The COVID-19 pandemic reveals the potential of cooperatives as vehicles for economic development in Black communities.
In the “sharing economy,” exemplified by companies like Uber and Airbnb, just about anything can be shared — except the profits. The profits go to the owners and shareholders as they did long before run-of-the-mill capitalism was upset by “disruptive” capitalism.
However, in the U.S., the COVID-19 pandemic has shown that traditional capitalist companies, where a few owners, or many faceless shareholders, share the profits, risks and decisions, have not fared as well as those based on a very different model: co-operatives.
In a May 8 Truthout article, “Pandemic Crash Shows Worker Co-ops Are More Resilient Than Traditional Business,” TESA Collective member Brian Van Slyke, gives examples of how, and reasons why, some American co-ops are weathering COVID better than their traditional counterparts.
Slyke quotes Esteban Kelly, executive director of the U.S. Federation of Worker Cooperatives, of which the TESA Collective is a member: “Traditional firms, when times are good, they take that surplus, they distribute it to the investors or maybe pay off debt, but they don’t necessarily do a lot of bonus pay for rank-and-file or increase wages …When times are bad, they panic…They’re slashing jobs and benefits…”
Kelly says things are different with coops:
“When worker-owned businesses are doing well, they share the benefits among worker-owners. This is most commonly achieved by increasing wages, expanding benefits, distributing dividends to the employees (instead of absentee stockowners) and reinvesting in their communities. But when business is tough, a worker co-operative equitably shares the burden. Instead of mass layoffs, the workers, who are the equal owners, strive to find collective solutions. Worker-owners might vote to take voluntary pay cuts so no one person loses their job, and worker committees might try to find new markets the cooperative can expand into.”
Slyke gives several examples of U.S. co-ops doing just this in response to the pandemic.
Co-operatives aren’t a new idea, including among African Americans.
Long before Maulana Karenga created Kwanzaa in 1966 with its fourth principle of co-operative economics, Ujamaa, Ella Baker and George Schuyler launched the Young Negroes Cooperative League (YNCL) in Pittsburgh in 1930 (Baker would go on to form the Student Non-violent Coordinating Committee with Martin Luther King).
As Barbara Ransby explains in her book, Ella Baker and the Black Freedom Movement — A Radical Democratic Vision, the idea was to form “Black consumer co-operatives as a strategy to combat the economic devastation being wreaked by the depression and to educate Black people about socialism.” This, at a time when Black people in the southern U.S. were still struggling under the crushing poverty of one of the many systems that replaced slavery: sharecropping.
According to the PBS article, “Slavery by Another Name“:
“After the Civil War, former slaves sought jobs, and planters sought laborers. The absence of cash or an independent credit system led to the creation of sharecropping. Sharecropping is a system where the landlord/planter allows a tenant to use the land in exchange for a share of the crop. This encouraged tenants to work to produce the biggest harvest that they could, and ensured they would remain tied to the land and unlikely to leave for other opportunities. In the South, after the Civil War, many Black families rented land from white owners and raised cash crops such as cotton, tobacco, and rice. In many cases, the landlords or nearby merchants would lease equipment to the renters, and offer seed, fertilizer, food, and other items on credit until the harvest season … High interest rates, unpredictable harvests, and unscrupulous landlords and merchants often kept tenant farm families severely indebted. Laws favoring landowners made it difficult or even illegal for sharecroppers to sell their crops to others besides their landlord, or prevented sharecroppers from moving if they were indebted to their landlord. Approximately two-thirds of all sharecroppers were white, and one third were Black.”
Although sharecropping hadn’t done great things for Black folks, sharing had. Ransby explains:
“Co-operation, the sharing of resources, and a strong community spirit were fundamental values among African Americans. Ella Baker’s extended family was part of a larger network of black farmers in Warren County, North Carolina, who emphasized self-help and mutual aid as strategies for survival and the betterment of the race. The co-operative ethos that permeated Baker’s childhood was deeply implicated in prevailing notions of family and community; groups of individuals banding together around shared interests and promoting a sense of reciprocal obligation, not of individualism and competition. For example, African-American farmers exchanged goods, services, and other resources among themselves. Expensive farm equipment was purchased collectively or used communally.”
Despite its promise, the YNLC only lasted about five years and “eventually collapsed under the weight of financial obligations” according to Ransby. She says Schuyler’s biographer, Michael Peplow, also attributed the YNCL’s failure partially to the fact that, “Schuyler’s inflammatory remarks about the Black church and the Black middle class had made him too many enemies.” For example, Schuyler had emphasized that, “…young [YNCL] recruits had to be militants, pioneers, unswerved by the defeatist propaganda of the oldsters, and the religious hokum of our generally parasitic clergy.”
So are there any signs of a cooperative resurgence among Black folks today? Yep.
After years of teaching and serving as a principal in Detroit schools, helping lead the Detroit Black Community Food Security Network (DBCFSN) and starting D-Town Farm on the city’s west side, Malik Yakini and DBCFSN are planning a 3,100-square-metre food co-op, event space, and commercial kitchens in Detroit’s North End neighbourhood. The Detroit People’s Food Co-op could serve as a proof-of-concept for the ability of co-ops to build wealth, create food security and drive investment in underserved communities.
Events in the U.S. following the death of George Floyd have many people comparing Canada with the U.S and saying we’re glad “we’re not like them.” Modeling initiatives like the Detroit People’s Food Coop would be a good place to make an exception to that.