This is the second part of an interview with Cath Muller of Radical Routes (here’s the first part). Cath hitch-hiked across the Atlantic on a sailing boat, to visit co-operatives in the States. I talked with her about the differences between co-ops over there and in the UK.
Hi Cath. What’s the difference between surplus and profit, in the co-operative world? I always understand the word profit to mean not just surplus, but surplus that’s extracted from a business to pay shareholders / owners, rather than being ploughed back into the business.
Yes. When consumer co-ops were originally being created, they were clear that they were collectively buying things, and that they would need a bit of extra money to cover expenses, to buy stock in advance, but they didn’t know how much, so they charged a bit more than it cost them to buy the goods. But then at the end of the year, they’d pay the surplus back to members in the form of a dividend. That’s what a dividend in a retail co-op is – you get money back in relation to how much you’ve spent. The co-op could use it to develop itself instead, or to keep reserves in the business.
In a worker co-op on the other hand, the workers have put in time, and if the co-op has made a surplus, then the workers haven’t been paid the full value of their work. So at the end of the year, a lot of worker co-ops pay any surplus back to workers, as it was always theirs in the first place. In a common ownership co-op (where assets are owned in common, rather than in the name of individual or group workers, consumers etc.), that money would just stay in the common pot, and be used to develop the business.
But that surplus is not profit, because people are not trying to invest money and then get more back (which would mean making money, ultimately from other people’s work).
Could you illustrate how surpluses can be generated from sharing and co-operation by comparing some of the places you visited, and that you’re familiar with.
I mentioned that in Cornerstone Co-op we have large houses, gardens and space to set up businesses. If you extrapolate that to a much larger co-op / commune, I went to visit Twin Oaks community in Virginia, which is an egalitarian community. That means everyone has access to the same levels of spending power / resources. It’s not structured like Cornerstone, where we pay rent. So we have to find money somewhere to pay the rent to the co-op. At Twin Oaks, they have income-generating businesses on-site, and they describe themselves as a worker-owned co-operative. At Footprint worker co-op (a printing co-op situated at Cornerstone), some of the work we do generates income – like printing, designing etc. – and some doesn’t – like cleaning the toilets etc. At Twin Oaks, they have a tofu factory, a hammock-making facility and a couple of other smaller businesses.
I’ve actually visited Twin Oaks. I travelled a lot visiting communities in my twenties and thirties. I also lived at Redfield Community in Buckinghamshire for 13 years. There were 15 of us in a Victorian mansion, with 20 acres. It worked and still works really well. But Twin Oaks is something else. So impressive.
It’s brilliant, isn’t it? It’s 50 years old, there are 100 people, of all ages. Babies are born there, and there’s a graveyard, with 15 people in it now.
Don’t people build their own houses?
They used to I think, but not now. They live in small living groups of between 8 and 12 people, in buildings with multiple bedrooms, plus communal living and cooking areas. But there’s also a massive community building, where lunches and dinners are made and served, where all of the communications happen in terms of proposals, notices, timetables etc. That’s where people tend to hang out. It has a library, kids space etc.
As well as their income-generating businesses, there are other things that members have to do. Everyone has a labour quota of 42 hours per week (with exceptions for age and capacity). This includes not only work in the businesses, but also veg growing, looking after the dairy herd, making lunches and dinners, clearing up, child care, elder care, property maintenance, meetings, wood splitting – all the things that in a mainstream lifestyle would be considered outside of work time. This leaves you with quite a lot of spare time. The surplus that they generate by living closely together and sharing tasks creates this wonderful sense of plenty – at least that’s what I felt.
Also, if you hate cooking, then you never have to cook – there are plenty of other things to do. But you still get 2 luxurious meals per day – all your food is organic and high quality. You’ll get looked after whatever happens to you. There’s a care centre with gym, hoists etc. where people stay if they need extra care. The kids are home-schooled. There’s a lake and a river to swim in; there’s a huge communal clothes store. You can arrive there with nothing, and live a really full life – and you never need to think about money, at least within the community.
However, the community does exist in a wider, capitalist world. People want more money to go on holiday, to visit family and friends etc. So over the years, they’ve come up with interesting rules – for example, to maintain egalitarianism on-site, if you have more money – such as savings, inheritance, gifts etc. – then you have to go off-site for 24 hours before you can spend it. That maintains equality on-site. People can’t just go to town, buy luxury goods and come back. People can pool income or work overtime to earn more money for holidays etc. Everyone gets $100 per month allowance on top of all the necessities of life that are provided by the community.
People in the capitalist world often conflate the words surplus and profit, but I think they’re different, and I think the word ‘extractive’ is crucial in understanding this. Profit, in a capitalist company, is extracted from the people who generated it, and given to people who didn’t generate it. Whereas, in the co-operative world, it’s never extracted from the people who generate it – either it’s ploughed back into the business they work for (and own), or it’s given to them as a dividend, or in some other way, but it’s not taken away and given to people who did no work. I think a lot of people have difficulty in distinguishing between those two concepts. Surplus and profit are not the same things.
I think it’s really important in our culture, which is so far from a co-operative culture, to focus on those philosophical differences, so that people get their heads around it. A surplus should be for the people who generated it.
I also know that there’s a fear of the word collective or collectivisation on the right. I just want to stress that what we’re talking about is entirely voluntary. We’re not talking about some sort of state apparatus that’s forcing people to collectivise. We’re talking about people doing it because they want to.
Absolutely. I’m trying to imagine a co-operative world where people are forced into it, but I can’t.
The Jordan Peterson fans of this world are scared of totalitarianism, and they’re scared of collectivisation because they see it as some sort of imposition.
It’s seen as a loss of agency or autonomy, which is interesting, because in our current system, anyone who doesn’t have a large amount of money already doesn’t have agency, and will experience a lack of autonomy. People working in multiple jobs for low-paying, exploitative employers don’t have any spare time at all, their housing might be shit etc. To me, the idea of giving up precarious individual lives for plentiful collective lives, where you’re accountable to other people that you know, rather than being accountable to the state or to corporations seems to me like more liberty, not less. But people have this idea that money provided liberty, but what it does is provide individual liberty at the whim of banks and corporations and the state.
I think there’s a myth that’s been sold to people in the West, and especially in the US – although you’d know better than me – that if they’re poor, it’s just a temporary situation, and really, their natural state is to be wealthy, but they’re experiencing a temporary blip, and soon they’ll be wealthy, so they keep plugging away in this system. They think ‘this is just a temporary embarrassment, and I’ll be rich soon’. But of course that’s not going to happen for the vast majority of people. It seems really strange to keep banging your head against that wall.
It is strange. But it’s reflected in the language, even in the co-operative movement, so in the UK, we talk about worker members of co-ops, but in the US they talk about worker owners, and the idea that every member owns a share of the co-op is crucially important. In the UK, yes, that’s quite a conventional model, that you buy your member’s share, which might be hundreds or thousands of pounds, depending on how high-earning the co-op is. That’s useful for the co-op – it means it has some working capital to play with if it needs it. But it’s not essential, and many co-ops are in common ownership here, without that individual ownership of a portion of the company.
But in the States, it’s seen as really important that individuals should own their share of their business – and that’s confusing to me.
I mean I can see it. People like to have that security of ownership of something. As long as it’s a co-operative, non-extractive enterprise, I’m not sure I have a problem with that. It’s certainly better than the extractive economy.
It’s better than the extractive economy, but it sort of entrenches individualism rather than collectivism. It’s just a philosophical difference between the two cultures I think. And it speaks to the nature of the people who colonised North America – individualists and pioneers who were trying to be self-sufficient and own their own bit of something.
I guess if somebody says ‘I don’t want to exploit or extract money from anybody else. All I want is a little smallholding, grow my own food, produce a surplus to sell at the local market, and to be left alone’, I’d say, yes, if you want to do that, that’s absolutely fine. There needs to be room for people to go their own way.
Oh yes. It’s just interesting that it carries more legitimacy in the US than the common ownership approach. Both approaches are just as legitimate in the UK.
We need to build a surplus in the co-operative / new economy don’t we? But it’s very difficult to get investment and to make the sector grow.
We don’t compete for the billions that are circulating in the capitalist economy. I tend towards the opinion that we create surplus by sharing more. Yes of course we should try to get money in somehow from the rest of the economy, but we can’t just wait for that to happen – we need to continue trying to develop the sector; and individual lives are more likely to be improved in the short term by getting together with other people.
A lot of people I talk to love the idea of working in the co-operative / alternative sector, but they just can’t escape. They’re stuck in a corporate job that they don’t like; they have a mortgage, and they can’t see any way to get out of their situation. What would you say to them? How do they take that step?
Well if people are not in a position to reduce their lifestyle costs, then I honestly don’t know what they can do. That’s the main thing. What I’d like to do next, if I can, is to develop a commune based on Twin Oaks. 100 to 200 people.
Where do you want to do that?
I’d like to do it in Yorkshire, although the planning laws might prevent it. But I’ll start looking there. We’d have to think about what income-generating businesses we might have – businesses that would require a reasonable amount of unskilled labour, but producing things that are reasonably high value. And with something as big and as counter-cultural as this would be, we’d have to be quite firm in laying out what would and wouldn’t be expected. After a while, the culture becomes entrenched and people moving in just fit in with whatever exists. But at the beginning it will be difficult, so I’m very interested in how things might develop.
With the people we’ve interviewed so far, there’s a common theme emerging – that there’s a crash coming, and people are building co-operative / community / commons networks to catch people when the inevitable crash comes. What do you think about that?
In a world where you can’t do very much, that seems like the best you can do. It’s hard to know what other options there are, other than let’s keep as many people living well as possible.
Where can people keep up to speed with what you’re up to?
- A surplus should be for the people who generated it.
- The idea of giving up precarious individual lives for plentiful collective lives, where you’re accountable to other people that you know, rather than being accountable to the state or to corporations seems to me like more liberty, not less.
- In the UK, we talk about worker members of co-ops, but in the US they talk about worker owners, and the idea that every member owns a share of the co-op is crucially important.
- What I’d like to do next, if I can, is to develop a commune based on Twin Oaks. 100 to 200 people. (in Yorkshire)
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1Grandfather Michael August 25th, 2019
I remember Twin Oaks from years back. In your informative and interesting blog there appears to be no comment on ethics and a relationship with Nature, environmental issues as guiding principles.
2Dave Darby August 25th, 2019
Michael – this article was more about the co-operative / economic aspects, but I remember when I was there, I think that most if not all of their electricity was and probably still is generated from on-site renewables, all the growing there was organic, and because of sharing, and living outside of consumer culture, individual levels of consumption, and therefore resource use and waste, were extremely low compared to the norm in the US.