Cooperative Enterprise and Market Economy: Chapter 2

| Introduction & Preface | Chapter 1 | Chapter 3 | Chapter 4 | Chapter 5

Chapter 2

Essence, economic objective, and characteristics of the cooperative enterprise.

1. Defining the essential nature of cooperatives in theoretical terms is no easy thing. Different characterizations, highlighting one or another constitutive feature, have been formulated at different points in the history of cooperativism and economics; but the results have never been satisfactory. We still lack an adequate scientific concept of the cooperative enterprise. In the first edition of this book we made what may be considered some important steps in this direction, although we must now admit that our attempt suffered from more than one theoretical ambiguity, which we will now try to overcome. In rewriting this chapter we have introduced important additions and corrections with respect to the first edition.

The first concept to clarify is what makes a cooperative an enterprise. The affirmation that cooperatives are enterprises – which we firmly supported in the first edition of this book – is now perhaps less relevant given that it has gradually come to be accepted and few would still deny it. Still, it is important to re-visit this affirmation since the arguments that underpinned the refusal to recognize cooperatives as true enterprises retain a certain currency and, if not adequately refuted, can reappear and find their way back into circulation.

Those who maintain that cooperatives should not be considered enterprises have offered two reasons.

The first is that cooperatives can not be considered to be true enterprises because it is the nature of all enterprises to pursue profits as their principal economic objective, and cooperatives are “non-profit” organizations. Recognizing that the people participating in cooperatives do seek economic gain, many theorists have argued that cooperatives pursue benefits for their members, as opposed to profit for the business itself. At the end of the fiscal year, cooperatives distribute among their members any surplus generated, in proportion to the contributions made by each member. This, the theorists say, does not constitute a true and proper profit, but only a transitory imbalance between revenues and costs that is reconciled at the end of the year. Thus, a cooperative is less an enterprise than an organization for the joint management of the business and economic activities of its individual members.

This leads to the second reason for denying that cooperatives are enterprises: a cooperative does not constitute a unit of economic activity that acts as a social subject with its own objectives. Instead, it is a mere conglomeration of the activities of individual members who have decided to come together to take advantage of economies of scale, eliminate intermediaries, etc.

As can be appreciated, neither reason is implausible, especially when we take into account notions and practices that are indeed present in the cooperative experience. But behind the denial that cooperatives are enterprises there is at work a negative conception of business profits (ganancias), benefits (beneficios), or gains (utilidades), which are all lumped together under the pejorative term “lucre.”1 This negative conception of gain is carries over to the mere facts of being an enterprise and an “owner” or “boss” (empresario).

We aim to overcome this narrow conception, first, by thoroughly correcting the economic concepts of “business,” “employer,” and “profit,” broadening their meanings and untangling the knot “capital-owner-profit.” We recognize the existence of “alternative forms of enterprise,” their distinct rationalities and business behaviors, and the plurality of organizing subjects and the economic objectives they pursue.2

Let us return, then, to ideas presented in the first edition, making modifications that we will explain in depth as we go.

Cooperatives are first of all distinguished by the fact that they are created, organized, and managed on the basis of economic categories other than capital, in particular, Labor and Community, corresponding to the universalization of the factors labor power and the “C factor.” The various types of cooperatives can be differentiated using this criterion, as we will see later on.

Cooperatives have a unique character – centered on the person, the community, and solidarity – because they arise on the basis of economic categories and factors that are inseparable from the people who organize and participate in them (unlike capitalist enterprises which, while also made up of people working together, are based on an economic factor – capital – that is separable from those who possess it). The enterprise is owned by those who participate in it. Members’ participation in the activities of the cooperative is decidedly personal in the sense that they are engaged as people, directly and globally. The enterprise can not continue to exist without this “first person” participation; the benefits or profits of the activities or operations are shared in solidarity on egalitarian lines. To be more precise, they are proportional to the personal contribution each member makes to the collective undertaking. In this way, the members’ interests are homogeneous.

The characteristic of cooperation that we pointed to in the Prologue – that cooperativism is at once an economic, social, political, and cultural phenomenon with unique relations between the various aspects – is derived from this particular rootedness in people.

But beyond specifying these characteristics, which have been highlighted by numerous authors on the descriptive level, it is necessary to make the unique nature of cooperatives theoretically precise, defining the economic relations and activities they share as a new type of enterprise.

Insofar as they personify and represent a specific economic category on which the enterprise is based, the members of cooperative enterprises establish definite relations with the other factors necessary for carrying out production, financing, and commercial activities, that is, they organize and administer the specific quantities of money, means of production (machinery, inputs, raw materials), labor power, technology, information, etc., indispensable in order to produce the products or services the cooperative brings to the marketplace. A cooperative enterprise, as a complex economic unit, establishes market relations with any external economic subjects who are interested in and willing to work with it.

Having obtained and assembled the factors that make up the enterprise, and set up market transactions with other interested subjects, the members and managers of the cooperative assign themselves the task of assuring that the algebraic sum of all the inputs and outputs, that is, the result of its activities and operations, be a positive value that compensates the economic factor that invested in and also organized the enterprise, assuming the ensuing risks. Such is the profit (ganancia) that the cooperative enterprise obtains through its operations.

Later on we will specify the essential nature of this profit: its economic, social, and ethical content. For now we are interested in establishing that this is how cooperative enterprises work, analogously (but not identically) to the other types of enterprise operating in the market.

As can be seen, it is a matter of obtaining real profits as an enterprise. The distribution of those profits among the cooperative members on a pro rata basis is another question. In fact, any enterprise distributes profits among its owners, following an internally defined criterion which responds to its specific economic rationality. The specific rationality of cooperativism entails the adoption of the criterion of proportionality in relation to the members’ contributions to the operation of the enterprise.

One might insist that a cooperative in which all the work is done by members, or all the sales are made to members, does not realize profits. For example, a consumer cooperative that sells only to its own members does not obtain profits from these sales insofar as whatever surplus (excedente) is generated is only the result of having paid higher prices than the cost price, such that redistributing the surplus merely compensates the members for having overpaid in the first place; it would not be a matter of distribution of profits as much as an ex post facto price adjustment. Yet, even if this is true, the fact remains that every cooperative (and consumer cooperatives are no exception) establishes commercial relations not only with its members but with a variety of other economic subjects: the people who contribute their labor power in return for a wage, the suppliers of means of production, inputs, or goods that the cooperative transforms or sells to its members, those who contribute technology, management, etc.. The enterprise is profitable, then, whenever the revenue is greater than the expenses, that is, whenever the cooperative enterprise receives more from transactions than it must pay to third parties for expenses.

In the case of consumer cooperatives, to which we alluded, if they sold products to their members for the same price the cooperative paid to obtain them, there would be no operating surplus in accounting terms. It would be as if the surplus had already been transferred to the members in each transaction, in the form of a lower price. This would correspond exactly to the idea of profit (ganancia), that is, a certain additional value, that is variable, from which the titular organizers of an enterprise (in the case of a consumer cooperative, the consumers themselves) benefit in one way or another.

In cooperatives, profits are normally expressed in monetary terms, but that is not essential in order to realize an economic benefit. In a consumer cooperative, in which the members are organized consumers, economic benefit or profit can take the form of lower prices for products, and, consequently, a quantitative increase in their consumption capacity, products of better quality and authenticity, consistent and adequate service, etc. In the case of worker cooperatives it can take the form of higher pay for work done, but also shorter or more flexible work hours, greater job security, and more humane and dignified working conditions. In producer cooperatives, member profit normally takes the form of a higher revenue in the sale of their goods, opportunities for expanded operations leading to economies of scale, etc. And, in all of these cases, members benefit from participation in and control over management of the enterprise.

The form the benefit takes or, the proportions of its different forms under one or another type of cooperative enterprise, are established by the cooperative itself. In essence, it is always a question of an economic benefit distributed to members in one form or another: shorter or more flexible hours, products of higher quality or authenticity, job security, better working conditions, etc. All of these are qualitative components of the cooperative’s product that are transferred to members. They are often assigned a monetary value and obtained on the basis of certain higher operational costs.

To express the different forms of benefit received by the members who organize the enterprise, we propose the terms “profits” (ganancias) for those gains that are measured in monetary terms by the difference between revenues and costs (including the alternative cost of one’s own labor), and “gains” (utilidades) for the entirety of benefits obtained by the members, in monetary form or not.

We reserve the term “surplus” (excedentes) for the difference between the total revenues of the enterprise and the total costs or expenses paid to third parties (including payments for taxes and re-stocking), in other words, the totality of the monetary compensation obtained by the worker-members, through remuneration of their work as well as through distribution of financial gains generated by that work.3

When it comes to defining what a cooperative enterprise is and distinguishing it from other types of enterprise, the decisive question is not, then, whether it makes a profit (monetary or otherwise). Nor does it help to raise a questionable distinction between gains and lucre, as some have tried. Nor, again, is it a question of defining the goals of the cooperative enterprise as “social,” or of “mutual aid,” or making reference to an overly abstract notion of “acting for the common good.” Like any other enterprise, the cooperative pursues an economic benefit (profit or gains) and operates directly in the interest of those who organize it and the economic category over which they preside. Consequently, in keeping with their specific rationality, cooperatives try to pay as little as possible to the other, external, economic subjects with whom they establish market relations, just like capitalist enterprises.

The fundamental difference between cooperatives and capitalist enterprises is this: cooperatives act in the interests of economic (and social) categories other than capital; their interests contrast starkly with the interests of capital.

This is why cooperatives have transformative potential: their decidedly progressive character and the social dimension that distinguishes them resides in the fact that they involve economic activities carried out in the market in the interests of social groups whose position and role in society is determined not by possession of capital but by the lack thereof. It is precisely for this reason that they find themselves in a subordinated status in capitalist society (a society in which capitalist enterprises dominate the market). Lacking capital, but possessing other economically useful factors and resources, the cooperative enterprise starts from the decision to organize the factors it possesses and bring them to bear in the market in a way that is autonomous and not subordinated to capital. In a cooperative enterprise it is the finance factor that is subordinated.

2. Affirming and consolidating this point, we need to specify the economic categories which can play the role of organizing category in cooperative enterprises. Doing so will help us understand more deeply the essence and profound content of cooperative gains or profits.

We ended the previous chapter with a certain ambiguity or indeterminacy with respect to the expression “cooperative enterprise,” from the standpoint of the categories that organize it. We began this chapter alluding to the need to make certain corrections to our definition of the essence and objectives of cooperatives as expressed in the first edition. We have now identified the organizing categories of cooperative enterprises as Labor and Community. This means that in the cooperative enterprise the subjects who contribute the factors labor and “C factor,” that is, workers and communities, play the role of economic organizers.

Our previous understanding was different. At that time we said the organizing categories of cooperatives were “labor, consumption, savings, technology, and administration,” and using these criteria we distinguished the different types of cooperative: worker cooperatives, consumer cooperatives, savings and credit cooperatives, technical services cooperatives, and producer cooperatives. In support of that focus we used to say, “beyond the immediate reality of the enterprise, there are other general economic categories, based on broader market relations and instances; this is the case with the categories, consumption, savings, and public authority.” There is a still more universal and general economic category, one that presents singular characteristics distinguishing it from all the others: the commodity. This has come to be the general form in the capitalist economic system, which precisely presents itself as “an immense collection of commodities.”4 This is as far as our previous thinking reached.

We had not yet clarified the concept of “economic category,” nor had we studied the processes of production, circulation, and consumption within the framework of a comprehensive vision of the global economy.5 Having done that, we are now in the position to resolve the theoretical problem posed by the existence of different types of cooperatives, all forming part of a single cooperative phenomenon. In effect, side by side with worker cooperatives, we find consumer, savings and credit, technical services, producer, housing, and other cooperatives.

These different expressions of cooperativism correspond, on one hand, to various types of economic activity organized and carried out in a cooperative manner. Working, consuming, saving and borrowing, securing housing, supplying oneself with inputs, and marketing one’s products are central activities, respectively, of worker cooperatives, consumer cooperatives, credit unions, etc. But the diversity of economic activities is not the only factor that distinguishes cooperatives, if it were, the theoretical problem would have been easily resolved.

The source of the theoretical difficulty is the fact that in some cooperatives the organizing subjects are the workers, in others, the consumers, in yet others, the savers, producers, etc. that is, people who take on a distinct economic and social role. In the first edition, having just discovered the economic categories and perceived their enormous explanatory potential, we did not yet understand these roles clearly. Weren’t the organizing subjects of a consumer cooperative the consumers? People who borrow and save money, the organizing subjects in a credit union? And weren’t the organizers of the various types of enterprises the “economic categories” themselves?

The passage from this analysis to the extension of the notion of “category” to other fields was very subtle and easy. It was as easy as extending a concept thus made “fluid” to explain the classification habitually made in the heart of the cooperative movement, encompassing as well technological service cooperatives and others (conflating a distinction that responds simply to the different economic activity deployed by enterprises with another between the subjects that organize them). This also “explains” the extension of the concept of economic category to such general notions as the commodity. At the root of the error was the failure to understand with rigor the fundamental nexus between economic factors and economic categories, truly fundamental concepts that correspond to the theory of production.

We are not trying to justify our error but to examine it carefully in order to avoid possible confusion. On the other hand, our error contained a germ of true theoretical insight, the need for which we only recognized later, when analyzing the processes of circulation and consumption. Let us make another clarification, based on this insight: a point to which we previously failed to pay attention.

Analyzing the processes of circulation and consumption, we observe, as we observed in the production process, that in those processes the economic subjects (and forces) that take shape adopt different configurations depending on the specific activity they undertake.

Thus, examining the different manners in which factors and products enter and circulate in the market in the process of circulation, we identified distinct economic relations in which the subjects assume various economic roles or figures. (At the same time, the products themselves adopt different economic forms.) Sellers and buyers, donors and beneficiaries, cooperators and sharers, contributors and collectors, etc. are examples of the different economic and social figures that subjects assume in the context of the relations embodied in the processes of circulation.

These figures are in a certain way analogous to the economic (and social) “figures” adopted by subjects in the production process when they constitute themselves as differentiated contributors of the various necessary factors. In turn, economic goods adopt corresponding economic forms which differ in the context of these different economic relations; taking the form of commodities, donations or gifts, dues, tributes, etc.

We also discover in the consumption process new economic activities and new ways for subjects to enter into and participate in the economy. These too are constitutive of determinate and differentiated economic and social “forms.” Thus, consumers are subjects in the consumption process, savers in the savings process, investors in the investment process, etc.

The “figures” and “forms” constituted in the processes of circulation and consumption are realities that we can compare to the economic “factors and categories” that arise in the process of production. Compare, but not identify in the way we implicitly did in the first edition of this book. It is an analogy that can even be greater if we take into account (and this is the aspect to clarify in relation to our earlier analysis of circulation and consumption) that the figures that appear in circulation and the forms that present themselves in consumption, can come together and organize, giving rise to social and institutional realities that act as such in the economy.

There exist, in effect, groups of consumers, savers, investors, buyers and sellers, etc. As associations built on an economic base, pursuing specific economic objectives and operating in the market, they are recognizable as economic entities, institutions, and organizations. We can say that they are also “economic entities,” if we are careful not to treat the terms enterprise and economic entity as synonymous, as is usually done, because the economic organizations to which associationism gives rise at the level of circulation and consumption are not properly considered enterprises as such. This is because they do not fulfill all the requirements mentioned in the previous chapter, specifically they do not generate economic value. What they do is something different, consisting fundamentally of connecting economic activities and operations, at different levels.

We can identify various modes of this connective function and activity: coordination of activities and decisions by subjects who carry out similar operations (this is the case, for example, in a labor union, a consumers association, an employers association, a mutual aid organization, etc.); intermediation between subjects who carry out different but complementary activities (such as entities that bring sellers and buyers together, or link those offering money to those seeking it); the planning or joint programming of activities that would otherwise take place in isolation; etc.

So, we have the concepts needed in order to distinguish among the different types of enterprise, and among them the different types of cooperatives; and to identify and distinguish at the same time other non-enterprise phenomena that, nonetheless, are often related to the reality of enterprises and specifically the cooperative phenomenon, such as associationism, unionism, and mutualism, to mention the most relevant.6

3. Let us return to the essence of the cooperative enterprise and clarify its concept and classification on the basis of the concept of organizing categories.

The analysis of economic factors and categories leads us to distinguish theoretically between six main types of enterprise: Capital, Labor, Administration, Material Resources, Technology, and Community. These types exist in fact and correspond to different modalities of economic organization which have been more or less widely diffused in the different economic epochs and contexts.7

Moreover, there is not a unique mode existence as an enterprise that corresponds to each type, rather, different modalities can exist within each of them, corresponding first to the differentiation resulting from the other three criteria of distinction that we mentioned in the first chapter (economic relations, institutional relations, and technological relations), which intersect with this criterion of organizing categories.

Thus, in general terms, we can affirm that that which is often considered historically and culturally as the cooperative phenomenon corresponds fundamentally to the types of enterprise that we have identified here as Labor Enterprises (or worker enterprises) or Community Enterprises (or communal enterprises). In reality, the cooperative phenomenon manifests a great internal diversity and differentiation in different countries and contexts; a diversity that reflects not only the distinct enterprise modalities that result from the organizing action of the categories Labor and Community, but also the fact that the various forms are often recognized as members of the cooperative movement. By extension, other forms of economic organization and activity tied to the processes of associationism and mutualism to which we just referred are part of the cooperative phenomenon. We have, then, a situation in which the term “cooperativism,” being of doctrinaire origin and not based on a rigorous economic theory, and being the expression of a social and economic phenomenon that has deployed itself historically in connection with broad principles, values and norms, encompasses and expresses realities that manifest notable differences and internal plurality. From the strictly theoretical and scientific point of view, the cooperative phenomenon is a concept that we must recognize as still relatively ambiguous and indeterminate, which is true of nearly any concept elaborated outside of its proper analytical framework. This does not rob the term of its expressive value, social force, or practical utility. (See the warning in footnote 6 above).

What, then, to say of consumer cooperatives, service cooperatives, producer cooperatives, savings and credit cooperatives? Who organizes them? Are they really cooperative enterprises or just forms of associationism linked to activities in the realm of consumption and circulation? As there is a wide variety of situations, it will be necessary to analyze them case by case.

The fact that these cooperatives realize intermediation or consumption activities doesn’t negate their enterprise character. Their economic circuit consists precisely of intermediation (commercial, financial, etc.) or consumption. What makes them enterprises is the economic object that they pursue and the nature of the organizing subject.

For example, we can see that a traditional consumer cooperative, of the type that is organized as a commercial enterprise that buys from third parties and sells to its members, is an authentic enterprise that pursues benefits (which it later transfers to its members). It makes efforts to remunerate the factors it contracts (labor power, management/administration, technology, etc.) and to pay the providers of commodities the lowest possible prices under market conditions. This economic entity is also an enterprise, generating gains for its members, the amount varying with the quality of its management and business operations.

What is the organizing category here? It could be capital, if the organization of this enterprise is based on the financial contributions made by each member and those contributions are the only ones constitutive of the society (the only factor that confers a right to participate and be recognized as a member). Still, such an enterprise, even if it can be considered a capital enterprise according to this concept, can probably be considered a cooperative on the basis of one of the other distinguishing criteria mentioned above, as well as those we will discuss further on. On the other hand, an association of consumers that is limited to demanding and ensuring the authenticity and quality of products might only be a manifestation of associationism in the field of consumption.

Popular economic organizations8 such as those created (by common agreement) with the goal of joint buying of articles of regular consumption in order to benefit from economies of scale, or the goal of social consumption of food items so as to lower costs for obtaining and preparing goods, may be considered authentic enterprises, with Labor and Community as their organizing categories (assuming the organization is based on the labor activity of the members or the existence of an integrated community, and membership is based on the fact of participating in the labor collective or the community).

It is not difficult to understand that the benefits generated by such enterprises and distributed among the members are produced by (and in turn used to compensate) the labor of the members or the activities of the community, according to the case. We see these organizations as forming part of the cooperative phenomenon, even when they don’t share certain traditional cooperative traits or do not consider themselves to be such.

The personalism, communal nature, and solidarity that so many authors have highlighted as characteristic of cooperative practice, are less principles or foundations of cooperation than consequences of the fact that Labor and Community are the organizing subjects of the cooperative enterprise.

As economic factors, Labor and Community shape individual and social subjects in which special value is assigned to the person, the community, and solidarity. The same can be said of the anti-capitalist character attributed to these factors, which we shall discuss further on.

It is worth mentioning, moreover, that to the degree that cooperative enterprises are structured on the basis of economic categories other than capital and thus organize the various economic factors in accordance with economic objectives that differ from those of capitalist firms – the objectives of the workers and communities that organize them – they give rise to a different type of professionalism and business culture (empresarialidad), that follows its own logic and criteria, creating spaces for new social relations of production characterized by the subordination of capital to the human person and the community.

4. Having grasped the essence and fundamental characteristics of cooperative enterprises, we can now focus on a new problem: the role of cooperatives in the market: their potential efficiency and their capacity for growth and development. We will not do more than pose this problem here, because it is closely connected to the question that we have examined regarding the way we understand cooperativism and the preconceptions that have been spread about it.

In the foregoing analysis we defined two basic types of cooperative enterprise – worker enterprises and community enterprises – each with its own definite economic rationality. As is recognized, and shall be examined more closely later, each demonstrates an ethic capable of generating a high consensus among its members. Both types of enterprise are compatible with the market economy and have long existed side by side with capitalist enterprises. Nonetheless, the historical development of industrialization and modernization of production, finance, and commercialization has lead to the unchallenged generalization and predominance of non-cooperative types of enterprise, especially those of capital and those of public administration in their distinct modalities as productive, financial or commercial enterprises.

In a context of competition with capitalist societies, cooperative societies and other forms of participatory and worker self-directed enterprises have demonstrated limited capacity for development and growth. This is true even for those cooperatives that are rooted in superior ethical values and offer a more harmonious articulation of the interests of the different sectors that form them (e.g. the interests of labor and capital).

Empirical observation of the problems that arise in the development of cooperatives leads to the identification of various indicators: cooperative enterprises typically suffer from a chronic insufficiency of internal capital and confront difficulties when trying to mobilize external sources of finance, and they often demonstrate little commercial and technological dynamism, adopting structures and behaviors that do not permit sufficient mobility of productive factors, in particular the factor of labor.

Why is this so? We need to understand first of all that the problems facing cooperative enterprises arise as the inevitable corollary of their economic logic. Or, put another way, if there is a way to overcome the problems and eliminate the obstacles in (Labor and Community) cooperative enterprise models it is by respecting the essence and the constitutive characteristics of these forms of economic society as we have delimited them.

Obviously, if the limits they face are a necessary consequence of the practice of the essential values of cooperativism, the spread of cooperative enterprises and methods beyond the marginal and subordinated spaces in market economies that they have occupied until now is inconceivable. On the other hand, if it is a matter of obstacles that can be removed without harm to the essence and purpose of cooperative enterprise, we can imagine a new cycle of expansion of the cooperative movement.

The problems we have examined are concentrated around the theme of accumulation and valorization and the way in which cooperative enterprises organize and treat the various factors of production, especially finance and labor. The hypothesis with which we now begin is that some economic behaviors that present obstacles to the balanced and expanding operation of these enterprises have become calcified in cooperative practice and organization, and that this is due to the interference of ideological elements that lead cooperative organizers to stray from the economically rational logics of these economic entities.

Of the two basic types of cooperative constitutive of the cooperative phenomenon, we will center our analysis on those that we call worker or Labor enterprises. Later on we will return, at least in part, to the problematic of communal or Community enterprises.

Translated by Matt Noyes9
Header image by Jeff Warren and Caroline Woolard. CC BY-SA 3.0

• 1In Spanish, “non-profit” is “sin fines de lucro,” literally, “without aims of lucre.” - MN
• 2The Spanish word “empresario” has no exact equivalent in English. Owner, executive, boss, manager, employer, businessman, etc. express particular roles or functions that are combined in empresario. We have used different terms depending on the context. - MN
• 3We should distinguish here between “net income,” the difference between total income and total costs, “profit” the share of net income generated by the labor of non-members, and “surplus,” the share of net income generated by members. In the U.S., these distinctions have tax implications: surplus distributed to members (patronage allocation) is taxed only as member income, whereas profit is retained and taxed as corporate income. See Bauen, R. et al. (2021) Democratic Management: a Practical Guide for Managers and Others. The School for Democratic Management at DAWI. https://institute.coop/resources/democratic-management-practical-guide-managers-and-others - MN
• 4“The wealth of societies in which the capitalist mode of production prevails appears as an ‘immense collection of commodities”…” (Marx, Karl. (1977). Capital: A Critique of Political Economy. Trans. Fowkes, Ben. Vintage.) - MN
• 5We did this in Book Three of Economía de Solidaridad y Mercado Democrático. (1984). Programa de Economía del Trabajo, Academia de Humanismo Cristiano.
• 6The reader should be warned that the distinction between enterprises and those economic organizations that are not enterprises is not always easy to make; there exist numerous hybrid economic realities in which activities of one of another type are carried out in the heart of the same organization. Such organizations can, as a result, turn out to be as much enterprises as associations for consumption or circulation. For example, a mutual or a labor union can also act as a true enterprise if its activity generates gain or produces some new wealth. To understand it as an enterprise, one would have to identify its organizing economic category. The fact that empirical reality does not correspond clearly and neatly to theoretical concepts is not a reason to disregard the latter; on the contrary it shows their validity and capacity in that they enable us to discern distinct situations, including in the heart of cases that are hybrid or even confused. This observation can and should be understood also as applicable to the cooperative phenomenon, whose complexity and hybrid character we recognize and into which our conceptual elaboration provides entry, revealing to us so many different situations.
• 7See the first section of Book Three of Economía de Solidaridad y Mercado Democrático. (Razeto, 1984)
• 8activities that generate income or provide services to satisfy the basic needs of work, food, health, education, housing, etc. on a basis of cooperation and mutual aid. Solidarity “Popular economic organizations [are] small groups or associations of people or families who collectively manage their scant resources so as to develop workshops, housing committees, “buying together,” community utilities, “building together,” family gardens, and community development programs are some of the most widespread types.” Razeto, Luis (2019) Solidarity Economy Roads, Chapter 2. https://geo.coop/story/solidarity-economy-roads-chapter-1
• 9Thanks to John McNamara and Josh Davis for suggestions. - MN