Faithful fans of Book View Cafe have probably noticed that we’ve added the word “cooperative” to our name and wondered what that meant. On the most basic level, it means that we have incorporated as a cooperative association. In the U.S., only businesses set up under specific state co-op laws can use the words “co-op” or “cooperative” in their name.
We decided to set up as a cooperative because that form of organization reflected how we were actually doing business. BVC was set up by writers to publish and market their work. It was capitalized by those members — mostly through labor — and has always operated democratically. Outside of the money necessary to run the organization, the income goes to the members as payment for their work.
That may sound idealistic — and certainly most people who get involved in co-ops have a lot of idealism — but it doesn’t mean that BVC is flaky.
BVC is what is generally called a producer co-op. We’re set up to produce and sell member ebooks and to provide other services related to publishing. It’s a business model particularly useful to those in creative trades; a number of visual artists run co-op galleries, for example. It’s very similar to farmer co-ops, many of which are very large, like Sunkist and Land o’ Lakes.
Most people are familiar with food co-ops, which are a type of retail co-op. Those are businesses owned by consumers and operated for the benefit of those who shop there. REI, the nationwide recreational equipment company, is a co-op. Credit unions are also a form of consumer co-op.
Other types of consumer co-ops include everything from the rural electric co-ops — which were started as part of a federal government project to expand electrical service throughout the U.S. — to housing co-ops. And housing co-ops are very diverse themselves, ranging from student housing co-ops (similar to dorms, but the students do the cooking and cleaning to keep the costs down) to very expensive apartments in New York City.
Worker-owned cooperatives are another common form. These are businesses owned by the people who work there. Unlike the producer co-ops — which are formed by independent contractors (like writers or farmers) — the members are employees who draw salaries as well as the business owners. These co-ops range from small restaurants to steel mills.
What all these businesses have in common is that they are operated for the financial benefit of their members, rather than for shareholders or other investors. In the U.S., co-ops also get a tax break because any dividends they pay are taxed only to the co-op members individually, not to the co-op corporation. Other than those two important things, co-ops are a lot like other corporations.
Co-ops have been around in the U.S. for about 150 years. They got a big push from the federal government during the New Deal as part of the effort to get the country out of the Great Depression. But co-ops are still a small part of the economic landscape in the U.S.
That’s not true in the Mondragon co-ops, based in Mondragon in the Basque country in Spain, where a push for cooperatives in the 1950s led to a large and successful interrelated group of co-ops of all kinds. They represent a significant amount of the economic activity in their region. During the recent Great Recession, the economy was healthy in Mondragon when it was a disaster in the rest of Spain.
The success of Mondragon shows that co-ops can be solid businesses while still being run for the best interest of their members rather than the best interests of outside shareholders.
Book View Cafe is not my first experience with co-ops. In the 1970s, I was heavily involved in the food co-op movement and am proud to say that I was one of the people who started Wheatsville, a food co-op that recently expanded to a second store in Austin. I lived in a co-op apartment house in Washington, D.C., for several years, have been a member of REI since the 1980s, and do my banking at Capitol Credit Union in Austin. A recent movie, Many Hands, gives a detailed history of the Austin co-ops. Similar co-op efforts took place all across the U.S. in the 1970s.
There is a renewed interest in co-ops today, though they’re still a small part of the economy. I’m happy that BVC is part of that new movement and I hope other groups of authors will follow our lead. Co-op publishing is not the only solution to the technological changes that are revolutionizing the business, but it’s one way to make sure the writers don’t get left out of the money.