Cooperative Power (Andelskraft)
Cooperative Power – Community, Business, and Purpose
Business forms are institutionally embedded structures whose functionality depends on their compatibility with the overarching economic system; therefore, neither feudal, capitalist nor democratic enterprises can be understood independently of the institutional frameworks that reproduce and stabilize them. Andreas Pinstrup Jørgensen has produced a highly valuable and compelling work with the book Andelskraft – Styrken i fællesskab og forretning (The Power of Cooperatives: The Strength of Community and Business). It serves as a successor to his 2020 book Medejer – Kunsten at overhale konkurrenter gennem demokratisk ejerskab (Co-owner: The Art of Overtaking Competitors through Democratic Ownership).
Taken as a whole, the book presents cooperative power as an institutionally conditioned and competitive organizational form whose economic efficiency, social coordination, and normative orientation are integrated through appropriate institutional frameworks. Cooperative power is therefore not merely an organizational principle but an expression of how specific and reformed social institutions can enable stable and effective democratic enterprises governed by the needs of their members within a renewed democratic market economy.
Andreas Pinstrup Jørgensen has created an exceptionally worthwhile and engaging work with the book Andelskraft – Styrken i fællesskab og forretning (The Power of Cooperatives: The Strength of Community and Business). As a successor to his 2020 book Medejer – Kunsten at overhale konkurrenter gennem demokratisk ejerskab (Co-owner: The Art of Overtaking Competitors through Democratic Ownership) (Jørgensen, 2026 and 2020), Andelskraft discusses the full spectrum of democratic ownership and organizational forms in business. Whereas his 2020 work focused exclusively on employee-owned firms, The book "Andelskraft" (Co-operative Power) addresses various forms of participation and democracy, ranging from producer cooperatives, consumer cooperatives, and worker cooperatives to multi-purpose cooperatives and other forms of economic democracy that do not necessarily adhere to the International Cooperative Alliance's codification of the Rochdale Principles.
These principles were established in 1844 by the Rochdale Pioneers, founders of the first consumer cooperative. In their simplest form, they include open membership, democratic member control, limited liability, and dividends distributed to members in proportion to the extent of their purchases. Today, these principles serve as the foundation for cooperative enterprises worldwide and often promote social justice and engagement in local communities (International Co-operative Alliance, 1995 and 2018; Kooperationen, 2018).
It can therefore also be concluded that Jørgensen's ambitious and, in several respects, groundbreaking contribution to the understanding of democratic enterprises and their role in modern economies has been successful. Through these two works, he has established himself as the most significant author of books on Danish economic democracy. Andelskraft convincingly succeeds in revitalizing the cooperative idea as an important and competitive ownership and organizational form, provided that this alternative type of enterprise is situated within the appropriate reformed institutional frameworks. Through the concept of cooperative power (andelskraft), the author introduces an analytical model that connects association, business, and purpose into a unified understanding of how enterprises can be both economically efficient and socially embedded within the framework of Danish associational culture.
The book is divided into four sections that together provide a comprehensive picture of democratic enterprises and cooperative power:
- The historical background of democratic enterprises, with particular emphasis on labor, consumer, and cooperative movements.
- The conceptualization of the democratic enterprise and the Cooperative Power (Andelskraft) model.
- A portrait of seven areas in which democratic enterprises have demonstrated relatively greater impact and cooperative strength.
- Future opportunities and visions for democratic enterprises.
The analysis and the Cooperative Power model clearly demonstrate that the cooperative model is not merely a transient historical phenomenon. Economic democracy is a living and dynamic form of ownership and organization that could assume a much more significant role within the Danish economy. This connection between historical rootedness and contemporary relevance makes the Cooperative Power model a strong point of departure for a principled discussion of the relationship between ownership, institutions, resource allocation, organization, and management.
The central question in Andreas Pinstrup Jørgensen's book may be summarized as follows: under what conditions can economic democracy function as an economically efficient mechanism for resource allocation within the framework of a macroeconomic system? Here, we are speaking of a system in which economic democracy is the dominant form of organization, rather than the frequently undemocratic, if not outright autocratic, forms of management that have long persisted behind the doors of Danish enterprises. Could participation in financing and decision-making processes increase well-being, enhance individual motivation and productivity, and strengthen innovative capacity through participants' suggestions for incremental improvements?
In this context, Pinstrup Jørgensen does not merely present idealized visions. He also discusses and cites critics who emphasize that democratic forms of ownership and organization are no longer, as they were in the early days of the cooperative movement, a powerful solution to social and economic problems. According to some critics, economic democracy is not substantially different from the familiar negotiated economy model based on the triangle of state, market, and civil society (Nielsen and Pedersen, 1989; Pedersen, 1998, 2011).
From here, it is only a short step to the neoliberal critique exemplified by critics such as Martin Aagerup, former director of the neoliberal Center for Political Studies (CEPOS), who has suggested that democratically owned enterprises have not succeeded in generating significantly more "business" or economic efficiency. One of Aagerup's key arguments is that anyone is free to establish a cooperative enterprise, yet this freedom has not resulted in the democratic ownership form proving more attractive to entrepreneurs (Aagerup, 2021). According to Aagerup, the most successful enterprises remain the traditional capitalist firm. The Austrian School and the socialist calculation debate, represented by figures such as Friedrich August von Hayek and Ludwig von Mises, could scarcely have made the argument any better themselves (Hayek, 1994; Mises, 1976; Lange, 1938; Horvat, 1982; Winther, 2004).
We are, however, confronted with an interesting paradox, one for which Pinstrup Jørgensen's Cooperative Power model provides an answer through its central thesis that enterprises are not merely technical units of production but cultural and economic embedded organizations whose strength emerges through the interaction of association, business, and purpose.
The answer to the typical appearance of reality—or to Aagerup's distorted understanding of the empirical, observable, or perceived domain in which we operate—is found in Critical Realism, which, when combined with the Cooperative Power model, provides a definitive response to Aagerup's distorted preconceptions regarding the problems of economic democracy that Pinstrup Jørgensen himself highlights (Bhaskar, 1975, 1993, and 2008; Collier, 1994; Dow, 1999; Danermark et al., 2002; Jespersen, 2003; Lyubimov, 2015; Winther and Ingemann, 2024; Jørgensen, 2026).
The critical realist paradigm finds a parallel in Marxian methodology concerning the relationship between the concrete (appearance) and the abstract (essence), as developed in the landmark work in the history of human thought, Das Kapital—without itself constituting a Marxist theory (Marx, 1970; Lundkvist, 1974).
From an institutional economic perspective, Critical Realism and the Cooperative Power model become more than an everyday, immediate reflection upon appearances—more than an empirical surface. Critical Realism offers a more sophisticated understanding of the relationship between what we can observe and the underlying mechanisms, structures, and forces that exist independently of the kind of false everyday consciousness represented by Aagerup. Beneath the empirical domain lie the actual but invisible structures containing the patterns, relations, and processes that unfold within the social world. At an even deeper level, we encounter the underlying real structures and mechanisms that generate these patterns and events. These are not always directly observable, yet they shape what we immediately perceive or infer through fleeting observation.
The empirical domain is reflected in Aagerup's claim regarding the limited impact of economic democracy and its alleged lack of economic efficiency, which is explained solely by its limited diffusion and influence.
The actual domain, however, presents a paradox. Why do studies in the hundreds on employee ownership, worker self-management, and the participation literature—including studies of employee participation and stakeholder involvement in ownership, management, and decision-making processes—indicate an overwhelming preponderance of positive results? It is rare within business economics, the sociology of work, and microeconomic research that different methodological and empirical approaches arrive at the same conclusion. Meta-studies encompassing case studies, comparative studies based on samples of democratic and conventional enterprises, econometric analyses, and field studies employing diverse methods and datasets largely point toward the same positive findings (Blumberg, 1969; Levine and Tyson, 1989).
Indeed, the often-forgotten macroeconomic research in the form of production-function studies conducted in the former employee-managed market economy of Yugoslavia—the system of worker self-management—from 1951 to 1965 demonstrates that democratic control at the micro level can, in fact, also be effective at the macro level (Blumberg, 1969; Balassa and Bertrand, 1970; Thomas and Logan, 1981; Horvat, 1982; Conte and Svejnar, 1989; Levine and Tyson, 1989; Semantic Scholar, 1994; Jones and Kato, 1995; Winther, 1994a and 1994b; Winther, 1995; Winther, 1997; Winther, 1999; EsopCenter, n.d.; Winther and Sørensen, 2009; Pinstrup Jørgensen, 2020 and 2026; Ellis et al., 2021; Kruse, 2022).
Our research question therefore concerns the paradox of an apparently less efficient system of economic democracy. In a manner analogous to Aagerup's argument, Peter Abell of the London School of Economics once asked a group of participants at a seminar organized by Eugen Pusić at the Inter-University Centre of Postgraduate Studies in Dubrovnik why such enterprises had not long since outcompeted conventional firms (Abell, 1983; IUC, 2010; Pusić, 2010).
In Denmark, Pinstrup Jørgensen and the think tank Democratic Business (Demokratisk Erhverv) have demonstrated that democratic enterprises are more widespread than is commonly assumed. Approximately 7,000 enterprises possess a democratic organizational character. Ten percent of the total turnover generated by Danish enterprises originates from democratic enterprises. One in every twenty Danes is employed in a democratic enterprise. Millions of Danes are co-owners of democratic enterprises through agriculture, electricity grids, water and heating utilities, mortgage institutions, bank accounts, insurance companies, pension schemes, purchasing associations, and other arrangements. In total, 98 percent of the population over the age of eighteen is involved in one way or another in a democratically owned and organized enterprise, Nevertheless, the frequency of employee owned companies in Denmark is very little (Jørgensen, 2026; Tænketanken Demokratisk Erhverv, 2026).
Within the framework of Critical Realism, the real domain provides the answer to this apparent paradox concerning the limited impact of economic democracy at the macro level. Implicit in the paradox is the fact that no transformation of the broader social system has occurred: the institutions of the capitalist and largely undemocratic market economy remain intact, and this naturally has implications for the comparative efficiency of economic democracy.
From a historical perspective, the answer is readily apparent. Yet proponents of the Danish branch of Adam Smith's classical liberalism, as well as neoclassical economists and the Austrian School, remain largely blind to it because a form of everyday consciousness prevents them from moving beyond the empirical surface of observable phenomena toward a deeper framework of understanding (Smith, 1901 [first published 1776]; Blaug, 1968).
Many years ago, the Yugoslav economist Branko Horvat participated in the Swedish debate on worker-managed enterprises as an alternative to traditional firms. Horvat was often regarded as an economist whose analyses occupied the borderland between neoclassical and Marxist economics (Horvat, 1974; Ward, 1979; Winther, 2004).
Horvat's contribution to the Swedish debate led to a question similar to that posed within the framework of the actual and real domains of Critical Realism: Why have worker-managed enterprises not already outcompeted capitalist firms? Initially, Horvat considered the answer to this question to be self-evident.
Approximately forty years before "the Danish Austrians and other neoliberal good folk" once again derailed the debate, the fallacies were essentially the same. A democratic, employee-owned, or cooperative enterprise cannot be more efficient if it has failed to outcompete private firms in the marketplace and thereby become the dominant form of economic organization—or can it? Since the most profitable enterprises in a competitive market will necessarily perform best, is it not the case that the relative rarity of worker-managed and employee-owned firms constitutes sufficient evidence that they are generally no more efficient and perhaps even less efficient?
The paradox could scarcely be expressed more clearly than Horvat did:
"Suppose, however, that there exists a limit to efficiency determined by the social order itself within a capitalist environment. In that case, only capitalist forms will be able to survive. A conceivably more efficient organization will either fail to emerge or—if it does emerge—will be unable to exploit its inherent economic superiority."
Under feudalism, the emerging capitalist form of ownership and organization would hardly have been able to achieve a full breakthrough. A fundamental question in this context is whether it would have been possible to adapt the emerging capitalist enterprise to a feudal mode of production based on the dominance of landed estates and serfdom. Although early capitalist enterprises already demonstrated certain inherent economic advantages under feudalism, the existing institutional framework was not designed for this new form of enterprise. The capitalist firm required a much higher degree of mobility for the factors of production—particularly labor—as well as the possibility of free entrepreneurship and individual liberties. These prerequisites stood in fundamental contradiction to the social and economic structure of feudal society, where the workforce was tied to the land and economic activity was largely subject to the control of the landed aristocracy.
The institutions of feudalism therefore constituted not merely a constraint but increasingly a direct obstacle to the development of the capitalist enterprise and capitalist modes of production.
In other words, business forms are institutionally embedded structures whose functionality depends upon their compatibility with the broader economic system. Consequently, neither feudal, capitalist, nor democratic forms of enterprise can be understood independently of the institutional frameworks that reproduce and stabilize them (Winther and Ingemann, 2027).
The answer to the general critique of the democratic enterprise is embedded in Pinstrup Jørgensen's analysis of a coherent model of Cooperative Power (Andelskraft), just as it is embedded in the framework of Critical Realism. If the model's interaction between association, business, and purpose fails to materialize, and if the necessary institutional frameworks at the macro level are absent, this is because the development potential of democratic ownership and organizational forms is constrained by anachronistic institutions. These institutions are geared toward the private-capitalist market economy, which is characterized by inequalities in the distribution of income, wealth, and power.
A democratic market economy requires a different body of business legislation, the appropriate institutionalized support structures, reformed incentive systems, a reduction of unequal distributions through lower Gini coefficients, the division of large enterprises into autonomous democratic base organizations with their own democratic governance and operational autonomy, and measures of human development and security that extend beyond purely material considerations. Democracy is itself a productive force; this is demonstrated by the findings of business-economic, industrial-sociological, and microeconomic studies. Economic democracy, however, cannot fully develop within the existing institutional framework.
Within reformed institutional settings, the transformative potential and competitive strength of the cooperative model are only unleashed when the three elements—association, business, and purpose—are coherently integrated. The interaction between democratic co-ownership, democratic control, the degree of stakeholder participation, and objectives relating to democracy per se, enhanced member motivation, productivity, employment, and comparatively superior economic outcomes constitute the result of the three-stranded Cooperative Power model. Purpose and tradition can therefore continue to enhance the comparative developmental and competitive capacity of democratic enterprises relative to traditional capital-controlled firms.
In Pinstrup Jørgensen's model, association refers not merely to an organizational structure but, more importantly, to Danish associational culture as a historical and sociological resource. In a society characterized by a high degree of voluntary organization, association functions as a form of social infrastructure that enables collective action, reduces transaction costs, and generates high levels of trust.
Business within the model represents market rationality and a form of new institutionalism in which enterprises must be capable of operating efficiently within appropriately regulated market mechanisms.
Purpose constitutes the normatively guiding dimension that ensures long-term organizational development, coherent macroeconomic, environmentally oriented, and resource-conserving planning, and qualitative economic growth rather than short-term profit maximization.
Historically, the purpose embodied in the model arose from the needs of wage earners, small farmers, and consumers for improved economic conditions. These needs were translated into demands for better wages and working conditions in production associations and later worker cooperatives. Within agriculture, the cooperative movement emerged from suppliers' need for better settlement prices for their products. This gave rise to supplier-owned cooperative enterprises such as dairies, slaughterhouses, purchasing associations, and leasing cooperatives.
In the cities, it was consumers' demand for affordable, high-quality goods that gave rise to the consumer cooperative movement. Today, the need-driven democratic enterprise addresses a far broader range of needs. Whereas the original needs emerged as a defense against primary and secondary forms of exploitation in pursuit of improved living conditions, the underlying principle remains the same: purpose continues to be guided by human needs.
Whether this concerns access to affordable energy through a wind-turbine cooperative, access to environmentally sustainable goods and services, or the activities of social enterprises more generally, the fundamental logic remains unchanged. New needs emerge alongside technological, social, and economic development, prompting groups of people to come together in pursuit of collective solutions to needs that are not adequately addressed by conventional market mechanisms.
Taken as a whole, the book positions the source of cooperative power as an institutionally conditioned and competitive organizational form whose economic efficiency, social coordination, and normative orientation are integrated through the appropriate institutional framework. Cooperative power is therefore not merely an organizational principle but an expression of how specific and reformed social institutions make possible stable, effective, democratic, and need-driven enterprises within a new democratic market economy.
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