Spencer for President – Position Paper Number 8

8. Strengthen co-ops and other quasi-socialist enterprises via tax policy, purchasing policy, and infrastructure funding

Speaking of socialism (Position Paper # 7), co-operatives are a variety of free-market, semi-socialist business organization. Conventional socialism is normally characterized as national in scope and in control. Theoretically, national control equals rationalization of output to “market” requirements, plus balance of inputs (labor, raw materials, intermediate processes, and transportation), as defined by “experts”. As discussed previously, this approach is fully warranted on industries that are very large-scale and fully mature.

Free markets do work, however, where producers really are numerous. Competition does spur innovation and does regulate price. There is waste associated with the process, but it is a cost of the “pursuit of life, liberty, and the pursuit of happiness”, as best we know it. I have not evolved to the point where I can simply work to create value without any concern about reward or advantage. How about you?

So – my question is: How best to work with what we have, whenever what we have is not particularly sociopathic (like neo-imperialism and corporate oligopoly)? Co-ops tend to be sociogenic. They usually function at a very local and small level, and they tend to be focussed on very specific economic niches. There are producer co-ops, ranging from craft specialties to regional dairies. There are consumer co-ops for groceries and for medical drugs. There are housing co-ops that could be considered to be both consumer and producer types, when they engage in construction. A Public Utility District for electrical power distribution is a variety of government-sanctioned co-op, which is set up primarily for consumers, but which sometimes develop generation capabilities as well.

Co-operatives – producer or consumer, for-profit or non-profit – are a form of economic democracy that can be applied to many other endeavors that are not traditionally associated with the term. For examples, organic vegetable farmers, recyclers, construction workers, or equipment rental/maintenance companies could be organized in this manner. The incentive to join in this style of organization is the magnification of the power of the individuals involved. At the most basic level, we can buy at wholesale rates, rather than retail.

A more contemporary observation, which is germane in my opinion, is that the success of many “high-tech” businesses is built on the old adage that “two heads are better than one”. This is certainly true in my career and experience. It was true in most of the ‘60s political movement. And it’s becoming obvious once again in the world of blogs, as well. Any given blog may seem to be one long tangential argument at times, but the picture that emerges from each seems more comprehensive to me than the “snapshot” journalism with which we are familiar. Co-ops are – or should be – the same kind of long tangential debate between many stake-holders that actually accomplishes something – namely the economic purpose that defines each co-op.

Back to the power equation – my argument is that the powerlessness of most individuals is partly due to our training – or lack of training, if you prefer. The old expression in sports is, “Nobody remembers the team that came in second place.” So we all compete for first place, and to some extent those of us in second, third, and so on become the relatively undifferentiated mass. But it’s a mass of individuals. Marriage and family and club affiliation can be gratifying, but they are rarely power bases. That would be OK, except that the few who seek power, and who understand power, use their power to use and abuse the rest of us. To resist this abuse requires power. It may seem a stretch, but co-operatives are a training exercise in the creation and use of power on a small scale. (Maybe distributed power on small scales is the best way forward in general.)

In another approach I have a close friend who has started an aircraft ownership corporation, based on mutual control by “worker” (say, a pilot trainer or a mechanic) and consumer (e.g., airplane user, potential pilot trainee). It is a standard, for-profit corporation, but the bylaws are written to minimize the role of the money-investor per se. Shares are aligned with use of the corporation’s assets so as to assure voting control by the two groups that hold the biggest stake – the worker and the consumer. For example, a pilot trainer pays a certain rate for the use of the airplane to teach his trainees. This payment is divided up into several funds: airplane maintenance, capital asset (replacement or expansion), and overhead (field rental, insurance). The capital asset part of the fee also becomes an increase in shares. A pilot who reserves the airplane to fly on a vacation pays the same rate, but the pilot is a consumer in this case. The payment is divided the same way. The same thing would apply to a pilot trainee who uses the airplane to build hours. The upshot is that the persons who use the assets the most also have the largest share of votes in corporate decisions. In such cases the self-interest of the worker and consumer are essentially synergistic.

If you’re with me so far, then the question becomes, “What does the campaign for POTUS have to do with co-ops and corporation reform?”. As in most of these position papers, the answer is partly that a POTUS who supports the positions of this campaign cannot do much at all; because the Congress, the courts, the bureaucracy, the mainstream media, the corporations are all going to oppose almost every item herein espoused. However, the POTUS can promote the idea that co-operatives are worthy entitities for: 1) increasing the efficiency of certain enterprises, thereby lowering costs; 2) spreading economic power in favor of many small organizations; 3) indoctrinating many individuals into the actual practice of power-building and power-sharing; and 4) improving the welfare of the co-op’s members. (Put in that way, even the corporations will find it difficult to disagree. They will, of course, leave it to some foundation to call it “social engineering” or “secular humanist” or some new, pejorative, strawman term.)

Besides the theoretical benefits, though, the POTUS can propose the concrete features of co-operative-oriented legislation. First proposal can be that co-ops of certain definitions will have tax advantages, such as charity-deduction status for donations of volunteer labor at some “prevailing local wage” level (charity starts at home). Another possibility is to fund some specific program, such as bottle and aluminum can recycling centers, as an adjunct function to certain types of co-ops.

Producer co-ops can be given some advantage in the bidding for federal purchasing contracts, such as “the tie goes to the co-op”. Another possibility is interlocked contracts, where the product from one co-op is the raw material for another – a vertical integration that might not tend toward monopoly, if truly regulated. Related to these could be “at-cost” rental of federal properties and assets for use by the co-op. Such an approach is justified by the social and economic benefits of a co-operative society.

Whatever your definition of socialism, public participation in business is an essential aspect in my opinion. Besides, when successful, co-ops are just nice places to be.

Paul Spencer

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