CRITICAL EXAMINATIONS

14 A Long and Strong History with Southern Roots

Jessica Gordon Nembhard

African Americans, as well as other people of color and low-income people, have benefitted greatly from cooperative ownership throughout the history of the U.S., similar to their counterparts around the world. My recent book, Collective Courage: A History of African American Cooperative Economic Thought and Practice (2014), documents these experiences, and particularly the efforts—successes as well as challenges—of African American-owned cooperative enterprises, and analyzes the lessons learned. I explore a variety of cooperative economic models for contemporary community economic development, particularly in communities of color.[1]

The African American Cooperative Movement was a silent partner in the long civil rights movement. Throughout the efforts for Civil Rights, from when we first set foot on North American soil, African Americans have resisted enslavement and oppression and fought for their own freedom. Pursuit of economic alternatives and solidarity economic relationships were part of this struggle and resistance. Even in the face of sabotage and violence we practiced cooperative and collective economics.

African American Cooperative Economics Message

Several African American scholars and leaders have advocated for economic cooperation as an important strategy for Black economic development and increased quality of life. Some leaders have actually practiced cooperative economics in their communities. Although all of them are well known for achievements in other areas (and not for their involvement in the cooperative movement), examples include scholar/activist William E.B. Du Bois (1907, 1933a, 1933b, 1975); activist Marcus Garvey (Shipp 1996: 87-88); businesswoman Nannie H. Burroughs (Hope 1940: 46); activist and organizer Ella Jo Baker (Grant 1998: 30-36; Ransby 2003:75-90); writer, journalist and satirist George Schuyler (Schuyler 1930 and 1932; Calvin 1931; Ransby 2003: 80-90); historian E. Franklin Frazier (1923, 228-229); former Jackson State College (now University) President Jacob Reddix (1974, 117-121); and Black labor leader and organizer A. Philip Randolph, and the Ladies Auxiliary of the Brotherhood of Sleeping Car Porters, (Cohen 2003: 49; Chateauvert 1998). Maulana Karenga (1989) included both Ujima—the collective work and responsibility of African Americans toward their community—and Ujamma—cooperative economics—in addition to self-determination among the seven Kwanzaa principles. Kwanzaa is an African American holiday created by Karenga.

W.E.B. Du Bois proposed economic cooperation as the only effective and practical solution throughout his life. Du Bois argued that African Americans must become the masters of their own economic destiny. Blacks could position ourselves at the forefront of developing new forms of industrial organization that would free us from marginal economic status. He advocated using “intelligent [consumer economic] cooperation” as an important approach. He advanced the concept and strategy of “racial economic cooperation” combining cooperative industries and services in a “group economy,” through which African Americans could use their sense of solidarity, gain control over their economic lives, and assert themselves as equals into, even leaders in, the mainstream economy.[2]

“We can by consumers and producers cooperation, . . . establish a progressively self-supporting economy that will weld the majority of our people into an impregnable, economic phalanx” (W. E. B. Du Bois 1933b, 93-94).

Schuyler (and co-founder of the Young Negroes’ Co-operative League) advocated similarly,

“As I have pointed out again and again … there is only one thing that can immediately get the Negro group out of the barrel and that is consumers’ cooperation, the building up of a Negro cooperative democracy within the shell of our present capitalist system of production and distribution” (1930: 9).

He called on African American youth to lead the movement (Schuyler, 1930 and 1932; and Calvin 1931)). W.C. Matney (1930), manager of the co-op store at Bluefield Colored Institute, West Virginia, was articulate about how cooperatives offer a solution to “the economic riddle confronting the Negro” (p. 49). President of the Ladies Auxiliary to the Brotherhood of Sleeping Car Porters, Helana Wilson, reminded that:

“No race can be said to be another’s equal that cannot or will not protect its own interest. This new order can be brought about once the Negro acknowledges the wisdom in uniting his forces and pooling his funds for the common good of all. Other races have gained great wealth and great power by following this simple rule, and it is hoped some day that the Negro will do the same” (Halena Wilson, ALetter to Lucille Jones,@ January 26, 1942 (1942: 1-2)).

Philip Randolph argued that cooperatives are “the best mechanism yet devised to bring about economic democracy” (Randolph 1944).[3] Three decades later in his memoir, Jacob Reddix (1974), co-founder of Consumers Cooperative Trading Company (Gary Indiana) and former president of Jackson State College (now University), also concluded that a “nationwide system of [African American] cooperative businesses” … “could lift the burden of economic exploitation” from the backs of African Americans (p. 119).

African Americans often followed this advice and engaged in cooperative economic practice throughout our history (see especially Woods 1998, and Reynolds 2001). According to Clyde Woods:

Generation after generation, ethnic and class alliances arose in the [Delta] region with the aim of expanding social and economic democracy, only to be ignored, dismissed, and defeated. These defeats were followed by arrogant attempts to purge such heroic movements from both historical texts and popular memory. Yet even in defeat these movements transformed the policies of the plantation bloc and informed daily life, community-building activities, and subsequent movements (Woods 1998: 4).

African American Cooperatives in the South

The South was well represented in the African American cooperative Movement. The Colored Farmers’ National Alliance and Cooperative Union officially started in Texas in 1886, and grew to establish chapters in every state in the South. By 1891 the CFNACU become the largest African American organization in its time with an estimated 1 million members or more (Gordon Nembhard 2014, 55). The first African American association to demand reparations, National Ex-Slave Mutual Relief, Bounty and Pension Association, was founded in 1896 in Tennessee as a mutual aid society (Berry 2005, Gordon Nembhard 2014). The Colored Merchants Association, a marketing cooperative of independent African American grocery store owners, is founded in Montgomery Alabama in 1925. Chapters of the Young Negroes’ Co-operative League, co-founded by George Schuyler and Ella Jo Baker in 1930 and headquartered in New York City, were organized across the country, including New Orleans, Columbia SC, Portsmouth VA, and Washington, DC (Gordon Nembhard 2014, 116).

After the Civil War, Blacks in Baltimore, Maryland, turned to cooperation to try to improve their lot in life. One cooperative was formed in 1865 to hire Black shipyard workers and stevedores. White workers in the shipyards agitated to get free Blacks fired, and so they formed their own shipyard, the Chesapeake Marine Railway and Dry Dock Company, which operated successfully for 18 years, until the owner of the land used by the shipyard doubled the rent (Du Bois 1907, Gordon Nembhard 2014).

In August 1918, a “Mr. Ruddy” returned home to Memphis, after attending a meeting of the Negro Cooperative Guild called by Du Bois to discuss ways to spread the adoption of cooperatives among African Americans, and organized a study group (The Editor, 1919). In February 1919, the group incorporated as the Citizens’ Co-operative Stores to operate cooperative meat markets. They raised more equity than expected, selling double the amount of the original shares they offered. By August 1919, five stores were in operation serving about 75,000 people. The members of the local guilds associated with each store met monthly to study cooperatives and discuss any issues. The Citizen Cooperative Stores planned to own their own buildings and a cooperative warehouse. The editor of the Crisis Magazine (presumably Du Bois himself) who reported this, notes that: “Colored people are furnishing their own with work and money for services received and the recipients are handing the money back for re-distribution to the original colored sources” (The Editor, 1919: 50).

The Commercial Department of the Bluefield Colored Institute in Bluefield, West Virginia, formed a student cooperative store probably in 1925 (Sims, 1925). The store’s mission was to sell supplies the students and school needed and be a “commercial laboratory for the application of business theory and practice” (Sims: 93). A share of stock sold in the Co-operative Society for less than $1. After two years in business the cooperative paid all its debts and owned its own equipment and inventories (Matney, 1927). The store began to pay dividends of ten percent on purchases made. The student members voted to use profits to pay for scholarships to the Secondary School and Junior College (see Sims, 1925, and Matney, 1927). Members of this cooperative were the first African Americans to attend the National Cooperative Congress, when they attended the one in Minneapolis in 1926 (Matney). They had became members of the Co-operative League of America in 1925.

There was extensive cooperative activity among African Americans in rural areas of the state of North Carolina in the 1930s and 40s anchored by Bricks Rural Life School and Tyrrell County Training School. These schools sponsored cooperative economics education and developed co-ops that joined together to organize the Eastern Carolina Council Federation of North Carolinian Cooperatives (Pitts 1950). Pitts documents that as interest increased among Blacks in North Carolina about cooperatives speakers from the Bricks and Tyrrell co-ops were asked to speak (Pitts 1950: 31). Efforts by the Eastern Carolina Council eventually led to the establishment of the North Carolina Council for Credit Unions and Associates (shortened to the North Carolina Council). The North Carolina Council, describing it as an organization of credit unions and cooperatives operated by Negroes to promote new credit unions and other cooperatives throughout North Carolina and to aid existing credit unions and cooperatives (Rosenberg 1950, 182). As a result of this activity to promote, develop and support credit unions and cooperatives among African Americans in North Carolina the number of credit unions and cooperatives among Negroes increased dramatically. According to Pitts (1950), in 1936 there were three Black credit unions in the state, and by 1948 there were 98, and 48 additional cooperative enterprises: nine consumer stores, 32 machinery co-ops, four curb markets, two health associations and one housing project (35). (From Gordon Nembhard 2014.)

The 1964-65 Black voter registration drives and the Selma to Montgomery “March for Freedom” contributed to the formation of the South West Alabama Farmers’ Cooperative Association (Reynolds 2002: 12). The SWAFCA was formed in 1967 by a group of African American farmers whose families had farmed the same land for more than two centuries. The goal was to keep Black farmers and former sharecroppers in the region, on their land (de Jong 2005: 399). The means was to diversify their crops, create a marketing cooperative, and at the same time advocate for their political rights (Reynolds 2002; and de Jong 2005). The co-op was able to secure federal funding which allowed it to expand. Within a few years the SWAFCA included 1800 families, making it the largest agricultural co-op in the South.

In the first year the cooperative Association had saved its members an average of $2.00 per ton on fertilizer and to sell their crops for a total of $52,000 (de Jong 2005: 400). The SWAFCA worked with the Farmers Home Administration (similar to what Freedom Farm did in Mississippi) to help their members qualify for mortgages and loans (de Jong 2005). While the organization achieved significant marketing successes, despite white opposition, there were challenges with its management, cooperative education program, and access to markets (Reynolds 2002: 12). Overall, the cooperative increased members’ economic security by working with them to reduce operating costs, encourage diversification, and raise incomes (de Jong 2005). Originally eight of the families were white. But harassment by racist politicians and businessmen; banks and suppliers refused to deal with them until the whites withdrew (Curl 1980).

Poor People’s Corporation, Jackson MS was organized in 1965 in Jackson, Mississippi, by a former field worker of SNCC. Within four years they were running thirteen producer cooperatives and a marketing co-op, producing sewing, leather-and wood-crafts and candles. They had over 800 members, mostly former sharecroppers (Curl 1980, 45).

Freedom Quilting Bee was established in 1967, in Alberta, Alabama, to help share cropping families earn independent income. Some of the women in Alberta and Gees Bend, Alabama, came together to produce and sell quilts. In a few years they made enough money to buy land and build a sewing factory. They also provided day care and after school services (for members’ children and others). The cooperative was a founding member of the Federation of Southern Cooperatives and is an example of women’s leadership and control over their own work conditions and company; as well as an example of community solidarity in terms of the ways this cooperative supported and helped its community and members in its community. (See Gordon Nembhard 2014, 161-162.)

Federation of Southern Cooperatives

Founded in 1967 by Civil Rights groups to consolidate co-op development in the South, the Federation of Southern Cooperatives is a not-for-profit organization of state associations that promotes cooperative economic development as a strategy (and philosophy) to support and sustain Black farmer ownership and control, economic viability of farm businesses—especially small, sustainable and organic farming—and stewardship of Black land and natural resources in rural low-income communities in the Southern United States. After merging with the Land Emergency Fund in 1985, the organization became The Federation of Southern Cooperatives/Land Assistance Fund (FSC/LAF). FSC/LAF is a network of rural cooperatives, credit unions, and state associations of cooperatives and cooperative development centers in the southern United States. The FSC/LAF provides technical assistance, legal assistance, financial support, education and advocacy for its members and low-income populations in the south. In addition, the organization promotes and supports policy changes and legislation favorable to small farmers and low-income rural populations. In its almost 50 years in existence, the organization has helped to create and/or support more than 200 cooperatives and credit unions mostly in the seven states where is has state offices. Examples of cooperatives in the Federation are: Freedom Quilting Bee, North Bolivar County Farm Cooperative, Panola Land Buyers Association, and Shreveport Credit Union. The Federation owns and runs a rural training and research center that showcases sustainable forestry, provides co-op education, and helps to develop Black youth-run co-ops. The FSC/LAF also engages in cooperative development in Africa and the Caribbean. The organization has an important reach throughout the south, is connected to the larger U.S. cooperative movement, and has successfully advocated for important measures in U.S. farm bills to support Black farmers, Black land ownership, and Black co-op development.

Fannie Lou Hamer moved from advocating for voting rights to advocating for and creating cooperatives in her home county in Mississippi in the late 1960s and early 1970s. She began by working with Dorothy Height and the National Council of Negro Women in 1967 to establish a “pig banking” program in Sunflower County, MS, to help women farmers put meat on their tables and earn some extra income. She then raised money to buy a farm, and then more land. Hamer biographer Lee (2000, 147) summarizes that:

“In 1969 Hamer laid the groundwork for an elaborate project to make poor folks economically self-sufficient. That project became the Freedom Farm Corporation. Through her work with the farm, Hamer broadened the meaning of civil rights activism to include addressing the economic needs of Black poor folks. Freedom Farm was to institutionalize a structure and process for low-income and destitute rural people (Black and white at first, and then with a focus on women and Blacks) to feed themselves, own their own homes, farm cooperatively, and create small businesses together in order to support a sustainable food system, land ownership, and economic independence (which would allow for political independence).”

Hamer (1971) argued that “Cooperative ownership of land opens the door to many opportunities for group development of economic enterprises which develop the total community rather than create monopolies that monopolize the resources of a community.” She had found that voting rights were not enough. White racists use economic retaliation, fire people from their jobs and/or evict people from sharecropping or housing for their civil rights activities. Without economic independence—owning our own land, growing our own food, owning our own homes- we can’t gain political independence. Cooperative ownership allows a people to control their own economy and protect people from economic retaliation.

John Lewis, past president of the Student Nonviolent Coordinating Committee, former organizer for the Southern Regional Council’s Community Organizing Project, and currently a member of the U.S. House of Representatives for Georgia, provides a similar analysis in his autobiography. “The civil rights movement was old news,” with press coverage moving North to cover the Black Panthers, riots, campus unrest, and the Vietnam War, according to Lewis, when he started organizing in Alabama in the mid 1960s. People could vote, but did not have enough to eat. “My job was about helping these people join together, helping them help one another to fill those needs. It was about showing people how to pool what money they had to form a bank of their own, a credit union. Or how to band together to buy groceries, or feed, or seed, in bulk amounts at low prices – how to form cooperatives” (Lewis 1998: 399). John Lewis’ main focus then was to establish “cooperatives, credit unions and community development groups” throughout the Deep South.

More recently two movements are of note: Us Lifting Us, and the Southern Grassroots Economies Project.

Us Lifting Us Economic Development Cooperative, LLC, describes itself as a “global economic enterprise designed to change the paradigm of how we do business with and among ourselves and with others.” They aim to provide practical business models that “give us the capacity to gain significant control of the economics of our communities and to free us from the current state of economic exploitation by multiple forces in the world.”[4] They practice Black Power cooperative economics in order to build a successful independent Black economy. The ULU Ten-Point Plan is listed as follows:

1) As Black People we take full responsibility for the economic destiny of our communities and nations.

2) Black persons and Black institutions (especially the Black Church) join together as Members in a large-scale Cooperatively Owned Business Enterprise to pool our resources.

3) This Cooperatively Owned Business Enterprise is reflective of our unique culture and interest in the world.

4) The governance and legal form of the Cooperative accommodate democratic principles; one member, one vote, with elected leadership.

5) Only members of the Cooperative (and not the public) have the opportunity to secure ownership units (equity) in the Business Enterprise, with the potential to amass billions of dollars for community development.

6) The Cooperative focuses on opening and operating businesses in local communities that (1) provide needed goods and services, (2) create new jobs, (3) stimulate additional business activity and (4) yield a fair profit.

7) The Cooperative is driven to duplicate and expand into hundreds and eventually thousands of businesses, all owned and controlled by the collective.

8) The net profits from overall Cooperative success are used to (1) reinvest, (2) for the distribution of grants and endowments and (3) direct returns (dividends) to Member/Owners of the Cooperative.

9) The large-scale cooperatively owned (group owned) Business Enterprise functions as a catalyst and central element in building and sustaining the new Black Economy; one that gives Power to our People.

10) Us Lifting Us Economic Development Cooperative, LLC serves as the aforementioned model.[5] .

The Southern Grassroots Economies Project

The Southern Grassroots Economies Project (SGEP) (http://sgeproject.org/about/) is building networks across the US South to promote and launch sustainable cooperative economies. Our work is inspired by the rich history of social justice struggle in the South and looks to the example of the worker-owned cooperatives of Mondragon, Spain, and Emilia Ramagno, Italy, for guidance. We are an association of southern organizations and national affiliate members: The Federation of Southern Cooperatives, The Fund for Democratic Communities, Highlander Research and Education Center, Cooperation Texas, Cooperation Jackson, Farmworker Association of Florida, with the U.S. Federation of Worker Cooperatives, Grassroots Economic Organizing (Ecological Democracy Institute of North America), and Working World. SGEP focus its work in three areas: education with the annual CoopEcon training conferences; policy analysis and development, and a loan fund.

The Southern Reparations Loan Fund (SRLF), a project of the Southern Grassroots Economies Project (SGEP), makes business loans to cooperatively owned businesses anchored in the most marginalized Southern communities. We especially focus our lending toward start-ups and expansions of democratically governed enterprises that meet the needs and elevate the quality of life of African Americans, immigrants, and poor whites. Our goal is to nurture the development of businesses that maximize community benefit, rather than the narrow concept of maximizing profit. The concept of reparations is at the heart of SRLF’s mission: SRLF moves capital stemming from an economy rooted in extraction, exploitation, slavery, and land grabs to build Southern enterprises that are owned and democratically controlled by the very communities from which the wealth was stolen in the first place.

As part of of our commitment to the most marginalized communities, we target our lending to projects that other lenders might consider “un-bankable,” because they are too small, not adequately collateralized, or, though profitable, not “profitable enough.” Operating from a principle of “radical inclusivity,” SRLF is interested in projects that are based on sound business ideas that meet real community needs, businesses built by people who know how to work together to get good things accomplished—regardless of their individual “credit-worthiness.” If SRLF does its job according to its mission, the vast majority of our loans will go to poor people who have a direct personal and community-wide stake in building an inclusive economy that is democratic, just, and sustainable.

Concluding Remarks

In sum, African Americans have used cooperative economics for survival, but also to gain economic independence. African American cooperatives throughout history have provided livelihoods, land ownership, home ownership, savings opportunities, and other mechanisms for economic independence for their members—even if modest. Many of the cooperative businesses emerging in health care, child care and temporary services, for example, are leading their sectors in changing the nature of work and increasing the returns to such work and ownership—for African Americans, women, and youth.

They address market failure and racial discrimination. Cooperative businesses stabilize communities because they are community-based and locally owned. They distribute, recycle, and multiply all kinds of local resources, capital and expertise within a community. Co-op members pool limited resources to achieve collective goals. Co-ops generate income, and jobs, and accumulate assets; provide affordable, quality goods and services; and develop human and social capital, as well as economic independence for their members. In addition, co-op enterprises and their members pay taxes, and are good citizens by giving donations to their communities, paying their employees fairly, and using sustainable practices. (See also Gordon Nembhard 2013)

Cooperatives have longevity. Cooperative businesses have lower failure rates and higher survival rates than traditional corporations and small businesses, after the first year of startup, and after 5 years in business (Williams 2007). In addition, evidence shows that cooperatives both successfully address the effects of crises and survive crises better than other types of enterprises (Borzaga and Calera 2012, 7). Cooperatives enable their members to stabilize and increase their incomes, and to accumulate assets. Cooperatives also provide more stable employment levels than investor-owned firms which tend to adjust employment levels, in contrast to worker cooperatives that adjust pay or compensation to safeguard employment (Borzaga and Calera 2012, 9). As local businesses, cooperatives increase community economic development and sustainability, and recirculate resources. Cooperatives provide economic benefits but also social and health benefits. Cooperative ownership enables affordable housing and worker ownership. Cooperative enterprise ownership also enhances community relationships (community-business partnerships), well-being, leadership development, and women’s and youth development.

References

Carlo Borzaga and Giulia Galera. 2012. Promoting the Understanding of Cooperatives for a better world. Summary, proceedings of “Promoting the Understanding of Cooperatives for a Better World” conference, sponsored by Euricse and International Cooperative Alliance, March 15 and 16, 2012, Venice Italy. September 28, Euricse. Retrieved from http://ica.coop/sites/default/files/media_items/Report_Venice2012_PRINT.pdf.

Cohen, Lizabeth. 2003. A Consumers’ Republic; The Politics of Mass Consumption in Postwar America. New York: Alfred A. Knopf.

Du Bois, W.E.B. 1933b. “The Right to Work.” Crisis, 40 (April 1933): 93–94. Reprinted in W. E. B. Du Bois: Writings, ed. Nathan Huggins, New York: Library of America, 1986, 1237.

Gordon Nembhard, Jessica. 2014. “White Paper: Benefits and Impacts of Cooperatives.” With factsheet, executive summary and tables. The Center on Race and Wealth, Howard University, February.

Gordon Nembhard, Jessica. 2014. Collective Courage: A History of African American Cooperative Economic Thought and Practice. University Park, PA: Pennsylvania State University Press.

Hamer, Fannie Lou. 1971. “If the Name of the Game Is Survive, Survive.” Speech given in Ruleville, Mississippi, September 27, 1971. Fannie Lou Hamer Collection, box 1, folder 1, Tougaloo College Civil Rights Collection T/012, Mississippi Department of Archives and History, Jackson.

Williams, Richard C. 2007. The Cooperative Movement: Globalization from Below. London: Ashgate Publishing Group.


  1. This essay is based on Gordon Nembhard Collective Courage 2014 and Gordon Nembhard Cooperative Ownership in the Struggle for African American Economic Empowerment. 2008
  2. See in particular Du Bois 1907, 1933a, 1933b, and 1975; Joseph DeMarco 1974 and 1983; Haynes 1999; Haynes and Gordon Nembhard 1999; and Nembhard 2014.
  3. At a Brotherhood of Sleeping Car Porters’ Consumers Cooperative Buying Club rally, in Chicago in 1944. Quoted in Cohen, 2003, 49.
  4. http://www.usliftingus.com/#!ulu-homepage/mainPage
  5. http://media.wix.com/ugd/abf0d9_a7326989f2f844c1bce8e48070b09a95.pdf

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