Cooperative federalism (economics)

Cooperative federalism is a school of thought in the field of cooperative economics. Historically, its proponents have included J.T.W. Mitchell, Charles Gide,[1] Paul Lambert,[2] and Beatrice Webb (who coined the term in her book The Co-operative Movement in Great Britain).[3]

Cooperative federalism versus cooperative individualism

Cooperative federalism has been one side in the historical debate in cooperative economics between cooperative federalism and cooperative Individualism. In an Owenite village of co-operation or a commune, the residents would be both the producers and consumers of its products. However, for a cooperative, the producers and consumers of its products become two different groups of people, and thus, there are two different sets of people who could be defined as its 'users'. As a result, we can define two different modes of cooperative organisation: consumers' cooperatives, in which the consumers of a cooperatives goods and services are defined as its users (including food cooperatives, credit unions, etc.), and producer cooperatives, in which the producers of a cooperative's goods and services are defined as its users (which includes worker cooperatives, agricultural producer cooperatives, for example), as advocated by cooperative individualism.

In this debate, cooperative federalists are those who support consumers' cooperatives, and those who favor producers cooperatives have been pejoratively labelled ‘individualist' cooperativists by the federalists.[4][5]

Cooperative federalism

Cooperative federalism is the school of thought favouring consumers' cooperative societies. The cooperative federalists have argued that consumers' cooperatives should form cooperative wholesale societies (by forming cooperatives in which all members are cooperatives, the best historical example being the English CWS) and that these federal cooperatives should undertake purchasing farms or factories. They argued that profits (or surpluses) from these CWSes should be paid as dividends to the member cooperatives, rather than to their workers.[6]

What consumers’ cooperation does

Below is an account of: ‘What Consumers’ Cooperation does,’ excerpted from the May, 1934, issue of Cooperation, which provides an outline of cooperative federalist thought:

• Consumers' Cooperation is the Economic System necessary to match the Age of Automatic Power Production. It is a democratic economic system based on "cooperation for use" and not "competition for profit." It is the Economy of Abundance instead of Scarcity. These are some of its proven Principles and Practices—which really make "life, liberty and the pursuit of happiness" possible for ALL.

• Consumers' Cooperation means Consumers' Ownership and Control. In as much as consumers furnish the market, which is the most essential thing in an economy of abundance, organized consumers must have the ownership and control of the means of production and distribution so that they can regulate production to their needs of consumption, can supply themselves with pure products without adulteration, and do so without competitive wastes in the processes of production and distribution.

• Consumers' Cooperation is Economic Democracy. Consumers, who are everybody, become the owners. Voting is by person and not by property -- one person, one vote. Proxy voting is eliminated -— members must attend meetings and be active. Membership is open to everyone. We now have management control largely in industry, not even stockholder control. Under a cooperative system consumers control and the management executes their will.