Painer, Alaska
Dorothy M# Bell, Editor
Published once a reek at Palricr, Alaska, for the I'.-tar.uska Valley '“amors? Cooperating
Association for the purpose of giving nors of tho -j-ssooiations rork, problcns and
Ac coralishnents.
SUBSCHIFTIOII RATE $1,75 0l»CO for six nonths 10^ a copy
FARM- COOPERATIVES anq FREE ENTERPRISE
Farmers cooper1 to for profit and thorc is no basis for conflict betreon their organ
izations and other typos of business, says Dr, Karl 3utlcrs president of the American
Institute of Cooperation^ In fact, ho goes on to say,; farm cooperatives arc among the.
best customers Anorican Industry has fiodsy& Moreover. they have sot nor standards of
quality in marketing products. Many of tneir established brand names are nor house
hold rords throughout tho nation.
Cooperatives and other business enterprises both omphasizo the profit motive as fro
principal business incentive. YJho profits from tho operation is the main differ' icej
In a cooperative the refunds and final payments go torard enhancing the indivies. 1.
farmers prof it.' Often referred to as a ''non-profit’* organization, a cooperative as so
ciation, by lar, cannot make a profit unto itself.
The principal reason rhy farmers associate themselves into a cooperative is to on a a;
their orn individual gain® Because of this, farmers -ho are members of coopcratirv.
rightly think of thcnsolvcs as vigorous proponents of free enterprise, and regard • u ■
cooperative business as a vital phase of our American econonyo
In considering the place of tho farmer cooperative in our capitalistic economy.; ro
must examine our society in order to dotermino and agree on some basic concepts,
Free Enterprise defined.
Capitalism, the froc enterprise system, may bo defined as that political and economic
order v'hich permits every citizen to aenuiro property'1 ornership in proportion to hi;!
thrift, industry, and intelligence, so long as it is not in restraint of trade.
Some of the basic characteristics of our Joorican capitalistic economy, according tc
Dr, Butler, are:
1. a profound belief in free enterprise, individual or corporate, including private
property rights. ....
2. Ackno; lorgment that capital for business should be furnished voluntarily by or from
private sources.
3; recognition of tho profit motive as the principal business incentive; and
4. the conviction that government participation in business should be at a minimum.
I. Do farmers believe in free enterprise?
Farmers arc the members and the oarers of farmer cooperatives. They either om land
or rant to. They, are enterprisers in the truest sense of the rord. A farmer probably
maizes more decisions per man day than docs any other business man in our ccuntry.Thorc
are over six million individual farm businesses in the United States. Thhy far out
number tho total of individual businesses in any other area of our economy.
II, Business-capital supplied fron Private Sources,
Cooaerativesj like other business organisations, have obtained their basic business
capital rrnorily through voluntary subscriptions!
A- cooper-•.tiyo business principle is to rr ivido services for the people rho put up the
nancy and control the business. Usuallyether corporate businesses obtain capluai
fron those rho arc interested in-lionet ary returns fron on invostnont. Their invention
is to put funds to rork to provido r.aterials and services for a third party™ In g-.'iji’
al i corporation allocates all earnings above cost to the stockholders* in proper.. . n
to the capital contributions of each. This is a perfectly legitinatc .and respc ijcle
way to do business. Horevor, in a business cooperative corporation, the contri'n..
of capital arc paid nodost dividends on their investment; tie remainder of the no..^-’
bcing allocated in proportion to patronage. Dr,. Eut.lor says—I see no fundancr,--,
.ctrifo in the -nhilosorhy of these tub nodes of doing businos3.
III, T* nrofit motive is the principal business incentive.
mentioned earlier, both cooperatives and other business enterprises emphasize ojvj
profit motive as the principal business incentive. The main difference is in v.ho j
profits fron the operation. In a cooperative the refunds and final payments are
’•profits”to tho farmers.
IV, Minimum participation by government in business.
In general- farmers and other businessmen arc opposed'to Government participation ir.
business, Tho role of government is regarded by nest, as that'of an umpire. Busmu ■
as vo knot: it nay bo proprietary, a partnershipa corporation, an incorporated oeopj ;
ativo association, or sonhthing else*.