Worker Cooperatives and Other "Cooperatives"

When is a "Coop" not really a cooperative?

The short answer is whenever the actual activity of the "cooperative" is not carried out by the members but by employees. The problem is, of course, not in cooperation per se but in the hiring, employing, renting, or leasing of people to carry out the supposedly "cooperative" activities of the "cooperative" (Ellerman, 2021).

Consider the case of a typical consumer cooperative. What is the cooperative activity carried out by the consumer-members? They do not consume cooperatively; that would be a commune or kibbutz. They shop and consume as individuals or as individual families. They do not carry out the activity of the consumer cooperative business-which is conducted by the hired managers and employees of the business. The whole notion of the consumer-members cooperating together in some joint activity is a beautiful fiction, but a fiction nevertheless. Of course, there may be some overlap between employees and consumers, but we are analysing functional roles, i.e., the roles people have qua consumers and qua workers. Moreover, the number of consumers will far exceed the number of employees.

Another important example of a cooperative where most of the activity is carried out by rented people is the agricultural marketing cooperative. The members are, in the best case, family farms and, in the worst case, agribusiness corporations. The individual farms or agribusinesses supply the agricultural products to the cooperative for processing and marketing. All the processing work of the cooperative is carried out by employees, from the managers on down.

The same holds for credit cooperatives where the members are the depositors, but the work of the credit union is carried out by its employees. Similarly, in a mutual insurance company, the members are the policyholders, and the work of the cooperative is carried out by its employees. Some non-worker cooperatives may have very few, if any, employees such as small housing co-ops (Ellerman, 1983)-although the "cooperative activity" (living in individual family units with shared spaces) is much the same as in non-cooperative condominiums.

In short, it seems the only sort of cooperative that, by definition, has the joint activity of the cooperative carried out by its members is the worker cooperative.

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