A Compelling Case for Cooperatives


The following article was taken from an interview with Dr. Ray Marshall by Heather Gray for the Federation/LAF’s 25th Anniversary in 1992. Dr. Marshall served as the Secretary of Labor under President Jimmy Carter. As an economist Dr. Marshall shares his insight on the economic needs of individuals, communities and nations and, importantly, the different levels of democracy and how cooperatives can serve to strengthen democratic institutions.

by Heather Gray
from an Interview with Ray Marshall

Justice Initiative International

Heather Gray: How do you make it possible for low income Blacks and low income whites in the mountain areas to improve their income?

Ray Marshall: I can’t think of an institution better suited to that than a co-op. Co-ops are the best people development institutions you can have. With cooperatives you deal with all of it – you are involved in the leadership development, people have to learn to run co-ops, work with people, learn to make plans, meet and set goals, marshal resources.

I have always been interested in rural development in the South. It’s not well understood outside of the South that there’s a connection between economic independence and political independence – that people didn’t have economic independence if when they voted they lost their jobs or got kicked off the plantation. The whole reason for forming cooperatives is to give people economic independence so that they could have independence in political and other matters.

In our early organizing work in the South we learned a lot about how the economy works – particularly how the federal government works. We couldn’t get help from the federal government for low income farmers because they were biased toward large farmers. Most of our financial institutions were set up to help those who didn’t need help and to take money out of our rural areas and not to put it pack in. We need institutions like the Federation/LAF that understand the conditions of rural America and are controlled by the people there. Nobody, for example, can better understand the problems of the small farmers in Georgia and Mississippi than the farmers themselves.

Cooperatives are very important because if we’re going to make our political system work in this country we have do it from the bottom up. I’m an optimist about that. All over the world you see democratic institutions sprouting up and we need to strengthen our democratic institutions here. The basic evolution is that first you have political institutions that are controlled by the people and not special interest groups – that’s political democracy. After workers get the right to vote then you have industrial democracy which means worker participation in the work place. That’s collective bargaining. Most countries have taken that further than us. Then there’s social democracy where you have safety nets – a minimum level of welfare services. Every industrial country in the world is more developed in social democracy than us in, for example, health care and education. Finally, there’s economic democracy where individuals and not special interests control their economic institutions. Economic democracy strengthens all other forms of democracy. If you have economic democracy then people can’t intimidate you when you vote.

America would be better off with a strong cooperative movement. Most countries that are having trouble economically are those that are weak in economic democracy. The main economic developmental strategy in the United States is to keep people’s wages and income down. That’s a loser and you wouldn’t want to win it. Most other countries know that a much better approach is to try to compete by improving productivity and quality and that means more efficient institutions. A co-op can be one of the most efficient institutions you can put together because it’s controlled by its members who have a vested interest in achieving their own objectives.