Income equality is getting worse. Can the co-op model solve this problem?

Co-ops are more pervasive than you think. They just suffer from a marketing problem.

People inside hardware store

Hardware store in the city boulevard. Customers stand by the counter.

Photo by Roberto Machado Noa/LightRocket via Getty Images.
  • The cooperative model accounts for $154B every year in America.
  • America leads the world with cooperatives, with over 30,000 businesses operating under this model.
  • Co-op advocate Nathan Schneider believes this model can help level the economic playing field.

What is a Co-operative?

Nathan Schneider plays a game at strip malls. The activist-journalist and University of Colorado Boulder media studies professor tries to guess how many businesses were directly or indirectly inspired by co-ops. The number is higher than you'd expect.

Whether it's organic food or fair trade coffee or Visa labels in the windows of the small business or chains like Dairy Queen and Best Western, cooperatives are built into their model.

Reading Ours to Hack and Own, a book on the cooperative tradition that Schneider co-edited, I learned that the nation with the largest number of cooperatives is right here. America has over 30,000 businesses built under this model. Co-ops account for $154 billion every year in the U.S. I met Schneider because I too work for one, and during our talk he educated me on the vast influence of cooperatives on American businesses, a fact I had never stopped to contemplate.

While there are a number of variables in the cooperative model, the basic principles, followed by co-ops around the world, were created by the Rochdale Society of Equitable Pioneers in 1844:

  • Voluntary and open membership
  • Democratic member control
  • Economic participation by members
  • Autonomy and independence
  • Education, training, and information
  • Cooperative among cooperatives
  • Concern for community

The Next Economy: Worker-Led, for Public Interest

According to Worldwatch Institute, in 2012 one billion people around the planet were part of a cooperative. The 300 largest co-ops are worth $2.2 trillion. Dating the cooperative model to an origin point is impossible since tribes generally worked under this model. The problem, Schneider says, is that players in the capitalist model take credit for the work that cooperatives have done. For example, credit cards.

Visa, he says, was originally Bank Americard. This early Visa credit card, founded in 1958, was not working under the guidance of Bank of America. A decade later, Dee Hock founded a network of banks that ran under the cooperative model.

That was what made the credit card phenomenon really work. After the cooperatives built that industry, it got demutualized, privatized, turned into this kind of rapacious and exploitative industry. But it was actually the cooperative movement that enabled that feature of capitalism to grow.

While researching his latest book, Everything for Everyone, Schneider discovered his grandfather, a "farm boy from Colorado," was the director of a large national purchasing cooperative in the hardware industry. Growing up, he knew his grandfather ran a company called Liberty Distributors; he just didn't know it was a co-op. This is a persistent problem with co-ops, Schneider says. Few people, for example, know that large companies like Land O'Lakes, ShopRite, and ACE Hardware are co-ops. The most publicized, REI, is predominantly reserved for outdoor fanatics.

Whereas the co-op model might inspire thoughts of conformity, Schneider argues that it actually promotes individuality through participation. Regional cooperatives match the environment in which they are founded and service, whereas chain stores demand subservience from customers. It might seem convenient that I can go into a Home Depot anywhere in America and know where everything is shelved, but this mindset is antithetical to the co-op model.

Liberty was all about using the cooperative model to enable local stores to be more individualistic, to actually enable them to have more control over how they branded themselves and what stock they carried. The hardware store in my town that's a member of ACE Hardware is much more tailored to the culture of the town than the Home Depot conglomerate down the road. The corporate model expects a kind of mass conformity; the cooperative model is a strategy for enabling businesses to help people be their fuller selves.

Corporate responsibility? Don’t make me laugh.

This model can help level the economic playing field in a country like America, which is suffering from staggering income inequality. While Schneider's grandfather never became super wealthy, he was actively engaged in a community in which the rewards of the profession were distributed equitably. Self-help books about economic empowerment and business success proclaim that anyone can become the next Steve Jobs or Bill Gates with a dream and drive, but Schneider recognizes such a promise as nonsense. The capitalist playing field is limited to few winners while forcing small businesses—the romantic 'Main Street' model of suburban America—to shutter their windows.

Schneider points out that even in a time of extreme party-line politics, the Main Street Employee Ownership Act, which argued for employee ownership through a cooperative model, received bipartisan support when signed into law in August 2018. While Schneider says that Republicans are more likely to work with electrical and agricultural co-ops in rural states, both parties need to better educate themselves on the history and importance of this model moving forward. Unfettered capitalism espoused by paid lobbyists is not doing the citizenry any favors.

This is especially problematic, Schneider says, during a time when so much wealth is locked into smaller technology companies that are poorly understood by government.

We have an incredibly widespread accountability problem. Our businesses, especially the dominant ones, are just not accountable the way we need them to be. We can drag them in front of Congress as many times as we want, but they're clearly on their own agenda; we need a different strategy. And another difficulty here that we're in is that we're no longer in the realm of national companies. We need governance that is transnational; we can't just rely on a hodgepodge of national regulations to deal with the emerging digital economy.

Honoring value creators is the way to move forward, according to Schneider. One thing is certain: we're currently not headed in that direction. Empowering members and consumers instead of treating them as a flock will benefit the greatest number of people. Forty years into the trickle-down experiment have shown its utter failure. When will we come to terms with this fact?

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This article was originally published on our sister site, Freethink.

China wants to build a mini-star on Earth and house it in a reactor. Many teams across the globe have this same bold goal --- which would create unlimited clean energy via nuclear fusion.

But according to Chinese state media, New Atlas reports, the team at the Experimental Advanced Superconducting Tokamak (EAST) has set a new world record: temperatures of 120 million degrees Celsius for 101 seconds.

Yeah, that's hot. So what? Nuclear fusion reactions require an insane amount of heat and pressure --- a temperature environment similar to the sun, which is approximately 150 million degrees C.

If scientists can essentially build a sun on Earth, they can create endless energy by mimicking how the sun does it.

If scientists can essentially build a sun on Earth, they can create endless energy by mimicking how the sun does it. In nuclear fusion, the extreme heat and pressure create a plasma. Then, within that plasma, two or more hydrogen nuclei crash together, merge into a heavier atom, and release a ton of energy in the process.

Nuclear fusion milestones: The team at EAST built a giant metal torus (similar in shape to a giant donut) with a series of magnetic coils. The coils hold hot plasma where the reactions occur. They've reached many milestones along the way.

According to New Atlas, in 2016, the scientists at EAST could heat hydrogen plasma to roughly 50 million degrees C for 102 seconds. Two years later, they reached 100 million degrees for 10 seconds.

The temperatures are impressive, but the short reaction times, and lack of pressure are another obstacle. Fusion is simple for the sun, because stars are massive and gravity provides even pressure all over the surface. The pressure squeezes hydrogen gas in the sun's core so immensely that several nuclei combine to form one atom, releasing energy.

But on Earth, we have to supply all of the pressure to keep the reaction going, and it has to be perfectly even. It's hard to do this for any length of time, and it uses a ton of energy. So the reactions usually fizzle out in minutes or seconds.

Still, the latest record of 120 million degrees and 101 seconds is one more step toward sustaining longer and hotter reactions.

Why does this matter? No one denies that humankind needs a clean, unlimited source of energy.

We all recognize that oil and gas are limited resources. But even wind and solar power --- renewable energies --- are fundamentally limited. They are dependent upon a breezy day or a cloudless sky, which we can't always count on.

Nuclear fusion is clean, safe, and environmentally sustainable --- its fuel is a nearly limitless resource since it is simply hydrogen (which can be easily made from water).

With each new milestone, we are creeping closer and closer to a breakthrough for unlimited, clean energy.

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