A practical discussion among cooperative developers about enterprise and democracy, and how co-ops are just plain useful
There’s a way of talking about cooperatives in Australia that turns them into either nostalgia or marginal policy footnotes. They become the old rural thing your grandparents knew about, or the theoretically worthy alternative wheeled out only when the main neoliberal script is failing. What gets far less attention is a more interesting question, ‘What do people learn when they actually spend their time helping cooperatives form, survive, govern and grow?’
This is the thread running through the following discussion. The authors all undertake cooperative development across Australia through Co-operative Bonds, a cooperative that provides education and development services to other cooperatives and member-based enterprises. The work stretches across energy, community services, farming, shared business services and even, on one occasion, stonemasonry. Between start-ups and more mature enterprises, they have seen both the appeal and importance of the model and the friction built into trying to make it work in an economy that treats investor control as the norm.
The first lesson is that cooperatives matter now, not because they are ideologically pure but because they change where authority sits. As Yolanda van Gellecum puts it, in a period marked by ‘the kind of polycrisis we have in inequality, in climate, in ecosystems’, too many decisions are made through centralised structures with centralised ownership. ‘Local communities get left by the wayside…Co-ops are the antibody of that disease.’
How does this disease manifest? In the standard investor-owned firm, the official story is about efficiency, capital allocation and growth. The lived story is often one of distance: that is, distance between ownership and work, distance between control and place, distance between investment and consequence. The stubborn sanity of the cooperative form is that it narrows that distance. Members are not an afterthought. They are the point.
Anthony Taylor frames this distinction in clear terms: ‘Co-ops and mutuals are businesses that are owned and democratically governed by members.’ Because ownership and control sit with consumers, workers or producers rather than external shareholders, ‘the purpose and behaviour of a co-op is different to a shareholder-owned company’. A co-op or mutual is ‘about maximising the services and benefits provided to its members’. That is a broader aim than profit alone. It can include price, quality, access, sustainability, regional development and the simple fact of keeping something useful alive. Anthony’s point is important because it names what mainstream business culture spends a great deal of energy trying not to see: ownership shapes behaviour. Cooperatives and mutuals, as member-owned businesses, are formed to benefit the people who use them rather than external shareholders.
Clare Fountain brings a perspective grounded in the reality of regional Australia, where she lives. She says, ‘solutions need to be a good fit for the users of those solutions’, with the cooperative ‘a classic example of being place-based’. In small towns, the abstraction called the market often appears in a very concrete form: the bank shuts, the store closes, the pub becomes a boarded-up shell, the service disappears because the numbers no longer suit a distant decision-maker. ‘Shareholder-driven, profit-orientated businesses pull out and leave those towns with massive gaps, which are social as well as economic.’
This is how extraction works. Revenue leaks out. Control leaks out. Jobs, skills and confidence leak out with it. The local economy becomes a thin pipeline feeding someone, something, elsewhere, while communities are told this is just efficiency doing its work.
From this angle, the social and solidarity economy of which cooperatives are a part is not a slogan but a practical means of resistance. It names forms of enterprise where use, participation, reciprocity and stewardship matter more than external return. Anthony Taylor calls this ‘the concept of mutual aid applied very practically to business’. The word ‘practical’ is of central importance. No one in this discussion sees the co-op as theory; they see the model’s practical substance.
Clare’s own definition makes this clear: ‘a cooperative is formed when a group of people, five or more, establish that they can solve a problem collectively that they can’t solve on their own’. That problem might be access to work, a viable local service, affordable energy, shared back-office support, a community asset, a route to market or simply a better deal. The point is not ideology first. It is problem-solving first, through shared ownership and control.
That practical edge comes up again and again. Asked what usually brings people to the cooperative model, Clare says, ‘An issue comes up for people, they get frustrated and they go, what can we do about this?’ There is usually already a relationship there, some local or sectoral connection, and then a collective response starts to take shape. ‘We’re fed up with seeing the real estate in our town being bought by outsiders’, or buildings left derelict, or services disappearing. Then, if they are lucky, ‘someone connects them into the co-op model’.
Yolanda has seen the same thing from another angle. In work with refugee communities, the issue was exclusion from decent work due to language and education barriers. The turn to cooperation was not theoretical. It was ‘a really practical response to trying to survive’. For her, there is also a second stream of attraction—for people, often professionals, who are tired of institutions where they have no real say. Really, ‘you just want your contribution to matter’.
More broadly, as Antony McMullen says, cooperatives may form part of an antidote to political toxicity because they make democracy part of daily life rather than a periodic visit to the polling booth. Yolanda agrees: worker and multi-stakeholder cooperatives can make democracy ‘an everyday practice’.
Clare, however, is more circumspect. For many people, especially in stressed communities, the co-op is not experienced as a democracy lab. It is the thing that keeps the lights on and the doors open. If people come together to save the general store so they can ‘walk down the street and buy a pie and ice cream’, that matters in and of itself. They don’t need to first pass an oral exam in political theory. This is a useful corrective. The cooperative form may have democratic depth, but it often earns trust through ordinary usefulness.
The anecdotes here are telling. Clare points to Sea Lake Hotel Co-operative, which operates The Royal Hotel Sea Lake in Victoria, a case where the community saved its pub. The town renovated and reopened the hotel through a cooperative structure. What came back was not just a business. It was employment, training, a renovated building, civic pride and a place to gather. The same applies when a town rescues its general store or post office. People do not invest because they are chasing speculative upside. They invest because they want a service, a place, a future. As Clare puts it, ‘the focus isn’t about extracting money out. The focus is on delivering community value’.
This is where the cooperative structure stands out. Voting is attached to membership, not to the size of your stake. ‘Your voice is attached to you as a human being rather than the money that you invest’, says Yolanda. That changes not just the member experience but the whole mood of the organisation. It keeps investment local or at least keeps control among those using the enterprise. It bakes in what Yolanda calls ‘care and relationality’ rather than distance and extraction.
It also changes the boardroom. One of Yolanda’s observations is that the key question for a board is to whom it is answerable. If the answer is, even indirectly, external shareholders, the pressure to extract value takes primacy. If the answer is the collective aspirations of members with whom there are real relationships, ‘that dynamic may seem subtle, but it goes very deep’.
What, then, is possible in Australia under the cooperative and mutual model? All three co-op developers in this discussion are clear that the potential remains widely underestimated. Co-ops can operate across sectors. They are not confined to farming, however strong the agricultural tradition remains.
Taking a wider lens, Anthony Taylor notes that sectors where co-ops and mutuals have historically played a major role include ‘agriculture, banking, insurance, housing, Aboriginal and Torres Strait Islander community-controlled health, and retail’, while emerging areas include ‘social care, affordable housing and renewable energy generation’. He points to Ngardara Cooperative (Ngardara Project), Goulburn Community Energy Cooperative and Hepburn Energy as energy examples. Gateway Bank, originally the CBA Staff Credit Co-operative, is another example of the role co-ops and mutuals play in ensuring working people and communities have fair access to goods and services. This member-owned bank was originally formed by employees of the Commonwealth Bank, as they were not able to access such loans from the bank they worked at.
Australia, Antony McMullen notes, now has a national cooperative law framework. That is important. It means the structure is available across the country, and it is flexible enough to handle different membership types and forms of members and, importantly, community investment, while preserving member control. In legal form, at least, the door is open wider than many people realise.
But the barriers are real and systemic. Australia’s legal architecture for cooperatives is more developed than in some parts of the world, including in relation to investment. Nevertheless, this corporate and investment framework remains underused, despite its real practical value for communities. Clare says the reasons for this are: ‘low awareness, the ability to secure seed funding’, and the dominance of neoliberal assumptions about what a proper business looks like. Yolanda adds that banks often do not understand co-ops and therefore will not lend, or will only do so on terms that don’t fit. Access to ‘fairly priced capital’ and ‘slow capital’ is thin.
According to Anthony Taylor, ‘fair access to government programs, procurement and business support, and modern legislation and regulation that is attuned to the distinct ownership model of co-ops and mutuals, are policy priorities for the BCCM. Around the world these are proven building blocks for a larger cooperative economy and the economic and social benefits this can bring.’
Indeed, there are many international examples to draw upon for policy that supports cooperatives. In Italy, for instance, there is strong recognition of co-ops, which comes from the model being embedded in the country’s constitution. This manifests in a strong ecosystem for cooperative investment and an innovative social cooperative sector. The UK government’s policy commitment to double the size of the country’s cooperative and mutual economy is leading to detailed policy reviews and discussions of where the model should play a bigger role. In the Canadian context, the government is partnering with the housing cooperative movement to provide more secure and affordable housing.
Anthony outlines the broader problem that co-ops and mutuals face, that they are still ‘not really taught about in the education system, so the baseline understanding of what they can contribute for their members and for a more inclusive and democratic economy can simply be missing’. It also means practically that lawyers, accountants, advisers and bankers who advise and support businesses and not-for-profits to form and grow often can’t properly support cooperatives or put the model on the table as an option. In fact, it’s not uncommon for groups interested in forming a cooperative to be advised to look at other options. That ignorance reproduces itself in the wider ecosystem of grants, procurement, finance and advice. It is a tidy piece of circular nonsense. Because the model is uncommon in teaching and institutions, it remains uncommon in practice; because it remains uncommon in practice, the institutions feel confirmed in ignoring it.
And then there is the work itself. Cooperatives do not fail because economic democracy is impossible. They fail in examples of democracy without structure, education, skill or a viable business model; when they are subject to the ‘tyranny of structurelessness’ (to borrow Jo Freeman’s classic formulation). Clare puts it bluntly: people often think democracy means everyone deciding everything all the time, and then conclude that it can never work. Yolanda makes a similar point. ‘It’s got to be a viable business model first, otherwise you don’t have a cooperative.’ Both stress the need for governance education, business nous and a culture strong enough to survive the departure of founders.
That may be the hardest-earned lesson from the field. A cooperative is not an escape from economics. It is an attempt to reorganise economics around people (as members), place and purpose. That is both more demanding and more promising than the usual start-up fairy tale. It is definitely slower than the lone-wolf social entrepreneur route, but, as Anthony Taylor observes, it comes with ‘other benefits such as spreading risk’: ‘If you want to walk fast, walk alone. If you want to walk far, walk together.’
There is nothing quaint about that line now. Cooperatives will not fix every problem in the economy. But they remain one of the few forms through which communities (and smaller enterprises) can, in Anthony’s words, ‘put themselves in the driving seat’. In the present moment, that is no small thing.
Co-operative Bonds
Business Council of Co-operatives and Mutuals
Sea Lake Hotel Co-operative story and Royal Hotel Sea Lake
Ngardara Project
Goulburn Community Energy Co-op
Hepburn Energy
Gateway Bank
Jo Freeman: The Tyranny of Structurelessness
Authors: Antony McMullen, Clare Fountain and Yolanda van Gellecum, with reflections from Anthony Taylor
Bio: Antony McMullen, Clare Fountain and Yolanda van Gellecum are members of Co-operative Bonds. Antony focuses on governance and cooperative development, Clare on cooperative planning and business model development, and Yolanda on research and sociocracy (dynamic governance and self-management). Anthony Taylor is Policy and Government Affairs Manager and Company Secretary at the Business Council of Co-operatives and Mutuals, the national peak body for the movement.