A Democratic and Sustainable Approach to Socioeconomic Development


2012 is the International Year of Cooperatives, as declared by the United Nations General Assembly. What is a cooperative? How do they work? What are the benefits of joining a cooperative? These questions are being asked as the result of recent efforts of the U.N. to bolster support of cooperatives and their contributions to socioeconomic development.

The reason the United Nations selected cooperatives as the annual issue of interest was to increase public awareness of the capacity of cooperatives in terms of reducing poverty, generating employment, building economies, providing critical services, improving civil society, and integrating societies. Cooperatives serve as an alternative business model that is aimed at generating and sustaining business and socioeconomic development concurrently. They have a long and successful history and offer a consistent model of development, as all cooperatives worldwide are guided by the same seven principles, giving them a different purpose and a different allocation of profits, established and regulated through a democratically organized structure of control.

Cooperatives are member-driven organizations or business enterprises that are owned by the members who use the services, or are employed there. They provide customers with a unique experience, given their distinct value based and community owned and operated structure. Cooperatives exist in virtually all sectors of the economy, including but not limited to agriculture, retail, financial services, renewable energy, insurance, housing, child care, and even funeral services.

The seven principles by which cooperatives operate are:

  1. Voluntary and Open Membership
  2. Democratic Member Control
  3. Member Economic Participation
  4. Autonomy and Independence
  5. Education, Training and Information
  6. Cooperation Among Cooperatives
  7. Concern for Community

By using these seven principles to guide their business practices, the primary purpose of cooperatives is to meet the common needs of their member communities while maintaining a sustainable and successful business. The goal of cooperatives is not simply to maximize profit for shareholders. Instead, the goal is to focus on maximizing the quality of services while simultaneously improving the wellbeing of the community – a collective rather than an individual focus.

This unity is achieved through a one member/one vote system, as opposed to the one-vote-per-share system employed by most for-profit businesses, to ensure that people, and not capital, control the direction of the organization. Profit sharing among member owners is based upon how much they use the cooperative, as opposed to the number of shares they possess. It is very common for profits to be reinvested by members into the cooperative in order to improve services and better promote and sustain the well-being of the cooperative community.

Canada is a fine example of a country which has long benefitted from cooperative business practices. In the 19th century farmers in Quebec and Atlantic Canada developed cooperative creameries and cheese factories to meet a growing demand for these products. Today, there are approximately 9000 cooperatives and credit unions in Canada, comprised of 18 million members. Of these, 2200 are housing cooperatives (home to 250 000 people), 1300 are agricultural, 650 are retail, 900 are credit unions, 450 are child care or related to early childhood education, 600 are worker owned and operated (130 000 worker members), and 100 are health care cooperatives. In Canada, cooperatives are valued at an estimated $252 billion in assets, employ over 150 000 people and boast 100 000 volunteers. In fact, 35 percent of our maple syrup in Canada is cooperatively produced!

The initiative undertaken by the United Nations in 2012 to foster and develop public awareness and participation in cooperatives has accompanied an increasingly supportive public opinion. This has been achieved through events such as panel discussions and forums to educate and empower, which has taken the efforts of the international cooperative community and all of its members. The growing positivity in public opinion regarding cooperatives clearly indicates that increasingly, people are becoming aware of and participating in cooperatives, especially in Canada.

In May 2012, the Canadian Cooperative Association (CCA) commissioned a national survey to measure Canadian perceptions on cooperatives. Most Canadians have heard of, or are familiar with, cooperatives. 41 percent said they were members. As well, the national survey asked respondents to compare cooperatives with private businesses. The results were very interesting as 82 percent believed that cooperatives were more likely to support community values, 83 felt that cooperatives allow people a greater say in how businesses are run, 82 percent said that cooperatives were more likely to support the local economy, 81 percent replied that cooperatives were more likely to sell locally produced goods, 76 percent expected cooperatives to have better employment standards and treat their employees fairly, 72 percent of respondents believed that cooperatives operate according to environmentally sustainable practices, and 53 percent expected cooperatives to have lower prices. From the results it is clear that Canadians have a positive perception of cooperatives, clearly represented in the fact that Canada has the highest participation in cooperatives per capita.

Growth in positive public opinion regarding cooperatives is a direct result of their historical successes. While maintaining a social focus, cooperatives have traditionally been able to enjoy a higher success rate than private businesses in terms of staying power. According to a 2008 Quebec study, 62 percent of new cooperatives are still operating five years later, compared with 35 percent of new private enterprises. The same study indicated that after ten years these numbers decreased to 44 percent and 20 percent, still in favour of the cooperative over the private business.

When looked at from an economic, political, cultural, and social standpoint, the collective gains of a cooperative business model are far greater and more widespread than those of individual gains from private enterprise. Cooperatives provide a fiscally and socially responsible business model that has proven to be a successful and sustainable alternative to private enterprise, with far less risk given the scope and breadth of the cooperative support network and the number of members who participate.

Being a part of a cooperative is a great way to act locally, and think globally. In fact, cooperatives “cooperate” on a global scale, creating a strong international network of cooperatives which has further contributed to their success. The belief that “where there is poverty, there can be no sustainable future” lends to the CCA’s International Development Mission, whereby they envision a future where collectively, people everywhere can work together in order to achieve economic successes while fostering cultural and social viability. As a proud member of the international cooperative movement, the CCA is one of over one billion cooperatives and credit unions who have formed a global network which is committed to the development of lasting international prosperity in their communities though poverty reduction, investments in civil society of less developed nations, and ultimately, building sustainable livelihoods. For these reasons the United Nations has declared 2012 as the International Year of Cooperatives, recognizing that the cooperative model is an invaluable contributor to our local, national, and global economies and societies.

As Ban Ki-Moon, United Nations’ Secretary General says, “Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”

July 21, 2018, 3:37 AM EDT

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