Tuesday, September 16, 2008

Italy's co-ops form a different sort of economy

During this week when Wall Street has registered the biggest bankruptcy in history and the largest single-day drop the Dow since 2001, I've been visiting cooperatives in the northern Italian region of Emilia Romagna. Residents were surprised we'd be interested, since the co-ops are so much a part of everyday life here. But for someone from the U.S., where people are losing their homes to foreclosures brought about by speculative finance, where millions can't get access to health care, where jobs can leave town at the drop of a hat (or when a union is being formed), the cooperative model is worth a long look.

It's not perfect. The system has its critics who say that some of the larger cooperatives are hard to distinguish from transnational corporations. But taken as a whole, co-ops make a big difference in the life of Emilia Romagna. The region, devastated in World War II, is now one of the most prosperous in Italy. Co-ops provide jobs that don't go off-shore, and they support the quality and economy of local food, the arts, and social services.

In Bologna, if you're looking to buy a house or some groceries, you'll likely go to a co-op. If you need day care for your children or a rest home for aging parents, social cooperatives offer both.

Co-ops serve the middle class who are looking for life insurance or a reliable, local bank. They serve the poor who are looking for work. They serve tourists in search of some of the best cheese in the world, a bottle of great red wine, and a night out at the theater.

One co-op we visited sells houses to members at 15 percent below market price (since they have no need to generate profits for shareholders). They incorporate the most energy-efficient design and selection of materials in home construction, including widespread use of solar panels.

Relatively small co-ops form networks, as needed, to do large manufacturing projects that can compete in the globalized marketplace while retaining a human scale and a democratic, bottom-up structure.

Networks of farmers get market access for small-scale production, and assure that the quality of their products is recognized in the price they receive.

More recently "social cooperatives" are taking the place of government bureaucracies and for-profit businesses, providing services in ways that are compassionate, flexible, and deeply rooted in concern for the well-being of those typically excluded by society. The members of these co-ops are made up of social workers and staff, or those receiving social services, or both. As a result, groups of people who are among the most powerless—a homeless person or a housekeeper in a nursing home—become powerful players in setting the terms of their work lives and resolving the pressing issues they face.

The scale of the cooperative economy is extraordinary. In the town of Imola, near Bologna, 60 percent of the economy is in the cooperative sector. More commonly in this region, the co-op sector accounts for around 30 percent of the economy.

A mixed economy is what makes the most sense, according to Stefano Zamagni, economics professor at Bologna University and founder of an advanced program in cooperative management. If you appreciate democracy, freedom, solidarity (caring for others), and human development, of course you would want a strong cooperative sector, he says. But there is no reason you can't have cooperatives and capitalist companies operating side-by-side in a market economy.

As my week in this region draws to a close, I've been encouraged by the fact that, in the U.S., have a growing cooperative movement.

The current issue of YES! has an article about low-income women forming cooperatives that provide them with a dignified and sustainable livelihood - and some control over their collective futures. Land trusts, like the one in Burlington, Vermont, also build on the cooperative spirit, although their legal structure is different. Earlier, we featured Omar Freilla, founder of the Green Worker Cooperative in the South Bronx, who is bringing the co-op model to a neglected area of New York, where low-income people are creating their own sustainable economy.

The corporate finance economy is showing increasing signs of instability, and even at its best, it concentrated wealth, removed land and resources from people with little power and transferred it to those with the most power, transformed vital natural resources into profits plus garbage, then rolled on to new green fields with fresh resources to exploit.

Cooperatives are different at their core, according to Professor Zamagni. They are structured to distribute profits and to build-in democracy. And because they are rooted in place, they have a long-term commitment to the health of the natural environment.

The cooperative model may make the most sense for meeting our needs and sustaining our natural environment for the long term. We'll especially want to have some diverse, flexible, and resilient alternatives at hand if the corporate economy continues to falter.

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