Op-eds

In this week’s Principle 6 Newsletter, are co-ops essential infrastructure?

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Image show many hands coming together, each holding a different piece of a puzzle.
Does a focus on customers rather than members dilute co-op identity, or create member value?

“The concept of ‘infrastructure’ is not confined to steel and concrete,” Mike Mercer writes in a new issue of the Principle 6 Newsletter.

In fact, “if existing co-ops organized themselves and resolved to present the cooperative model as a structural solution for the community, designation as essential infrastructure could become a reality,” he writes.

Read the full issue of Principle 6 Newsletter below to find out. 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 – Essential Infrastructure?

Issue 22 – May 26, 2021

When government invests in public goods like roads, airports, public transit, schools, and solar panels, economic growth soars—just as is does when you put a roof over a farmer’s market. – “The Free Market is Dead. What Comes Next?” Chris Hughes, Time, 5-24-21

The ideal [Biden Infrastructure Plan] is one that promotes “forward-looking investments” that will create “lots of good jobs” over the next 50 years and that tackles the major infrastructure repair and replacement work that is too costly and unprofitable for anyone but government to do. – John Macomber, quoted in “Analysts,” Harvard Gazette, May 2021

By providing business supports and adequate financing and eliminating barriers to existing programs, policymakers can encourage cooperative businesses that preserve the benefits of local business ownership, save jobs, and build and sustain communities. – “Policy Strategies to Build a More Inclusive Economy with Co-ops,” Urban Institute, Oct 2020

Cooperatives as infrastructure?

Don’t be ridiculous. Infrastructure, when government is paying, should be things made out of steel and concrete—roads, bridges, maybe rural broadband. Things that the private sector can’t (or won’t) do. Projects that take lots of money and muscle to build. Things that go on a balance sheet somewhere with depreciation schedules measured in decades. Such is the essence of opposition to the original $2.3 trillion Biden infrastructure (American Jobs) plan.

In the original Biden plan, only $115 billion (5 percent) is allocated to roads and bridges. Slightly more than half is earmarked for the broad categories of transportation, buildings and utilities. The largest single piece of that is affordable housing ($213 billion), followed by electric vehicle incentives ($174 billion). But $948 billion is provided for the broad categories of in-home care, jobs and innovation. Care for people with disabilities and older adults adds up to $400 billion. The rest includes things like supply chain support, climate technology, support for rural areas, and community investment. The entire infrastructure plan is supposed to be “paid for” by 15 years of higher corporate taxes. Skeptics see trillions being added to the national debt. Clearly, this plan, even the scaled-back $1.7 trillion version, will be subjected to rigorous debate and partisan brinksmanship.

The concept of “infrastructure” is not confined to steel and concrete.

The purpose here is not to ignite deliberation about the president’s infrastructure plan. But the composition of the plan does illustrate that the concept of ‘infrastructure’ is not confined to steel and concrete. In fact, infrastructure is defined by some to be investments in any project or activity that strengthens the fabric of community (underserved places), the enhancement of individual opportunity (rural broadband) or the health of the population (home care). It would not be a stretch to contend that investment in community development credit unions, home care co-ops, food desert grocery co-ops, affordable housing co-ops and the like are essential infrastructure, worthy of government favor or investment. This could be especially true at the community level.

Some co-op groups will burrow into the Biden infrastructure plan and the companion $1.8 trillion Families Plan to seek funding for mission fulfillment. The funds earmarked for community investment, dislocated workers, underserved places, underbanked people, workforce development, education, in-home care, child and family support, nutrition programs, and others create genuine opportunities for co-op financial support. While mining the present-day government spending bonanza might produce temporary resource boosts for those doing the work in co-ops at the street level, long-term financial strategies must be built around self-sufficiency.

The purpose here is likewise not to advocate (or discourage) lining up at the government “pay windows” if/when the plans become laws and agencies begin making choices about where to spend. Instead, the national debate about infrastructure launches another thought. What if co-ops worked together to convince community leaders that co-ops are essential infrastructure for the well-being of citizens and the future fabric of the community itself? Co-ops could provide communities with ownership infrastructure that enhances resilience and vitality. The cooperative model could be used to address numerous problems and opportunities in a way that keeps the benefits at home.

If existing co-ops organized themselves and resolved to present the cooperative model as a structural solution for the community, designation as essential infrastructure could become a reality.

Today, communities suffer from all forms of extraction. Big business drains profits and jobs from the area. The lack of opportunity sends the brightest young people off to distant places, rarely to return. This happens in underserved areas within big, dynamic cities as well. Co-ops have always moved toward poorly served needs. If existing co-ops organized themselves and resolved to present the cooperative model as a structural solution for the community, designation as essential infrastructure could become a reality.

Something like this would not be feasible unless and until leaders of the large existing co-ops came to regard the “essential infrastructure” strategy as being conducive to their own success. But one doesn’t have to exercise much imagination to envision a time when all co-ops would benefit from being recognized as essential infrastructure. Not necessarily to grab larger chunks of government spending, but perhaps to curry favor in future debates about government policy. Things like tax policy, regulation, organization incentives, and technical assistance could be meaningfully impacted by a reputation of being essential to the fabric of American communities. More important, the citizens would come to view co-ops as being on their side in life. This reputation, of course, would present unlimited growth possibilities. To a strategist, differentiation that could not be legitimately emulated by the for-profit providers.

Things like tax policy, regulation, organization incentives and technical assistance could be meaningfully impacted by a reputation of being essential to the fabric of American communities.

In a year when the International Cooperative Alliance is emphasizing a deeper expression of cooperative identity, the timing could not be better for taking the collaborative initiative to become regarded as essential community infrastructure.

Stay tuned,
Mike

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