An Outline History of Cooperatives in the Bay Area and California

By John Curl

John Curl is author of For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements and Communalism in America. Oakland: PM Press, 2009, ISBN 978-1-60486-072-6



COLLECTIVITY IN INDIAN TIMES

For thousands of years the San Francisco Bay Area supported a population of thousands of Ohlones, Miwoks, and Wintuns living in a stable life system based on peaceful collectivity.

The basic societal unit was a tribelet of typically about 250 people. There were about thirty permanent villages scattered around the Bay and into the delta, alongside rivers and creeks. The typical village had about fifteen houses arranged in a circle around a plaza, with a communal sweat lodge. Their houses were dome-shaped, framed with bent willow poles, between about six and twenty feet in diameter, each housing an extended family; the sweat lodges were usually twice as big as the family houses. Besides these main villages, there were other settlements used at different harvest seasons, and families and tribelets moved about throughout the cycle. The bay was also shared with tribelets having their primary villages inland, who made treks here in regular seasons for particular harvests.

Most tribelets spoke different dialects, but all lived in very similar life patterns. Food was readily available, so they lived entirely by hunting and gathering; hunger was entirely unknown. Annual intertwined harvests were connected with rituals and social celebrations oriented toward maintaining balance in the natural world and among people. Among the tribelets there was a complex network of trade, marriage, gift-giving, and ritual feasts. There were occasional conflicts between tribelets or villages, but differences were almost invariably settled with gifts as reparations to wronged parties.

Most hunting and gathering was done by extended families, but periodically they worked in larger communal groups. Communal hunts were invariably followed by great feasts and celebrations. Catches were divided in a ritual manner, with different parts of particular animals going to designated family members, relatives and neighbors.

Each tribelet had an elder man or woman in a chief-like position, but this position held mostly moral authority, and a chief's power varied with the respect commanded by deeds. A new chief was chosen by a consensus of elders, always however from the same family. The chief's main job was to maintain the traditional balances within the village, and tribelet, and with neighboring tribelets. This included seeing to the general welfare of the community. It was considered a great personal shame on the chief if anyone in the tribelet was needy. Cooperation and sharing were virtues, and competitiveness was not. People gained status in the community through generosity. Private property in land was unknown. Families and tribelets had "collecting rights" to particular areas to gather foods, but were expected to be generous to neighbors; should a harvest in one area fail, the unfortunate tribelet or family could traditionally share in the resources of adjoining areas. It was virtually unthinkable to let a neighbor go hungry. The elderly, crippled, sick, and children were well cared for by the village. A person's goods were not handed down in the family after death, but were dispersed or destroyed.

SPANISH and MEXICAN PERIODS

When the Spanish arrived, about 350,000 Native people lived in Alta California, including about 10,000 each of Ohlone, Miwok, and Wintun. The Spanish began their first settlement and mission in San Diego in 1769. San Francisco Mission Dolores was founded in 1776, and the following year the first East Bay mission at Santa Clara. In all, they organized a chain of 21 missions. The missions acquired great wealth by forced Indian labor, the primary economy of the region. Within a short time, the Native peoples' way of life disrupted and destroyed. After a half century of Spanish rule, ended by the Mexican Revolution of 1821, the Native population was reduced by over 2/3rds.

Californio settlers from Mexico, many artisans among them, arrived in groups that were cooperative en route, then dispersed and lived in ranchos or agricultural settlements near the missions. Californios were never very numerous, and their population peaked around 7,000. There was little private land during the Spanish period. The government did not offer community land grants in California, as they did in New Mexico, where the cooperative ejido system was widespread. Instead, they granted land to individuals for cattle ranching. Most of California land was considered usable primarily for ranching, but over 30 acres was needed for each head, so grants were large. During the entire Spanish period, fewer than thirty land grants were issued. Much of the East Bay, including the sites of Oakland and Berkeley, was granted to the Peralta family as Rancho San Antonio, less than a year before the declaration of the Mexican Republic in 1821. When the new Mexican government took over, it accelerated the land grant program, and there were over 1,000 California land grants by 1840.

AMERICAN INVASION and GOLD RUSH

Between 1840-46 about 1,500 US citizens entered California, mostly in overland emigrant parties from the mid-west. These Anglo-American home seekers, beginning in 1841 with Bidwell's Party of 32 emigrant men, women and children from Missouri, were typically cooperative and collective en route in their wagon trains, with elected leaders. Although some settled together after arriving, most disbanded and each family went its own way.

Soon after the American conquest of 1846-48, gold was discovered and people poured into California, thousands in emigrant parties, with San Francisco the dock to prepare for the jump into the gold fields. Over 100 parties of ?Americans? from the mid-west and east flooded in overland in 1849, and large numbers arrived from the east by sea, about 77,000 people in all, exploding the non-Indian population four times, then almost doubling it again the next year. About 20,000 entered from Mexico, Britain, France, Spain, Chile, Peru, Hawaii, China and other countries. The region and the city quickly took on an international character.

At the beginning of the Gold Rush, Yerba Buena?soon to be renamed San Francisco?was still a sleepy port town of 812 people, dealing mostly in cowhides and tallow. Almost overnight the entire fabric of Bay Area and California society changed. By the summer of 1849, San Francisco had become a booming commercial center of 5,000, and by 1850, of 25,000. By 1850 over half the population was engaged in mining. All routes to the mines started at San Francisco, and the gold flowed back through it. The Bay Area suddenly became the hub of the region.

In the mines this situation produced what many early historians described as a unique social spirit. "It is sometimes said," an historian wrote in 1886, "that the miners of 1848 and 1849 had the most interesting and efficient system of cooperation, successful for years, but finally broken down and destroyed by the encroachments of capital. They joined their labor, man to man, in many a company to turn the course of mountain streams and mine the rich gravel beds below. Hundreds of such organizations, most assuredly cooperative, existed during the mining days. . . but by 1856 most of the mining rights and water rights acquired by them had lapsed, or had passed into the hands of capitalists. Some of these simple cooperative groups fulfilled the purpose for which they were organized and then disbanded." (Schinn)

"Every man was a laborer," a later historian added, "whether or not he had previously been a teacher, lawyer, farmer, mechanic, preacher or sailor. Physical labor was honorable. Class lines and class distinctions were forgotten, and a universal spirit of rough democracy prevailed. This wholehearted democratic spirit of the mining days permeated virtually every phase of early California life." (Cross).

California labor historian L. Eaves wrote in 1910, "There were miners' unions in all the camps - meetings where the conditions under which the mines should be worked were freely discussed, and regulations binding upon the community agreed upon. They heartily approved of the prevailing regime of absolute democracy and equality of opportunity, and vigorously opposed all efforts to introduce any class of servile labor."

SQUATTERS

Large numbers also flooded into California looking for land to farm. Most became squatters. Apart from the Spanish and Mexican land grants, most of California was considered public land, and that was where miners and squatters primarily staked claims. There was deep sympathy and solidarity between miners and squatters, for those who failed in the mines commonly turned to farming.

Squatting quickly became widespread throughout rural California. In the westward expanding US in the early 1800s, squatting was sanctioned by the ?preemption? acts, which offered a process by which squatting on unsurveyed land could become a legal homestead. (These laws would be superceded by the Homestead Act of 1862.) The first California legislature in 1850 awarded the right of preemption to anyone settled on and improving up to 160 acres of public land.

In the fall of 1850, after just two years of boom, the economy tanked hard. Squatting quickly became common in urban areas, including San Francisco. Many urban squatters were former miners. Mutual aid played a predominant role in urban squatter settlements.

The squatters claimed that all land should be presumed to be public until legal title should be proven, and in San Francisco a Settlers' Party was formed to protect squatters' rights. In the East Bay the squatter town called Contra Costa was founded in 1850, which would develop into Oakland. There were squatter riots in Sacramento in 1850, put down by two militia companies. In 1856 the State legislature passed another law recognizing squatters' rights, but it was struck down by the state Supreme Court.

By the treaty that ended the war, Mexican land grants were to be respected. This involved over eight million acres of the best land in California, held by about 800 people. Almost none of this land was opened to homesteaders, but instead most of it was taken over intact by Anglo-Americans, often by fraud and swindle. Land speculators had a heyday. Most failed miners found themselves stonewalled out of the farming areas. Thousands of small holdings were snatched out from under settlers by false and forged claims.

The national land question, debated since the founding of the US, was briefly resolved when Congress passed the Homestead Act of 1862, partly as an incentive to northern workers during the Civil War. California was seen as a social safety value for workers exploited in eastern cities, and as area of social experimentation. But most of this "free" western land, and the best of it, in California as elsewhere, quickly wound up in the pockets of speculators and the railroads. Over 20 million acres of California were granted to the railroads, which quickly came to dominate the state. Only a small percentage of those who poured into the west ever held onto any land. By 1870 the ownership of California land was firmly established in the pattern we have to this day. In 1871 Henry George wrote, "The land of California is already to a large extent monopolized by a few individuals." Out of a population of 600,000 at that time, sixteen men each controlled over 84 square miles, about 500 owned half the farmable land in the state, and the vast majority were landless.

WORKER COOPERATIVES

Industrial worker cooperatives were common in early San Francisco. The Knights of Labor had a presence, and encouraged worker cooperatives with their vision of a Cooperative Commonwealth and their nationwide chain of almost 200 worker cooperatives.

In 1867 the San Francisco boot and shoemakers staged a general strike in their industry in protest of reductions of prices for piece work. This was connected with the introduction of Chinese labor. The strike failed and many of the workers formed the United Workingmen?s Cooperative Boot and Shoe Manufacturing Company of San Francisco. Two decades later it was still ranked as ?one of the most solid business houses in the city.?

Completion of the transcontinental railroad in 1869 resulted in layoffs of many workers, causing unemployment, and leading to worker cooperatives. In 1870 there were three cooperative foundries in San Francisco, a cooperative saddle and harness company, and five cooperative boot and shoe factories, some of them organized by the shoemaker labor union known as the Knights of St. Crispin. In 1872 the Pacific United Workingmen?s Furniture Manufacturing Company organized with a capital stock of $50,000.

Historian Clare Horner lists the following worker cooperatives in San Francisco during the early period (with year founded): Carpenters? Eight-Hour Protective Union Co-operative Planing Mill (1867); Journeymen?s Co-operative Boot and Shoe Manufactory (1867); United Workmen?s Boot and Shoe Factory (1868); Metropolitan Boot and Shoemakers? Union (1868); Women?s Co-operative Union (ornamental goods, clothing) (1868); St. Crispin?s Co-operative Boot and Shoe Factory (1869); California Co-operative Boot and Shoe Factory (1869); Miners? Foundry (1869); co-operative tailors (1870); Woman?s Co-operative Printing Union (1870); Golden State Iron Works (1870); Columbia Foundry (1871); co-operative printing shop (1871); co-operative laundry (1877); Co-operative Watch Repairing Co. (1881).

How long many of these worker cooperatives continued is not recorded, but it is likely that most of them succumbed during the wave of repression of the Knights of Labor chain of cooperatives in the years following the Haymarket Massacre of 1886.

All Chinese people entered California as contract labor for one of six companies, but many soon set up independent businesses, particularly laundries, often as cooperatives. The six companies were involved in organizing an extensive and very disciplined system of Chinese-American worker cooperatives in the San Francisco area.

CO-OP STORES & FARMER CO-OPS

Cooperative Union Store opened in San Francisco in 1867, the first cooperative store in California, organized on principles similar to Rochdale. By 1875 there were six consumer co-op stores in the state. But they ?fell victim to the prosperity that followed the panic of 1873, and to the reaction following too rapid a growth.? (Parker)

In 1874 the Italian vegetable farmers of San Francisco organized a very successful cooperative market, the Colombo Market. In 1910 they supplied 95% of all vegetables consumed in the city. All participating farmers sold under a system fixed prices.

In rural areas in the 1870s the National Grange of the Patrons of Husbandry organized cooperative stores, creameries, agricultural marketing and purchasing associations, and banks in California. In the following decade the Grange faded, but other rural cooperatives continued, particularly in irrigation, road building, farming, telephones, fruit picking and packing, warehouses, supply purchasing and marketing associations.

In 1904 the Cooperative Meat Company of Oakland was organized by the Butchers Union as result of attempt of employers to introduce the ?open shop.? They also opened a sausage factory and operated a branch in East Oakland.

Mutual fire insurance was widespread in California. In 1900 there were mutual companies in six counties; by 1909 in 17.

The Labor Exchange movement of 1889-1906 spread throughout the west, and ran 22 Exchanges in California. Beginning by organizing barter, a number of these Exchanges became Rochdale stores. Dos Palos Rochdale Co (1896) began as an exchange in 1896 and became the first specifically Rochdale store in California, while it continued to market farmer members? produce.

In 1894 the Altrurian Cooperative Councils, based in Oakland, organized the first cooperative store system in the urban Bay Area.

In 1899 representatives of a number of co-op stores in rural California communities came together in Oakland and organized the Pacific Coast Cooperative Union (PCCU). A co-op wholesale?Rochdale Wholesale Co.? opened in 1900 in San Francisco. At that time there were six stores in California. They set out to organize more stores, as they considered these needed to make the wholesale viable. An organizing bureau was formed, and by the end of 1900, there 28 stores in the Rochdale Family. In 1900 the PCCU and the Rochdale Wholesale Co. had the distinction of being the only cooperatives in the US sending delegates to Europe to the congress of the International Cooperative Alliance. In 1905, out of 65 co-op stores in California, 51 were part of the Rochdale group. Historian Ira Cross wrote in 1905: ?In no place is the cooperative movement so strong or so successful as in California.? In 1906, there were 100 stores. But the movement in San Francisco was hurt by the earthquake and fire. They moved the wholesale temporarily to Oakland. The financial panic of 1907 hurt many co-op branches. In 1910 there were about 50 stores in California, including San Jose, most in smaller towns. Of these, 46 were organized together in the Rochdale Family. Each store held stock in the Rochdale Wholesale Co. of San Francisco. They were attacked by other wholesalers, which were trying to force Rochdale into bankruptcy. Many stores were weak, and the wholesale needed a bigger movement to support it. In 1910 they reorganized on new plan. Called the California Rochdale Co., they aggressively organized new branches. Branch managers worked under centralized supervision of the manager of Rochdale Wholesale Co. By 1912 they were a chain of 12 branches. They collapsed in 1913, and all branches closed. Rochdale Wholesale Co. was on verge of collapsing, with less than 30 co-op store as members. However, there were still 100 independent associations in California.

The Pacific Cooperative League (PCL) was formed in 1913 as an organizing & informational organization. They had 30 co-ops members in California at that time. They began with buying clubs as a mail-order scheme attached to Rochdale Co. The first few years they sold only coal, sugar, and groceries. In 1917 they began to organize local stores. Local members formed ?management committees,? but the managers were selected and supervised by the central organization. In 1919 they had 32 branches in California and Arizona. By 1920 they were extended into OR, WA, ID, NV, NM, & TX. They took over the Rochdale wholesale, and joined the International Cooperative Alliance. In 1921 they had 17 stores and a $4 million volume. But they were soon in an internecine war with the Cooperative League (CL) over centralization. CL, founded in 1916 and based in the east, was the primary national cooperative organization in the US. The PCL was also more radically oriented than the CL, and PCL supported the Seattle General Strike of 1919, while CL condemned it. PCL was refused recognition at the 1920 CL National Congress. In the post-war boom of 1923, PCL collapsed, primarily due to overexpansion. But in the Bay Area, the East Bay Pacific Cooperative League continued and resurfaced as a Self-Help cooperative in 1930.

After the economy collapsed in 1929, only 5 co-op stores remained in California.

LAND COLONIZATION

From the early years of the American period, the Bay Area saw waves of urban workers organize cooperatively to form rural colonies in the surrounding region. Many early colonies were planned to be collective only at first. Typically a time period was set up, often ten years during which the land was worked in common and all income from crops, etc., was devoted to paying for it and improving it; afterward the land was divided into individual plots. Many however had an aspect of land development schemes, and many speculators made killings through swindles. "Semi-cooperative schemes are abundant" a 19th century historian wrote, "temporary associations to buy and divide up land, or colonies where each purchaser agrees to certain mutual improvements, are matters of frequent occurrence." (Schinn)

One of the earliest colonies was Anaheim (1858). The site was prepared using Mexican labor; as soon as the workers moved onto it, it was divided, but continued to have many cooperative aspects for some time. There was a long string of colonies in the 1870s and '80s, many involving different immigrant groups: Kingsbury (Swedish), Selma (Danes), Rosendale (English), El Chino, Elizabeth, Citrus. The Italian-Swiss Colony, originating from a San Francisco credit union of immigrant workers, never divided their land, but became a joint-stock company revolving about their vineyard.

An historian wrote in 1935, "The land-colonization project, as a means of solving the farm-labor problem dates from a very early period... Land colonization, on a collective basis, has a definite background in California. Most of the early settlements in the state were based upon group colonization; a large number of the rural communities, which later developed into cities, were settled by groups of settlers . . . For many years the practice was for a promoter to purchase a large tract of land, subdivide it into small acreage lots, endow the subdivision with a euphonious name and then proceed to interest some group in (it) as a community. . .Many cooperative and semi experimental ?new life? colonies were established... It is unquestionably true that land-settlement promoters exploited to the full the social idealism of prospective immigrants who wanted to found new communities in California. Some of these early land colonies were advertised as cooperative or semi-cooperative ventures. In fact, some elements of cooperation were to be found in many of the colony settlements. The older colony settlements were, by and large, successful, but as the state grew the colony idea was appropriated by unscrupulous promoters who worked great havoc with their pretentious swindles." (McWilliams) A state legislature inquiry in 1915 of 32 land colony settlements begun between 1900-15 found swindles connected with almost every one.

But the vast majority of colonists were not swindlers. Many were part of a larger movement for social justice. The International Workingmen's Association (IWA), organized in 1852 in San Francisco with the leadership of Burnette Haskell, J. J. Martin and Frank Roney, tried to renew the old First International (which had disbanded six years earlier). Haskell was a newspaper editor and a leader of the radical wing of the Knights of Labor. Martin would soon be the main organizer of the area's first successful Seamen's Union. Roney had been a leader of the anti-Kearney faction of the Workingmen's Party of California, and along with Haskell, would be one of the central leaders of the Federated Trades Council.

This new IWA met with a fair amount of success over the next several years, which was a time of rising radical worker movements around the country. But during the nation-wide police repression after the Haymarket Massacre of 1886 in Chicago, the IWA dissolved, along with most other radical groups in America. Seventy of the leaders and members, including Haskell and Martin, thereupon formed Kaweah Cooperative Commonwealth, "To illustrate and validate the premises on which the labor movement is based." They homesteaded a tract of 600 acres in Tulare county. Rising at their peak to 300 members, by 1890 they had constructed an 18-mile road and a ferry, published a weekly magazine, operated a sawmill, besides building homes, orchards and gardens. They functioned under a system of labor-checks based on the amount of time worked; the checks were convertible for any item at the community-run store. But reactionary forces in the state soon took note and the US Congress quickly passed a bill creating Sequoia National Forest out of Kaweah under the false grounds that their original homesteads filings had been technically deficient. Two years later the Kaweahns were driven from the land by US cavalry and arrested.

The Cooperative Brotherhood of Winters Island, in the Bay near the delta, was begun in 1893 by Erastus Kelsey from the Nationalist Club of Oakland and Kate Nevins, an organizer from the Farmers' Alliance and Populist Party. All three organizations backed cooperativization of the economy; the Alliance organized the largest farmers' cooperative network in the United States, taking up where the National Grange had left off. Winters Island began with 100 members, but probably no more than a third of these ever actually lived there. Their plan for intensive agriculture got underway, yet the entire operation remained dependent on outside members' support. Then the country hurtled into a deep depression and outside money dried up, strangling the colony. The last residents dwindled away about ten years after its founding.

Altruria community came out of the Christian Socialist movement, a powerful influence nationwide at the time; its name came from a utopian novel by Wm. Dean Howells. A Berkeley Unitarian minister, Edward Payne, sparked the idea for the colony in 1894. Cooperative Councils were formed on both sides of the Bay. They bought a plot of land near Santa Rosa and thirty people moved onto it, mostly working families, a majority of them artisans. They used labor-checks for their work and practiced equality of goods. There was an entrance fee. They were supported by a string of clubs as far away as Los Angeles. But they had financial problems. Although they had seven houses and a hotel built by the end of their first year, they had to fold, broke into three smaller groups, which stayed together another year, then the entire project dissipated. Meanwhile, however, the Altrurian Cooperative Councils were also organizing their cooperative store system in Oakland.

Fort Romie community was begun in 1898 by the San Francisco Salvation Army as an attempt to create "a peasant proprietorship in California by settling the unemployed on the land." They bought a tract in the Salinas Valley, near Soledad, close to a sugar beet factory. The tract was cut up into smaller lots of 10-20 acres and distributed to poor families mostly from San Francisco. By 1903 there were 70 colonist families there, raising beets through collective irrigation and using many cooperative techniques. Although the plan never got beyond this first plot, it was widely held to be a very successful demonstration project. The EPIC movement of 1934 would again take up the idea of settling the urban unemployed on the land.

Japanese immigrants formed the cooperative colony of Livingston in 1910. They did so well that state planners began proposing that the government help organize colonies of non-Japanese in the area. The planners also had the racist side motivation of limiting Japanese expansion in the area. With planning from the University of California, Durham and Delhi communities were set up nearby in 1919. But the land chosen was poor and the post-World War I deflation brought both colonies to ruin; both finally disbanded in 1931. Livingston however, flourished until the Japanese internment during World War II.

Job Harriman was manager of the San Francisco Altrurian cooperative store in 1895, ran for Vice President of the United States as Gene Debs' running mate in 1900 on the Socialist Party, then came close to being elected the first Socialist mayor of Los Angeles in 1910. In 1914 Harriman led a large group of cooperators out onto land outside Los Angeles to form Llano del Rio Cooperative Colony. Like Kaweah, it grew out of a failed union activist movement. Much of their support and many of their members came from the Bay Area, although the primary base was in southern California. A year after founding they had 150 members and by 1917, a thousand. They operated a printshop, shoemaker, cannery, laundry, bakery, cabinet shop, brick makers, and other industries. But they were constantly harassed by authorities for their radicalism, were beset with organizational problems (they were overly managerial), and found their water rights taken out from under them by the courts. They bought new land in Louisiana, and many moved there while the California bankruptcy court closed Llano. New Llano grew to a peak of over 300 residents during the Great Depression.

SELF-HELP in the GREAT DEPRESSION
Self-Help Coops sprang up soon after the economic crash of 1929. A survey in December 1934 counted 310 different groups, with over one-half million members, with people involved in 29 states, about two-thirds of them in about 175 groups in California. Several forms of Self-Help were usually distinguished, although most groups practiced them all to varying degrees: exchange among members, exchange of labor for goods or services, and cooperative production for use, trade or sale. Exchange among members was the most widespread, and commonly involved partial payment in cash. It was only in the later stage of the movement that many groups turned to production, and most never did to an appreciable extent. The groups appeared wherever conditions were ripe among the unemployed and underemployed, particularly near farming areas, It was truly a spontaneous mass movement.
Numerically the largest concentration was in Los Angeles county, where about 75,000 people in 107 groups participated in the harvest of fall 1932, Among the earliest in the state were the LA Exchange, started by Bessie Mays, the Compton Relief Association, begun by a group of World War I veterans, and the Unemployed Association of Santa Ana (in Orange county). Since farming areas were easily accessible in the south, most of these groups organized large numbers of people to harvest produce in exchange for a share of the crops. Nearby Orange county was also an area of concentration.
In the San Francisco Bay Area the Self-Help movement reached its most sophisticated level of development. The first Bay Area labor exchange was set up by the Pacific Cooperators League of Oakland in 1930. The summer and fall of 1932 saw the biggest blossoming. By spring 1933 there were 22 Self-Help groups in the East Bay, nine in San Francisco and the Peninsula, one in San Jose.
The Berkeley Unemployed Association, at 2110 Parker Street, had sections that included sewing, quilting and weaving, shoe repair, barber, food canning and conserving, wood yard, kitchen and dining room, commissary, garage, machine shop, woodshop, mattress factory, and painter and carpenter teams. At their height they involved several hundred people and had full medical and dental coverage. A visitor to the wood shop in December 1934 reported them working on office desks and furniture, as well as fruit lugs for the farm exchange section. They later changed their name to the Berkeley Self-Help Cooperative, typical of many groups who considered themselves no longer unemployed.
A few blocks away, on Delaware Street, was the Pacific Cooperative League (PCL), which operated a garage, flour mill, wood yard, store, canning and weaving projects, and ran a newspaper, the Herald of Cooperation, later called the Voice of the Self-Employed. They laid claim to having organized one of the earliest labor exchanges of the Depression, when they traded an Atascadero rancher their harvesting labor for part of his apricot crop in September 1930. The PCL was not a new organization like almost all the rest, but dated back decades, surviving the death of their parent organization and staggering along at a low level until sparked by the Great Depression.
The San Jose Unemployed Relief Council (later called the San Jose Self-Help Co-op) was formed by a group of laid-off cannery workers. They soon had a wood yard, a fruit-and-vegetable drying yard, a store, laundry, farm, soap factory, barbershop, shoe shop, commissary, sewing project and contracted for a wide variety of jobs and services, At their height they were about 1200 strong.
The Peninsula Economic Exchange, in Palo Alto, was organized by a group of unemployed white collar workers, professionals, and bankrupt merchants. With about a hundred member families, they had a store, a farm, a cannery, woodyard, and fishing boat. Unlike most of the other northern groups, they issued scrip, in-house currency, to members for hours worked. "Scrip exchanges" were more common at first in southern California, but were usually plagued with problems.
The most highly developed group in California was the Unemployed Exchange Association (U.X.A.), begun in 1932 in Oakland with the leadership of Carl Rhodehamel, an unemployed electrical engineer. Beyond organizing barter and labor exchange, they began producing articles for trade and sale. They set up a foundry and machine shop, a woodshop, garage, a soap factory, a print shop, a food conserving project, nursery and adult school. They had eighteen trucks that they?d rebuilt from junk. They branched outside of town, and maintained a woodlot in Dixon, ranches near Modesto and Winters, lumber mills near Oroville and in the Santa Cruz mountains. At their peak they were providing 1500 people with farm produce, medical and dental benefits, auto repair, some housing and other services. They called it Reciprocal Economy. They made no distinction in labor value between men and women, skilled and unskilled. At first they functioned entirely by barter; it was all done on the books, without a circulating scrip. Members could write "orders" ? like checks ? against their account to other members for services provided. Eventually they began making trades that involved part payment in cash. All work was credited at one hundred points per hour. Members exchanged points earned for their choice of items in the commissary. Each article brought in was given a point value, which approximated the labor time that went into it, with some adjustment for comparable money value. They offered many services for points, including complete medical and dental, garage, nursery school, and barber. They provided some housing and all of their firewood needs. At their peak they would distribute forty tons of food per week to their members.
Unions and Self-Help groups often worked together. A good number of workers belonged to both a union and a co-op. Some Self-Help co-ops, such as the San Jose Unemployed Relief Council, were staffed by unionists. Others, such as the U.X.A., decided specifically that they would not seek to take over any jobs already being performed by steadily employed labor. This friendship paid off in mutual solidarity during the San Francisco General Strike. The Self-Help co-ops of the Bay Area were able to move about freely bringing supplies to the strikers, while "normal" commerce was blockaded. Both the unemployed and the strikers had fruit and vegetables "at a time when money could not procure them."
While the New Deal famously helped rural America through assisting in organizing co-ops for irrigation, electricity, farming, and other infrastructure, they drew the line at urban worker co-ops, which might challenge the wage system in industries. The New Deal Works Progress Administration (WPA) of 1935 helped with grants to Self-Help co-ops, then also hurt them by not permitting the sale of products made in the co-ops. The WPA struck a mortal blow by not permitting work in Self-Help co-ops to count as WPA hours. Unemployed people desperately needed a cash income, so many?particularly younger people?flooded out of the Self-Help co-ops for WPA jobs.

EPIC MOVEMENT 1934
In September 1933, while the U.X.A. and the other Self-Help co-ops were on an upswing, Upton Sinclair, novelistic chronicler of American social reality, long a leading member of the California Socialist Party, suddenly changed his registration to Democrat and threw his hat into the ring for the Democratic gubernatorial nomination with a program he called EPIC: End Poverty In California.
With "Production For Use" as its rallying cry, the EPIC plan proposed creating state agencies to take over idle farms and production facilities and turn them over to the unemployed, to ?establish State land colonies whereby the unemployed may become self-sustaining, to acquire factories and production plants whereby the unemployed may produce the basic necessities required for themselves and for the land colonies, and to operate these factories and house and feed and care for the workers..., (to) maintain a distribution system of each other?s products..., thus constituting a complete industrial system, a new and self-sustaining world for those our present system cannot employ.?

EPIC clubs sprang up around the state like grass after rain, ultimately 2000 of them. The EPIC News reached a circulation of 1.5 million. But most of the Democratic Old Guard defected to the Republicans to oppose Sinclair. In the midst of possibly the most vicious and libelous campaign in California history, Sinclair went to Roosevelt for support, and met with him. Sinclair recounts the conversation:

"At the end he told me that he was coming out for production for use. I said, 'If you do that, Mr. President, it will elect me.' 'Well,' he said, 'I am going to do it.'"
FDR indicated he would come out for the plan during a nationwide radio address scheduled for the week before the election, but in the end FDR said nothing about production for use. Sinclair got 37%, the Republican 49%, and a third party candidate the difference.
After the defeat, a large number of EPIC groups planned buying clubs and stores. Over the following year, they succeeded in organizing 210 consumer co-ops in California, with 50,000 members, almost all the groups newly organized. Among the most successful at first were New Day Co-op in Oakland, with 1000 members, and Producers-Consumers Co-op at 668 Haight Street in San Francisco. But these and the great majority of the others soon collapsed.
BERKELEY CO-OP
Consumer Cooperatives of Berkeley (CCB) began as one of these buying clubs formed in 1936, soon joining with a Finnish Co-op that started around the same time. It was destined to become the largest and most successful consumer cooperative in the United States at its height in the 1970s, with 100,000 member families. In 1938, the Berkeley Co-op began its first campaign to promote stronger consumer protection laws and expressed solidarity with the labor movement. By 1957 the Berkeley Co-op had become the second largest urban cooperative in the United States. Further expansion resulted in a pharmacy, an arts and crafts co-op, a co-op book store, and a credit union. But along with expansion came problems. The Co-op News debated the issue, "How do we keep democratic control and participation while we continue to expand?" They had close ties with two other Bay Area cooperatives: the Palo Alto Co-op and Associated Cooperatives (AC), the regional wholesale. Both had been founded at about the same time as CCB, and involved some of the same people. Expansion of co-op stores into new areas was fueled by the wholesale?s perceived need to be larger to maximize economics of scale. Meanwhile, the Berkeley Co-op?s social accomplishments continued to mount. In 1962 they instituted "free speech tables" near entrances for literature and petitions. In 1963 they debated milk contamination from a proposed nearby nuclear power plant; supported a local anti-discrimination housing ordinance; stopped stocking products boycotted by the Central Labor Council. In 1964 they increased minority employment; held a food drive "to aid persons suffering Civil Rights discrimination" in Mississippi; pioneered biodegradable detergent with Co-op label. In 1965 they packaged meat with the better side down; lobbied for a bread and cereal enrichment law; educated on peanut butter additives. In 1966-67 they lobbied for a Fair Packaging and Labeling law; contributed to the United Farm Workers (UFW) co-op in Delano; instituted unit pricing on all shelves; lobbied for regulation of diet foods and for a unit pricing law; agitated against a phone rate increase; labeled all Dow products as boycotted because of their napalm production; assisted the legal defense fund for besieged integrated Southern co-ops. In 1968 they authorized centers to ban smoking; removed all nonunion grapes; withdrew from the Chamber of Commerce because of their consistent opposition to consumer legislation. In 1969 they battled against utility rate hikes; donated food to the Black Panthers children?s breakfast program; demanded the "immediate termination" of the military occupation of Berkeley by the National Guard (ordered by Governor Ronald Reagan because of People?s Park); posted statements at all co-op centers condemning the war; closed in solidarity during a People?s Park protest march and on Vietnam Moratorium Day.
At the same time, the co-op was continuously drained by failing expansion stores, and profits continued to spiral down. The truth had to be faced: expansion had failed. There were ten losing stores scattered around the north Bay Area, supported by the three still-thriving Berkeley Co-ops. "Just as the arrow was shot into the air, it fell back to earth," said president Fred Guy, "and in 1983 one by one all the losing operations were closed, at great financial loss, and the Co-op remained briefly with only the centers in Berkeley left, just being a community cooperative, which was perhaps what they should have remained all along.? In 1987 CCB filed bankruptcy, followed by the wholesale and the Palo Alto Co-op.
INTER-COMMUNALISM
The "inter-communalist" Black Panther Party, first organized in Oakland in 1966, ran a host of "survival programs pending political revolution." In Oakland this included a health clinic, free shoe factory, plumbing service, food and clothing, cooperative housing, job-finding service, transportation for elders, breakfast program for children, pest control, busing to prisons for visitors, and prisoners? commissary. All goods and services were free. The Panthers ran communal houses for full-time party workers. Through boycotts they convinced many businesses to recycle some of their profits back into the community through the Panthers? social projects.
COLLECTIVE MOVEMENT- COUNTERCULTURE
Starting in the mid-1960s, large numbers of young people worked to create a survival network outside of and against the capitalist system with a common ideological base of working to build a new social system based on cooperation and sharing ?within the shell of the old.? The mass media called it the ?counterculture? or ?alternative.? It was an era when many people, particularly young people, were searching for a better way to relate to the world and to each other. Many thought that they found it in collective and cooperative work. The world they rejected was based on hierarchy, power, and competition. They wanted a world based on equality, democracy, cooperation, sharing; a way to live and work that could liberate. In the mutual aid and support they found there, they saw the embryo of a new society in which the promises of America could at last become reality. The earliest rumblings of the counterculture probably came with the left?s rediscovery of the collective form of organization in the freedom rider groups of the early Civil Rights movement, and in the Anti-Vietnam war and student movements.

The collective form of organization helped break through formalistic ?democracy? at a moment when a new energy was bursting forth through the social fabric. Within a few years, dozens of these groups sprang up in numerous fields such as the women?s, ecology and anti-nuclear movements. Collectives were used to organize almost every activity from education, childcare, art, communications and counseling to legal services and recycling. Almost all the early countercultural forms chose the collective form because participants wanted their means to reflect their ends. These forms ranged from freestores to communes, from ?underground? newspapers to collective gardens, including cooperative houses, food conspiracies, and ?free? schools and universities. They developed the organizational technology that laid the base for the producer and merchant worker collectives and cooperatives that appeared in widespread areas.

Many of the early collectives tried to provide basic social services that capitalist society did not supply. Primarily young professionals formed the free clinics, law collectives and free schools. Others were connected to political movements, like the Young Patriots? clinic in Chicago and the Black Panthers? clinic in Oakland. Most clinics functioned through collectives of physicians, paraprofessionals and volunteers. Almost all had some combination of control by the worker collective and the community. Most of these social service collectives survived through donations and grants.

BAY AREA COLLECTIVES

Young people from all over the country were drawn to the San Francisco Bay Area, where conditions, including inexpensive housing, seemed ripe for a new consciousness. By the summer of 1966 the community of young people had grown to such proportions that it began to gather national attention in the news media. Communal households were widespread. A newspaper expressing the new consciousness appeared, the Oracle. The first ?Human Be-in? happened that fall in Golden Gate Park. The Haight became the hothouse in which the national movement called the counterculture was born.

The group known as the Diggers helped to channel the enormous energy that was exploding into the rudiments of a survival system outside of the old society. They began gathering necessities that were being wasted or hoarded, and redistributed them, organizing free food giveaways and a Freestore. Duplicated around the country, the Freestore was run entirely on collective energy. The idea was simple: people could bring and take what they wanted and needed.

But national attention brought a flood of people from all over the country to San Francisco in the summer of 1967, overwhelming the community and making it impossible to continue as it had been. Entrepreneurs looted the Freestore, coming at favorable hours to clean out anything sellable. This resulted in the store being replaced by a free box on the street.

Moving beyond the limitations of the Diggers? approach, people soon began setting up more organized structures. ?Alternative? news media, primarily ?underground? newspapers, grew to mass proportions around the country by the late 1960s, filled with information impossible to come by in the mainstream media. Collectives doing community service work were often ?open,? and almost anyone could join or participate as an unpaid volunteer. The open collective was for projects that attempted to draw in as much community energy and input as possible. In numerous university towns ?free universities? were set up, with courses in subjects ignored by the schools. These eventually gave way to a large variety of ?alternative? educational organizations.

Numerous collectives of every sort came out of the women?s and feminist movements. The collective structure was a natural form, as it provides group empowerment for previously disempowered people. A small collective group started the San Francisco Women?s Center in 1970. Over the following years, numerous women inspired by feminist ideology came together spontaneously into small consciousness-raising groups. Out of these developed many service projects, such as the Health Collectives and the Switchboard, to fill gaps not provided for by society; and many women? work collectives, such as Seven Sisters Construction, the Juice Bar, A Woman?s Place. The Women?s Center and Women?s Building became an umbrella organization of about eighteen collective projects.

Collectives hit the airwaves. In the Bay Area, listener-sponsored KPFA radio, begun back in 1949 as the flagship of the Pacifica network, struggled and experimented with the issues of collectives and internal democracy in these years. Like the Berkeley Co-op, KPFA earned recognition as a community resource.

Collective groups also played an important role in the development of the Bay Area?s gay and lesbian communities. The San Francisco Gay Men?s Chorus, for example, self-organized in the days following days the assassinations of Supervisor Harvey Milk and Mayor George Moscone in 1978, after an impromptu gathering the night of the tragedy to sing on the steps of city hall.

WORKER COLLECTIVES IN THE 1970s

The earliest collective businesses were mostly connected with radical communication media: presses, bookstores and film. This reflected the explicitly political movement from which they emerged. They were followed by food-related cooperatives in the late 1960s, and artisan/industrial collectives and cooperatives beginning around 1970 both in urban and rural areas. Worker collectives and cooperatives represented the embedding of the counterculture in the working population; their revolutionary roots were in workers? control and self-management.

They took two basic forms. Some collectives were centralized, with each worker paid through the enterprise. Others, such as artisan cooperatives, were decentralized, maintaining the studio space or the means of production that the craftspeople used.

These early cooperative and collective work groups sprang up in many areas around the country. There were soon collective and cooperative bakers, teachers, truckers, mechanics, farmers, carpenters, printers, food-handlers, cabinetmakers, taxi-drivers, medical workers, sellers, artists, technicians, machine-operators, cooks, editors, etc. Cooperatives operated successfully almost everywhere in light production, distribution and services. Cities where the largest concentrations of worker collectives and cooperatives could be found included the San Francisco Bay Area, the Boston area, Seattle, Portland, Minneapolis, New Haven, Austin and Madison.

In Berkeley-Oakland, one of the earliest collectives was Taxi Unlimited, collectivized in 1965, in time to play a role in the Free Speech Movement; others included Uncle Ho?s Mechanix Rainbow, Movement Motors, Build carpenters, Alternative Food Store, and the Cheeseboard, all formed between 1970 and 1972, followed by Uprisings and Nabalom Bakeries, the Brick Hut and Swallow restaurants. Every loaf of Uprisings bread included a small flier announcing progressive political and cultural events. By the end of the decade, there were over 150 collectives and collective-cooperatives in the San Francisco Bay Area.

Due to their underground nature, estimates of the total number of worker cooperatives in the US in this period differ widely. One study published in 1980 estimated between 750 and 1,000 small worker cooperatives in the US at that time.

THE FOOD SYSTEM

Collectives and cooperatives connected with food cut across rural-urban lines. Of all the countercultural organizations, they became the most interconnected, the most developed ideologically and?apart from music groups?had the most far-reaching effects. In the late 1960s, ?food conspiracies? formed in cities and towns across the country. Basically buying clubs, they called themselves conspiracies to indicate that they aspired to more than just stretching dollars, and aimed at overthrowing the established food distribution system. Most had literature and newsletters that publicized their larger motives along with local food news. Most were based on member energy and labor requirements, and run through democratic and collective systems. Many connected with small local and regional organic farms, and made ?natural? foods available in their areas for the first time, while providing the farms with needed outlets. According to the Cooperative League, between 5,000 and 10,000 of these clubs had formed across the country by 1975. The Bay Area was a West coast nexus.

The Haight-Ashbury Food Conspiracy began in 1968 as a buying club, reaching 150 member houses in 1973. At the same time across the bay, the Berkeley-Oakland Organic Food Association had some twenty-one affiliated neighborhood conspiracies. The conspiracies were organized around member participation. They got food from regional farmers as well as at the Farmers? Market, and were organized so that each neighborhood conspiracy was responsible for one job each month.

In the early 1970s, ?new wave? co-op stores began appearing, run by worker collectives and many stemming from conspiracies. They differed from the earlier co-op stores in that they were non-managerial. In some, the worker collective comprised the entire membership, while in others workers and member-customers shared control. Meanwhile, natural food stores began to appear, and chain supermarkets also began stocking organic and natural food lines, providing competition at the alternative system?s strongest point. The Cooperative League estimated in 1979 that between 5,000 and 10,000 small ?new wave? food co-ops of various structures had formed in the past decade, and several thousand were probably still functioning with a 500 million dollar annual volume.

When natural food stores began appearing in an area, the buying clubs generally took a dive as the stores were providing most of the same products almost as cheaply and with more convenience. Some of the most active people in the old food conspiracies were instrumental in starting some of the stores, and many of the former conspiracy members formed their customer base. By 1976, both the Haight-Ashbury Food Conspiracy and the Berkeley-Oakland Organic Food Association had lost most of their membership and were in a state of near collapse.

The conspiracies and collective stores found that due to their small size they could usually only compete with the supermarket chains in the area of natural foods. In response, the collective stores began forming alternative wholesales, some run by independent collectives, some by federations of stores and conspiracies. Trucking collectives connected the whole into broad interlocking networks on both coasts and the Midwest. Citywide and regional ?Food Systems? attempted to grow large enough to create a stable economic base for the whole movement and to create a viable alternative to the supermarket chains.

From the Seattle Workers? Brigade and the Portland Area Food System, down to the Southern California Cooperating Communities, across to the Tucson Peoples? Warehouse, the Austin Community Project, Minneapolis Peoples? Warehouse, the Federation of Ohio River Cooperatives (extending over a six state area), and the New England People?s Cooperatives, regional Food Systems soon overlapped coast to coast.

The collective movement of the era made its greatest impact in the Food Systems. Here the counterculture actually made a frontal challenge to the dominant system in one of its most vital spots, food. It was a real and serious attempt to provide a large-scale collective alternative to the corporate food system, weaving worker-run production units into a larger organism reminiscent of the 19th century Cooperative Commonwealth vision of the Knights of Labor and their coalition with the Farmers? Alliance. Because food is essentially a political issue, many of the most volatile of forces of the 1970s met in the Food Systems, and clashed.

The Food System movement became based in ?new wave? wholesales and regional federations around the country. As such, these became the center of ideological struggle over the aims and strategy of the counterculture movement by the mid-1970s. Some saw the movement as primarily part of an overall struggle against the capitalist system, and advocated more political involvement. In general, these people thought that the movement should be focused to serve the working population, that it should be anti-profit, that its capital accumulation should not be privately owned by groups of workers or consumers, and that the movement should be more unified and centrally structured. Others saw the movement as primarily economic and personal, and in general supported decentralization, structural diversity, and federation, with each group deciding questions like capital accumulation, profit, or political involvement as it saw fit. There were not two clear-cut camps, as each organization had its own variation of worker vs. consumer control, federation vs. centralization, etc., and there were many different viewpoints within each organization.

The mid-1970s was a time of crisis for Food Systems around the country. When many small collectives and cooperatives attempted to federate into larger organizations, they came up against the problem of how to grow large enough to be economically viable without becoming managerial bureaucracies like many of the co-ops started in the 1930s. This, together with the economic recession and runaway inflation, caused most to remain on shaky foundations.

The San Francisco People?s Food System was formed in 1973 by some of the most active people who had left the old Food Conspiracy and organized the first collective stores. Over its short life, the Food System actively and materially supported a number of progressive struggles, and was instrumental in organizing the alternative People?s Bicentennial celebration in San Francisco. Internally, there was a stress on struggling with racism and sexism.

The Food System centered on the San Francisco Common-Operating Warehouse (COW). Instead of using the collective structure like most groups, the COW took a structure that in theory combined representative democracy with centralized efficiency, but in practice invested real power in a small self-perpetuating group. It was not long before the Common-Operating Warehouse?s system collided with the autonomy and consensus system of most of the member work collectives.

In early 1975, SF Food System workers began gathering in regular All-Co-op meetings (?the Forum?) to try to develop and better organize the system. By 1976, the System was growing large and strong, with member collectives and co-ops on both sides of the bay. But internally, an ideological battle was brewing over organization, involving anarchists and marxists. In April, members decided that there would be an elected Representative Body (RB). By the end of the year, the Representative Body had drafted a Basis of Unity, which was approved by all the collectives, and the RB elected a steering committee in January 1977. But at that point internal disagreements and problems rushed to a head. A number of the food collectives were involved with the prisoners? rights movement, and there was strong conflict between competing radical prisoner organizations. When a small group disrupted and shut down an All-Worker conference in April 1977. the San Francisco Food System came crashing down and, as it did, a countercultural dream shattered and died.

With the SF Food System functionally defunct, the numerous small autonomous collectives again became the main base of the movement in the Bay Area. The following year, the old Food Conspiracy was reorganized and revived as a communal enterprise, with all member-customer energy requirements removed; under this system it grew to sizable proportions again in the Bay Area for a few years. The San Francisco Common-Operating Warehouse hung on for a few years, then closed its doors in February, 1982.

COLLECTIVE DIRECTORY GROUP and INTERCOLLECTIVE

Meanwhile, in 1976, a small autonomous Bay Area circle called the Collective Directory Group began a project of networking among collectives. The first edition of the Collective Directory was published in 1977. Updated editions came out in the following years. Besides listing information about groups, expanded Directories included articles on history and theory of the movement.

In 1980, workers from a wide variety of Bay Area collectives came together and formed the InterCollective, an association for exchanging ideas and information, promoting networking, and striving to develop the movement. The InterCollective had no centralized leadership or organization, but gathered in open monthly meetings and held political and cultural events. They organized a well-attended Collective Conference in 1982, weekly classes and workshops between 1981 and 1986, a Collectives Fair in 1983, and sponsored an anti-nuclear action collective for the 1982 non-violent blockade and civil disobedience at the Livermore Weapons Lab. The Collective Directory became a project of the InterCollective. The 1985 edition was the most extensive, listing almost 150 collective groups in the Bay Area and over 350 on the West coast. But by that time the collective wave had already peaked, the country dominated by Reagan-era economics. The competitive climate engulfed and bankrupted many of the most successful of the worker collectives. Some groups self-destructed. In those years, few new collectives or cooperatives were being formed. The 1985 Collective Directory was the last, and the InterCollective disbanded in 1986. But not all ?70s collectives succumbed, and some groups from this era continue today.
NOBAWC
The Network of Bay Area Worker Cooperatives (NOBAWC) renewed the movement in 1994, after growing out of monthly meetings between several groups to discuss their experiences and common problems, with the mission of information and resource sharing among worker co-ops, and building a movement for worker self-management. NOBAWC is today a member of the US Federation of Worker Cooperatives.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

SELECTED BIBLIOGRAPHY

Adams, Herbert Baxter. History of Coöperation in the United States. John Hopkins University Studies in Historical and Political Science, Sixth Series. Baltimore: John Hopkins Press, 1888.

Collective Directory Group, eds., The Directory of Collectives, (San Francisco: Collective Directory Group & InterCollective, 1977-85).

Cross, Ira B. ?Co-operation in California,? American Economic Review, Vol. 1, No. 3 (Sept., 1911), pp. 535-544

Curl, John. For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements and Communalism in America. Oakland: PM Press, 2009.

Horner, Clare. ?Producers? Co-operatives in the United States, 1865-1890.? Ph.D. diss., University of Pittsburg, 1978.

Knapp, Joseph. The Rise of American Cooperative Enterprise 1620-1920. Danville: Interstate, 1969.

______________The Advance of American Cooperative Enterprise 1920-1945. Danville: Interstate, 1973.

Parker, Florence E. The First 125 Years: A History of Distributive and Service Cooperation in the United States, 1829-1954. Superior: Cooperative League, 1956.

Shinn, C. H. ?Cooperation on the Pacific Coast.? Adams, Herbert Baxter. History of Coöperation in the United States. John Hopkins University Studies in Historical and Political Science, Sixth Series. Baltimore: John Hopkins Press, 1888.

Oakland Mayoral Candidates Support Local Currency

FOR IMMEDIATE RELEASE
All of Oakland’s Mayoral Candidates Agree

Wednesday, August 11 11:00 am
In front of Oakland City Hall

The Oakland Community Action Network (Oakland C.A.N.) will be holding a press conference in front of the Oakland City Hall that will be attended by Terrence Candell, Greg Harland*, Orlando Johnson, Rebecca Kaplan, Don Macleay, Don Perata*, Jean Quan, and Joe Tuman**. All of these mayoral candidates have stated some degree of support for the creation of a local currency. Each will speak briefly on their candidacies and their support for the Alternative Currency for Oakland Residents and Neighbors (ACORN). Most of the candidates will be filing their nomination papers with the City Clerk that Wednesday.

That these candidates can come together at the formal beginning of this campaign to recognize this area of agreement is a testament to the new ranked-choice voting system in Oakland. Oakland’s mayoral candidates can state clearly their agreements and disagreements without resorting to personal attacks and without “knee jerk” oppositional positions merely because of the position of another candidate.

Background: Twenty-nine Oakland organizations endorsed the City ID/Value Storage Card and the City has received three vendor responses to the late March RFQ. A coalition of Oakland organizations have been working on the ID/local currency card for two years (http://oaklandcityidcard.org/).

Oakland’s efforts built on the local identification card
implementations in New Haven, Conn., and San Francisco, Ca. The debit card platform and the local currency function work synergistically with the City identification card to solve City implementation cost issues and many more complications. Not only will the card enhance the success of local small businesses but it also has the potential to resolve the City’s current budget deficit. More than 60 communities in the US have had local currencies at one time or another.

The E. F. Schumacher Society (http://www.smallisbeautiful.org/)
is a national depository of information – including on the legality of local currencies.

During times of economic crisis, interest in local currencies increases
because of their proven ability to relieve economic distress in a
micro-economy.

Oakland’s micro-economy is currently being stressed. This is recognized
by all the mayoral candidates.

Oakland C.A.N. does not see the ACORN as the solution to all of Oakland’s
problems. The issues of poverty, institutional prejudice, and the damage of past injustices must be addressed. Oakland C.A.N. believes that Oakland’s future as a model city for the nation is forth coming. Oakland C.A.N. is happy to host this press conference and to stand with these mayoral candidates.

*These candidates had not confirmed their attendance at the time of the press release but they have stated their support for the ACORN.
**Have not confirmed attendance or support from this candidate at the time of the release.



Contact: Wilson Riles
510-530-2448
wriles@pacbell.net
Oakland C.A.N. (Community Action Network)
3746 39th Avenue
Oakland, CA 94619
510.530.2448

San Francisco Considers Participatory Budgeting (After Chicago)

Here is a recent article about participatory budgeting in Chicago. Will SF be the next city? Perhaps to the first in the US to have a municipal-wide participatory budgeting process? The SF Community Congress has listed this among its top priorities to discuss at the Congress. Participatory budgeting is one giant step towards real democracy and participatory local self-governance, as well as a tool to move money towards other programs of real social change.

from Yes Magazine
by Josh Lerner

Chicago’s $1.3 Million Experiment in Democracy
For the first time in the U.S., the city’s 49th Ward lets taxpayers directly decide how public money is spent.

by Josh Lerner, Megan Wade Antieau
posted Apr 20, 2010

Ward 49 Ballot

All 49th Ward residents age 16 and over, regardless of voter registration or citizenship status, were invited to vote on the 36 budget proposals developed by the community.

On Chicago's far north side, citizens are taking democracy into their own hands. Through the first "participatory budgeting" experiment in the United States, residents of Chicago's 49th Ward have spent the past year deciding how to spend $1.3 million in taxpayer dollars. Over 1,600 community members stepped up to decide on improvements for their neighborhoods, showing how participatory budgeting can pave the way for a new kind of grassroots democracy, in Chicago and beyond.

From Porto Alegre to Chicago

Chicago may seem an unlikely site for participatory democracy, given the city's famous patronage system and lack of transparency in public finances. Faced with this system, community groups end up competing for budgetary scraps—an exhausting struggle. But frustration with backroom dealing is in part what makes Chicago and the United States ready for new ways of managing public money.

In 2007, Alderman Joe Moore discovered an alternative at a US Social Forum session on participatory budgeting. There, he learned about Porto Alegre, Brazil, where since 1990 tens of thousands of people have been directly deciding how to spend as much as 20 percent of their city's annual budget. Moore also learned how participatory budgeting has gone global, spreading to over 1,200 cities around the world and winning the United Nations' recognition as a best practice of democratic governance.

No U.S. city had let citizens directly decide how to spend public money, but Moore saw Chicago's 49th Ward as the perfect place to try.
Democracy in Action

The 49th Ward, home to over 60,000 people and the neighborhood of Rogers Park, is known for its diversity and vibrant community life. Over 80 languages are spoken within less than two square miles. Independent-minded citizens have often put intense pressure on local officials. Concerned that Moore wasn't responding to ward needs, they nearly voted him out of office in the last election. So how does one of the nation's most diverse neighborhoods bring opinionated residents together to make difficult budget decisions?

Moore started by setting aside his $1.3 million "menu money," the discretionary budget that each alderman receives for capital infrastructure projects. In April 2009, with guidance from The Participatory Budgeting Project, Moore invited leaders of all the ward's community organizations and institutions to form a Steering Committee, which decided the timeline and structure of the process.
"At the community meetings everyone was complaining about their block," says 49th Ward resident Laurent Pernot. "But now every single committee has taken stewardship of the whole ward as their mission."

At a series of neighborhood assemblies starting in November, residents brainstormed initial spending ideas and self-selected community representatives who would transform those ideas into concrete proposals. These representatives, along with Steering Committee mentors, split into six thematic committees. They then spent four months meeting with experts, conducting research, and developing budget proposals.

The Public Safety Committee, for instance, received many requests for security cameras. To learn more, they visited the neighborhood’s 24-hour camera viewing center. As community representative Marilou Kessler explained, "everyone [on the committee] came—about 15-16 people on a workday. It was astonishing cooperation." The trip shifted the committee's priorities: They learned that the cameras are used only occasionally, mostly by specialty police teams, and are not continuously monitored. After police explained that lighting is more effective at deterring crime, the committee replaced several camera proposals with street light proposals.

At first, some skeptics worried about what residents would propose. Would they rush through inappropriate projects, or focus just on their personal needs? Not quite. To identify sidewalks most in need of repair, Transportation Committee members walked almost every block of the ward, in the middle of the Chicago winter. "I will never look at sidewalks the same way again!" reflected Dena Al-Khatib, one of the sidewalk inspectors. Community representatives also learned to move beyond their initial assumptions and priorities. As Laurent Pernot of the Transportation Committee said, "At the community meetings everyone was complaining about their block... But now every single committee has taken stewardship of the whole ward as their mission."


After months of work and more neighborhood assemblies, the community representatives presented a ballot of 36 specific budget proposals, and then helped organize a publicity campaign. The Arts and Other Committee put together an artistic exhibition of proposals at Mess Hall, a local cultural center. Andy De La Rosa, an artist on the committee, found himself swayed by the proposals from other committees. "This is all extra," he said of his committee's proposals for murals, artistic bike racks, and historical markers. "I hope people vote for the streets."

49th Ward Discussion

On April 10th, all ward residents age 16 and over, regardless of voter registration or citizenship status, were invited to vote on the proposals at a local high school. In the week beforehand, 428 residents voted early at the Alderman’s office—more early voters per day than during the 2008 presidential election. On the final voting day, a stream of people filled the school cafeteria, reading over proposals, consulting with community representatives, and voting for up to eight projects on paper ballots.

In the end, 1,652 residents turned out, not to elect someone to decide for them, but to make their own decisions about the ward. The turnout vastly exceeded expectations, considering the brand-new process, lack of media coverage, and absence of any other elections or ballot measures to inspire turnout.

The $1.3 million was enough to fund the 14 most popular projects. The proposal to fix sidewalks received the most votes, and other funded projects included bike lanes, community gardens, murals, traffic signals, and street lighting. Every committee had at least one proposal funded.

Democratizing Democracy

But participatory budgeting in Chicago still has a long way to go. Like at most community meetings in the ward, turnout did not reflect the full diversity of residents. In most participatory budgeting processes, disadvantaged communities turn out in droves, but not yet in the 49th Ward. Despite additional Spanish-language assemblies, materials, and outreach, Latino turnout was particularly low. According to Latino leaders, this was due largely to general distrust of government and worries about immigration status. Some community organizers added that there was too little time for one-on-one meetings with such leaders early on, and that the infrastructure funding did not speak to the concerns of many low-income residents. Had turnout been more diverse, would funding have been allocated differently?

Organizers will have a chance to find out, since Moore has already committed to continuing participatory budgeting. As he wrote in a letter to constituents, it "exceeded even my wildest dreams. It was more than an election. It was a community celebration and an affirmation that people will participate in the civic affairs of their community if given real power to make real decisions." Community representatives are already debating how to deepen community engagement by building on the outreach from this year.

Important as it is, the ward's $1.3 million discretionary budget is just the beginning. Residents are now discussing how to bring participatory budgeting to other budgets, and some reformers in other wards are already considering running on a participatory budgeting platform in the next municipal elections. This energy shows the power of truly democratic experiences, and opens up new possibilities for democracy in Chicago and beyond.

Josh Lerner is co-director of The Participatory Budgeting Project, a resource organization that has advised Alderman Joe Moore throughout the 49th Ward’s participatory budgeting process.
Megan Wade Antieau, a writer and ward resident, has served as a community representative in the 49th Ward Participatory Budget, working with other residents to transform community input into budget proposals.

Toronto Tenants Participate in $9 Million Budget Allocation

from http://www.torontohousing.ca/participatory_budgeting
see the UN Guide to Participatory Budgeting to find out how to move your city towards greater participatory self-management...

Despite a downturn in the economy that is putting the pinch on households and budgets, Toronto Community Housing tenants this year once again decided how to invest $9 million on ideas that will improve tenants' quality of life.

2009 is the eighth year for Participatory Budgeting at Toronto Community Housing, an idea which originated in Brazil, which gives tenants the power to decide how housing money is spent. They decide how to spend the $9 million in a democratic and transparent way. The theme of this year's process is "Working Together: Making a Difference."

This year, tenants have provided funding to more than 150 initiatives in buildings across the city, including:

* Garden beautification at 123 Sackville St. (at Queen and Parliament) - $5,000
* Playground improvements at Blake Boultbee (at Gerrard and Pape) - $25,000
* New hallway tiles at Kennedy-Dundalk (at Ellesmere and Kennedy) - $90,000
* Additional security cameras Finch-Brahms (at Finch and Brahms) - $30,000
* Paint common areas at Warden Woods (at Danforth and Warden) - $40,000
* Gym renovations at Scarlett Manor (at Lawrence West and Scarlett) - $50,000
* New kitchen cupboards at Thistletown (at Martingrove and Albion) - $55,000
* New bathroom vanities Jane-Yewtree (at Jane and Finch) - $50,000
* Computer resource centre at Swansea Mews (at Queensway and Windermere) - $25,000


How Participatory Budgeting works

pbIt all starts with getting people involved. Tenants in every Toronto Community Housing building come forward with ideas for improving their community. Then they sort through the ideas and democratically decide with their neighbours which ideas are the top priorities for their buildings. Only capital projects are eligible for funding.

Tenants bring forward those ideas to big voting events, where tenants from different buildings come together to hear about all the priorities and vote on the winners.

At the voting events, tenants passionately present their ideas to their fellow tenants to garner support. There is a time to ask questions. Tenants can learn more about the ideas by examining display boards that each of the buildings creates.

Then, it comes time to vote. It's a "dot-mocracy." Every building selects a delegate. They get sticker dots which they use to vote for the best ideas. The ideas with the most votes get funding.


A garden in the city

pb2Rfifi Abdessamad lives in a townhouse complex in the area of Queen and Parliament streets. He's a big supporter of Participatory Budgeting. Last year, he and his son made a legendary presentation. It was an impassioned plea for a new playground, urging tenant voters to "Do it for the kids." He got the votes and the tens of thousands of dollars in funding he was seeking. The community got the playground, much to the delight of children and their families.

This year, Mr. Abdessamad put forward a more modest proposal at his community planning meeting. Plant a garden to make the community beautiful. Just $5,000 would mean tenants being able to grow a lush, green garden for three years.

Mr. Abdessamad makes a convincing case. His neighbours agreed to make the garden the townhouse complex's top priority at the big voting event. And at that event, Mr. Abdessamad is equally convincing. Tenants from other buildings like his idea. The project receives funding and will go ahead.

"This will make people happy. It will make the children happy. That is very important,"
a beaming Mr. Abdessamad says.


Tenants decide

pb3Participatory Budgeting is one of the key ways Toronto Community Housing ensures tenants have a real say over decisions that affect their lives. A working group made up of tenant volunteers from an October 2003 tenant forum worked together with Toronto Community Housing staff to develop this process. It is one of the most popular events Toronto Community Housing hosts every year.


Different perspectives, unity in purpose

Tenants who take part in Participatory Budgeting come from different backgrounds. Some, like Juliet Flowers, who lives in the city's northwest, are long-term participants. This year's edition is Ms. Flowers' fourth.

"It's always an exciting process," she says.

This year, Flowers speaks out for better outdoor lighting in her building's breezeways (covered passageways). She says it pays to be creative. This year, she tells a spooky story about ghosts lurking in the breezeways. The only way to get rid of them? Better lighting.

"Humour adds to the presentation. If they laugh, they remember it," she explains.

Watching on is Alonzo Howlett. The Downsview Acres tenant is a Participatory Budgeting first-timer. He doesn't have the same experience as Flowers, but he has the same goal - convince tenants to fund his idea and improve quality of life in his community. He asks for money to renovate his building's lobby.

It wasn't easy for Mr. Howlett to take part.

"I am recently out of surgery, but I think this process is so important, I had to get involved," he said.

He's glad he did. His community's idea got funding. Ms. Flowers' idea received funding too.


No matter who wins, everyone benefits

pb4Participatory Budgeting is about bringing tenants closer to the decision-making process. But it's about more than sharing power. It's also about increasing transparency, accountability, understanding and social inclusion.

In that context, when tenants take part in Participatory Budgeting, everyone benefits - even tenants living in buildings whose bids happen to fall short.

Natalie Marquardt lives in the Gilder community in Toronto's east end. It's a community of 325 housing units spread between two buildings. Marquardt is another first time Participatory Budgeting participant.

After a lively community planning meeting, where Gilder tenants put forward ideas and voted to decide the best ones, painting and plastering common spaces and installing additional security cameras were set as top priorities.

"We are a tight-knit community with a lot of seniors and youth and we're doing our best to make sure we feel safe and our environment is presentable," Marquardt says.

It's time to present her idea. It's difficult to stand in front of a room full of strangers with so much on the line, but Marquardt steps up and does a good job. She receives a warm reception from fellow tenants.

"It was a little nerve-wracking, but everybody made me feel comfortable because we're here for the same reason -- to make our community a better place," she says.

It's time to vote. There isn't enough money to fund all the ideas. Unfortunately for Marquardt, the Gilder proposal misses out on funding in a close vote.

But for Marquardt, there are no hard feelings. She has experienced first-hand the challenge of making spending decisions when resources are scarce. Through that, she has learned more about challenges in other buildings. And she has developed a new understanding of fellow tenants and the communities they call home.

"It's very obvious that some of these places need a lot of care so there's nothing to get upset about. It's more about being happy for someone else to be able to live a better life," she says.

The Cooperative Movement in Century 21

The Cooperative Movement in Century 21
By John Curl
“There is nothing new under the sun.”
2010

INTRODUCTION

In 2002 the UN General Assembly recognized that cooperatives “are becoming a major factor of economic and social development,” and urged governments to promote their growth by “utilizing and developing fully the potential and contribution of cooperatives for the attainment of social development goals, in particular the eradication of poverty, the generation of full and productive employment and the enhancement of social integration;... creating a supportive and enabling environment for the development of cooperatives by, inter alia, developing an effective partnership between Governments and the cooperative movement.”(1) Recently the UN declared 2012 to be the International Year of Cooperatives.

The people of the world do not care what you call the economic system as long as it works. For the last century ideologists of both capitalism and state socialism have made extravagant claims and promises about the superiority of their economic ideas, but the proof was in the pudding. Neither one was able to bring peace, prosperity, and social equity to the world on a sustainable basis. That overarching goal could not be accomplished by either economic system, because neither was actually geared to bring it about. Social justice requires full employment, while capitalism structures unemployment and marginalization into the very bones of the system. Capitalism privatizes the world, transforms power and property into money, reduces people to labor or marginalized unemployed, disempowers democracy, and crashes periodically with disastrous consequences. State socialism centralizes power in the hands of bureaucrats, planners, and party hacks, disempowers civil society, and rigidifies into a self-perpetuating overly-centralized establishment which inevitably makes monumental social planning blunders. The economics of the 21st century must be based on intense practicality, not false ideology.

The cooperative movement of the present and near future operates primarily in the spaces that the corporate system cannot and will not fill. Cooperatives can provide a dignified living for the many millions who would otherwise be unemployed or marginalized. Cooperatives build bridges between people in conflict, as they did between east and west after World War II and during the cold war. Cooperatives played an important role in the formation of the European Union, and are continuing to build bridges today between Palestinians and Israelis, Bosnians and Serbs, and in conflict areas in Indonesia, India and Sri Lanka. (2) Cooperatives and social enterprises are the world’s best hope of achieving peace, prosperity, and social equity in this new century, and it is there that the eyes of the world need to turn.

The movement for worker cooperatives, workplace democracy, and social enterprises is resurgent around the world today. Grassroots social movements have turned to cooperatives in response to the depredations of globalism and the worldwide deep recession, to improve people’s living conditions and to empower them. People band together into cooperatives because they need others to share work, expenses, and expertise, and because they prefer working in a democratic situation. Many of the new social enterprises are arising from spontaneous initiatives of grassroots groups, and many are being organized, coordinated, and backed by nonprofit development organizations, governments, and communities. (3) Nonprofits have turned to organizing social enterprises to fulfill social equity missions. Communities and governments have turned to them for economic development.

In the US today 85 percent of jobs (nongovernment and nonfarm) are in the service sector (4), and these are often best performed by small enterprises. Startups in this sector do not have to begin with expensive, cutting-edge technological equipment. It is here in particular that cooperatives and other social enterprises are able to successfully set up. This sector will continue to be fertile ground for cooperatives for the foreseeable future. In addition, small industrial and artisanal enterprises also do not require expensive technology, and that is another strong sector in which worker cooperatives and social enterprises operate successfully.

But as the size of the firm increases, maintaining direct democracy in the workplace becomes increasingly difficult and complex. Large modern firms based on sophisticated technology, expertise, and management do not lend themselves easily to direct democracy, and efficiency of scale often conflicts with democratic processes. However, worker cooperatives have functioned successfully in America in medium-sized enterprises. (5) Mondragon, the world's largest group of worker cooperatives, centered in Basque Spain, has a workforce of over 92,000. (6)

Today’s movement is not primarily focused on transforming large corporations into cooperatives, although it does put workplace democracy and social equity squarely on the table. Larger enterprises are the territory of the labor movement, which has been reduced to an extremely weakened state in the US; only when workers force changes in the labor laws will American unions win the space to put workplace democracy in large enterprises on the immediate agenda. I will not deal with the questions of workplace democracy in larger enterprises in this paper.

Cooperatives are both a natural formation of human interaction and a modern social movement. They are probably the most integral and natural form of organization beyond the family. Without simple economic group cooperation and mutual aid, human society would never have developed. On the other hand, the cooperative movement was one of the first social movements of modern times, with roots at the beginning of the industrial revolution, and was an integral part of the early labor movement.

A dynamic has always existed between cooperatives as a natural social formation and cooperatives as a social movement. The social movement is based on the natural formation, and on the widespread perception that modern society has interfered with and denied the natural work democracy that humans crave. Market capitalism lauds the employee system as the basis of human freedom but, as most employees understand, the system has also almost always been a tool of oppression and bondage. The cooperative movement aims for liberation from oppressive social stratification and alienation.

What makes the new resurgence of the cooperative movement different from what came before? To elucidate that question, we need to take a brief look at some of the history of the movement. Since I know the US movement best, I’ll focus on that history. Since this is a world-wide movement, I’ll also relate US history to some other developments around the world. There are many approaches to the history of the cooperative movement, and various visions of its goals and mission. Every country has its own equally important history. The saga is not simple.

To begin in a traditional American context, Thomas Jefferson wrote, “Whenever there are in a country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate the natural right. The earth is given as a common stock for man to labor and live on.” (7) That was a key concept of Jeffersonian democracy, and the underlying basis for Abraham Lincoln’s Homestead Act, which opened millions of square miles of land to people who were willing to work it. In today’s world we cannot all be small farmers, but these concepts still apply inalienably to the varieties of work as we know it. These ideas form part of the legal and historical basis for the American government providing a supportive environment and enabling infrastructure for cooperatives.

AN OUTLINE HISTORY
OF THE COOPERATIVE MOVEMENT IN THE USA (8)

Worker cooperatives were organized by some of the very first North American labor unions in the early 1800s. The earliest unions came out of guilds, which included both masters and journeymen, and structured the industries. They were basically mutual aid organizations. At the point that masters became bosses, the journeymen broke away and formed separate organizations. These developed into what we know as unions. They too specialized in mutual aid. In many of the earliest strikes, the journeymen formed worker cooperatives, sometimes temporarily to support themselves during the strike, and sometimes to continue on a permanent basis. These cooperatives were facilitated by the fact that most industrial production was still done with comparatively simple hand tools.

Worker cooperatives became a modern movement with a broad social mission in the 1830s, in reaction to the injustices of the rising capitalist system and the concomitant impoverishment and disempowerment of the working classes. Worker cooperatives were promoted by the first national labor organization, the National Trades’ Union (NTU). In the early 1870s, shortly after the Civil War, the National Labor Union (NLU) renewed the American worker cooperative movement, and honed its mission. In the early 1880s worker cooperatives found their greatest manifestation in the labor movement in the Knights of Labor (KOL), the largest labor organization in the world at that time, which organized a network of almost 200 industrial cooperatives. This was the era of the domination of the great industrialist “robber barons,” enormous social strife, and the KOL cooperative movement was in the thick of it.

Back in the colonial era, the early American governments were dominated by elites of large merchants, bankers, and plantation owners These elites continued to control federal, state, and local governments during the first decades of independence. As the industrial capitalist system increasingly predominated during the 19th century, manufacturing and railroad magnates joined the other privileged interest groups in asserting dominance over government for their own benefit. Under the control of these power elites, on the whole government was antagonistic to the cooperative movement. Control of state and local governments varied by place, and regional powers vied for a place within national power. Democracy for ordinary working people was mostly window dressing. People were treated as just labor input in the economic machine. In colonial America, a large part of the early work force was made up of indentured servants, people who signed themselves into temporary bondage in exchange for passage to America. These were slowly replaced in the North by wage labor (including child labor and prison labor) and in the South by slave labor. The capitalist system, the conquering ideology in the Civil War which abolished chattel slavery and replaced it with “freedom,” was based on the wage system. The employer-employee relationship was a subtler form of bondage in which people rented themselves to other people for specific time periods and under specified conditions. Other forms of the same system included piece-rates, share-cropping, tenant-farming, and various labor contracting. The social mechanism used to compel enough people to rent themselves into this temporary bondage, was poverty. The endless flood of immigrants to America provided a seemingly inexhaustible bounty of willing victims. The union movement was the revolt of the wage slaves.

Worker cooperatives by the decades after the Civil War had become integral to the overall strategy of the labor movement. At the same time as the Knights of Labor fought for higher wages and better working conditions, they were also attempting to construct a vast chain of cooperatives, with the mission of abolishing what they called wage slavery, and replacing the capitalist wage system with workplace democracy in what they called a Cooperative Commonwealth. This concept arose autochthonously in America, parallel to the growth of the socialist movement during the same period, to which it was conceptually interrelated. (9) The Cooperative Commonwealth vision was based on free associative enterprises in a regulated market economy, with the government relegated to infrastructural functions and public utilities, such as water systems, roads, railroads, etc. This concept was fundamentally distinct from the state socialist concept of the government running the entire economy with all workers as government employees. The Cooperative Commonwealth vision was Jeffersonian.

During this same period, between 1866 and the 1890s, American small farmers also organized cooperative movements with similar motivations, strategies, and ends. Thanks to Lincoln’s Homestead Act, the rural US at that time was populated widely by freeholding farm families, who organized cooperative movements for purchasing supplies and marketing farm products. Their opponents were the railroads, bankers and middlemen. The main farmer organizations were first the National Grange (NG) and later the Farmers’ Alliance (FA). Parallel to the union movement the farmer cooperatives saw their mission as organizing an alternative economic structure that would supercede the existing one, a vast network of cooperatives that would be the lever of their liberation from economic oppression. Historian Michael Schwartz called the Farmers’ Alliance Exchanges “the most ambitious counterinstitutions ever undertaken by an American protest movement.” (10)

As the worker and farmer movements developed, the consumer cooperative movement formed a third stream of the cooperative movement. The consumer store movement started independently in America at an early period, but was destroyed by price wars with capitalist competitors. Later consumer cooperatives achieved some success after adopting the British Rochdale system of keeping prices at about market rates and giving rebates to member customers. Cooperative stores run by farmer organizations and unions were notably successful. But the other side to the Rochdale approach was that they ran the stores managerially with workers as employees and not necessarily co-op members. This approach was expanded into an alternative version of a cooperative commonwealth in which giant consumer cooperatives owned all the factories and farms, with the wage system universalized instead of abolished. By this twist the consumer cooperative movement abandoned what had been a core goal of the worker cooperative movement: workplace democracy and liberating workers from wage slavery.

The Knights of Labor was defeated in 1886-87, in the wake of the national May Day strike for the 8-hour day in 1886 and the ensuing Haymarket riot and nationwide crackdown. The KOL worker cooperatives were destroyed at that time by the combined forces of the capitalist system and the government. This was the ultimate triumph of industrial capitalism in the US, and the end of the era when industrial workers thought they could defeat the system economically and supercede capitalism through peaceful competition by building an alternative parallel cooperative system. As the KOL waned, the American labor movement continued on a different footing from the European movement. In most of Europe the socialist movement and workers parties had become an accepted part of the political landscape, while in America they were excluded from the mainstream. As historian Kim Voss wrote in The Making of American Exceptionalism, “American industrial relations and labor politics are exceptional because in 1886 and 1887 employers won the class struggle.” (11)

In rural America the capitalist defeat of the cooperative system was completed a few years later, when the Farmers’ Alliance likewise saw their cooperatives destroyed and their organization defeated by a coalition of bankers, wholesalers, and manufacturers who cut off their credit, supplies, and ability to do business. (12)

The FA and the KOL played one last card. Forming a “third party” alliance, they went into electoral politics and were instrumental in organizing the Populist Party, the most successful third party in American History. They ultimately joined with the Democrats and narrowly missed electing William Jennings Bryan to the presidency in 1896. (13)

After the demise of the KOL, the surviving American Federation of Labor (AFL) began its domination of the mainstream US labor movement. The AFL abandoned the idea of abolishing the wage system, and instead focused only on negotiating contracts and working conditions. Some unionists in the Industrial Workers of the World (IWW) and other organizations continued to fight for industrial freedom and workplace democracy, but instead of building cooperatives they looked to take over the existing industries.

In the 20th century the consumer cooperative movement became the dominant cooperative philosophy in the US, promoted by the Cooperative League (CL), the most important national coordinating and educational organization. For much of the century CL excluded worker cooperatives and even farmer marketing cooperatives (farmer supply purchasing cooperatives were however acceptable to them).

The modern cooperative movement developed in other industrializing countries at the same time as the US movement. Every country had its own variation, related to its level of industrialization. France, first influenced by the ideas of Proudhon and then anarcho-syndicalism, was similar to the US in its focus on worker cooperatives, self-help and solidarity. The movement in Germany focused on banks and credit for farmers, artisans and small entrepreneurs. In Italy it was a diverse mix of worker, farmer, banking, and consumer cooperative experiments, with the Catholic church ultimately organizing a parallel cooperative movement. The movement in Britain started around the same time as the US, and in the 1830s involved thousands of artisans, farmers, and unions forming labor exchanges as part of the National Equitable Labour Exchange, with large warehouses in London and Birmingham. A parallel movement organized the Grand National Consolidated Trades Union, an umbrella organization which immediately became embroiled in labor struggles and came under harsh attack by employers and government. Under duress both the labor exchanges and the union collapsed. When the British cooperative movement revived in the 1840s in Rochdale, it found great success as a consumer movement, and carved out a niche for itself through its core compromise of not threatening the market and abandoning workplace democracy. The British success resulted in consumer cooperative philosophy dominating much of the international cooperative movement as well the US movement during the 20th century, while worker cooperatives and workplace democracy became relegated to the realm of impractical dreamers and radical groups.

THE NEW DEAL AND THE COOPERATIVE MOVEMENT

When the economy collapsed, the “Self-Help” cooperative movement, stressing mutual aid and barter, quickly became widespread among the unemployed and underemployed. It was truly a spontaneous mass movement. These cooperatives produced a variety of goods for trade and self-use, and organized exchanges between laborers and farmers, in which people would work for a share of the produce. They sprang up in many locales around the country, and became a part of daily life for many people. Money was scarce. Scrip was sometimes used. By the end of 1932, there were self-help organizations in 37 states with over 300,000 members. A survey in December 1934 counted 310 different groups, about two-thirds of them in California with over a half million members. (14)

The Great Depression of the 1930s and the New Deal changed the relationship between government and cooperatives in the US for a generation. While the movement had always had isolated supporters among elected officials, as a whole government was anything but supportive. With the New Deal the American cooperative movement won support at the highest level of government for the first time. The New Deal was also a great backer of the labor movement and adhered to strong government regulation of the capitalist system.

Roosevelt’s programs provided enormous help to rural and farmer cooperatives. But urban cooperatives were not a significant part of the programs. Above all, industrial worker cooperatives were excluded. The New Deal drew the line at helping cooperatives that challenged the wage system.

One of the New Deal’s first acts was to set up a Division of Self-Help Cooperatives (under the Federal Emergency Relief Act), providing technical assistance and grants to self-help cooperatives and barter associations. (15) The “community projects” program in California included cooperative industries such as a wood mill, a tractor assembly plant, a paint factory, and hosiery mills. However, the law stipulated that production facilities set up with FERA funds could not be used in money transactions, while self-help cooperative groups usually tried to include money in their exchange arrangements whenever possible, as well as producing articles for their own use. This provision seriously undercut many self-help co-ops’ ability to function, since everyone needed cash badly. In some situations, FERA cooperators could receive pay, but only to produce articles for their own use.

The Farm Credit Administration (FCA) of 1933 set up Banks for Cooperatives, which had a very significant effect on the farmer cooperative movement. With a central bank and twelve district banks, it became a member-controlled system of financing farmer, telephone and electric cooperatives. After having been set up with government seed-money, the FCA became self-supporting. The banks were not permitted to give assistance to consumer or industrial cooperatives. Banks for Cooperatives became an indispensable institution for organizing and stabilizing farm cooperatives for the rest of the century. (16) The Farm Security Administration (FSA) of 1935, initially part of the Resettlement Administration, set up to combat rural poverty, helped organize 25,000 cooperatives of all types among about four million low-income farmers. The Rural Electrification Administration (REA) of 1935 promoted cooperative electrification in rural areas. Only about 10 percent of rural homes had service at that time but through REA loans, local electrification cooperatives served almost 300,000 households, or 40 percent of rural homes by the end of 1939.

While the New Deal’s backing of farm cooperatives was instrumental in the rural recovery from the depression, the exclusion of worker and urban cooperatives helped only to maintain working people in a state of disempowerment, and dependent on government relief or work programs.

Even though industrial production facilities were sitting idle around the country, the New Deal never supported the idea of workers taking them over with government backing and restarting them as cooperatives. The celebrated wave of factory seizures by workers, beginning with the Flint sitdown strike against General Motors in 1936-37, in which strikers occupied several plants for 44 days, repelling attacks from the police and National Guard, had as its goal union recognition, and the Flint sitdown ended in GM’s recognition of the United Auto Workers. A wave of sitdowns followed, with over 400,000 workers occupying plants and businesses around the country in 1937. The wave faded as the courts and the National Labor Relations Board held that sit-downs were illegal and that sit-down strikers could be fired. In the following decades many other powerful tools that American workers used in the 1930s to unionize were taken away.

From the New Deal’s beginning, reactionary forces worked tirelessly to stymie it, and succeeded in dismantling it piece by piece after World War II. Few cooperatives survived the war, and those that did were attacked by the dogs of McCarthyism, and most purged of any connection to a social movement. Government regulations over capital, corporations and the market were removed thread by thread, while worker organizations were diminished and hamstrung by new laws and regulations. Small farmer cooperatives found a fierce enemy in escalating corporate agribusiness.

In the 1960s and 1970s, a new generation rediscovered cooperation, collectivity, and communalism, creating their own structures and definitions, inspired by a new political opposition movement and in turn shaping that movement. In a unique way, the Sixties gave new life to a vision of America that, unknown to most to the new visionaries themselves, closely reflected the older cooperators’ dreams. Like their forebears, the new co-ops and collectives struggled between their dual identities as “pure and simple” cooperatives and a radical social movement.

The most important milestone for mainstream cooperatives in that period was the chartering of the National Cooperative Bank under President Carter in 1978, to service all types of nonfarm cooperatives.

Shortly thereafter the country sunk into decades of a long rightward spin under the suffocating cloak of Reaganism and its false promises of prosperity through deregulated capitalism. Until the bubble finally burst in 2008 and the economy came crashing down.

URBAN HOMESTEAD MOVEMENT IN NEW YORK CITY (17)

The most successful contemporary radical cooperative movement in the US is a local movement spanning the last four decades and led by an inspiring grassroots spirit of revolt: the building occupations of the urban homestead limited equity cooperative movement in New York City.

In the mid-1960s, many New York landlords in low-income neighborhoods abandoned their apartment buildings because they considered them not profitable enough, averaging 38,000 abandoned units a year by the end of the decade. The City foreclosed for non-payment of taxes and serious code violations, and assumed ownership as “landlord of last resort.” In 1969 a group of neighbors on East 102nd Street in Manhattan, mainly Puerto Rican families, took over two buildings by direct action and started rehabilitating them through sweat equity as cooperatives. That touched off a direct action tenant movement in other neighborhoods. In 1970 groups of squatters took over vacant buildings on West 15th, 111th, 122nd streets, and along Columbus Avenue around 87th Street, proclaiming the community’s right to possession of a place to live. The City reacted by evicting most of the squatters, but public outcry resulted in their granting management control of some of the buildings to community organizations for rehabilitation by the tenants themselves. Several cooperative development nonprofits were formed, including the Urban Homestead Assistance Board (UHAB), which became the most effective organization. In 1973, 286 buildings were slated for urban homesteading, but funding obstacles undercut their efforts. Forty-eight of these buildings were actually completed as homesteaded low-income limited-equity co-ops.

In the 1980s New York tenant groups led many squats, taking over abandoned buildings illegally at first and rehabilitating them. By 1981 the City had become the owner by foreclosure of about 8,000 buildings with around 112,000 apartments, 34,000 of the units still occupied. At the urging of housing activist groups, particularly UHAB, the City instituted urban homesteading programs to legally sell the buildings to their squatting tenants for sweat equity and a token payment, with a neighborhood organization or a non-profit development organization often becoming manager during rehabilitation. By 1984, 115 buildings had been bought as limited-equity tenant co-ops under the Tenant Interim Lease Program, with another 92 in process. UHAB provided technical assistance, management training and all-around support. Autonomous groups of squatters continued to take over buildings, with an estimated 500 to 1,000 squatters in 32 buildings on the Lower East Side alone in the 1990s. Hundreds of Latino factory workers and their families squatted in the South Bronx. The City’s response changed with the political winds. Some City administrations curtailed the homestead program and evicted many of the squats, but some squatter groups successfully resisted eviction. In the ‘90s the City renewed its support of tenant homesteading, and by 2002 over 27,000 New York families were living in homesteaded low-income co-ops. Over the last 30 years UHAB has worked to successfully transform over 1,300 buildings into limited equity co-ops, and 42 more buildings are currently in their pipeline containing 1,264 units, most of them in Harlem and the Lower East Side.

The urban homestead movement is based in law on the concepts of squatters rights and homesteading. Homesteading is by permission, usually on government-owned land or land with no legal owner. The homesteader—like the squatter—gains title to the land in exchange for the sweat equity of working it for a certain time period, usually 10 years. In many cases people who start as squatters become homesteaders. Squatters rights and homesteading have been part of US and English common law since very early times, and are deeply embedded in American history. With squatting—legally called “adverse possession”—the squatter takes possession of the land or building without permission of occupancy from the legal owner. Squatters use adverse possession to claim a legal right to land or buildings. The idea is that a person who openly occupies and improves a property for a set amount of time is entitled to ownership, even though that property may have originally not belonged to them. For the first thirty days of occupation, squatters are legally trespassers liable to eviction without cause. During this time squatters are usually discrete about their presence, but open enough to be able to document their occupation. After thirty days, they gain squatters’ rights—or tenants’ rights—and in New York thereafter can only be evicted by a court order. At that time the squatters often openly begin to undertake major renovations or improvements.

The basic concept has been used beyond housing elsewhere in the Americas. The core idea of the Mexican Revolution (1910-17) was “land for those who work it,” and that concept was enshrined in the Mexican Constitution as the ejido system of communal property. The Brazilian Constitution (1988) says that land that remains unproductive should be used for a “larger social function." (18) Brazil’s Landless Workers Movement (MST) used that constitutional right as the legal basis for numerous land occupations. The largest social movement in Latin America today with an estimated 1.5 million members, MST has peacefully occupied unused land since 1985, won land titles for more than 350,000 families in 2,000 settlements, and established about 400 cooperative associations for agricultural production, marketing, services, and credit, as well as constructing houses, schools, and clinics.

RECENT FACTORY OCCUPATIONS

The same core concept has been applied to production and business facilities by the recovered factory movement in Argentina, Brazil, Uruguay, Mexico, and Venezuela. Most of these started as occupations of shut-down or bankrupted factories and businesses by their workers and communities, and reopened as worker cooperatives. Many of them have received government recognition and support, particularly in Brazil, Uruguay, and Venezuela. In Argentina there are about two hundred worker-run cooperative factories and businesses today, most of which started as plant occupations during the economic crisis of 2001-2002. Argentina’s is the largest worker-recuperated movement, despite receiving less government recognition and support.

The recent wave of factory occupations was next taken up in Ontario in 2007, when Canadian workers occupied three plants that were shutting down, and forced the owners to honor their severance agreements, but there was no plan to reopen these factories as cooperatives. The spirit arrived in the US in December 2008 in Chicago, when over 200 workers, members of United Electrical Workers (UE), staged a factory occupation at the shut-down Republic Window and Doors plant, demanding their vacation and severance pay, or that the factory continue its operations. (19) They were given only three days’ notice of the shut-down, not the 60 days required under federal and state law, and the management refused to negotiate with the workers’ union about the closure. After 6 days of occupation, the Bank of America and other lenders to Republic agreed to pay the workers the approximately $2 million owed to them. Meanwhile, the workers explored ways to restart the factory, including the possibility of a worker cooperative, and set up a “Windows of Opportunity Fund” to provide technical assistance and study this and other possibilities for re-starting production. But, as a union representative has since explained, “the fact that no real movement of worker-run enterprises exists in the US makes this option much more difficult at this point.” (20)

Instead of reopening as a worker cooperative, a firm specializing in “green” energy efficient windows bought Republic Windows in February 2009, and a union spokesman said that the new owner will offer jobs to all laid-off workers at the reopened plant. Nonetheless, that the UE union at Republic seriously considered a worker cooperative is an excellent sign. Historically many unions have feared their position would be weakened by worker cooperatives because they blur the line between workers and management. The labor movement, at least on the international level, has moved beyond that stasis today. The International Labour Organization (ILO), affiliated with the UN, strongly supports worker cooperatives today as a strategy to achieve full employment, and is working closely with the International Cooperative Alliance (ICA), which represents the international cooperative movement. While the new cooperative movement is currently still embryonic in the US, it has the potential of becoming that “real movement” whose lack the worker at Republic Windows bemoaned.

A recent event of enormous promise is the collaboration, announced in October, 2009, between the United Steel Workers Union (USW) and Mondragon International. The USW is North America’s largest union, and Mondragon is the largest group of worker cooperatives in the world, centered in Spain’s Basque regon. According to USW International President Leo W. Gerard, they are exploring a partnership “towards making union co-ops a viable business model that can create good jobs, empower workers, and support communities in the United States and Canada… Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollowing out communities by shedding jobs and shuttering plants. We need a new business model that invests in workers and invests in communities." Mondragon president Josu Ugarte added that their "complimentary visions can transform manufacturing practices in North America. We feel inspired to take this step based on our common set of values with the Steelworkers who have proved time and again that the future belongs to those who connect vision and values to people and put all three first." (21)

Today all over the US production and business facilities sit idle, while the sector of unemployed swells. The government has mortgaged our grandchildren’s future to bail out the banking system—for the most part those same banks that own title to the idle production facilities—with little in return. It would seem perhaps a small step for the US government to become “landlord of last resort” like the City of New York, and open tens of thousands of shuttered business, idle factories, and closed plants to worker cooperatives in exchange for sweat equity. That is a great stimulus plan that the economy sorely needs.

CONCLUSION

Today’s cooperative movement has centuries of history behind it. At the same time it is also a new movement of a new generation. Like every social equity movement, the cooperative movement rises and subsides, and its deeper goals cannot be permanently achieved because society is always changing: all social goals must be constantly renewed, and all social movements must go through cycles of renewal.

Some tendencies in today’s movement differ in several aspects from the cooperative movement as it was not long ago:

• it has returned to its mission of democratizing the workplace;

• it encompasses experimental structures of social enterprises;

• it is included by diverse nonprofits as part of their mission strategy;

• it has increased its worldwide character, with the international movement having stronger influence over national movements;

• it is reforging a close alliance with the labor movement;

• it has returned to direct action activism with housing, land, business, and factory occupations;

• it is achieving the backing of government in creating a supportive and enabling environment for the development of cooperatives;

• it is part of an international strategy, coordinated by the UN, to reorganize the world economy with the cooperative sector a permanent part, helping to provide full employment for the unemployed and marginalized people of the world.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

John Curl is the author of For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, (Oakland, CA: PM Press, 2009).

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NOTES

(1) UN General Assembly, “Resolution on Cooperatives in Social Development,” UN Resolution A/RES/56/114, Adopted 18 January 2002. http://www.copac.coop/publications/unpublications.html

(2) Rita Rhodes, The International Co-operative Alliance During War and Peace, 1910-1950, (Geneva: ICA, 1995); International Co-operative Alliance, “Peace-Building Through Cooperatives,” (Geneva: ICA, 2006), http://www.copac.coop/idc/2006/2006-idc-ica-en.pdf.

(3) For international examples, see the 11 case studies in Johnston Birchall, “Rediscovering the cooperative advantage: Poverty reduction through self-help,” Cooperative Branch, International Labour Office, Geneva: 2003, 31-62. The Uganda Shoe-shiners Industrial Cooperative Society began spontaneously. Nepalese hill community forestry user groups took over sustainable management of the public forests with support from the government. Milk Vita dairy cooperatives in Bangladesh began in a government program with international aid, and became independent. Women’s agro-tourism cooperatives in Greece were first initiated as a public development strategy, and then by grass-roots initiatives such as the Zagora co-op in Pelion. Tribal people’s cooperatives in Orissa, India, were started as pilot projects through the International Labour Organization and an NGO partner. The water cooperative of Santa Cruz, Bolivia was initiated by the community. Labor cooperatives in Finland were spontaneously organized by a variety of groups.

(4) Douglas B. Cleveland, “The Role of Services in the Modern US Economy,” (Washington, DC: Office of Service Industries, US Chamber of Commerce, International Trade Administration, 1999),” http://www.ita.doc.gov/td/sif/PDF/ROLSERV199.pdf

(5) Current examples of successful worker cooperatives involving larger groups include Sustainable Woods Cooperatives ( Lone Rock, Wisconsin), Equal Exchange (West Bridgewater, Massachusetts), Arizmendi Association of Cooperatives (Bay Area), Cooperative Care (Wautoma, Wisconsin), Chroma Technology Corp (Rockingham, Vermont), Rainbow Grocery (San Francisco). Cooperative Home Care Associates (New York City), WAGES (Oakland), Big Timberworks (Gallatin Gateway, Montana), Union Cab of Madison, and Isthmus Engineering & Manufacturing (Madison, Wisconsin).

(6) Mondragon Corporation: Economic Data, http://www.mondragon-corporation.com/language/en-US/ENG/Economic-Data/Most-relevant-data.aspx

(7) Philip S. Foner, ed., Thomas Jefferson: Selections from His Writings, (New York: International Publishers, 1943) , 56-57.

(8) See John Curl, For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, (Oakland, CA: PM Press, 2009). A detailed survey of this history can be found in my book.

(9) The extent of the worker cooperative movement was nationwide and regionally balanced. Early centers of cooperative growth were urban metropolises such as New York City, Philadelphia, Chicago, and Boston, followed by smaller cities including Cincinnati, Detroit, Milwaukee, Minneapolis, St. Louis, Baltimore, New Orleans, and San Francisco, as well as numerous small towns. Between 1865 and 1890, 72 worker cooperatives were opened in New York State; 69 in Massachusetts; 61 Illinois; 48 each in Pennsylvania and Ohio; 24 Minnesota; 20 Maryland; 17 Indiana; 15 Wisconsin, Kansas and Missouri; 13 Michigan; 12 Iowa; 11 New Jersey; 10 Louisiana; 9 Kentucky; 8 Connecticut; 5 Virginia and West Virginia; 4 Georgia; 3 Maine, New Hampshire, Rhode Island, Alabama, Arkansas and Texas; 2 Tennessee, North Carolina, Oregon, Washington Territory, and District of Columbia; 1 each in Vermont, Delaware, South Carolina and Mississippi. New York City had the greatest concentration (38), followed by Chicago (27), Minneapolis (18), Philadelphia and Baltimore (16), San Francisco (15), Cincinnati (14), Milwaukee (13), Boston (11), St. Louis, New Orleans and Detroit (9). In addition 11 were in Canada, with 3 each in Montreal and Toronto. The leading trades (in descending order) were boot and shoe making, iron molding, printing-publishing, cigar making, coal mining, barrel making (cooperage), glass making, clothing manufacturing, furniture manufacturing, carpentry, and shipbuilding. See Clare Horner, “Producers’ Co-operatives in the United States, 1865-1890.” Ph.D. diss., University of Pittsburg, 1978, 229-43.

(10) Michael Schwartz, Radical Protest and Social Structure: The Southern Farmers' Alliance and Cotton Tenancy, 1880-1890 (Chicago: University of Chicago Press, 1976), 217.

(11) Kim Voss, The Making of American Exceptionalism: The Knights of Labor and Class Formation in the Nineteenth Century (Ithaca: Cornell University Press, 1993), 232.

(12) Curl, For All The People, 111-17.

(13) See Norman Pollack, The Populist Response to Industrial America, (Cambridge: Harvard University Press, 1962); Hicks, J. D. The Populist Revolt (Minneapolis: University of Minnesota Press, 1931. Reprinted. Lincoln: University of Nebraska Press, 1961); Lawrence Goodwyn, The Populist Moment (London: Oxford University Press, 1978).

(14) Clark Kerr and A. Harris, Self-Help Cooperatives in California (Berkeley: Bureau of Public Administration, University of California, 1939), California Emergency Relief Administration, 135-38.

(15) For the New Deal cooperative programs, see Paul K. Conkin, Tomorrow a New World: The New Deal Community Program (Ithaca, NY: Cornell University Press, 1959).

(16) Joseph G. Knapp, The Advance of American Cooperative Enterprise: 1920-1945 (Danville, Illinois: Interstate Printers and Publishers, 1973), 260 ff.

(17) Ronald Lawson, The Tenant Movement in New York City, 1904-1984 (New Brunswick, N.J.: Rutgers U. Press: 1986); Johnston Birchall, “Rediscovering the cooperative advantage: Poverty reduction through self-help” (Geneva: Cooperative Branch, International Labour Organization, 2003), 32; Urban Homestead Assistance Board, “Programs Overview,” “Co-op Development,” http://www.uhab.org; Robert Neuwirth, “Squatters' Rites,” City Limits Magazine, September/October 2002.

(18) Jeffrey Frank, “Two Models of Land Reform 
and Development - Brazil, Z magazine, November 2002; Sue Branford, and Jan Rocha, Cutting the Wire: The story of the landless movement in Brazil, (London: Latin American Bureau 2002); Brazil’s Landless Workers Movement, “About the MST,” http://www.mstbrazil.org/

(19) Michael Luo, “Sit-In at Factory Ends With 2 Loan Agreements,” New York Times, December 12, 2008; Michael Luo and Karen Ann Cullotta, “Even Workers Surprised by Success of Factory Sit-In,” New York Times, December 12, 2008.

(20) Benjamin Dangl, “Firing The Boss: An Interview with Chicago Factory Occupation Organizer,” Toward Freedom, January 15, 2009, http://towardfreedom.com/home/content/view/1506/68/

(21) Carl Davidson, “Steelworkers Plan Job Creation via Worker Coops,” Znet, http://www.zcommunications.org/steelworkers-plan-job-creation-via-worker-coops-by-carl-davidson, November 3, 2009.

Festival of Grassroots Economics

Final cut of video from the festival we held last Sept in Oakland:
http://www.youtube.com/watch?v=yDrMkQFsQTQ

3 Cheers for Detroit's Local Currency

3 Cheers for Detroit's Local Currency
Kelli B. Kavanaugh Tuesday, April 21, 2009

Corktown, The Villages, Downtown Detroit, New Center, Midtown, Eastern Market
Detroit, some say, is a weird but cool blend of big city and small town. Detroit Cheers is making it weirder, smaller and cooler.

Detroit Cheers is a new local currency -- the city version of exchanging grain for flour or darned socks for a loaf of bread. Only it's more like beer for pizza, or housewares for a bike tune up.

With the goal of supporting a local small economy, a trio of Detroit business owners -- John Linardos from Motor City Brewing Works, Tim Tharp from Foran's Grand Trunk Pub and Jerry Belanger from Park Bar -- have put up their own cash to back a new local currency, or scrip, called Detroit Cheers.

The scrip concept was fairly common during the Great Depression (the city itself issued scrip in the 1930s) and is making a resurgence across the country these days. The basic premise is that participating businesses (listed below) accept Cheers and will make change from it -- in regular old fashioned dollars, scrip, or some combo of the two.

Consumers who use the scrip are making a defacto pledge to buy local, since only businesses within the city accept it.

And that's the point, says Greg Gedda, the owner of Union Street in Midtown, one of the businesses that will accept Cheers. "Because it's the city, it's for everyone, and this is our town to promote," he says. "This is the Detroit economic stimulus package."

Cheers 101

Put plainly, Cheers are locally issued currency accepted at select local businesses. Belanger, Tharp and Linardos each put up $1,500 to back the $4,500 worth of Cheers in circulation. The backing money is held in reserve at a bank. As backers are added, they'll release more Cheers. So one Cheers equals one dollar. "It's as good as the U.S. dollar … ironically, it's no better," Belanger says.

Dave Mancini of Supino Pizza in Eastern Market signed on to the Detroit scrip concept as soon as he heard about it, partly for his own benefit. "It's free promotion -- that sounds really selfish," he says. But as he surveys the scene at the Park Bar, he says, "I spend money here all the time, so I might as well take it."

That interconnected community of Detroit small business owners seems to be growing stronger, thanks to concepts like Detroit Open City and now, Cheers. "It means something to us ... that we're connected," says Belanger. "Spending Cheers is almost like giving a secret handshake."

So is this about warm and fuzzy, or is there real economic merit to a local currency? The possibility is certainly there. Berkshares, which are accepted at more than 350 businesses in southern Massachusetts, were launched in the fall 2006. There have been more than 2 million circulating to date, with five different banks and a total of twelve branch offices now serving as exchange stations.

Local backers have hopes for a similar strength. "This is not a novelty thing," says Linardos. "It will grow as we move forward."

Cheers were released into circulation earlier this month at the Park Bar. The party came off like a family reunion, with small business owners chatting about Final Four profits, clean and safe issues, and small successes while sipping on pints of Ghetto Blaster.

At one point, Belanger barked Cheers-accepting business names into a microphone, doling out free Cheers to guests in exchange for a promise that they will spend them at a business they hadn't yet patronized.

As Mancini watched a dozen people picking up Supino-bound Cheers, he shook his head, saying, "He's a saint."

But you know what they say about saints: They sometimes have clay feet. Belanger admits that the Cheers roll-out, while enthusiastic, hasn't been flawless. "We've been overwhelmed with the response, with people who want to use Cheers -- almost too much," says Belanger. "It's been bad in a good way or good in a bad way."

One issue has been with the paper that Cheers was printed on. The trio of backers chose a cotton rag paper for durability, and bought a ream of it -- no cheap purchase. Then they had to print the stuff.

"In keeping with spirit of the whole idea, we could have gone to a printer from out-of-state that has already done this for other municipalities, where we wouldn’t have had the learning curve," says Belanger. "But that would have been kind of contrary to our sustainability, local thing -- so we're going through a learning curve."

The worst-case scenario that Belanger fears is having to completely reissue the scrip. "To have that expense all over again ... it's not always just roses!"

Not to end on a sour note, Detroit Scrip seems to have some legs -- not yet with the mainstream, but with a community of people who tend to already spend their money in the city. And the reserve bank looks like it will be growing: Union Street is preparing to join as a backer. "I'm bowled over by everyone wanting to be involved," says Belanger.

Detroit Scrip FAQ

Q. Is it legal?
A. Yes. Scrip dates way back -- it was issued as wages in early mining towns and was even accepted as payment for Federal land in 1835, thanks to President Andrew Jackson. The concept is experiencing a comeback in recent years. Traverse City, The Berkshires in southern Massachusetts and Ithaca, New York are just three of the many places around the country with some form of local currency. The E.F. Shumaker Society has lots more info on local currency.

Scrip may not attempt to look like Federal money, and anyone holding some must be able to exchange it for equivalent Federal legal tender at any time -- i.e., it must be "backed." To do that with Detroit Scrip, visit Foran's Grand Trunk Pub, Park Bar or Motor City Brewing Works and turn it in for the green stuff.

The businesses only ask that if you are planning on exchanging a lot -- say, a few hundred -- of Cheers at one time, you give them a heads up so they can make sure they have enough cash on hand.

Q. How do I spend it?
A. Simply use it as you would any ol' three dollar bill! Cheers is printed in denominations of 3. If your pizza tab comes to $8, you can pay it with a U.S. fiver and a Cheers. Or three Cheers and get a dollar back. Or, you can pay for a $2 beer with a Cheers. and you'll get a buck back in change. Or you can use a U.S. $5 bill, and then ask for one Cheers back.

Q. Where do I spend it?
A. These businesses accept Cheers. Check the web site for updates.

Restaurants and Bars

* Union Street: 4145 Woodward, Midtown, 313-831-3965 begin_of_the_skype_highlighting 313-831-3965 end_of_the_skype_highlighting
* The Bronx Bar: 4476 2nd Ave., Midtown, 313-832-8464 begin_of_the_skype_highlighting 313-832-8464 end_of_the_skype_highlighting
* Motor City Brewing Works: 470 W. Canfield, Midtown, 3131-832-2700
* Woodbridge Pub: 5169 Trumbull, Woodbridge, 313-833-2701 begin_of_the_skype_highlighting 313-833-2701 end_of_the_skype_highlighting
* Supino Pizza: 2457 Russell St., Eastern Market, 313-567-7879 begin_of_the_skype_highlighting 313-567-7879 end_of_the_skype_highlighting
* Park Bar: 2040 Park Ave., Downtown, 313-962-2933 begin_of_the_skype_highlighting 313-962-2933 end_of_the_skype_highlighting
* Cliff Bell's: 2030 Park Ave., Downtown, 313-961-2543 begin_of_the_skype_highlighting 313-961-2543 end_of_the_skype_highlighting
* Eph's Deli: 608 Woodward, Downtown, 313-964-4511 begin_of_the_skype_highlighting 313-964-4511 end_of_the_skype_highlighting
* Foran's Grand Trunk Pub: 612 Woodward, Downtown, 313-961-3043 begin_of_the_skype_highlighting 313-961-3043 end_of_the_skype_highlighting

Retail/Services

* Bureau of Urban Living: 460 W. Canfield, Midtown, 313-833-9336 begin_of_the_skype_highlighting 313-833-9336 end_of_the_skype_highlighting
* Canine to Five Detroit Dog Day Care: 3443 Cass Ave., Midtown, 313-831-3647 begin_of_the_skype_highlighting 313-831-3647 end_of_the_skype_highlighting
* Wheelhouse Detroit: 1340 E. Atwater, Downtown, 313-656-2453 begin_of_the_skype_highlighting 313-656-2453 end_of_the_skype_highlighting
* Dormouse Design: 6447 Mack, The Villages
* Recy-Clean: 1331 Holden, New Center, 313-871-4000 begin_of_the_skype_highlighting 313-871-4000 end_of_the_skype_highlighting
* Steve Adams Design
* Treetop Craftsman, Inc.
* Electrician Pat Deegan

Q. How do I get it?
A. Go to the bank! Which, in this case, is Foran's Grand Trunk Pub, The Park Bar or Motor City Brewing Works. You want $40 bucks worth? Hand over two twenties and you will receive 13 Cheers and a US dollar. Also, when you are at any of the aforementioned businesses that accept Detroit Scrip, you can ask to receive all or part of your change in Cheers.

Q. Why should I participate?
A. As Liz Blondy, owner of Canine to Five Detroit Dog Daycare puts it simply: "Karma."