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Two examples of weird and unique cooperatives

Weekly newsletter of Coop Exchange
Weekly newsletter of Coop Exchange
The three million co-operatives in the world include examples from almost every sector imaginable: from a snake charmers cooperative in India to an Amish-run organic camel milk cooperative in Pennsylvania. This article describes two successful cooperatives that are weird, unique and successful.

WIR - a cooperatively owned complementary currency
In 1934, more than a thousand people had gathered in a small Swiss town to hear a local councillor called Werner Zimmerman speak. After a religious ceremony, he started preaching ideas about “free money” and promised that the implementation of these ideas would eradicate poverty while unleashing tremendous scientific progress. While Zimmerman’s ideas did not live up to his promises, I presume they did exceed the expectations of most observers at the time. The speech sparked a series of events that a year later culminated in Zimmerman establishing WIR, a cooperatively owned barter club of small and medium-sized business owners that continues to grow to this day. Instead of using Swiss Francs to trade, the members of WIR issue their own currency and used it to trade with each other. A restaurant owner might pay a carpenter with the currency, who would use it to buy tulips from a florist, who would then spend the currency in the restaurant to buy a meal, etc. In the midst of the Great Depression, when banks restricted lending, WIR stood out as an attractive option and, by the end of the year, had grown from initial 16 founder-members to over 1,000 small businesses that offered 850 different goods and services.
The main theorist behind WIR was a German-French economist Silvio Gesell, who had quite a remarkable CV. For example, he had lived in Argentina, where he managed a successful dental equipment business while residing and helping run a vegetarian commune, before returning to Germany, where he served as the finance minister of the short-lived Bavarian Socialist Republic for exactly one week. He had ideas about how to radically reform the economic system using what he described as “free money and free land”, which influenced many of his contemporaries. For example, John Maynard Keynes described Gesell as “a strange, unduly neglected prophet.” and had an entire chapter about his ideas in the groundbreaking masterpiece “The General Theory of Employment, Interest and Money”. 
Silvio Gesell
Silvio Gesell
Roughly simplified, Gesell was critical of usury and wanted to establish a banking system that would be dramatically different. A venture that was based on this type of thinking and stood as one of the inspirations for WIR was the Swedish JAK Bank, which is a rather peculiar firm in the industry as it charges no interest. The members of JAK earn points by having savings in the bank and can use the points to borrow money: neither savings nor loans have any interest attached to them. While JAK has not turned out as a successful WIR, it continues to operate with around 24,000 members in 2021.
Gesell, however, wanted to go even further: he sought to establish a form of money that, instead of earning interest, would “rot like apples” by having a negative interest rate. The intention was to discourage the wealthy from hoarding it while encouraging it to be spent and invested instead. This was how WIR first operated: it issued its own currency with a “tax” on the holding of the currency, which sought to accelerate circulation. 
Later on, WIR abandoned many of Gesell’s core ideas and has come to resemble a more conventional bank, with one massive difference: it issues its own currency. Instead of “taxing” holders of the currency, it pays them interest. WIR can afford to do so by charging a small transaction fee and offering its members mortgages and business loans in its own currency with interest well below that of conventional banks.
WIR currently has more than 50,000 members - which add up to nearly one in five Swiss businesses, with the cooperatives symbol being a common sight in store windows next to VISA and Mastercard. Exchanges in WIR represent between 1- 2% of the Swiss GDP, with research showing that the cooperative has played a noticeable role in helping small and medium-sized businesses during periods of economic downturns and made the Swiss economy as a whole more resilient.
Inventor cooperatives in Finland
Nokia’s success is often described in Finland as a miracle; the company originally made tyres and gumboots in a small city called Nokia. When it moved into mobile phone manufacturing, the industry was still very small and it managed to reach a significant market share. However, what happened next was something unprecedented in Finnish history.  It seemed like everyone in the world wanted a mobile phone, was willing to pay substantial amounts for it and wanted successive phones – and as a result Nokia became the global market leader, a spot it held for 14 years. Nokia’s share of the Finnish GDP during this time was around 3-4%. In no other western country did one company have a similarly large share of the overall economy.
As the company started to decline with the rise of the iPhone, the lay-offs and decline in research and development were so painful that Finland is still yet to recover from the shock. However, it also gave birth to a movement that might have a more profound and lasting effect on the world – that of inventor cooperatives.
In 2015 former Nokia employees, many of whom had registered many patents during their time at Nokia, set up A. Vipunen, a cooperative of inventors. It now has over 160 inventors, of whom it helps to develop and commercialise the inventions. It provides free advice and mentoring, helps make a business plan and patents the innovation. And, perhaps most importantly, it provides a community of experienced inventors that have weekly meetings open for all members, where they can socialise and share their ideas. Collaboration also happens with universities, where the cooperative helps researchers find business opportunities for their research. An important part of the process is the use of publicly funded “innovation vouchers”, which the government issues for small businesses that have an idea for a product or a service that has potential for global markets. The vouchers can be used to buy consultancy services for €6200. A. Vipunen also organises Hackathon-type events where businesses give challenges to the cooperative that organises its members to provide solutions that the businesses can then buy.
The Handy Care Ring is one invention that originates from A Vipunen. It releases tension in the forearm muscles, allowing them to start recovering on their own. It is especially useful for treating tennis/golf elbow and mouse arm.
The Handy Care Ring is one invention that originates from A Vipunen. It releases tension in the forearm muscles, allowing them to start recovering on their own. It is especially useful for treating tennis/golf elbow and mouse arm.
The growth of membership surprised its founders, who were expecting the cooperative to have little appeal outside of former Nokia employees, but soon found membership applications coming from a broad range of people. It is based in the north of the country and has had a statistically significant effect on increasing the number of patents in the region. They have also helped replicate the model and set up numerous similar inventor coops around the country.
In conclusion
Perhaps one takeaway from these two examples is that the cooperative model can and should be used in more imaginative ways to organise a wider range of economic activities than it currently is. The movement needs to have an open mind to experiment with bold and out-of-the-box ideas: almost by definition, the best way to find success stories that exceed expectations is to try out ideas where you are less certain what to expect, such as when establishing ventures in new and emerging areas of the economy. For cooperatives to better explore and establish themselves in new and emerging sectors, new forms of financing for cooperatives need to emerge. This is the mission of us at Coop Exchange.
Consider subscribing to our newsletter to read more about existing cooperative success stories and exciting ideas about the future of the movement.
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