Rural Co-ops Show the Way to Urban Job Growth


| 11/30/2012 4:09:38 PM


Tags: Cooperative, Great Depression, New Deal, Rural Electrification Administration, USDA, Mondragon, Shareable, Hannah Miller.,

Telephone-Wires 

This post originally appeared at Shareable.net.  

Rural electricity and telephone co-ops are one of the great sharing success stories in American history—largely due to coordination by the federal government. In 1934, only 11% of farmers had electricity compared to 90% in Europe. Private electric companies refused to serve many rural customers or price gouged them when they did. The Rural Electrification Administration (REA) was formed in 1935 to fix the problem by providing technical assistance and loans to electric cooperatives. Less than 20 years later, practically all farms had power due largely to electric co-ops.

The REA was such a success that the same strategy was used in the 40s to make telephone service available in all rural areas. The Rural Telephone Administration matched the success of the REA. To this day, 1.2 million rural residents are members of a telephone co-op.

The US government's success in boosting rural economies through cooperative development is a largely forgotten story that couldn't be more relevant today. For instance, in creating jobs.

Member owned cooperatives are a proven economic development strategy the world over, and were recognized as such by the United Nations which declared 2012 The International Year of the Cooperative. The democratic ownership and management of cooperatives creates stable enterprises and jobs. Yet, none of the $20 billion in loan programs available to rural cooperatives are available to urban ones. This is despite the fact that 80 percent of Americans now live in cities, with some of the highest poverty rates in the country.