a result, there is immense pressure on the companies backed by these investors to go fast, go big, and sell the company or IPO within 10 years of the initial investment.

Who benefits financially in this scenario? The small group of people who invested early (and who had the economic privilege to invest in the first place).

Now, consider, on the other hand, the very different financial incentives of cooperatives, who are explicitly trying to create long-term ownership and wealth within a much broader community, whether that community be workers, or Black farmers, or musicians.

Upcoming

July 23 Webinar: Co-ops and Childcare

Ownership Matters recently co-sponsored a webinar with Zebras Unite called “Co-op Strategies for Reclaiming Human-Centered Healthcare.” That topic is one dimension of a larger subject: the general crisis in caregiving in this economy.

Consider the fact that over half of U.S. families live in child care deserts — i.e., with no local options for public preschool, Head Start, or private child care centers.

Then there’s the precarious status of the more than 1 million home childcare providers, only about half of whom are “on the books.” Exactly as we discussed in the case of home care workers, child care workers endure low pay, little support, and low respect. So what might ideas of shared ownership offer to this critical sector of our society?

We were familiar with the important work of the ideas lab Capita and its co-founder Joe Waters. We asked him to convene and moderate a panel on this question, co-hosted by Zebras Unite, at noon ET on July 23. Here are the panelists:

• Leslie Borell is the founder of Carefully, a collaborative platform for sharing care, organizing pods, co-ops, and mutual aid.
• Emma Rubin is a Senior Cooperative Developer at the ICA Group, which supports the development of worker cooperative child care centers and cooperative networks of home-based child care providers.
• Teresa Mansell is a founding mother of Childspace, a worker-cooperative child care business in Philadelphia.
• Jessica Mason is the co-director of Start.coop, a business accelerator developing the next generation of co-operative entrepreneurs.