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What is a co-op?
A co-op
is a business owned by its customers or its workers. Co-ops
started in the 1840's in England as a way for people to save
money. People pooled their money and bought food in quantity
which got them a volume discount. And the fact that they
didn't need to make a profit also helped to keep costs low.
Besides saving money, co-ops are attractive to people who like
the idea of a business being owned and managed by its members.
During the Depression
college students started housing co-ops to live in while going
to school. These were large houses of twenty or so rooms. The
students saved money by sharing the cooking and cleaning
rather than paying maids and cooks. They also enjoyed the
built-in community, and the idea of all working together.
Co-ops are characterized
by the Rochdale Principles, named after the first successful
co-op which was started in Rochdale, England in the 1840's.
This is a paraphrased version:
- Open Membership. A co-op does not discriminate.
Anyone can join.
- Democratic Control. The co-op is owned and operated
by its members. Each member gets one vote (unlike
publicly-traded companies in which those who buy the most
shares get the most votes).
- Limited Return on Capital. A co-op is not intended
to be a money-making enterprise for its members. Members may
thus be paid only a "limited" amount of interest on any
money they invest. (Most co-ops have a very modest
investment requirement. My local credit union requires only
a $5 lifetime investment.)
- Surplus Belongs to Members. Since the members are
the owners, they receive any profit the co-op makes. In many
co-ops the profits are reinvested into the business rather
than being returned to the members.
- Honest Business Practices. Cooperatives deal
openly, honestly, and honorably with their members and the
general public.
- Ultimate aim is to advance the Common Good. The
ultimate aim of all cooperatives should be to aid in the
participatory definition and the advancement of the common
good.
- Education. Co-ops are expected to educate their
members, officers, and employees and of the general public
in the principles and techniques of cooperation, both
economic and democratic.
- Cooperation among Cooperatives. Co-ops should
actively cooperate in every practical way with other
cooperatives.
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