The birds and the bees of mutual benefit: where co-ops come from

A review of lessons and questions emerging from Anne Gessler's Cooperatives in New Orleans, including the conditions in which co-ops thrive and the structural factors that have limited their scale in the past.


A survey of cooperative structures in the city of New Orleans in the 19th, 20th, and 21st centuries, Cooperatives in New Orleans: Collective Action and Urban Development (Anne Gessler) necessarily ranges to encompass aspects of co-op proliferation across the Gulf Cost/Southeast regions. It's predominantly an exploration of the social values and contexts that give rise to cooperatives, but it begins to explore the economics of these structures as well. It includes cooperatives along a spectrum of formality and ideology, giving readers a sense for many flavors of the form.

Points that stuck with me
  1. The book begins and ends with assertions on the rich ecosystems of cooperatives in New Orleans, and the greater South. These communities are the frontier of formal and informal collective organizing, though government and non-profit authorities have not always seen it as such.
  2. Sometimes it appears as though there's a dearth of economic/cooperative activity because of the dangers of formal structures in these spaces. Particularly when cooperatives are seeking to transgress racially-motivated policy, they do not benefit from formal hierarchies or agreements which are vulnerable to direct attacks. While decentralization and informality have their costs, they seem to deliver significant benefit in these instances given the durability of these ecosystems. As Camille T. Dungy wrote, "Where there appears to be only dirt, there may be the root system of some kind of insistent thriving."
  3. Cooperative organizing is as much (if not more) social organizing as it is financial activity. A vast majority of the book is dedicated to the rhetoric of organizations and the factions that developed within cooperatives, as opposed to the merchant activity they undertook. While there are some adroit dissections of the financials of co-operative institutions, it's clear that those economics require collective identity, hence the initial focus. Many collectives fractured along line of race and trust in the system.
  4. Most cooperatives are ephemeral, lasting in response to a specific problem or a price imbalance. Cooperatives seem to last longest in two situations: when system oppression completely removes certain populations from market infrastructure and cops are the only way to access services. When a market is structurally broken, and cooperatives organize both the supply and the demand side of the market to allow consumers access to reasonable wholesale pricing.
Points I'm still exploring
  1. Many of these co-ops were tied up in social movements that made them politically dangerous. The system defends itself violently. How will that manifest itself today were there to be a rise in cooperatives and politically dangerous ideologies?
  2. Many coops crashed on the rocks of overhead cost, a problem which technology is rapidly solving. It opens up the possibilities that many of these coop models might be a fit for various consumer needs or supply chain issues. Which cooperative economic models are best fit to which situations? I'm also wondering why I never really ran into cooperative economics in school, but I'm guessing that has to do with the point above.
  3. Many of these cooperatives come of age in inflationary periods driven by speculation or in the economic downturns that speculative mania. As a result, most of these cooperatives held anti-speculation as a core value. Where is the line between anti-speculation and anti-investment? Does the attitude against speculation eventually undercut the long-term future of the cooperative? How influential are dividends on the realized price to the consumer? Does that change as timelines expand?
  • Long history of cooperative organizing in New Orleans as the city has the right milieu for cooperative organizing…integrated social spaces…you have a lot of European and cosmopolitan perspectives on various systems of organizing people…"ferocious attachments to place"
  • There is also economic hardship…some of the more well-off citizens see New Orleans as constantly on the cusp of renewal…a vast majority of its disenfranchised citizens know that that renewal is not going to come for them through traditional structures… also a vulnerability to severe weather
  • As "infrapolitics", co-ops encourage new ways of relating to power structures and pressure governments to respond to a collective and clear voice of citizens  
  • book explores cooperatives across the 19th, 20th, and 21st centuries in three different form factors 1) Utopian Socialist: argues for an economy organized around loosely affiliated worker-owned voluntary organizations, tend to be more about ideology than action 2) Rochdale cooperatives: espouse three pillars of democratic control, anti-speculation, and all services have a price and profits are returned to members as dividends 3) Hybrid racial justice co-ops: co-ops that started as Rochdale, before rejecting the form as complicit in American racialized capitalism
  • The studied forms are largely based on what can be observed, as many of New Orleans' cooperative space is informal…anonymity for some of these groups is a requirement of the strategy, particularly when efforts cross racial lines…many neighborhoods of color implicitly function as co-operatives, "Largely invisible to the dominant power structure"…… scant scholarship on urban Louisiana cooperatives reflects the labor movements "refusal to conform to established paradigms"
  • co-ops are hard to predict because they're unpredictable outgrowths of community + global trend, and it's important to distinguish between where they can exist: perceived: what the city looks like from the outside, conceived: how economic development folks think about the city, lived: the city as it exists…"a strong undercurrent among folks who are anarchist-minded to not engage with the government in any way. Applying for federal non-profit status 'was just pulling teeth because folks were like 'we don't need to do that. We're not here to be part of the government; we're just here to work with kids and fix bikes.''
  • Given all this preamble, it's already becoming clear that cooperatives are as much about collective identity and social organizing as they are about economic impact (in many cases more so optimized for social), particularly in the early days
  • Utopian socialist cooperatives came of age during the rise of organized socialism in America…they're talking about organizing for higher wages have long contentious meetings, 2-hour intros on the importance of values (sound familiar DAOs?)…theosophy a key driver when many felt that Christian socialism, sociology, and theosophy were analogous in their pursuit of truth
  • collective identity for many cooperatives did not cross racial lines, or when it did, they would compromise away that value when they're trying to make their efforts economically viable…Utopian Socialists under the Laboringmen's Protective Association (LPMA) brought together unionists and city gov't employees, started with racially inclusionary language. They were practical, non-idealistic, and very good at negotiating specific contract clauses…made significant strides for home labor, but that quickly became constricted in policy to white labor, infrastructure jobs literally fragmented into the White Laboringmen's Protective Association (WLMPA)
  • under the Housewives' League were organizing for price controls on food and other pocketbook items…WWI made a lot of the League's activity not just acceptable but desirable…HL members are asked to run gov't food programs and defense response. They are being accepted into the system…racial equality ceased to be a precondition of their work (and maybe never was)…foggy feelings of goodwill with black organizers, and a lot of self-serving behavior…black cooks gain free training, but it mostly reduces white housewife cost as opposed to increasing empowerment
  • when scale is possible, the most expedient way to gain more members was to cut ties to black co-op orgs, so that their efforts would be more palatable to a mainstream audience and less upsetting to the status quo
  • many cooperatives didn't really last that long…Housewives' League co-op only survived for nine months…WLMPA lasted less than two years…Consumer's cooperative union grocery store
  • Reasons Co-ops Fail Fast #1: They were reliant on volunteer labor/low-cost labor…The Housewives' League opens curbside marketplaces to "supervise" supply and demand side behaviors, connecting truck farmers to consumers…1914-1915 food crisis in New Orleans -- Wilson calls on the nation to feed itself, and organizers see this as an opportunity to break the city's reliance on northern and western agriculture…arguing that civic-minded consumers are rational agents that put the benefit of the community over self…the league started keeping their own hens, and then selling eggs direct to consumer…eventually grocers agreed to match their prices…got the city to open more markets and remove middlemen from produce transactions…League members monitored pricing and behavior in these markets as well…labor all voluntary…these markets struggled to scale though, and the League moved toward more Rochdale structures, abandoning curbside markets
  • Edna Egleston, league chain in 1919 -- individual solutions cannot solve large scale economic problems…"Once a small cooperative store grows beyond the stage of voluntary unpaid selling staff, it goes to pieces on the rocks of overhead cost."
  • Consumer's Cooperative Grocery opened to serve the Frenet neighborhood…found that a cohesive member identity allowed the store to weather pricing spikes and outages…given close associations of cooperatives and communism, the collective identity behind the store died out, and with it the store…surviving cooperatives eschewed politics altogether…prices were comparable to other grocers though, as labor shortages meant that no one was willing to work for below market rate
  • Reasons Co-ops Fail Fast #2: They’re reliant on government operations…Housewives' League initially tried to run their coops alongside gov't food distribution centers that were prevalent during the food crisis…wanted to take advantage of wartime programs to operate coops alongside gov't food programs and stores…gov't quit these efforts early on due to the high cost of operating physical distribution points…gov't begins to laud buying clubs as "practical substitution for gov't intervention in consumer markets"
  • a different kind of reliance and failure, credit unions that supported black communities failed in the 70's because they had essentially become rails for War on Poverty funding into communities…in the 70's Nixon wanted to get government out of markets, and returned control of credit unions to the states…states are essentially using credit union regs as an arm of racial profiling, as a result, black credit unions on life support
  • Reason Co-ops Fail Fast #3: They’re reliant on external price environment…many coops couldn't really cut costs on the supply side and their grocery stores didn't deliver competitive product in more normalized periods…even if they could, most chain stores could cut their costs and run at a loss, eating into past profits. Coops could not do the same, and so for-profit actors ran them out of the market…unless they had educated their consumers that they needed to stay onboard throughout this period
  • Successful programs organize both buyers and sellers to connect consumers directly to wholesale pricing…if you organize the supply side, but not the demand, intermediaries take a large chunk of profit, and keep the product relatively expensive…if you organize demand but don't take material cost out of the supply side, then consumers are relying on collective identity, which can fracture
  • Rochdale cooperatives tended to do this best because of their explicit focus on economics…credit unions are the best and most prolific example of Rochdale coops that have had the longest tenure and the greatest impact…by 1962, there were 1,100 credit unions in NOLA alone and 200k Louisianans were members at credit unions across the state…credit unions were seen as an extension of Christian socialist principles, and they said so explicitly…by the mid-60's they were a critical partner in the War on Poverty..with collaboration comes regulation though, and the NCUA's regulatory burden put a lot of small credit unions out of business…particularly those that served minority citizens
  • Another successful co-op category were those that are organized around total market failure, typically brought on by racial discrimination…African American mutual benefit and cooperative orgs are some of the longest-tenured efforts. Hardship drives collective behavior"…burgeoning black economy in the late 19th and early 20th century meant that most Black social orgs and mutual benefit groups turned into financial institutions by necessity
  • some Rochdale cooperatives, and some less formal economic arrangements survive…the dividing line here tend to be around believed in the system and willingness to fight it or work alongside it…Rochdale coops tend to take the line: cooperatives "offer a more fruitful way of living in this world, until the required social changes materialize"…"a permanent united body of black southern cooperatives would tell the government about our needs just like other major interest groups do. We shouldn't have to wait for the government to tell us what to do."…"Money can't buy racial justice" but it can "buy expertise and credit"
  • This is a philosophical divide, as others become skeptical of Rochdale coops…see the structure as promoting the same sins of the system…in part because colonial governments were using Rochdale coops in Uganda to control production, wages, and pricing by bringing previously informal activities into the formal economy…seeing rise of a "profound skepticism about the possibilities for meaningful political change coming from institutionalized civil rights leadership"…start to create cooperatives that emphasize values far more than economics…becomes a real gating factor on membership, because many groups mandated trainings, education in ideology, etc. before individuals could participate in decision-making…This is where the Panthers and more radical attitudes around property and justice would fall
  • There’s an interesting tension between the middle-class aesthetic and the more grassroots mutual aid…many come to regard the trappings of mutual aid societies as beneath them when they gain more wealth…in this trend toward formalization, the Southeastern Cooperative Educational Association (SCEA) and other Rochdale orgs belittled the work of mutual aid societies as something other than the work of the formal cooperatives that were doing "the work"…regardless, many tend to follow the same formula of organizing both sides of the marketplace
  • in the late 90's, as vacant land appeared across New Orleans, movements popped up to support informal, impermanent gardens …mostly run my elder African Americans from rural communities…at first, harvesting/consuming food from the gardens was managed by social norms/capital, essentially organizing the demand side informally, has become more formal over time but still largely volunteer-based
  • an organized supply side was continuously undercut by land insecurity…landowners could reclaim land at any time, or the city could auction the lot in a tax sale…post Katrina, that trend was on steroids…more vacant land + market-driven governance meant that private market placyers were deciding who should own what land and gauging that decision mostly on ROI…gentrification got so bad that by 2008, 110 of 300 Mardi Gras Indians had left the city…Common Ground and other collectives pulled together resources for recovery and used that social capital to pull together community land trusts and enough engagement from the government to put together neighborhood plans and access state and federal funding

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