Cooperatives and Democracy | Equal Exchange

Cooperatives and Democracy

Frankie Pondolph
May 30, 2018

By Rink Dickinson, Equal Exchange President

One of the challenges of worker coops, consumer coops, and producer coops is how to reconcile two competing high level goals. On one hand most of these coops have an economic,organizational, and service mission. In the case of a consumer coop the mission is to serve the members, which translates to goals such as good and affordable food. In the case of a producer coop the goal is higher prices, while in a worker coop the goal could be rewarding and economically sustainable jobs.The competing goals are to run the organization democratically, where members participate in some type of joint democratic development and learning process.  

It seems that most of the engaged coops are more complicated, not to mention the competing goals of economics and service versus democratic development. Most food coop  have mission statements that will go beyond good and affordable food to goals such as supporting local producers, building a cooperative network, and moving towards greater food justice.The Equal Exchange mission is global and is about connecting US consumers with small farmers and demonstrating the viability of fair trade and worker coops.

Ignoring the layered complexity in the missions of many producer, worker and consumer coops, let’s return to the challenge of delivering benefits to members and the goal of living as a democratic/learning/mistake-making organization.

THE BACKDROP OF POLITICAL DEMOCRACY

The United States at large and democratic countries in general are failing at learning, practicing, and building democracy. This failure of the last forty or fifty years has now reached the point where democracy itself as a value and a process is being openly sabotaged. This attack on democracy is very present in the US, but also in most countries that are more or less democratic. A short list of these countries would include France, the UK, Germany, India, and Brazil. Defending, developing, and creating political democracy in these democratic countries is becoming the great political challenge of this time.

WHAT’S THE PROBLEM

My thesis here is that there is a connection between the challenges that democracy is facing on a political level in our democratic countries, and the problem democracy faces in our cooperatives. For democracy to function there has to be community engagement, dialogue, risk, learning, and some ability to learn from failure and success. There has to be participation, communication, and respect. The mix of risk, learning, failure, success, and starting that process over again is very fragile. The process and the results have to be considered fair and meaningful to the participants.

We are all experiencing the challenges in our political system. Participation in the US is too low and  many people believe there is no reason to participate. There is an overt strategy to reduce citizen’s participation particularly directed at racial minorities.Communication, respect, and support for minority views is being greatly reduced. In this environment it is harder to obtain healthy learning, or understanding of success and failure which is vital to society progressing.Ultimately,the political process in most of our democracies is becoming weaponized between parties/interest groups and has become a fight for winning and little else.  

In our worker, consumer, and producer coops the democratic dilemma plays out differently but the underlying processes are similar. The greatest threats to our nominally democratic coops are these:

Too little organizational success-  picture a consumer or producer coop that is small, economically struggling and just doesn’t have enough members, capital, or capacity, and is weak economically. This type of organization does not deliver enough benefits to its members, is too marginal in terms of resources and capacity to work that well. Perhaps there is a culture of caring and sacrificing for this type of coop organization for a medium or long period but the risk of social fracture, anti-social fighting, poor management, poor board leadership is also quite likely to be part of the culture as well. Ultimately, these organizations are under extreme threat because they struggle to develop to a place where they can deliver benefits to their members. They are often at very high risk of destructive democratic conflict as well.

Too much organizational success- it seems odd to argue that success would threaten a cooperative organization. Possibly success in and of itself is not the problem. It is when economic success is present, but meaningful democratic control is not generally present or not really possible. My image here is coops that are ossified become coops in the name only. I am thinking of large agricultural coops that have been around for 50 or 100 years.They might be economically large, perhaps economically successful, but operate just like an average corporation. The democratic control of membership is long past and is basically there in form only. The messy issues of minority viewpoints, investing in democracy, and making good and bad democratic decisions are long gone.The worst form of this type of coop is one in which members are members in name only. The very worst situation  is one in which “members” are coerced participants with no options but to sell to participate with no control whatsoever over “their” coop. An example of this is many large scale dairy coops in the US, which have delivery vehicles to isolated farmers to offer prices below the cost of production.

Too little democratic process- this often pairs up with coops that are economically successful but it doesn’t need to. How do we know when our democratic coops are keeping and building their democratic culture? How many high level decisions do members make and how often? If you are a farmer in a dairy coop in the US, or in a producer coop in Guatemala, or a coffee coop in Nicaragua, or a tea coop in South Africa how much involvement is the right level? That question applies to consumer and worker coops as well. Scale compounds these issues. To be economically stable it often makes sense to be larger. Being larger requires all kinds of skills which make the organization more complex which require skill and specialization.  The larger scale and specialization in itself weakens commonality and group learning on successes and failures. It is easy to see an economically successful coop slowly, unconsciously evolve into an organization with little real democratic process, learning and decision making. Even in well intentioned situations what can result is the structure of democracy (well the board is elected by the members of this good sized entity and therefore we are passing as a democratic organization) with no democratic culture, or muscle.

Too much democratic process/destructive democratic process- again the problem here might be too much process or it might be an unskillful or destructive democratic process. Democracy is risky. We will make mistakes. The goal is to keep making decisions and mistakes but to avoid destructive, brutal, internecine, cooperative warfare. Every one of our genuinely democratic coops is at some risk of being brought down by highly destructive conflict through the needed democratic process.  There is a direct relationship between the problem of too much democratic process and too little democratic process and this is where management and the board come in. As coops live through near death experiences from too much democratic process/destructive democratic process a lesson learned can often be to not put the organization at that risk again. Our very democratic structure and democratic participation can destroy us.  So perhaps the solution appears to be to avoid those risks altogether (which might be sort of correct) but the way to do that is do avoid all large, unclear issues getting in front of membership (which is incorrect). The contradiction is ultimately if the membership doesn’t debate, decide, or learn together that the coop is on the path to losing its culture and raison d’etre. Perhaps ten or thirty years later the coop will become an economically viable organization but not really a coop.

WHAT’S THE PATH FORWARD

Just to be in the market is risky. Most of us don’t really like risk.  We must choose between unpleasant options all the time. A large part of that process requires solid management.  

Building democratic coops also is in itself risky. We can only learn by making mistakes and learning. Meaningful large scale decisions need to be in front of membership with enough frequency for the coop as a whole to learn and advance. This group learning, struggle, and solidarity is the essence of what we are building. It is extremely challenging for membership, board, and management to build the skills to artfully negotiate the dilemma of which decisions should or should not go to membership. Usually there is no roadmap. What looks like an interesting vital issue to one person or group of people might look like the shadow of the real issue to another person or group.  There is no right answer, but there is risk and danger nevertheless. Ultimately we need to learn the skills of managing democracy and communication while also learning the more standard skills of running an effective organization