A “dirty word”?

Image show many hands coming together, each holding a different piece of a puzzle.
Co-op leaders can work together to better articulate what cooperatives are, rather than what they aren’t.

In this week’s newsletter, Mike Mercer argues that a cooperative should have its own definition—freed from the baggage associated with other forms of organization and economic thought.

“In America, ‘socialism’ is probably a dirty word in many circles. Increasingly, it seems, ‘capitalism’ is repulsive in many other circles. In no circles should ‘co-op’ be a dirty word,” Mercer writes. Keep reading this week’s newsletter to learn how co-op leaders can work together to better articulate what cooperatives are, rather than what they aren’t.

And while you’re thinking about “cooperation among cooperatives,” take a moment to consider how you and your cooperative practice this principle. NCBA CLUSA is on a mission to document Principle 6 collaborations across the country so we can identify trends, document best practices and share this knowledge with you—our fellow cooperators!

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Principle 6 Newsletter – A Dirty Word?

November 23, 2021


Sometimes there was more talk than action (re: African American cooperative development)…because of the prevailing ideology in the United States that cooperative economics was socialist, which was then and remains today a dirty word. – Jessica Gordon Nembhard, “Collective Courage,” 2014

When you hear the word “co-op,” you immediately think of a white guy like me standing in a food co-op in Berkeley, selling you vegan cheese. – Trebor Scholz, “Stuck in the Gig Economy,” TED Talk, Aug 2021

1any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

2a: a system of society or group living in which there is no private property

  b: a system or condition of society in which the means of production are owned and controlled by the state

3a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done – full definition of “socialism,” Merriam-Webster Dictionary, 11-23-21


Admit it. When the tactless banker calls the local credit union a “socialist” organization at the chamber of commerce luncheon, non-biblical thoughts are being held back by professional decorum, barely.

In America, the predominant thinking has been that socialists belong in Europe and that full-fledged communists should be locked up. Despite more than a century of struggle between private sector business owners and workers, the prevailing view is that free-market capitalism is the system that produces the best results for all concerned. In fact, it has become expected that democracy’s role, in large part, is to protect the free market from assault by the socialists and communists. Individuals should be free to pursue their economic interests, relatively unhindered by (nay, supported by) their government.

In America, cooperatives are welcome to operate in the shadows of the free-market economy. They are even accorded government favor and tax incentives here and there—as long as service is being provided to those that don’t sufficiently ring the profitability bell of mainstream capitalism. The underserved. The poor. The oppressed. But when co-ops wander into the arena of profitable business, the screams of unfairness are quickly presented by the franchise protection associations representing the for-profit providers. Credit unions know this well.

A literal reading of Webster raises the possibility that co-ops are possessed with the trappings of socialist institutions. “Collective ownership and administration of the means of production and distribution of goods” and “group living in which there is no private property” are easily draped over common co-op principles like democratic control and indivisible reserves. And, from the peaks of public policy, co-ops are routinely grouped in with civic organizations, non-profits and others under the banner of the “social economy.” In Europe (as any American individualist would expect), the EU has been working on an initiative called Social Economy Europe. It counts mutuals, associations, foundations and co-ops among its flock.

Some co-ops lean into social identification. They promote their mission of contributing toward a better society and justness for all. The recently opened Fredericksburg Food Co-op highlights “environmentally sustainable practices” and “best practices on nutrition, wellness and encouraging plant-based diets.” Clean Energy FCU has a vision “where everyone can participate in the clean energy movement.” In some cases, socially conscious co-ops have had to defend their reputation from being too capitalist (extractive) on the one hand or from being an unprofessional hippie commune on the other.

Among larger co-ops, the American free-market ethos has more impact. Despite believing deeply in cooperative values and principles, no self-respecting professional co-op dares exhibit socialist inclinations. These co-ops are, after all, serious business organizations determined to generate value for members, operate profitably and accumulate sufficient reserves. The difference between them and their for-profit competitors is the absence of third-party shareholders and the return of positive margins in the form of patronage refunds. Otherwise, they tell new recruits, the co-op is a progressive, innovative and fiscally responsible business. Socially conscious but not socialist!

The best defense (from external and internal misclassification) is a good offense. Co-ops need a better articulation of what they are, not what they ain’t. How about this… co-ops are co-ops? They create value for members. Together, they create vitality for communities. Structurally, they fortify the well-being of consumers, workers and small businesses. They have to create tangible value or they cease to exist. They either operate profitably or they can’t build capital or scale. They strive to serve the less profitable members but, to do that, they need to serve some profitable members.

In America, “socialism” is probably a dirty word in many circles. Increasingly, it seems, “capitalism” is repulsive in many other circles. In no circles should “co-op” be a dirty word. A co-op should have its own definition, freed from the baggage associated with other forms of organization. Easier said than done. Not possible unless co-op leaders decide to make it so.

Stay Tuned,

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