Co-op Principle 5: Continuous Education

One reason cooperatives need to educate about cooperatives is that assumptions about how businesses operate are not always appropriate to cooperatives. If co-op members, officers, and employees are to know how to operate a cooperative well, it falls to the cooperatives to provide education.

Take the case of equity. Making an equity investment in a business entails a risk. In capitalist businesses, risk is balanced by the prospect of profit. In a co-op, risk is balanced by the services which the co-op provides to its members. A capitalist business can get equity from anybody willing to accept that business's particular combination of risk and potential profit. In a co-op, the people who must be counted on to make an equity investment are the members who are using the co-op. And because the investment entails risk without a large financial return, it needs to be spread out among all the members of the co-op. It is important that all the users of the co-op be recruited as members so that, among other reasons, the required equity investment and risk may be spread over a larger base. The members, officers, and employees of many co-ops fail to understand this.

Capitalization is not the only area in which co-ops are different, and co-op education important. Co-ops frequently hire as managers, or elect to their board of directors, people with good business training but no co-op experience. This is a sound practice, but often leads to conflict, because the co-op's new leaders don't understand the ways in which a co-op should be different from another business. A retail consumer food co-op needs good merchandising, for example, but must make sure that a person hired for this understands the importance of consumer education in a co-op. When a co-op is honest and Informative about the products it sells, it provides a vahiable service to its members, and at the same time establishes its own credibility as their buying agent.

A second general reason a why co-op education is important is that co-ops need the support of their members. In fact, the members of many co-ops don't stick together, but use the co-op only occasionally, making it difficult for the co-op to serve any of its members well. This failure of co-op members to cooperate should no really surprise us, since the idea of loyalty to a particular business is fairly foreign to our society. What is more American than the ability to hop in a car and pick a supermarket at whim? Co-op members need to know both why their co-op is special, and why their participation is important to the co-op.

A third reason why co-op education is important is that co-ops are democratic organizations. Without enough members who know how the co-op works and where it's going, members can't run the co-op well.

Co-op education is also important to build more co-ops, and to foster cooperation between co-op. All of the above points speak to the role of educauon in making a particular co-op work better, while this last point speaks to building a cooperative movement.

See other articles from this issue: #038 January - February - 1992