Friday, November 26, 2010

Consumer Co-op Strategies

       NYPIRG's Fuel Buyer's Group provides an approximately 10% discount on home heating fuel purchases and is an example of a quasi-consumer co-op strategy with minimal outreach and marketing.  Since NYPIRG, the New YOrk Public Interest Group, conducts minimal marketing and the populous is generally not oriented towards seeking such   What steps can create a broadly appreciated view of a sustainable, prosperous co-operative economy?     Inspired by John McNamara's discussion of inspiring a solidarity vision amongst people-at-large at his blog, The Worker's Paradise, and I was interested to read John's comments recently on processes related to "vertical integration," most commonly understood in terms of corporations owning subsidiaries in strategic sectors.  Horizontal integration represents another strategy, in which corporations might own former competitors, and he postulates co-operative "deep" variations in which a co-operative is part of a network of interacting co-op firms, and engaged in educational activity to build understanding of co-operative participation.  The latter concept is contrasted with a consumerist egalitarianism, in which a range of socioeconomically distinguishable people identify themselves as "middle class," whether they are at official poverty levels or earning significant incomes.
            Before reflecting on orthodox and mainstream identities, I think we can gain some important perspective by reviewing some alternative identities which have achieved some significant membership.  Voluntary Simplicity is one first popularly defined by Duane Elgin in 1978 in his book, and discussed by  longtime sociologist Amitai Etzioni in a 2004 Review of Social Economy article.  Philip McMichael is another scholar who has written an article recently published in the Journal of Peasant Studies, and in his analysis he refers to Slow Food and Via Campesina.  In the area of union activity amongst employees and workers, the negotiation of the United Steel Workers with Mondragon, along with projects such as the AFL-CIO's Executive Pay Watch and Pension strategists strongly suggests that, among others,  America's consumers are not all the same.  
            From a slightly different perspective, William Greider's 2003 book The Soul of Capitalism is a comprehensive treatment of stakeholder activism.  In it, he cites for example the activity of pension investors, and various examples of problems and solutions in businesses.  The primary solution he discusses is that of employee ownership, along with the whole cost accounting of ecological, and social, economics.  He discusses a number of interesting examples, including that of Solidarity, an employ owned and managed temp agency in Baltimore formed by the community of members of the twelve step group NA, and Blue Ridge Paper, a former multinational subsidiary, which was reorganized on behalf of employee owners through a specialist financing firm KPS.
        At Blue Ridge, moreover, they reformulated their processes to detoxify their effluents entering a local river.  Greider also discusses SAIC, a large and successful high-tech services firm.  C. Rosen et al's book Equity surveys the subject of Employee Stock Ownership Plan ESOPs in a related way and discusses examples like Publix Supermarkets.  Environmental techniques would include perspectives shared in books like that of Cradle to Cradle by McDonagh and Braungart and R. Anderson's Mid Course Correction.
       NYPIRG's Fuel Buyer's Group represents a consumer wholesale buying group that is almost a consumer co-operative.  NYPIRG is a non-profit group that has a long history as part of the wider PIRG movement of non-profits, all of whom have lobbied and researched numerous issues in the consumer interest.
Their effort would be worth comparing first with both food co-operatives and renewable energy co-operatives.  In fact, a number of the PIRGs have taken an entrepreneurial strategy.  A group of them, perhaps not including NYPIRG, have organized to form a socially responsible and activist mutual fund adding extreme integrity to such diverse efforts as the Dow Sustainability Index, the Social Investment Forum, Pax World Fund, the Interfaith Center on Corporate Responsibility, and the Domini 400 Social Index.  Their fund, Green Century Mutual Funds, includes shareholder activist strategies similar in nature to campaigns conducted by the founding non-profits and other activist civil society groups like Rainforest Action Network, Greenpeace, and Oxfam.  The PIRGs also formed a telecommunications company on the model of Anita Roddick´s original The Body Shop, Whole Foods Markets, Internet, and Credo (formerly Working Assets Long Distance), a company called EarthTones.
        While the purchasing of stock involves dynamics of stock prices and shareholder voting influenced by large shareholder holding differentials, organized efforts such as NYPIRG's Fuel Buyer's Group, the Park Slope Food Co-op, the South Bronx Food Co-op, and the Maryland Solar Co-ops are four specific entities that demonstrate practices which already are accessible to area residents, and make a viable discussion for enterprises which can offer immediate advantages  the subject of the employee ownership or co-operative business model.  For the record, I want to acknowledge other interesting partnership efforts following the co-operative model, such as Evergreen´s Ohio Co-operative Solar and the Kentucky-based Foothill Co-op.
      Mendonca et al's concept of concrete market institutions and innovative democracy encompasses these grassroots types of enterprises, and even other historical policy instruments.  The 1974 ERISA law involved Sen. Russell Long´s effort to incentivize Employee Stock Owner Plans, and the National Consumer Cooperative Bank Act in 1978 created the National Co-op Bank, and 1978´s PURPA created a vehicle requiring permission of independent energy generators and feed-in payments.  We could also review the role of the Rural Electrification Administration during the New Deal and view the successful financing of Rural Electric Co-ops in the U.S. 
      NYPIRG's practice provides a discount on fossil fuel's for home heating through wholesale purchases and membership, in what is similar to a consumer co-operative. Moreover, they have been including one of the renewable energy company's programs in their own plans with premiums that can be viewed as offset.
      However, their marketing and outreach has been built on canvassing and the benefits of their approach have otherwise had limited dissemination.  For my part, when I resided in the New York area until sometime in the last year, I had engaged in guerrilla promotions at one conference event and by inviting a NYPIRG speaker to the PSFC.  The speaker wasn´t available and able to accept the latter invite.  At the former, I don´t believe I encountered anyone that was familiar with the NYPIRG FBG program.
       By contrast, consider the Park Slope Food Co-op´s situation.  They participate actively in local outreach, including fairs.  The South Bronx Food Co-op has expanded their hours, and appears to be engaging in a successful outreach campaign in their underserved and economically disadvantaged neighborhood.  Green Worker Co-ops has initiated a construction recycling business and a co-op entrepreneurial training program.  By contrast, the East New York Food Co-op faced a similar challenge, but appears to have failed.
      A similar program exists in Pennsylvania, "The Energy Co-op."
      Conventional economists have operated according to certain assumptions concerning the functioning of corporate business enterprises, and the ownership of business process by shareholders without qualification.  David Ellerman has advanced the discussion in his 2007 Review of Radical Political Economics paper.  He describes one concept that publicly traded corporations can be considered capital co-operatives.  However, the lack of qualifications for involvement disqualify corporations from the term, since, for example, a company´s shares could be bequested to others.  Moreover, transaction cost barriers and social power relations have created a "fundamental myth" of neoclassical and Marxist thinkers that ownership of the means of production is the same as ownership of shares and the employer-employee contracts.  By identifying these distinct elements, we can unravel the assumptions which are often ignored in orthodox economic arguments and discussions.
       Moreover, ecological economists such as Herman Daly have outlined important assumptions in terms such as those of biophysical and ethicosocial limits, including source-sink, ecological interdependence, entropic flow issues, money fetishism, compensation, and more recently ownership issues.   

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