Rethinking Cooperatives in the 21st Century (6)

If a young elephant were to challenge the bull, the encounter would be raw, grounded, and brutally honest. The elephant, still growing into its power, might rely on size and momentum, charging with youthful arrogance. But the bull, seasoned and compact, would not flinch. It would lower its head, brace its stance, and meet the charge with concentrated force. The clash would not be elegant—it would be dust, muscle, and stubbornness. And in that moment, the elephant would learn that brute strength without control is a liability. The bull may not win by overpowering, but by standing its ground, it teaches the elephant that maturity isn’t about being bigger—it’s about knowing when to push, and when to hold.

If the young elephant were to challenge the eagle, the battle would not be one of equals, but of contrasts. The elephant, still learning the weight of its own footsteps, might charge with brute enthusiasm, shaking the earth beneath. Yet the eagle, seasoned in the art of distance and precision, would never descend to meet the elephant head-on. Instead, it would rise higher, watching, waiting, striking only when the elephant’s guard falters. Victory, in this case, would not be measured by force, but by finesse. The eagle wins not by overpowering, but by outlasting—reminding the young elephant that strength without strategy is merely noise.

Well, when the young elephant, brimming with ambition yet lacking the wisdom of age, sets out to defeat the eagles and the bull, the lesson must be crafted not through brute force but through consequence. Let the eagles rise in coordinated flight, weaving circles above the elephant’s head, taunting not with violence but with elegance and speed. Let the bull, grounded and resolute, stand firm—not to charge, but to mirror the elephant’s own stubbornness. And when the elephant, confused and exhausted, finds itself outmanoeuvred in air and outmatched in resolve, it must stumble—not fall, but falter—long enough to realise that power without perspective is a lonely march. The true defeat lies not in bruises, but in the echo of silence when no one follows.

Back to our book discussion.

Claudia Sanchez Bajo and Bruno Roelants argue that while the previous chapters focused on the causes, mechanisms, and structural vulnerabilities of the financial crisis, this chapter shifts the focus toward solutions and practical examples. The authors introduce the concept that cooperatives — whether worker, consumer, or producer-based — embody principles of shared ownership, democratic governance, and long-term sustainability, which contrast sharply with the short-term, speculative incentives dominating conventional capitalism.

They emphasise that cooperatives are not merely idealistic or niche experiments, but have demonstrated real-world resilience during economic downturns. By introducing these examples, the authors aim to explore how cooperatives manage to balance financial viability with social purpose, protect members from the worst effects of debt crises, and provide an alternative pathway for economies to grow in a more sustainable and humane way. 

The authors highlight the critical role that cooperatives play both economically and socially across the globe. They argue that cooperatives are not marginal or niche actors; rather, they are major contributors to employment, wealth creation, and social cohesion in many countries. Economically, cooperatives generate substantial revenue, stabilise local economies, and provide goods and services that might otherwise be neglected by profit-driven corporations. They often operate in sectors such as agriculture, banking, housing, and retail, where they serve large populations efficiently and equitably.

Socially, the authors emphasise that cooperatives promote democratic participation, collective decision-making, and shared responsibility. Members are both owners and participants, which encourages long-term thinking, ethical practices, and social solidarity. Cooperatives also tend to be more resilient during economic crises, because their governance structures and member-focused missions reduce the pressure for short-term speculative gains. By combining economic efficiency with social purpose, cooperatives demonstrate that it is possible to pursue profitability without sacrificing community welfare or ethical standards. The authors use this subchapter to set up cooperatives as a practical and scalable alternative to the unsustainable, debt-driven practices of conventional capitalism.

The authors emphasise that cooperatives are significant economic actors worldwide. They argue that cooperatives generate substantial revenue, maintain stability in local and national economies, and provide goods and services in sectors that may be unattractive to profit-driven corporations. Cooperatives often operate in agriculture, banking, retail, housing, and energy, creating markets that might otherwise be underserved. Their model ensures that wealth generated stays within communities rather than being siphoned off to distant shareholders. By doing so, cooperatives contribute not only to GDP but also to the long-term resilience of economies, helping to prevent the boom-and-bust cycles typical of debt-driven capitalist systems.

The authors highlight that cooperatives have a strong social dimension. They create employment opportunities that are often more stable and inclusive than conventional firms, offering jobs with fair wages, benefits, and participatory governance. By involving members directly in decision-making, cooperatives foster skills development, empowerment, and social cohesion. Beyond jobs, cooperatives build social capital: they encourage collaboration, community engagement, and ethical responsibility. Their approach reduces inequality, gives a voice to marginalized groups, and strengthens the social fabric of society, making communities more resilient in times of economic crisis.

Sanchez Bajo and Roelants point out that many benefits of cooperatives escape conventional economic metrics like GDP or profit margins. These include trust, solidarity, social cohesion, ethical business practices, and empowerment of members. Cooperatives often address needs that are socially essential but not profitable — for instance, providing affordable housing, local banking, or community services. They also maintain employment in downturns when traditional firms might lay off workers. Such contributions enhance quality of life, reduce social tensions, and create a more stable and resilient society, yet they are largely invisible in conventional accounting and economic statistics.

The authors argue that cooperatives have demonstrated a remarkable ability to withstand economic shocks compared to conventional capitalist firms. They explain that the inherent structure of cooperatives — where members are both owners and participants in governance — aligns economic decision-making with long-term sustainability rather than short-term profit. This alignment reduces exposure to speculative financial practices and encourages prudent management of debt and resources.

They provide examples showing that during financial crises, cooperatives often maintain employment, continue to provide essential goods and services, and preserve community wealth. Their democratic governance and member-focused mission create incentives to prioritise collective well-being over risky ventures, making them less vulnerable to market volatility. The section concludes that cooperatives’ resilience is not accidental but a structural feature of their model, demonstrating that economic enterprises can combine financial stability with social responsibility.

The authors elaborate on how cooperatives are guided by a unique logic that differentiates them from conventional capitalist enterprises. They argue that to understand cooperative resilience and effectiveness, one must examine both their international standards and operational principles, which together constitute the “cooperative rationality.”

Firstly, the international cooperative standards provide a framework that defines what a cooperative is and ensures that cooperatives adhere to principles of member ownership, democratic governance, and social responsibility. These standards serve as a global reference, allowing cooperatives to maintain their identity while operating in diverse economic and cultural contexts.

The first layer of cooperative rationality: the international definition emphasises the legal and conceptual recognition of cooperatives. It clarifies that cooperatives are enterprises owned and controlled by their members, who share in both benefits and responsibilities. This definition underlines the cooperative commitment to collective welfare, participatory decision-making, and the prioritisation of members’ needs over profit maximisation.

The second layer of cooperative rationality: the operational principles, focuses on how cooperatives function in practice. These principles — such as voluntary membership, democratic member control, member economic participation, autonomy and independence, education and training, cooperation among cooperatives, and concern for community — guide daily decisions and long-term strategy. They ensure that cooperatives remain mission-driven, sustainable, and socially responsible, even under economic stress. Together, these layers explain why cooperatives can maintain resilience and fairness, demonstrating that their rationality is not merely financial but deeply social and democratic.

The authors explicitly define cooperative values and list the key principles that underpin them. They define cooperative values as the core ethical and moral beliefs that guide how cooperatives operate and how members interact with each other. These values form the foundation for cooperative governance, decision-making, and social responsibility, distinguishing cooperatives from conventional profit-driven firms.

The authors explicitly enumerate the main cooperative values as:

1. Self-help–members take initiative to improve their own and collective well-being.
2. Self-responsibility–members are accountable for their actions within the cooperative.
3. Democracy–each member has a voice in decision-making processes.
4. Equality–all members are treated fairly and have equal opportunities.
5. Equity–benefits and responsibilities are distributed fairly among members.
6. Solidarity–members support each other and act with social cohesion.

They explain that these values are not just abstract ideals; they actively shape cooperative behaviour, governance, and outcomes. They are the ethical backbone that allows cooperatives to pursue economic objectives while also promoting social welfare, trust, and long-term resilience.

They emphasise that cooperative values are the moral and ethical foundation that distinguishes cooperatives from conventional capitalist enterprises. They argue that values such as self-help, self-responsibility, democracy, equality, equity, and solidarity guide not only the governance of cooperatives but also the behaviour of their members in daily operations. These values ensure that decisions are made with the collective interest in mind, rather than for the benefit of external shareholders or short-term profit maximisation.

The authors stress that cooperative values are not just symbolic ideals; they actively shape economic and social outcomes. For example, the value of solidarity encourages members to support each other during financial or operational difficulties, while democratic participation ensures that all voices are heard and that management is accountable. Equity and fairness reduce internal inequality and foster trust among members, which contributes to the long-term resilience of the enterprise. By embedding these values into their structure, cooperatives align economic activity with social purpose, showing that business success can coexist with ethical responsibility and community welfare.

The authors describe mutuals as a kind of economic organisation that shares a spiritual kinship with cooperatives but differs slightly in its structure and purpose. They explain that while both mutuals and cooperatives are founded on principles of solidarity, self-help, and collective benefit, mutuals usually concentrate on providing specific services—such as insurance, finance, or healthcare—to their members, rather than engaging in broader productive or commercial activities.

According to the authors, mutuals are owned and governed by their members, who are simultaneously the users of the services they provide. The primary aim of these organisations is not profit maximisation, but rather the mutual protection and welfare of their participants. In this sense, mutuals embody an alternative economic rationality, where trust, reciprocity, and shared responsibility replace the competitive individualism typical of capitalist firms.

Bajo and Roelants further highlight that mutuals, much like cooperatives, represent a more human-centred model of enterprise. They illustrate how these organisations weathered the global financial crisis more resiliently because they prioritised stability and member security over speculative gains. Mutuals, therefore, stand as living proof that sustainable economics can emerge from community-driven initiatives rather than market greed.

The authors explain that mutuals are indeed close relatives of cooperatives, sharing many structural and ethical similarities. Both are owned and controlled by their members, and both operate not for the maximisation of profit but for the benefit of those who participate in them. However, the authors emphasise that while cooperatives are built upon a broad philosophy of social transformation and community empowerment, mutuals tend to have a narrower scope, focusing mainly on providing specific services such as insurance, finance, or healthcare to their members.

They note that mutuals arise from a spirit of mutual aid—a shared sense of solidarity among members seeking to protect one another from economic uncertainty. Yet, unlike cooperatives, mutuals do not always adhere to the full range of the International Co-operative Alliance (ICA) principles, which include ideas such as democratic control, member economic participation, and concern for the wider community. Thus, while mutuals embody the idea of shared benefit, cooperatives represent a deeper rationality — one that blends economic participation with moral and social responsibility, aiming to contribute not only to the welfare of members but also to the advancement of society as a whole.They note that mutuals arise from a spirit of mutual aid — a shared sense of solidarity among members seeking to protect one another from economic uncertainty. Yet, unlike cooperatives, mutuals do not always adhere to the full range of the International Co-operative Alliance (ICA) principles, which include ideas such as democratic control, member economic participation, and concern for the wider community. Thus, while mutuals embody the idea of shared benefit, cooperatives represent a deeper rationality — one that blends economic participation with moral and social responsibility, aiming to contribute not only to the welfare of members but also to the advancement of society as a whole.

The authors present mutuals as a kind of “sibling institution” to cooperatives: similar in spirit, but more pragmatic and limited in ambition. Where cooperatives dream of reshaping the economy for collective good, mutuals simply strive to make the risks of life a little more bearable.

The authors argue that cooperatives cannot be understood merely as business entities; rather, they must be viewed as political and social actors embedded within the larger dynamics of capitalism. They stress that cooperatives emerge not simply to compete in the market, but to challenge the dominant economic logic—a system that prioritises profit over people, accumulation over equality, and speculation over production.

The authors propose that cooperatives operate within what they call a “dual nature”: on the one hand, they function in the same market system as capitalist enterprises, forced to deal with competition, pricing, and financial pressures; yet on the other, they uphold a distinct set of values—democracy, solidarity, and collective ownership—which push against the individualism and hierarchy typical of capitalism. This duality makes cooperatives both part of the system and a quiet form of resistance against it.

Bajo and Roelants also highlight that from a political economy perspective, cooperatives represent a redistribution of power within the economy. By giving workers and members control over decision-making and profits, cooperatives democratise economic life and provide an alternative model of governance—one that could, in the long run, help rebalance society’s relationship between capital, labour, and community.

Claudia Sanchez Bajo and Bruno Roelants present the Natividad Island Divers’ and Fishermen’s Cooperative as a compelling example of how small-scale, community-driven cooperatives can effectively manage natural resources to generate sustainable wealth. Located off the Pacific coast of Baja California, Mexico, Isla Natividad is a small, arid island inhabited by approximately 400 people, primarily dependent on artisanal fishing for their livelihoods. The cooperative, officially known as Sociedad Cooperativa de Producción Pesquera Buzos y Pescadores de Baja California, holds a government concession granting them exclusive rights to exploit the surrounding marine areas.

The cooperative's primary activity involves the harvesting of abalones, a rare and highly valued shellfish. Divers use a hookah system, spending four to five hours daily underwater, assisted by colleagues on small boats. This method allows divers to earn substantial incomes, with some earning up to US$10,000 per month, significantly higher than the national average. The cooperative's success is attributed to its democratic governance, collective ownership, and a strong commitment to sustainable fishing practices.

The cooperative's economic model emphasises the equitable distribution of profits among members, fostering a sense of community and shared responsibility. By controlling the entire production chain—from harvesting to marketing—the cooperative ensures that the benefits of their labour remain within the community. This approach not only enhances economic stability but also strengthens social cohesion, as members collaborate to maintain and improve their shared resources.

Recognising the vulnerability of marine ecosystems, the cooperative has implemented measures to ensure the long-term viability of its fishing grounds. They have established marine reserves and conduct regular monitoring to assess the health of marine life. These initiatives are supported by scientific organisations such as Comunidad y Biodiversidad A.C. (COBI) and the Reef Check Foundation, which provide training and resources for data collection and analysis. This proactive approach to environmental stewardship has contributed to the resilience of the cooperative's operations, even in the face of challenges like climate change and overfishing.

Despite their successes, the cooperative faces ongoing challenges, including the impacts of climate change, fluctuating market demands, and the need for continuous investment in sustainable practices. The cooperative has adapted by diversifying its activities, exploring alternative species for cultivation, and engaging in community-based conservation efforts. These strategies not only mitigate risks but also enhance the cooperative's capacity to respond to environmental and economic changes.

The Natividad Island Divers’ and Fishermen’s Cooperative exemplifies how small-scale, community-based organisations can effectively manage natural resources to generate wealth and promote social well-being. Through democratic governance, sustainable practices, and a strong sense of community, the cooperative has created a model that balances economic success with environmental and social responsibility. Their experience offers valuable insights for other communities seeking to develop sustainable livelihoods while preserving their natural heritage. [https://www.youtube.com/watch?v=t4zJKKca5Dc]

Ultimately, the authors convey a central message that economic enterprises can thrive without abandoning social responsibility, democratic governance, or environmental stewardship. They argue that the global financial crisis exposed the vulnerabilities of conventional capitalist firms, which prioritise short-term profits and speculative gains over long-term sustainability and community welfare. Through detailed case studies of cooperatives, including the Natividad Island Divers’ and Fishermen’s Cooperative, the authors illustrate that alternative models of economic organisation — grounded in collective ownership, member participation, and ethical values — can generate wealth while protecting both people and the environment.

The book’s broader point is that cooperatives are not marginal or quaint exceptions, but rather viable and scalable alternatives that demonstrate how markets can function in harmony with society. By highlighting cooperatives’ resilience, ethical framework, and commitment to sustainability, the authors challenge the assumption that profit maximisation must come at the expense of social good. Ultimately, they advocate for an economic paradigm where shared responsibility, democratic decision-making, and long-term thinking guide business practices, showing that human-centred economics is not only possible but necessary in the modern world.

[Part 7]
[Part 5]

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