A Model structure for cooperatives: Worker co-ops and Housing Co-ops

Abstract

The Industrial Cooperative Association (ICA) has developed a model structure for a workers' cooperative. [See Ellerman, 1980b.] The struc? ture is implemented in the ICA Model By-Laws for a Workers9 Coopera? tive and is operating in more than a score of I CA-assisted worker coop? eratives across the country. The purpose of this paper is to generalize the model structure to apply to other types of cooperatives. Two points determine a straight line. Similarly, the general model structure will be delineated as the common aspects in two particular applications: worker cooperatives and housing cooperatives. The model structure for worker cooperatives is a theoretical specification of the type of legal structure developed by the Mondragon industrial cooperatives. [See Oakeshott or Thomas and Logan.] The model structure of housing cooperatives represents a further refinement of what are known as lim? ited equity housing co-ops. [e.g., Rubenzahl et al.] The model structure is based on both theoretical and practical consid? erations. Both traditional worker and housing co-ops have certain simi? lar structural problems which lead to analogous practical consequences. For example, in a common traditional capital structure for co-ops, a person's membership share, in addition to carrying the membership rights (e.g., voting rights), also served as a carrier of the capital value due to the member when he or she leaves the co-op. In many worker and housing co-ops, that capital value has appreciated so much that future membership is effectively denied to low income workers or ten? ants. The model structure will afldress such problems.