Nathan Schneider Reflects with Us on Everything for Everyone (Part Two)
This year the theme of co-op identity has really emerged among several of the big co-op organizations — the NCBA / CLUSA, the International Cooperative Alliance in particular. What are your thoughts on why this theme had to re-emerge and from what?
Right — there are a few dynamics at work here. One is the legacy of the Cold War — for years, there was a cultural suppression of cooperatives, when there was often pressure to act like respectable capitalists. This was the case with my own grandfather. He was the CEO of a national purchasing co-op, but in those Cold War times, that wasn’t something he would come home and talk about. Even my mother never knew that her father worked for a cooperative. This was cultural suppression, and it produced a kind of self-censorship.
But that seems to be changing. Remember the kerfuffle a year or so ago or so when Land O’Lakes removed the fake Native American lady from their butter packaging? But what nobody much noticed was the way they replaced her with the words “farmer owned.” A number of large legacy co-ops are similarly putting their identity front and center again after hiding it actively for a couple generations. REI is doing it, too, and a number of credit unions.
Then there’s also just kind of the natural drift, where management gets a nice gig and doesn’t want anybody in their way — which can be a tendency in any kind of business, not just co-ops. In some parts of the country these attitudes became intertwined with racism — a means of trying to ensure that a white minority continues to control cooperatives in largely Black communities.
I think there’s an opportunity again in the co-op community to stir people up about this renewed sense of identity, just like we need civil society organizations that stir up our political activity. Like any kind of politics, the cooperative movement needs to rediscover its purpose in every generation.
As we know, co-ops make certain demands of their members, including shared governance. How much energy are we asking people to put into this?
This is a question that we have an opportunity to answer in new ways. We are still running on the same governance practices that were used in the 19th century. One place I’ve been seeing creativity lately is among blockchain communities using cryptocurrencies. Participants may be holding a zillion different kinds of tokens. They can’t participate in the governance of all of them.
In blockchain, there are a lot of experiments about how to address this. They’re figuring out new ways of delegating authority, to ensure that a small number of people are able to effectively represent a large number of people who don’t have the capacity to be actively involved in all of these things. If we have cooperatives across the economy, we’re going to need to address that problem by finding ways to make sure that we’re allocating our attention in ways that allow us to scale democracy in many different contexts.
When people in blockchain networks tell me only 3% to 5% of their token holders are voting, I say, same thing with credit unions or electric co-ops. It’s not a new problem. We need to develop mechanisms that assume that active participation may always be low, while finding ways to keep the system accountable and effective.
What are some additional obstacles you might see to reaching a more cooperative economy?
On a daily basis, I talk with new cooperative entrepreneurs, and a lot of them are very excited about the radical aspects of co-ops, as I am. But I find I’m often walking them off the cliff of reinventing every wheel they can — reminding them that cooperatives are not so different from investor-owned companies in some respects. Co-ops need strong leaders with vision, like any organization does. And co-ops can handle scale in many respects like investor-owned companies do. Those companies have lots and lots of shareholders, and they still manage to operate, as not all those shareholders are necessarily paying a ton of attention. And there’s some kind of oversight. Co-ops can learn from well-run companies of other kinds.
If nowhere else, however, the cooperative difference lies in whom the whole thing is accountable to. Who is the CEO lying awake at night worrying about: rich investors or workers who can’t afford to lose their jobs? That’s a small difference that can make a big difference.
Here’s an example. My local credit union probably behaves just like the Wells Fargo across the street 95% of the time. I wish it were more radical, but it isn’t. That other 5% of time, however, is when Wells Fargo is making up fake accounts in order to defraud Wall Street and its customers, and my credit union is not. So small differences can be important differences, even if nothing else changes.
Another difference is the sense in which a cooperative becomes a platform upon which people can decide on things that are not purely economic but also social. Take REI, for example. It is not a participatory cooperative by any measure, but it still closes its stores on Black Friday, the biggest shopping day of the year, as a kind of statement of priorities. If it had shareholders who were only interested in profits, I’m not sure it could do that.
You’ve been a resident of Colorado for a few years, a place with a lot of co-op activity, from the governor’s office on down. Could you give us a sense for the scene there?
I moved here in 2015 from New York City, just when the city was starting to do some exciting employee ownership stuff. And I thought, “Oh no, I’m leaving right at the wrong time.” Then after a short time I realized: “No, I came to Colorado at just the right time.”
Some years ago, our farmers really pioneered the adoption of the Limited Cooperative Association statute, which is a highly flexible, cooperative incorporation statute. And this was one of the rare moments where some people set up a new cooperative thing for themselves, but they didn’t limit it to just farmers. They saw it as just a super flexible cooperative tool. They never would have predicted that Colorado would become, as the law office of Jason Wiener calls it, the Delaware of cooperatives, a jurisdiction where co-ops from across the country incorporate because they can do so much more with our laws.
One reason for that is our laws don’t discriminate about what stakeholder classes you decide to have. You can have complex structures, you can have limited investor participation. So those farmers were very forward thinking, and that’s made this state a real center of this activity.
Another lucky thing: Jared Polis, our current governor, was part of the Congressional Co-op caucus when he was in Washington. And he used employee ownership through stock options when he was a tech entrepreneur. In 2018, he started his run for governor at an employee owned grocery store. Then when he became governor, he set up an employee ownership commission for the state, which has made the state a pioneer in setting up state level programs, such as grants for companies to explore employee ownership and a loan guarantee pool. These things give lenders an incentive to support co-op conversion processes.
More recently, Júlia Martins Rodrigues and I have also had the chance to do a case study on what we think is a novel strategy for cooperative organizing and scaling: what we call the “multi-stakeholder network.” This was pioneered by the leaders of Namasté Solar, a worker co-op here in Boulder, which has also spun off national purchasing and maintenance co-ops, as well as a credit union and an investment cooperative. A network like this demonstrates just how powerful cooperation among cooperatives can be if you take that idea seriously.
So Colorado has been a really exciting place to work on this stuff. It’s not the only exciting place — there’s a lot of good stuff happening elsewhere, particularly at the city level, and then some cases at the federal level. But it’s a pretty darn good place to start.