Jerry Voorhis’ 1983 challenge to the cooperative movement
[The late Jerry Voorhis was a co-op elder statesman when he spoke to February 23, 1983 annual meeting of Associate Cooperatives in Berkeley, California, where his remarks drew a standing ovation. This is an abridged version of the Voorhis address, borrowed from the February-March 1984 issue of Moving Food, the predecessor to Cooperative Grocer.]
The cooperative movement of the United States faces a challenge such as it has never faced before. That challenge is to do its part in guiding the people of this distressed land away from two mortally dangerous deceptions. First, the deception that in this day of scarcities they can go on consuming as if it were still the Nineteenth Century. Second, the even more dangerous deception that they can have a nice Nineteenth Century war with Twentieth Century nuclear weapons – and survive.
We are face to face the absolute necessity of changing our lifestyles to more simple ones, and concerning ourselves as never before for the welfare if all people, not just our own satisfactions. We have come into an age of dangers heretofore undreamed of.
The age which is dying has been one of profligate exploitation of the Earth’s resources, of conspicuous and sometimes obscene consumption, of a drive by individuals, corporations, and nations for material wealth and satisfactions, of wars and insane development of weapons of total human suicide. It has been an age which set no bounds to ownership of precious resources on which the lives of all people depend, an age in which the worth of men and nations has been judged by what they had, not by what they were in character, an age in which the resources of the Earth have become increasingly scarce, where some of them are already in critically short supply and most are becoming so costly as to be beyond the reach of an but the wealthiest nations and individuals.
The survival of our race depends upon this generation. If in this new age the affluent among individuals, groups, corporations and nations attempt to maintain by force their privileged position and extravagant lifestyle, the chances of human survival are slight. If, on the other hand, the people and their institutions and their nations begin to cherish the Earth – if an earnest drive to develop clean, inexhaustible, and essentially free sources of energy from the sun is soon undertaken – if there can be, in place of continuing exploitation of resources, a careful conservation and rationing of their use – if it can be recognized that cooperation and concern for one another are no longer simply fine ideals but the moral and practical imperative for survival – then there is solid hope for a far better society than man has ever known.
There are trends in both directions. Let’s take the bad ones first.
Inflation and unemployment
We are in a backwash of “me-first-ism” such as our country has seldom seen. Extreme reactionaries seek to dismantle government and all its social programs.
For the first time in our history the American economy suffers from simultaneous double-digit inflation and mass unemployment. Inflation is robbing the aging, the poor, even the middle-income people of their livelihood. Millions have to choose between eating and keeping warm. They cannot do both, in the richest country in the world.
At a time when social responsibility on the part of powerful corporations is a national necessity we fin the oil companies seeking a complete monopoly of all forms of energy, reaping exorbitant profits from OPEC pricing and even refusing to accept a reasonable windfall profits tax
The time is here when the American people should demand observance of a basic principle of economic decency: that whenever the supply of an absolute necessity becomes monopolized in an industry, that industry can no longer be left in private hands but must become the nationalized property of all the people. Oil first of all.
Yet, supinely, most of the nation seems to have accepted the false notion that all our woes are the fault of government, and a drive is on to strip government of its ability to protect the people against corporate exploitation. The recent action by Congress to cripple the Federal Trade Commission is a flagrant case.
The last tax bill passed by Congress gave half of all tax reductions to people with incomes of more than $200,000. And the voice of special privilege has controlled much of the action of the present Congress.
Meanwhile, in world affairs the outlook is ominous indeed. Mere mention of Iran or Afghanistan tells much of the story. The cold war could be drifting into a hot war which could bring death to most of the human race.
But the outlook is not altogether dark. Good trends are beginning to emerge.
Consumption of energy in the U.S. increased by less than 1 percent last year, compared to the utility companies’ projection of 3.5 percent. And for a number of quarters the use of gasoline has been going down.
Orders for new nuclear facilities are down to zero. Skyrocketing costs, Three Mile Island, and growing public opposition are having their effect.
The Department of Energy is beginning to put some major effort into development of clean, inexhaustible energy from sunlight, wind, geothermal, biomass, organic wastes and farm wastes.
Congress has passed legislation to promote the production of gasohol. Some twenty Wisconsin co-ops have formed a company that will produce large quantities of alcohol for use in gasohol.
Congress at long last has passed a standby bill for rationing of gasoline. It should be a much stronger bill, but it is at least a start.
Congress is almost sure to pass a bill to create a bank to make low-interest loans for solar energy development. There is hope too that the great potential in ore hydroelectric power will not be forever neglected.
While the major oil companies are not in immediate danger of being nationalized, the demand for that action is on the increase. And so is the demand for divesting the oil companies of their ownership of other forms of energy.
Direct dealing between consumers and farers is on the increase; more farmer-consumer markets are being organized. This means lower costs to consumers and better prices for farmers.
What can cooperatives do?
What can the cooperative movement do about all this? It could do a great deal. The big co-ops, at least, could add solar devices to their business; they could promote development of wind energy. Co-ops could form companies to produce energy from farm wastes.
What all co-ops can do is raise their voices to demand the saving of Planet Earth and justice to future generations. We can demand effective rationing of scarce resources and a crash program for development of clean energy alternatives. If this involves political action we should not be afraid of that.
The most hopeful trend of all is the spread of a new spirit fit for the new age among increasing numbers of people. It is the spirit of reverence for Planet Earth as the only home humanity can ever have. It is the spirit that rejects the false standard of material success and instead values people for the sacrifices they make rather than for what accumulate. It is the spirit of caring for one’s neighbors here and everywhere.
But spirit is not enough – not by itself. There has to be an alternative to the present exploitive system of economics. Such an alternative there is. It is here in this room. The alternative is economic and social cooperation. The institutions that you and I are privileged to serve are the best possible responses to the New Age. We are trustees, promoters, guardians and builders of the new world. We face a challenge such as the cooperative movement has never faced before. We must not fail to meet that challenge.
Suppose that all the oil companies were co-ops owned by users of the products. Would they bring on artificial scarcities so prices could be raised? Of course not. Instead, there would be an all-out effort to meet the needs of owner-members, and at the lowest prices consistent with sound business.
Cooperative enterprise, being consumer-owned must be a counter-inflationary force in the economy. If we could get into the minds of millions of people the simple idea that cooperatives are the answer to inflation, that their whole motivation is counter-inflationary, this might add more to our strength and membership than anything we could do.
What is a basic purpose of food co-ops but to reduce the cost of food so people – their owners – can have a decent diet? Why do food co-ops seek direct dealing with farmers? To reduce costs to consumers and increase farmers incomes at the same time.
What will it take to fulfill the role which the times require of us? If cooperatives are to be the health-giving alternative to a very sick monopoly capitalism they will have to grow substantially and they will have to be successful business enterprises. No weak or failing co-ops can help build the better social order which we seek.
Three basic objectives for cooperatives
The cooperative movement must always be guided by three basic objectives:
- first, to make each co-op a successful economic enterprise;
- second, to accomplish this without violating, but in every way strengthening, the principle of democratic control by the members;
- third, never to lose sight of our ultimate purpose: gradual transformation of society from the present exploitive age to the new age of conservation, inter-dependence and cooperation.
Let us be clear that the third objective need not mean “taking over the whole economy.” What it does mean is creating a cooperative segment strong enough to have a salutary effect on the economy as a whole and by its impact become a balance wheel for a just economic and social order.
As to the second objective: Democratic control means that all members, each casting one vote, elect as trustees of their interests a board of directors who then decide policies and general practices to be followed by the cooperative – subject always to submission of the board’s actions for approval or disapproval by the membership.
But democratic control does not mean that either the membership or the board undertakes to manage the day-to-day business affairs. On the contrary the board’s most important duty is to hire the most competent manager it can find and see that the manager faithfully follow the prescribed policies and practices. In the name of the members the board tells the manager what to do within the framework of the policies. If a manager fails to do a good job the remedy is to get a better manager, not to take over management functions.
Let me hasten to add that leaving business management to managers does not mean that participation in the life of the co-op by the members is not an equally important element in all three objectives. The larger the membership the more necessary an excellent newspaper or newsletter wit ample space for members’ letters or comment; regular reports from board and management; committees for challenging assignments; and membership meetings. There are two ways to stimulate attendance at such meetings. One is to get into trouble so you have to report it to the members. The other is to present proposals for growth or new services which only member input can make possible. Needless to say the second is preferable.
There is no question as to the necessity of member loyalty expressing itself in patronage of everything the retail co-op has to offer. But sometimes there is not equal loyalty by co-ops to their wholesales and central organizations or federations. I know of one large Midwestern cooperative that makes no appreciable purchases from its own cooperative regional wholesale. Consequently the wholesale is weakened, its buying power is much less, and it cannot do as good a service job.
Only if there is maximum cooperation among cooperatives can we hope to meet the challenge we face today….
Another kind of cooperation among cooperatives is formation of other kinds of co-ops among the memberships of each. Almost every cooperative of other type should have a credit union among its members. Organized memberships are one of the essential bases for formation of cooperative health plans. Members of large housing co-ops have organized successful consumer goods co-ops. And the converse should be true, with housing co-ops sprouting out of the membership of consumer co-ops. Memorial societies are another natural outgrowth.
To make possible the growth and progress the times demand, there must be capital accumulation. This applies as much to new wave co-ops as to established co-ops. Direct member investment is obviously the best way, and every education department has one of its primary assignments right here. Certainly you are wise to require a fairly substantial investment before a member can receive cash patronage refunds. Deferred refunds are another way. And when possible, put portions of earnings into reserves for contingencies.
Pricing policies have an inescapable relation to capital accumulation, and developing co-ops especially should be careful not to fix their prices so low as to make capital accumulation impossible.
Today we have an opportunity never before present: the National Consumer Cooperative Bank. If we can make it a successful source of loan capital and make the best possible use of that capital for expansion and if we drive relentlessly toward the day of full co-op ownership of the bank, we could be well on the way to meeting our challenge.
I have a deep and abiding faith in this great humanitarian movement of ours. We can succeed. There will be time.
Jerry Voorhis (1901-1984), a lifelong advocate of co-ops, served five terms in the U.S. House of Representatives from southern California from 1937-1947, then served as executive director of Cooperative League of the USA from 1947-1965 and its president from 1965-1967.