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In this week’s Principle 6 Newsletter, chicken or egg?

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Image show many hands coming together, each holding a different piece of a puzzle.
Successful co-ops create tangible value for their members.

“Co-ops have a chicken and egg situation,” Mike Mercer writes in this week’s Principle 6 Newsletter. What came first, and what’s more important? The co-op, or the economy? “Let’s aim high. Chicken and egg,” he concludes.

“Co-ops need a vibrant civil community to maximize long term member benefit. And any semblance of civil economy needs dynamic co-ops to achieve meaningful impact,” Mercer writes.

Read the full issue of Principle 6 Newsletter below to learn more. 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 – Chicken or Egg?

Issue 28 – August 24, 2021

The Oklahoma Food Cooperative, begun in 2002, sells only products grown and made in Oklahoma, through an order delivery system based on their website and a network of members and volunteers across the state. – John Curl, “For All the People,” 2009

The civil economy can inspire new thought that is capable of deep questions. It presents a different story about the market, an alternative path to a market economy than one presented by the dominant system that shapes our world and minds today. – Bruni and Zamagni, “Civil Economy,” 2016

Just as corporate capitalism has long depended on the backing of government policies, public funding and pro-business legislation, so now the commons need the backing of a Partner State whose aim is to enable the creation of common value. – Kate Raworth, “Doughnut Economics,” 2017

If there was a single point in my childhood that provided an early glimpse into my future, a first indication of what would come to shape my character…it would be the year my parents gave me the responsibility of taking care of our family’s chickens. – John Lewis, “Walking With the Wind,” 1998

John Lewis. “The vote is precious.” “Hate is too big a burden to bear.” “Go cause good trouble.” Inspired by chickens.

Co-ops have a chicken and egg situation. Meet the cast of our little story:

The Egg Any single co-op, like the Oklahoma Food Cooperative, devoted to members with common needs, creating value in a narrow, well-defined way. Under the right circumstances, the egg could produce a chicken.

The Chicken The vision of an economy comprised of fair, inclusive organizations—the “civil economy” espoused by Messrs. Bruni and Zamagni, for example. The chicken, of course, desires to produce eggs.

The Chicken Coop A safe space. A sponsor, like Kate Raworth’s “Partner State,” whose aim is to enable eggs and chickens to flourish. Like chickens and eggs, cooperatives need protection from an otherwise inhospitable environment. The co-op chicken coop is built of things that include legislation, regulation and incentives that are conducive to co-op success.

The Cooperative Identity The character-shaping culture for eggs and chickens, meaning individual cooperatives and the fair/inclusive (civil) economy.

Let’s get the not-so-relevant question you’re thinking about out of the way.

Which came first, the chicken or the egg?

Modern co-op folklore goes back to a few eggs showing up in England and Germany. In places like central Italy, northern Spain and the Manchester area, the proliferation of eggs led to the formation of chickens—the economic systems that we all study today. Absent the chicken analogy, independent co-ops arose to solve for very local needs. Eventually, the co-ops formed support organizations that solicited governments for legislative and regulatory support, building a foundation for a civil economy. Settled. Narrow-focused eggs caused society-focused chickens.

Not so fast.

Long neglected and deliberately obscured cooperative traditions among African Americans, Indigenous peoples, Asian and Pacific Islander communities are increasingly salient in dialogues around cooperative development and creating socioeconomically just communities.

Long neglected and deliberately obscured cooperative traditions among African Americans, Indigenous peoples, Asian and Pacific Islander communities are increasingly salient in dialogues around cooperative development and creating socioeconomically just communities. It sounds like the North American “chickens” were around long before the European “eggs” had their influence. The idea of commonwealth and distributed ownership came first, institutions (co-ops and others) were developed to fulfill the vision. Chickens caused the eggs.

Does it really matter which came first today?

In either case, federal, state and local governments encouraged and protected co-ops to varying degrees and with widely divergent effectiveness along the path. The chicken coop in our story. In some places, Emilia Romagna or Colorado to name two, the “chicken coop” is strong, constructive to co-op formation and success. In others, the walls are thin or non-existent.

And the principles, values and practices that emerged over time define the essence of cooperative identity. Thanks to the accomplishments and aspirations of prior generations, it is now possible to imagine a genuine economic alternative of people-centered businesses helping the citizens of a community or a region find work, obtain health care, become educated and meet many of the other challenges of life. In this vision, co-ops and other similarly motivated organizations work together to provide holistic support for the collective membership.

Here’s the thing…

We are all cooperators, at least around this letter. But some of us are eggs. Focused on running the co-op, hoping to grow it so that it can produce better value for the members. Running lean and reinvesting in the co-op to keep the value high. There are regulations to comply with and regulators to contend with. There are fierce competitors, and the technology keeps changing everything, from back-office processes to consumer preferences.

Others of us are chickens. Driven to design holistic solutions for people, small businesses and communities. Chickens are possessed with the vision of a more equitable, more inclusive economy. An alternative to the winner-take-all profit maximization model. The vision can only be accomplished by creating new co-ops and getting the existing co-ops to collaborate.

The chickens think a lot about the coop, constantly looking for better sponsor relationships with government and often trying to transplant good laws and regulations from other jurisdictions. The eggs are laser focused on value creation for members. Without it, the cooperative structure is irrelevant and the civil economy is just an academic construct. The chickens believe there are lives to change, people to elevate. The eggs are focused on tangible benefit at the receiving end of the services being provided.

So, look in the mirror. Chicken or egg?

Now, look into the future.

The future is not so bright if we are just a chicken OR an egg. The long game for a completely independent co-op is competitive frustration, likely leading to consolidation or demutualization. Very few will get big enough fast enough to achieve and sustain competitive superiority. By the same token, civil economy visionaries cannot ignore the daily tactical challenges facing the leaders of co-ops. Calls for collaboration among co-ops must include tangible benefits for participating co-ops. There isn’t bandwidth available for zero-return benevolence.

Rather, I think, we should learn to be part chicken and part egg. Only then can cooperative identity surface as a key element of strategic differentiation. Only then can co-ops achieve legal parity with for-profit and non-profit business structures in law and regulation. And, most important, only then can we extend cooperative impact beyond incremental price or service benefit—to holistic life enhancement for those that embrace co-op membership. Co-ops (especially credit unions, being financial connectors) need a vibrant civil community to maximize long term member benefit. And any semblance of civil economy needs dynamic co-ops to achieve meaningful impact.

Co-ops need a vibrant civil community to maximize long term member benefit. And any semblance of civil economy needs dynamic co-ops to achieve meaningful impact.

Let’s aim high. Chicken and egg.

Stay tuned,
Mike

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