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.
- 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?
Join Radiolab's Latif Nasser at 1pm ET on Monday as he chats with Malcolm Gladwell live on Big Think.
University of Utah research finds that men are especially well suited for fisticuffs.
- With males having more upper-body mass than women, a study looks to find the reason.
- The study is based on the assumption that men have been fighters for so long that evolution has selected those best-equipped for the task.
- If men fought other men, winners would have survived and reproduced, losers not so much.
Built for mayhem<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY2NDIyMy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMzk4NTQ2OX0.my6nML12F3fEQu3H4G0BScdqgaMZkRQHxgyj-Cmjmzk/img.jpg?width=980" id="906fc" class="rm-shortcode" data-rm-shortcode-id="dd77af7a881631355ed8972437846394" data-rm-shortcode-name="rebelmouse-image" />
Image source: Ollyy/Shutterstock<p>The researchers are, of course, talking averages here, not stating a rule: There are plenty of accomplished female pugilists, as well as lots of males who have no idea how to throw a punch.</p><p>Even so, says co-author <a href="https://www.wofford.edu/academics/majors-and-programs/biology/faculty-and-staff" target="_blank">Jeremy Morris</a> says, "The general approach to understanding why sexual dimorphism evolves is to measure the actual differences in the muscles or the skeletons of males and females of a given species, and then look at the behaviors that might be driving those differences."</p><p>Carrier has been interested in the idea that millennia of male fighting has shaped certain structures in male bodies. Previous research has reinforced his hunch:</p> <ul> <li><a href="https://jeb.biologists.org/content/216/2/236" target="_blank">When a hand is formed into a fist, its structure is self-protective</a>.</li> <li><a href="https://unews.utah.edu/flat-footed-fighters/" target="_blank">Heels planted firmly on the ground augment upper-body power</a>.</li> <li><a href="https://www.ncbi.nlm.nih.gov/pubmed/24909544" target="_blank">A study examined facial bone structure as being especially well-suited for taking a punch</a>.</li> </ul> <p>(That last one is our favorite. Do you know the German word "<a href="https://www.urbandictionary.com/define.php?term=Backpfeifengesicht" target="_blank">backpfeifengesicht</a>?" It's an adjective describing "a face that badly needs a punching.")</p><p>"One of the predictions that comes out of those," asserts Carrier, "is if we are specialized for punching, you might expect males to be particularly strong in the muscles that are associated with throwing a punch."</p>
Testing the theory<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY2NDIzMy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYwNzMxMTE2MH0.UXJICMy57UPYUWskhK98alctOrPidJL9yxMkz3HDQrM/img.jpg?width=980" id="98718" class="rm-shortcode" data-rm-shortcode-id="b12287684ac3e740b70392e6433a6b8f" data-rm-shortcode-name="rebelmouse-image" />
Image source: Ollyy/Shutterstock<p>The researchers measured the punching — and spear-throwing — force of 20 men and 19 women. The assumption was that early humans were punchers <em>and</em> spear-throwers.</p><p>Prior to testing, each participant had filled out an activity questionnaire so that "we weren't getting couch potatoes, we were getting people that were very fit and active," says Morris.</p><p>For punching, participants operated a hand crank that required movement similar to throwing a haymaker. The purpose of the hand crank was to spare participants any damage that might be inflicted on their fists by throwing actual punches. Subjects were also measured pulling a line forward over their heads to assess their strength at throwing a spear.</p><p>Even though all of the participants, male and female, were routinely fit, the average power of males was assessed as being 162% greater than females. There were no gender differences in throwing strength recorded. Other untested, though presumably likely, hand-to-hand combat activities come to mind including tackling, clubbing, running, kicking, scratching, and biting.</p><p>Carrier's takeaway: "This is a dramatic example of sexual dimorphism that's consistent with males becoming more specialized for fighting, and males fighting in a particular way, which is throwing punches."</p>
Boys will be boys<p>It, er, strikes us as odd that, even in science fiction — hi-tech weaponry notwithstanding — the hero <em>is</em> going to wind up duking it out with some bad guy, or alien, in the climactic battle. What is it about men punching, anyway? Are they more sexually attractive? The study suggests so:</p><p style="margin-left: 20px;"><em>The results of this study add to a set of recently identified characters indicating that sexual selection on male aggressive performance has played a role in the evolution of the human musculoskeletal system and the evolution of sexual dimorphism in hominins.</em></p><p>It's tough to contribute to the gene pool after being killed in battle.</p><p>Also, while the authors aren't <em>quite</em> saying that males' historical fighting role is mandated by biology and not by social expectations, neither are they quite <em>not</em> saying it.</p><p>As Carrier explain to <a href="https://attheu.utah.edu/facultystaff/carrier-punch/" target="_blank">theU</a>: "Human nature is also characterized by avoiding violence and finding ways to be cooperative and work together, to have empathy, to care for each other, right? There are two sides to who we are as a species. If our goal is to minimize all forms of violence in the future, then understanding our tendencies and what our nature really is, is going to help."</p>
The Labour Economics study suggests two potential reasons for the increase: corruption and increased capacity.
Cool hand rebuke<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQyMTIyNy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0NjY1NTYyOH0.0MCPKN3If94mYCNf3mMNrnTvJXjXN_bKLhgk9203EXk/img.jpg?width=917&coordinates=0%2C0%2C0%2C0&height=453" id="1627b" class="rm-shortcode" data-rm-shortcode-id="6d76421ba1ea0de4b09956b97e80c384" data-rm-shortcode-name="rebelmouse-image" />
A chart showing prison population rates (per 100,000 people) in 2018. The United States has the highest rate of incarceration in the world.
Who profits with for-profit prisons?<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="97ac37e6c7f6f22ec130ea2d56871701"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/dB78NV2WpWc?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span><p>The Labour Economics study suggests that privately-run prisons do convicts a few favors at the moment of sentencing. However, proponents of private prisons often point to other benefits when making their case. Specifically, they argue that private prisons reduce operating costs, stimulate innovation in the correctional system, and reduce recidivism—the rate at which released prisoners are rearrested and return to prison.</p><p>In regard to recidivism, the research is mixed. <a href="https://journals.sagepub.com/doi/abs/10.1177/0011128799045001002" target="_blank">One study</a> compared roughly 400 former prisoners from Florida, 200 released from private prisons and 200 from state-run facilities. It found the private-prison cohort maintained lower rates of recidivism. However, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1745-9133.2005.00006.x" target="_blank" rel="noopener noreferrer">another Florida study</a> found no significant rate differences. And two other studies—one from <a href="https://journals.sagepub.com/doi/abs/10.1177/0011128799045001002" target="_blank" rel="noopener noreferrer">Oklahoma</a> and another out of <a href="https://journals.sagepub.com/doi/abs/10.1177/0734016813478823" target="_blank" rel="noopener noreferrer">Minnesota</a>, both comparing much larger cohorts than the first Florida study— found that prisoners leaving private prisons had a greater risk of recidivism.</p><p>The research is also inconclusive regarding cost savings. <a href="https://www.hamiltonproject.org/assets/files/economics_of_private_prisons.pdf" target="_blank" rel="noopener noreferrer">A Hamilton Project analysis</a> noted that such comparisons are difficult because private prisons, like all private companies, are not required to release operational details. In comparing what studies were available, the authors estimate the costs to be comparable and that "in practice the primary mechanism for cost saving in private prisons is lower salaries for correctional officers"—about $7,000 less than their public peers. They add that competition-driven innovation is lacking as the three largest firms control nearly the entire market.</p><p>"We aren't saying private prisons are bad," Galinato said. "But states need to be careful with them. If your state has previous and regular issues with corruption, I wouldn't be surprised to see laws being more skewed to give longer sentences, for example. If the goal is to reduce the number of incarcerated individuals, increasing the number of private prisons may not be the way to go."</p>
What exactly does "questions are the new answers" mean?
- Traditionally, intelligence has been viewed as having all the answers. When it comes to being innovative and forward-thinking, it turns out that being able to ask the right questions is an equally valuable skill.
- The difference between the right and wrong questions is not simply in the level of difficulty. In this video, geobiologist Hope Jahren, journalist Warren Berger, experimental philosopher Jonathon Keats, and investor Tim Ferriss discuss the power of creativity and the merit in asking naive and even "dumb" questions.
- "Very often the dumb question that is sitting right there that no one seems to be asking is the smartest question you can ask," Ferriss says, adding that "not only is it the smartest, most incisive, but if you want to ask it and you're reasonably smart, I guarantee you there are other people who want to ask it but are just embarrassed to do so."