Co-operative Development in a Competitive World

Earlier this week I drove to the countryside and met a man by the name of Russ Christianson. He made me a great smoothie and we talked about many things for I had gone there to introduce myself to him and see if he is the right person to help me with the financing package I have to assemble to get investment so I can move forward with ergo and the Hollywood Survival Kit. He sent me the following paper he wrote so I would understand his thinking and how he has been helping the world deal with the capitalistic paradigm we are currently live in.

Russ is unassuming and friendly with a tremendous store of energy. He knew all about Homeopathy and even had a little kit that he made up himself to deal with minor ailments. He reminded me in a letter this morning "I'm with you on Homeopathy, and back 90 years to the influenza epidemic, the homeopathic hospitals in the US lost only 1% of patients, while allopathic physicians lost 30 to 40% of their patients.

Following is the paper Russ wrote in 2007 and although it is about co-operative development it gives us a good history of how we got to where we are today. The forces that have moved us away from our basic natures and captured us with new ideologies.


November 2007 1


Of all the teachings we receive, this one is the most important.
NOTHING BELONGS TO YOU,
of what there is, of what you take, you must share.
Curve Lake First Nation, Petroglyphs Provincial Park, Ontario, Canada

Written by Russ Christianson

Abstract
Just over two hundred years ago, an energy, technological and organizational revolution started in England with the
widespread use of coal as a fuel for the steam engine, and the invention of the “self-regulating market economy.”
The industrial revolution quickly spread around the world, along with the free market system, and subsistence
agrarian villages were transformed into factory towns and cities, with the emergence of slums, child labour, low
wages, and pollution.

Co-operatives were a response to the social misery caused by free markets and in 1844 the Rochdale pioneers
created the co-operative principles that all co-operatives use today. Before the widespread exploitation of cheap
fossil fuels (around 1850), the human population had reached about one billion – the natural carrying capacity of a
solar agrarian economy. By 2000, the population was 6 billion and we were using 125% of nature’s yearly output.
Clearly, using the world’s natural capital (water, soil, forests, fish, minerals and fossil fuels) faster than it can be
renewed is not sustainable. As democratic, innovative and community-based organizations, co-operatives are
playing an important role in transforming the short-term economic self-interest of the free market system into a
socio-economic system that can sustainably fulfill people’s collective needs.

Introduction
Starting co-operative businesses seems to go against the grain of our dominant culture. A culture that celebrates
win-lose competition and focuses on the “excitement” of conflict. In recent years, some large established co-
operatives have even de-mutualized (the Saskatchewan Wheat Pool for example) as part of their management’s
strategy to compete globally with large corporations.

Our society’s major institutions do not encourage co-operation. Nuclear family groupings and single family homes
cut our co-operative ties to our communities and extended “tribal” support systems. Schools and universities have
competitive evaluation systems built into their intellectual foundations.1 Sports teams (amateur or professional) are
quickly forgotten unless they win gold. Entrepreneurs and business executives are only successful if they become
multi-millionaires. The underlying assumption in all of these examples is that life is a competitive, win-lose game.


1
A recent study found that MBA students in Canada and the United States are more likely to cheat than students in other disciplines because they
believe it is how the business world operates – and because they believe their peers cheat. From Sharda Prashad , “MBA Students Likelier to
Cheat”, Toronto Star (www.thestar.com), Sep. 20, 2006.

page 2

Our children’s’ minds, emotions and behaviours are conditioned with these myths, messages and images from a very
young age. As they progress through life, they experience subtle and not-so-subtle external rewards and
punishments designed to encourage individualism and competition.2 It is difficult to peel back the generational
layers of competitive conditioning to get to the intrinsic motivation of co-operation. For many people, it is an
awakening, and they become lifelong, committed co-operative enthusiasts. In Paulo Freire’s words, they develop a
“critical consciousness”3:
Education either functions as an instrument which is used to facilitate integration of the younger
generation into the logic of the present system and bring about conformity or it becomes the practice of
freedom, the means by which men and women deal critically and creatively with reality and discover how
to participate in the transformation of their world.

Co-op developers have an inherent responsibility to fulfill as adult educators, animateurs, facilitators, and
catalysts for change. This article is intended to provide co-op developers and proponents with ideas that
expose the cultural and economic myth of competition. In my experience, this myth is the most significant
barrier to co-operative development, and it forms the basis of government policies and programs that
favour free trade over fair trade. Our money and consumption driven culture strongly encourages people to
act as self-interested individuals, and as people chase the material dream, their behaviour reinforces the
myths that people are naturally greedy and that competition is the natural order of things.

Our Natural Propensity to Co-operate
Co-operative development is a complex activity. It requires the apex of human skill and knowledge in
group dynamics, leadership, communication, and social organization. As a co-operative developer, it is
important to be aware of these dynamics, and to know when to observe and when to intervene in the
process of group development. And, this micro level of working with a group is highly influenced by the
macro level – the historical, cultural, social, economic and environmental influences present in our
dominant culture.

As human beings, we are born with the benefits of more than two million years of evolution.4 Each of us is
gifted with a brain that has a substantial inventory of intrinsic knowledge, and the ability to master complex
tasks, including learning a wide variety of languages. Language allows human beings to communicate in
great detail and efficiency because of shared meaning and understanding. As our ancestors evolved over
millions of years, our ability to communicate verbally, visually and in writing has become more
sophisticated. We have created complex technologies like the printing press, radio, the telephone,

2
Alfie Kohn, an American author has written two impeccably researched and accessibly written books on these subjects: No Contest: The Case
Against Competition (1986, 1992); and Punished by Rewards: The trouble with Gold Stars, Incentive Plans, A’s, Praise and Other Bribes (1993).
3
Paulo Freire (1921-1997) – Born in Brazil, Freire was one of the most influential educational philosophers of his generation. By the time his
seminal work Pedagogy of the Oppressed was published in English (1972), Freire was already being acclaimed internationally as "the authentic
voice of the Third World".
4
Ronald Wright, A Short History of Progress, Toronto: House of Anansi Press , 2004, page 16.


Page 3

television and the Internet to enhance our ability to communicate. The electronic communication tools we
all use everyday (and take for granted), only became widely dispersed in the last century – a blink of the
eye in human evolution.

The reality is that our human brain has evolved over two million years to cope with the social intricacies of
face-to-face communication. Reading and interpreting body language, facial expressions, and tone of voice
are skills that have been finely honed over hundreds of generations. The use of these social skills to
navigate the sea of human relationships is the main determining factor in our species’ success.

The most recent scientific research, in the multi-disciplinary field known as “evolutionary psychology”,
confirms that the way we behave today has its roots in the lives of our tribal ancestors. As science
writer William F. Allman states in his book, The Stone Age Present:
The primary adaptation of our species is not hunting, tool making, or language, but our ability to co-
operate. While the process of evolution is often characterized in terms of dog-eat-dog competition and the
‘survival of the fittest,’ this recent research reveals that our species’ success over the eons is due to the fact
that we are the most co-operative creatures on the Earth.5

Survival of the fittest is a phrase that is often used to justify the racism, oppression, and exploitation that is built into
“free-market” economics. It is a phrase that has been incorrectly assigned to the credit of Charles Darwin, the
founder of the theory of evolution. In fact, it was the “Social Darwinists” Thomas H. Huxley and Herbert Spencer,
not Darwin, who “coined this term and used it to justify the ascension of the wealthy elite and the exploitation of the
poor.”6

As a response to Huxley’s 1888 essay entitled, “The Struggle for Existence in Human Society” the great Russian
philosopher, Petre Kropotkin wrote his classic work, “Mutual Aid”. Kropotkin was a keen observer of nature and
human society, and spent many years in Siberia studying its geography, geology, and zoology. He also lived with
the indigenous people of the region, and was greatly influenced by their co-operative, tribal ways. After a lifetime
of study, discourse and observation, Kropotkin came to the conclusion that “in the ethical progress of man, mutual
support – not mutual struggle – has had the leading part.”7

A century later, David Suzuki, Canada’s world renowned geneticist and environmental activist came to the same
conclusion:8
Just as the key to a species’ survival in the natural world is its ability to adapt to local habitats, so the key
to human survival will probably be the local community. If we can create vibrant, increasingly
autonomous and self-reliant local groupings of people that emphasize sharing, co-operation and living

5
William F. Allman, The Stone Age Present, Simon and Schuster, New York, 1994, pages 14 & 21.
6
ibid., page 27.
7
Petr Kropotkin, Mutual Aid, Extending Horizons Books, Boston, MA, originally published in 1902.
8
David Suzuki with Amanda McConnel, The Sacred Balance, Greystone Books, Vancouver, 1997, p. 4.

Page 4

lightly on the Earth, we can avoid the fate warned of by Rachel Carson and the world scientists and restore
the sacred balance of life.

In my experience as a co-op developer, when I talk to people about our natural propensity to co-operate with each
other, most people knowingly nod their heads in agreement. It sets a positive context for their hard work in
developing their co-operatives, and provides an ongoing affirmation for their efforts. As a co-op developer, you will
have to use your judgment regarding the appropriate times or “teaching moments” to introduce these ideas to the co-
op members. A natural opportunity arises when we discuss the co-operative principles and values or during initial
discussions regarding the reasons for starting the co-op.

Co-op developers need to educate themselves and co-op proponents that our current “free market”
economic system is a human creation - it is not a natural system. And, it has only been around for two
hundred years. We need to reinforce our intrinsic knowledge that human beings naturally co-operate, help
each other, and share. Co-operation has been and will continue to be our most effective survival strategy.

Co-operative Solutions to Free Market Problems
Co-operation is the natural response of self-organizing groups who identify a common need and meet face-to-face to
find creative ways to fulfill this need in a mutually beneficial way. As this informal co-operation is formalized in a
legal organizational structure, the co-op members will require ongoing education, experiential learning, and the
concrete application of the international co-operative principles. The fifth co-operative principle, “co-operative
education” affirms the importance of investing in ongoing education to ensure the co-operative’s democratic culture
is maintained, particularly in the face of our current economic system’s undemocratic operation.

Our current economic system originated in England at the beginning of the industrial revolution. As Karl Polanyi
detailed in his classic work, The Great Transformation,9 market liberalism was the theoretical response of English
thinkers to the massive social disruptions caused by industrialization in the early 1800s. Writers like Adam Smith
attempted to provide a moral basis for the theory of market liberalism by defining “economic” rules that justified its
core belief that human society should be subordinated to “self-regulating” markets. As England expanded its empire
in the nineteenth century, these beliefs became the dominant organizing principle for the world economy.

Co-operative economics, championed by social reformers such as Robert Owen (a Welsh businessman), provided a
humane and concrete response to the social misery caused by free markets. In 1844, a group of weavers in
Rochdale, England, inspired by Owen, started a food co-op based on the co-operative principles they penned. As
word of their success spread, co-operatives based on the Rochdale principles were started throughout the world.


9
Karl Polanyi, The Great Transformation – The Political and Economic Origins of Our Time (Boston: Beacon Press, 1944, 1957, 2000).


Page 5

After the First World War, the United States and Canada experienced a sustained economic boom, “The Roaring
Twenties”, which came to an abrupt halt with the stock market crash of 1929. A deep economic depression ensued,
and in 1933, the newly elected Democratic President of the United States, Franklin D. Roosevelt, introduced his
“New Deal.” This brought together a broad coalition of social groups that supported an activist role for the federal
government, and FDR regulated capital markets, used fiscal policy to create jobs by building infrastructure, and
introduced relief (welfare), unemployment insurance and social security. In Canada, the Conservative Prime
Minister, Richard Bennett, attempted to implement similar reforms, but, like today, the provinces challenged the
federal government’s right to manage these programs. Canada’s economy was protected from further decline when
Britain more than doubled the value of its purchases from Canada.10

During the “Dirty Thirties”, there was a successful flurry of new self-help co-operatives organized in the United
States, including 300,000 members in California’s “reciprocal economy”.11 In Canada, several established co-
operatives hired organizers to help start new co-operatives of all kinds.12

After the Second World War, the citizens of western democracies ensured that the social programs and constraints
on the “free market” introduced during the Great Depression were solidified, and co-operatives began to thrive
again. For the next four decades, the world’s two remaining superpowers, the free market United States (and its
allies) and the communist Soviet Union, competed against each other (in the “Cold War”) for world influence,
building enormous stocks of conventional and nuclear weapons. By December 1991, the Soviet Union could no
longer keep pace, its highly centralized economy collapsed, and the United States emerged as the world’s sole super
power. Proponents of “free markets” viewed this as a victory and an affirmation of the neo-conservative economic
policies of Ronald Reagan, Margaret Thatcher, and Brian Mulroney.

Ever since, “free trade” and “global competition” have been the economic mantra of our governments, transnational
corporations, and international financial institutions. Globalization is a code word for a collection of “free market”
economic policies, including:
• Unfettered international movement and concentration of capital,
• Corporate and personal tax cuts (mostly benefiting the wealthy),13
• Deregulation, including diminished labour and environmental standards,
• Privatization of public assets, and
• Diminishing governments’ status and role in the economy.


10
www.wikipedia.ca
11
Jonathan Rowe, “Entrepreneurs of Cooperation”, YES! A Journal of Positive Futures. Bainbridge Island, Washington USA: Issue 38, Summer
2006.
12
Ian McPherson, Co-operative Movement, www.canadianencyclopedia.com
13
A Canadian study published in November 2007, shows that fifteen years of federal and provincial corporate and personal tax cuts have resulted
in an overall tax rate of 30.5% for the top 1% of income earners (a 4% decline since 1990), a 36% rate for middle income households, and a
30.7% tax rate for the bottom ten percent of families (a 5% increase since 1990). From Marc Lee, “Eroding Tax Fairness: Tax Incidence in
Canada, 1990 to 2005”, Canadian Centre for Policy Alternatives, Ottawa, November 8, 2007.


Page 6

This emphasis on global competition creates a very challenging political, economic and cultural ethos within which
to develop co-operatives. Even though co-operatives have an excellent track record in Canada, with one in three
people being members, and a survival rate that is twice as high as conventional businesses,14 it is an ongoing
struggle to gain supportive government policies.

Like the old proverb says, with every challenge there is an opportunity. As the globalized economy leaves more and
more people and communities behind, groups all over the world have identified opportunities to meet their needs by
co-operating together. There are thousands of examples of local co-operative initiatives, from credit unions in India,
fair trade coffee growers in Nicaragua, industrial worker co-ops in Argentina, renewable energy co-ops in Denmark,
and forestry co-ops in Canada. The following statistics paint an impressive picture of the worldwide impact of the
co-operative model: 15
• In 1994, the United Nations estimated that the livelihood of nearly 3 billion people, or half of the
world's population, was made secure through co-operative enterprises.
• Over 800 million people in over 100 countries worldwide are members of co-operatives.
• Co-operatives provide over 100 million jobs around the world, 20% more than multinational
enterprises.
• In the United States, more than 120 million people (40% of Americans) belong to 47,000 co-operatives.
• There are 132,000 co-operative enterprises in the European Union, with 100 million members and 2.3
million employees.
• Canada has over 9,500 co-operatives and credit unions, with combined assets of approximately $300
billion, employing over 155,000 people.
• Quebec, a province that has had co-operative friendly policies for decades, accounts for almost 40
percent of all co-operatives in Canada, and nearly 50 percent of co-op jobs.

The principles and values of co-operatives provide a positive alternative to the hierarchical business structure
favoured by the neo-liberal economy. The table below provides a comparison between the values of the competitive
“free market”, and the co-operative, “fair market”.

14
Survival Rates of Co-operatives in Quebec, Quebec Ministry of Industry and Commerce and the Co-operatives Secretariat – Government of
Canada, www.agr.ca/policy/coop/accueil.html, 2000.
15
International Co-operative Alliance, www.ica.coop, 2007; National Co-operative Business Alliance, www.ncba.coop, 2007; and Canadian Co-
operative Association, www.cca.coop, 2007.

Page 7

Value Comparison
Competitive (Free Market) Versus Co-operative (Fair Market) Economic Systems

Competitive Values
Self-interest (win-lose)
Maximize Individual Wealth
Short-term
Global Fear
Autocratic
Information Control
Bigger is Better
Centralized
Status Quo

Co-operative Values
Mutual Benefit (win-win)
Fulfill Collective Needs
Long-term
Local Empowerment
Democratic
Information Sharing
Small is Beautiful
Decentralized
Visionary Change


These values provide the underlying motivations for people in their daily activities. The contrast between the
competitive values and the co-operative values is startlingly clear. Given the last few years of very public corporate
scandals, and the greed exhibited by many corporate officers, it is not surprising that co-operatives enjoy a very
favourable public perception. Here are some results from recent public opinion surveys.

In the United States16
• 77% of people said co-ops have the best interests of consumers in mind, compared to only 47% for
private corporations.
• 76% agreed that co-ops run their businesses in a trustworthy manner and for the benefit of their
communities, compared to 53% for publicly traded corporations.
In Quebec17
• 75% of the general public view co-ops as a good solution to economic challenges.
• 79% believe they offer better prices than corporations.
• 83% believe that they encourage a hands-on, take-charge approach to the local economy.


16
National Co-operative Business Association, survey performed by The Opinion Research Corporation of Princeton, N.J. 2003; from
http://www.co-opmonth.coop/primer/perceptions.html
17
Bruno-Marie Béchard, “A Co-operative Approach for Uniting Our Society”, 2006 Co-operative Forum, Université de Sherbrooke, March 14,
2006, from http://www.usherbrooke.ca/accueil/direction/allocutions/2006/forum_cooperation-060314_eng.html


Page 8

If we look at the overall outcomes of globalization, it’s easy to understand why co-operatives are so positively
embraced by nearly a billion people worldwide.

Concentration of Wealth
It comes as no surprise that the wealthiest families (who own the majority of shares in transnational
corporations) have been globalization’s main beneficiaries. Free trade has resulted in substantial gains for the
owners of capital at the expense of wage-labourers. Corporate profits have risen everywhere, while in four out
of five developing countries the share of wages in manufacturing value added is much lower than it was thirty
years ago.18

Tax Cuts
Not only are corporations and their wealthy owners making higher profits, they are also paying less income tax.
For example, since Canada’s federal budget in 2000, the corporate tax rate has declined from 28% to 19.5%,19
making it significantly lower than the United States (35%). And yet, Canada’s business elite continues to lobby
strenuously for further tax cuts – using the usual “globally competitive” argument. In the words of Don
Drummond, Chief Economist of the Toronto Dominion Bank, “Canadian corporations are riding a wave of
record profits and sitting on an unprecedented pile of cash”. So much cash that “it raises questions about
whether they need or would make productive use of further tax relief.”20

Diminished Labour Standards
In the name of trade liberalization and labour market flexibility, corporations, the IMF, and the World Bank
have required developed and developing countries to water down their labour standards. Labour market
deregulation makes it is easier to hire and fire employees, lower wages, and diminish collective bargaining
standards. Today, a full-time permanent job is an oxymoron. Instead, more and more people live from short-
term contract to short-term contract, with no benefits or job security.

Privatization
Privatization of public assets has resulted in fire sale prices and a direct transfer of wealth from the overall
population to private owners (transnational corporations and local elites). In some cases, privatization has been
marked by extreme corruption, creating a small group of billionaires who have gotten away with stealing the
public’s wealth. For example, the Russian gas giant Gazprom was privatized for $250 million when Russia
embraced the IMF’s free market policies. Three years later, Gazprom's market value was $40 billion. In the
United States, it would have been valued between $300 billion to $900 billion USD. Other publicly owned oil,

18
Robert Wiessman, “Grotesque Inequality - Corporate Globalization and the Global Gap Between Rich and Poor”, Multinational Monitor
Magazine, July / August 2003; extracted from www.thirdworldtraveler.com/Third_World/Grotesque_Inequality.html
19
The Canadian Government’s “Economic and Fiscal Update” presented to Parliament on October 30 (2007), made a 12% cut to corporate taxes
(from 22.12 to 19.5 percent in 2008, and to 15 percent by 2012), mostly benefiting the top ten percent of wealthy Canadians. In the 1960s, the
heyday of productivity and investment growth, the federal tax rate was 40%. From http://www.progressive-economics.ca/2007/10/30/notes-on-
the-economic-and-fiscal-update/, 2007.
20
Don Drummond, TD Bank Report, April 2005.


Page 9

mining, and electricity companies were privatized at prices less than a twentieth of their subsequent market
value.21

The economic reality I have briefly sketched out above is not generally reported in the mainstream media –
including television, radio and print. The Internet and public broadcasters, like the CBC, the BBC or NPR provide a
more balanced approach, but they too are often hamstrung in the belief system of global competition and economic
self-interest.

As a co-op developer, I find it essential to have a thorough understanding of the global economic system and its
shortcomings. As wealth is concentrated, more people around the world do not have their basic physiological needs
met. Co-operatives provide them with a collective do-it-yourself approach to meeting their needs for decent
housing, financial services, employment and a variety of social services, like health care, child care and home care.
Understanding and communicating this critique of the free market system can provide a powerful motivation for
people to meet their collective needs by joining the co-operative movement.

One area of co-op development that I’ve been involved with for the past twenty years is organic food and
agriculture. The industrial food system is much like other industries – there are a few very large corporations that
control most of the market. Over the past decade, as organic food has become a mainstream consumer item, most
large food processors have added organic food product lines. One of their major strategies is buying out pioneering
firms who have developed organic brands. For example, in the last seven years, Heinz’s 57 varieties ($17 billion
USD capitalization) has found room for the buyout or merger of 21 leading organic entrepreneurial companies,
including: Hain-Celestial, Westbrae, Imagine/Rice Dream, Health Valley, Arrowhead Mills, Spectrum Organics,
Garden of Eatin’, Earth’s Best, and Walnut Acres. Cargill ($1.3 billion profit USD in 2003) also has an ownership
share in these same companies through Hain-Celestial.

And the world’s largest food retailers, including the behemoth – Wal-Mart ($288 billion USD in sales), have all
jumped on the organic bandwagon. “Wal-Mart says it wants to democratize organic food”.22 This is an absurd
statement, given that the family that owns Wal-Mart, the Walton family, make up five of the top ten wealthiest
Americans, with a combined fortune of $100 billion USD. Let’s take a couple of minutes to look at the incomes of
other middlemen and suppliers in the industrial food market:23
• Big Oil – four companies own 75% of Canada’s refining capacity (Exxon/Imperial Oil, Petro-Canada,
Shell, and Irving) – they are all enjoying record profits with Return on Equity or ROE between 19% to
32%.
• Big Fertilizer (natural gas) – four companies control 94% of the market, the biggest, Dow Chemical – 23%
ROE.

21
Robert Wiessman, “Grotesque Inequality - Corporate Globalization and the Global Gap Between Rich and Poor”, Multinational Monitor
Magazine, July / August 2003; extracted from www.thirdworldtraveler.com/Third_World/Grotesque_Inequality.html
22
Melanie Warner, “Wal-Mart Eyes Organic Foods”, The New York Times, May 12, 2006; www.nytimes.com
23
National Farmers’ Union, “The Farm Crisis & Corporate Profits”, November 30, 2005, Canada.


Page 10

• Big Seed – Dupont (Pioneer Hi-Bred) – 16% ROE.
• Big Drugs – Merck – 34% ROE.
• Big Banks – 15 to 20% ROE.
And let me add one more ROE, Canada’s small and medium sized family farms, negative 5%.

Paraphrasing Charles Dickens, it is the best of times (for corporations) and the worst of times (for family farms). In
fact, it’s even worse than the Great Depression for farmers, and without government support programs many more
would be bankrupt. As bleak as this seems, the silver lining is the growing importance of the co-operative business
structure in organic food. The two largest organic dairy producers in the United States and Canada are co-
operatives, owned by farmers. The leading fair trade marketing companies in the United States and Canada are co-
operatives, including Equal Exchange, Just US!, La Siembra and Planet Bean – all worker co-operatives. And, as
the public, economic and environmental pressure mounts in favour of local food production and distribution, co-
operatives have the opportunity to play an even more significant role, as a decentralized, community-based business
model overtakes the highly centralized “global” business model that is completely dependent on cheap energy.

When writing a feasibility study or business plan for a co-operative, it is important to take these broader economic,
social, political, legal and environmental aspects into account. A thorough analysis of this “situational
environment”24 will form the basis of the business strategy for the co-operative and the long-term sustainability of
its business model. The underlying advantage of the co-operative model is the creative collaboration that can be
harnessed with a thoughtfully designed co-op development process.

A well facilitated co-op visioning session25 with the founding members will often draw out a deep understanding of
these issues and the ramifications in their day-to-day lives. The ensuing discussion will provide the group members
and the co-op developer with a good overview of the various perspectives the members bring to the co-op and
whether they have a shared vision for the co-operative. Having facilitated hundreds of these sessions with start-up
groups, I always find the discussion worthwhile and often very inspiring. The visioning process is a powerful tool
for organizing co-operatives, testing members’ propensity to co-operate, and potentially providing an ongoing
source of inspiration that will keep the co-op going when times get tough.

Given the overwhelming influence of “global competition” in the dominant economic framework,26 it is necessary
to provide another perspective to co-op proponents. Nascent co-ops need to understand that they are part of
something bigger – the world’s largest and fastest growing socio-economic movement. Every new co-op that
survives the crucial first five years of operation becomes an important addition to the co-op movement. Newly
developed co-ops should be strongly encouraged to join their sectoral or regional co-operative associations – it will
open up new and unexpected opportunities for co-operation amongst co-operatives, and will usually enhance their

24
Please refer to “Co-op Business Plan” in the appendix.
25
Please refer to “The Co-op Vision – Facilitator” in the appendix.
26
A 2007 study of the contents of 22 business textbooks used in Ontario high schools found that only 0.3 percent of the materials (35 out of
11,375 pages) referred to co-operatives. Jack Quarter et al, from “Textbooks Economical with Words About Co-ops”, Toronto Star, September 5,
2007, page AA8.


Page 11

business success. New innovative co-ops also bring entrepreneurial energy and ideas to the larger established
ops, while the established co-ops can offer expertise, business networks and capita

Sustainability and Co-operation
Whatever else may be said about the century now approaching an end, it must be recorded as the period in
which mankind has done more to poison and destroy the environment than in all previous eras of history.
The industrial revolution of modern times, beginning about 200 years ago, started society on the road to
destruction and spoilage of the whole human habitat, using the adage "muck makes money". The
degradation of the environment has gone hand in hand with wasteful use of resources and disturbance of
the delicate balances of nature.

International Co-operative Alliance: Cooperatives in the Year 2000, London, 1980

While “economic growth” has been the raison d’etre of government economic policy for the past 150 years, we are
in transition towards a new understanding. “Sustainability” is the new term that is gathering momentum. Over the
past twenty years, since the release of the United Nations’ Bruntland Commission Report27 (the World Commission
on Environment and Development) the term sustainable development has been used to describe an “ideal” kind of
economic development that balances free market economic growth while halting ecological destruction. However,
to many (including myself), the term is an oxymoron, because the scale of global economic development that has
and continues to occur is simply not sustainable. Therefore, I will use the term sustainability. The question is, what
will a sustainable economy look like and what role might co-operatives play in creating this future?
Before I answer this question, it is important to look at our current state of ecological and economic affairs, and how
we got here. Twenty-seven years ago, the International Co-operative Alliance identified the root cause of the severe
environmental, economic and social challenges that our species faces today: the industrial revolution and its
supporters’ retrospective, theoretical justification – “self-regulating markets”. In October 2006, Sir Nicholas Stern,
Head of the British Government Economic Service and former World Bank Chief Economist issued his report, “The
Economics of Climate Change” with this admission: “Climate change is the greatest market failure the world has
seen.”28

These are significant and stark words to come from the lips of a neo-classical economist who was born in 1946 and
has spent his adult life studying and supporting the “self-regulating” market system. And as quickly as he provides
this courageous admission, he also describes climate change as an “economic externality”. This is economic speak,
words that economists use to theoretically justify the public cost of pollution that is a direct result of private market
transactions. In other words, the market economy has not factored in or bothered to measure the short-term or long-
term costs of the environmental pollution caused by our energy intensive, consumption-driven, wealth obsessed
economic system. Stern thus provides his fellow free market economists the escape hatch they desire – “market

27
United Nations. 1987. "Report of the World Commission on Environment and Development." General Assembly Resolution 42/187, 11
December 1987. Retrieved: 2007-04-10
28
Nicholas Stern, Stern Review: The Economics of Climate Change, October 2006, Executive Summary, page viii.


Page 12

forces” can find the solutions to the climate change problem, by, for example, developing a global market for carbon
emission credits. So, while Stern slaps the wrists of his free market colleagues (most of the political, academic, and
corporate leaders in the Northern Hemisphere), he also winks at them with his fingers crossed behind his back.

The Stern Review is just one of hundreds of studies, publications, movies and television documentaries that have
come to the same conclusions – the human species is causing the unmitigated ecological destruction of our earth.
Perhaps the most significant of these studies is the United Nations’ Millennium Ecosystem Assessment (Millennium
Assessment or MA for short).29 Published in April 2005, the MA is the most extensive scientific study ever
completed regarding the health of our planet’s ecosystem and how it affects human well-being. Four years in the
making, it brought together nearly 1,400 experts from 95 countries. The objective of the MA was to assess the
consequences of ecosystem change for human well-being, and establish the basis for actions needed to enhance
conservation and the sustainable use of ecosystems.

The results of the study are unmercifully sobering. Sixty percent of the planet's ecosystems are currently being
degraded by human activities. These activities include polluting the atmosphere with excess greenhouse gases,
draining freshwater aquifers, over-harvesting our forests and fisheries, polluting our oceans, and introducing alien
species to new regions. As a result, twenty percent of the world's coral reefs have been lost, forty percent of the
planet's rivers have been fragmented, and our climate has been seriously disrupted.

The Millennium Ecosystem study has four main conclusions:
1. Over the past fifty years, humans have changed ecosystems more rapidly and extensively than in any
comparable period of time in human history, largely to meet our rapidly growing population’s demand for
food, fresh water, timber, fibre and fuel. This has resulted in a substantial and largely irreversible loss in
the diversity of life on Earth.
2. The changes that have been made to ecosystems have contributed to material net gains in economic
development, but these gains have been achieved at growing costs in the form of the degradation of many
ecosystems, increased risks of abrupt collapse, and growing disparity between rich and poor. Unless they
are addressed, these problems will substantially diminish the benefits that future generations obtain from
ecosystems.
3. The degradation of ecosystems could grow significantly worse during the first half of this century.
4. The challenge of reversing the degradation of ecosystems while at the same time meeting increasing
demands for food, water, timber, fibre and fuel can be partially met under some scenarios that the MA has
considered, but these involve significant changes in policies, institutions and practices that are not
currently underway.

The incredible growth of the world’s industrial economies and human population (world population has doubled
since 1960) has been fuelled by cheap fossil fuels (gas, oil, coal, and natural gas). The early 1900s witnessed the

29
Millennium Ecosystem Assessment, 2005. Ecosystems and Human Well-being: Synthesis. Island Press, Washington, D.C.


Page 13

birth of the most dramatic century of material and technological progress in the history of human kind. And, it was
also a century of unprecedented human conflict and suffering, and ecosystem and species destruction.

Now, at the dawn of the 21st Century (two hundred years after the beginning of the Industrial Revolution and one
hundred years after the beginning of the Petroleum Age), we are facing a looming energy and environmental crisis.

The natural carrying capacity of the earth’s ecosystem before the exploitation of cheap oil and gas was
approximately one billion people.30 As we come to the end of the Petroleum Age, the following facts provide
unprecedented challenges for humanity:

Human Population
• World population is now over 6.5 billion.31 Half of humanity lives in abject poverty with income
of less than two dollars a day,32 and one in six goes hungry every day.33
• Since the early 1900s, the world’s population has multiplied by four and its economy – a rough
measure of the human load on nature – by more than forty.34
• The rapidly growing gap between the world’s rich and poor is the root cause of much of the
violence and war in the world. In 1960, the gap was 30:1, it is now 154:135, and 86% of the
world’s wealth is owned by the richest 20 percent.36
• In the 1960s, humans used 70% of nature’s yearly output; in the 1980s it was 100%, by 1999 it
was 125%.37


30
James Howard Kunstler, The Long Emergency – Surviving the Converging Catastrophes of the Twenty-first Century, New York: Atlantic
Monthly Press, 2005, page 6; and Paul Johnson, The Birth of the modern, New York: Harper, 1991.
31
World Bank, World Development Report 2000/2001: Attacking Poverty, September 2000.
32
www.globalissues.org/TradeRelated/Facts.asp; and World Bank, World Development Report 2000/2001: Attacking Poverty,
September 2000.
33
State of Food Insecurity in the World 2005. Food and Agriculture Organization of the United Nations.
34
Ronald Wright, A Short History of Progress, Toronto: House of Anansi Press, 2004, page 30.
35
www.thirdworldtraveler.com/Third_World/Grotesque_Inequality.html.
36
United Nations, from an interview with Linda McQuaid, CBC Radio, September 23, 2000.
37
BBC World News, April 8, 2004.


Page 14

Energy Depletion
• The original endowment of oil was about 2 trillion barrels. Since 1850, 50% has been used, and
the remaining 50% is the hardest to get and the lowest quality.38
• At the dawn of the Petroleum Age (1916) each barrel of oil drilled provided an energy return of
28:1, it is now 2:1.39
• Worldwide discovery of oil peaked in 1964 and has followed a firm downward trend since.40
• The rate of oil use has increased 20-fold in the last four decades.41
• The world has likely passed the point of peak oil production already, or will within this decade.42
After peak, world demand will exceed world capacity to produce oil, and costs will escalate and
ripple through the economy causing rapid inflation.
• Natural gas production is expected to peak within the next decade – by 2014 in Canada.43
• Our food system consumes 10 times more energy than it produces in food energy.44
• In Canada and the United States, we use 1,500 litres of oil to feed each person each year.45

Climate Change
• Our planet is warming, and the most significant greenhouse gas is carbon dioxide (CO2). Carbon
dioxide is created every time we burn something or when things decompose, and it is the major
cause of global warming (approximately 80%).46
• If we continue burning fossil fuels at our current rate, the 21st Century will see a doubling of CO2
in the atmosphere, from three parts per ten thousand that existed one hundred years ago to six parts
per ten thousand. This has the potential to heat our planet by three to six degrees Celsius,47
resulting in drastic weather changes and the world’s oceans flooding all coastal cities (most of
which are less than 1 meter above sea level).48
• More than half of humanity lives on a coastline, or lives within 200 kilometres of one.49

38
James Howard Kunstler, The Long Emergency – Surviving the Converging Catastrophes of the Twenty-first Century, New York: Atlantic
Monthly Press, 2005, page 66.
39
ibid, page 67.
40
ibid, page 66.
41
Dale Allen Pfeiffer, “Without Oil, Families Will Go Hungry, Not Just Their SUVs”, The CCPA Monitor, April 2006, page 22.
42
James Howard Kunstler, The Long Emergency – Surviving the Converging Catastrophes of the Twenty-first Century, New York: Atlantic
Monthly Press, 2005, page 67; and David Goldstein, Out of Gas, W.W. Norton & Company, New York: 2004, page 28.
43
Dave Hughes, a leading energy analyst at Natural Resources Canada, predicts that with all available resources on line, there will be a shortfall
of natural gas by 2014.
44
Dale Allen Pfeiffer, “Without Oil, Families Will Go Hungry, Not Just Their SUVs”, The CCPA Monitor, April 2006, page 22.
45
ibid, page 21.
46
Tim Flannery, The Weather Makers – How We Are Changing the Climate and What it Means for Life on Earth, Toronto: Harper Collins, 2005,
page 28.
47
ibid, page 26.
48
ibid, page 150.
49
Don Hinrichsen, “Coasts in Crisis”, September 1995, from www.aaas.org/international/ehn/fisheries/hinrichs.htm; and UN Atlas of the Oceans,
“Human Settlements on the Coast”, from http://www.oceansatlas.org


Page 15

The evidence regarding the impact of the global free market economy on the natural world is irrefutable. Our
human population has far exceeded the natural carrying capacity of the earth’s ecosystems, and we have accelerated
climate change by indiscriminately burning fossil fuels. Our current global economy is not sustainable. “Survival of
the fittest” economics is a failure. Our world is on the precipice of ecological collapse. If we continue with
competitive free market policies, billions of people will perish this century.

This is not “fear-mongering”; it is a conclusion that has been reluctantly reached by some of the world’s best
scientific, ecological, economic, and political minds. When we are able to suspend our disbelief and we begin to
absorb this knowledge, we cannot help but feel our stress levels rise as our involuntary fight or flight survival
response reacts. This knowledge will provide the motivating factor, the moral imperative that will be required to
initiate the changes we each need to make to move into the future with our children and grandchildren.

A few climate change deniers may remain (although the oil companies recently cut off their funding), but most
people realize that we have to do something different. Business as usual is no longer an option. In order to survive
and slow down the ecological destruction, we will have to radically alter our patterns of consumption, our belief
systems, and how we define success.

To answer the sustainability question, for humanity to move forward into the future with hope for coming
generations, like our tribal ancestors, we will have to co-operate. This cannot be forced co-operation, like the misled
practices of totalitarian or fascist regimes. It has to be voluntary co-operation, based on the natural yearning we all
have within us to work together to create something more positive and nurturing than we are able to as individual
human beings. Indeed, even Sir Nicholas Stern acknowledges that we have to co-operate globally to solve the
climate change challenge.

Conclusion
When I was twenty-five years old, I made a choice to work on the margins of the mainstream competitive economy.
I took the Manager’s job with a small co-operative food wholesaler, the Ontario Federation of Food Co-ops and
Clubs Inc. Over the next three years, I worked together with other dedicated employees, members and board
members to turn the organization around. We did this by shifting the focus from developing conventional
supermarket co-ops to supplying organic food to natural food co-ops, buying clubs, day care centres, and small
independent retailers. Our goal was to break $1 million in sales. In 2006, the co-op was thirty years old and had
over $23 million in sales. This not-for-profit co-operative has become Ontario’s premier independent organic and
natural food distributor, while dozens of private, for profit natural and organic food distributors have come and
gone.

After leaving the food co-op wholesaler in 1988, I worked for a year with a worker co-op in northern Ontario,
Kagiwiosa Manomin, that produced Canada’s first certified organic fair trade product – wild rice. This project was
capitalized by generations of indigenous knowledge regarding traditional wild rice harvesting and processing, years


November 2007 16

of sweat equity by community members, ongoing long-term support from Canada’s Mennonite Central Committee,
and a few hundred thousand dollars from the Canadian government. The co-op built a small processing plant on the
Wabigoon First Nation, performed and implemented very innovative market research, and broke into co-operative
and fair trade markets throughout Canada, the United States and Europe. Kagiwiosa Manomin still operates today,
and spurred the development of two other co-operative businesses – a wild-crafted jam processor and a sustainable
tree harvesting and planting operation.

Returning to southern Ontario in 1989, I became one of the founding members of a worker co-operative food
company. Origins Co-op developed a national brand for certified organic foods and distributed the products through
the five co-operative natural food wholesalers across Canada. We also attempted, unsuccessfully, to negotiate
distribution agreements with Canada’s large, established co-operative food wholesalers, Federated Co-operatives
and Co-op Atlantic. The managers of these co-op businesses did not see the potential for organic food sales, and
they were not willing to champion the products by educating their members. Origins Co-op also worked for five
years (from 1990 to 1995) to successfully lobby the Ontario Milk Marketing Board to allow a separate pool for
organic milk. Milk which is now sold under the Organic Meadow Co-operative label.

In the early 1990s, a group of worker co-op proponents inspired by the Mondragon co-ops founded the Ontario
Worker Co-op Federation (OWCF) and the Canadian Worker Co-op Federation (CWCF). In Ontario, we lobbied
the provincial NDP government to provide start-up and operating funds for four years to support seven worker co-op
developers in five regional centres. The OWCF worked with hundreds of co-op groups to help them determine their
business’ feasibility, and a good number of the co-ops that proceeded through the business development process are
still operating today.

During the mid to late 1990s, I worked with a number of Green Community organizations in southern Ontario to
develop their business plans and create effective revenue generating and marketing programs focussed on residential
energy and water conservation. In the late 1990s and into the new millennium this work was complimented by the
development of a number of renewable energy co-operatives, inspired by the wind farm co-ops in Denmark, and
supported by the Ontario Sustainable Energy Association and the Ontario Co-operative Association.

After many years of lobbying the Liberal federal government, the Canadian Co-operative Association (CCA) and
the Conseil Canadien de la Coopération (CCC) received a commitment of $15 million over five years (2003 to
2008) to support domestic co-operative development. This followed the Canadian Worker Co-op Federation’s
(CWCF) successful pilot project, Tenacity Works that was also funded by the federal government. In Ontario, the
Ontario Co-operative Association (On Co-op), the Conseil de la Coopération de l'Ontario (CCO), the CWCF and the
OWCF worked together to design a province-wide co-operative development strategy. Now in its fifth year, the
Ontario project has been very successful in:
• developing new, innovative co-ops,
• expanding established co-ops, and


Page 17

• providing coaching services to newly developed co-ops in an effort to increase their survival rate.

This strategically integrated approach (in both official languages) is a model for co-operative development and for
leveraging cash and in-kind resources from established co-operatives and other co-op funders – particularly given
the small amount of money provided by the federal government (less than $200,000 per year for the entire province
of Ontario). Unfortunately, the demand for the co-op development services has far exceeded the supply.

I provide these few examples of co-operative development from my experience to show that even within a very
competitive dominant culture, small groups of people who are dedicated to creating a more humane and ecologically
sound economic system can make a difference. Imagine what could be done with co-operatives in a societal
environment that is supportive, through:
• educational institutions
• government programs and regulations
• capital funds levered from established co-operatives and senior levels of government
• technical assistance (feasibility studies, business planning, incorporation, governance and board training,
management training and coaching)

In fact, your imagination doesn’t have to run wild, all you have to do is study the co-operative systems in
Mondragon Spain, Emilia Romagna Italy, and Quebec to quickly understand what is possible.

The reality in our relationships, families, work places, and communities is that those who get along get ahead. The
social glue of co-operation sustains personal and business relationships. The daily give and take of life demands that
we share with each other, that we tolerate our differences, and find mutually beneficial solutions to our challenges
and conflicts.

This century can be the turning point, or the next “Great Transformation”, from a destructive, competitive economy,
to a nurturing, co-operative economy. Co-operatives have the potential to experience exponentional growth
throughout the world, as people come to the realization that sustainability requires co-operation, and that co-
operatives are a proven organizational model that can successfully fulfill our economic, social and environmental
needs.

Everything on this planet functions according to the law of nature.
Particles come together, and on the basis of their co-operation everything
around us, our whole environment, can develop and be sustained. Our own body
too has the same structure. Different cells come together and work together
in co-operation, and as a result, human life is sustained. In a human
community the same law and principle of co-operation applies.
The Dalai Lama

Below is my first answer to him after reading the paper.

Sometime around 1990 I went to Jamaica with my aging and ill father, my wife at that time and a friend. We stayed a week and every day it rained for an hour.
When I got home I dedicated time to create prototypes of bamboo umbrellas and even a handle that would attach to a deck chair. My goal was to find a country in the
bowl of Islands that would help me develop a bamboo cooperative from growing the bamboo to making products like umbrellas that would sustain the operation. When the Chargé d'Affaires for Jamaica laughed at my idea I lost heart which was wrong but I could not see past the derision.

I appreciate your paper and the work you are doing and seeing it on paper only confirms what I somehow knew about you after we had spoken a few minutes.

I read your report and your direction and I wondered as I read what would happen if we developed a Health cooperative of Alternate Medicines with an empty hospital as the centering place. I wondered what your report would have read like if you had dedicated yourself to the destruction of the human due to the Pharmaceutical cartel that has dominated our landscape for the last 100 years or more. The destruction of Homeopathy in America is a simple knowable case in point. I wonder what the real cost to the human possibility of survival has been damaged by the money hungry liars that spread their medicines onto a hoodwinked populace. I need not talk to you about the cost to the human and profits to the corporations involved for you are aware of them and are protecting yourself and your family as best you can. The last thing in your report speaks directly to my thoughts in this regard.

Everything on this planet functions according to the law of nature. Particles come together, and on the basis of their co-operation everything around us, our whole environment, can develop and be sustained. Our own body too has the same structure. *Different cells come together and work together in co-operation, and as a result, human life is sustained.* In a human community the same law and principle of co-operation applies.
The Dalai Lama

The current paradigm does not respect this as it destroys the human system and if you did the numbers you would come to the knowledge that the American nation is the sickest in the world. I will not go on but I would love to do an imaging group that tried to wrestle itself into a forward going coop to do its part in saving mankind. I am doing my best to educate the ordinary person and will continue my efforts and would love to mount a concerted effort to enlarge my effort to bring into reality a dream I have had ever since the first hospitals closed in Toronto not so many years ago. We are captured at the present by more than the banks and the understandings so clearly stated in your paper.