Indivisible Capital, Indivisible Future

How are we preparing for a difficult future? Two recent articles have me wondering: one about cooperatives investing in further development, the other about how major disaster reveals our shared feelings and fate.

I have mentioned previously the need to improve education of members about investing in the co-op and in the future. Although excellent contributions are often made to community funds, when it comes to overall treatment of earnings, co-ops’ achievements frequently stop at the door, with little equity allocated to indivisible reserves and to broader cooperative development. Too often, the co-op’s membership-marketing messages, rather than stressing that investment provides an enduring community asset, emphasize instead that “you can get your investment back.”

Social capital in the form of indivisible reserves is under-recognized. Yet this form of shared capital is mentioned, under “member economic participation,” in the international statement of the cooperative values and principles. Cooperators are intended to recognize that the co-op is a gift from the past, a gift for which we are caretakers on behalf of the future.

From northern Italy, home to one of the world’s most advanced cooperative sectors, comes a report of remarkable achievements over several decades. Among these achievements, and essential to a strong and sustained cooperative sector, is recognition of social capital built through indivisible reserves—a legacy of shared wealth. Italian co-ops contribute 3 percent of earnings to a cooperative development fund; federal taxes are eliminated on major portions of earnings when assigned to indivisible reserves; and co-op net assets upon dissolution also go to a development fund.

In a fine statement of the philosophy behind this commitment to social capital, a leading Italian co-op group declares:

“Whereas the shareholders of an ordinary company are its actual owners, the members of a cooperative simply manage assets with a solid territorial identity that will eventually be passed on to future generations. In this way, cooperatives are enterprises that put people before money and work before capital.”

This essential recognition of our obligation to future society is underscored by the occurrence of disasters. Cataclysmic events which disrupt everyday life and upend the social order have a positive element in forcing recognition of our common fate. Routine behavior, including fear and prejudice, can disappear in the face of disaster and urgent, shared survival needs. The priority becomes helping one another.

Thoughtful discussion of this phenomenon appears in “The Uses of Disaster,” by Rebecca Solnit, in the October 2005 Harper’s:

“The aftermath of disaster is often peculiarly hopeful, and in the rupture of the ordinary, real change often emerges….Disaster recovery is not just a rescue of the needy but also a scramble for power and legitimacy, one that the status quo usually—but not always—wins.”

(In the latter vein, for reasons of social control and testing a martial law scenario the federal administration actively interfered with citizens and organizations attempting to immediately assist coastal storm victims.)

We can anticipate more disasters in the near future. Unfortunately, most of this nation’s public continues in a bubble of either comfort or fear while trying to ignore the changes that are just ahead: storms are growing, the heat is rising, and our pervasive dependence on fossil fuels faces a rude and painful withdrawal of supply. It’s likely that a major economic contraction has already begun—but don’t expect the official messages to provide much support or good advice.

One of many voices warning us about the decline of petroleum-based economies, Jan Lundberg, summarized the downside:

“With the U.S. gobbling up one-fourth of the world’s 80-plus million barrels a day of oil demand, and no sensible policy-change in sight, we are all consigned to involuntary and sudden change through nature’s force and/or global financial events reflecting monumental debt and deficit situations.”

Yet there can be a positive communal response to the disasters that these conditions will provoke. And this connects to our obligation to invest in a cooperative future.

Being clear about values and social capital will make our co-ops stronger in the future. And practicing cooperative values will position us to promote responsible, community-based behavior when circumstances bring everyone outside, greeting strangers and wondering what to do next.

See other articles from this issue: #121 November - December - 2005