Rural lightingLiving in the rural Texas Hill Country I get my electricity from the Pedernales Electric Cooperative. This is a private electric utility owned by the members it serves. It was established in 1938 as part of the Rural Electrification Administration.

As late as the mid-1930s, nine out of 10 rural homes were without electric service. For many years, power companies ignored the rural areas of the nation. On May 11, 1935, Roosevelt signed Executive Order No. 7037 establishing the Rural Electrification Administration (REA). A year later the Rural Electrification Act was passed and the lending program that became the REA was funded. By 1953, more than 90 percent of U.S. farms had electricity. Most rural electrification is the product of locally owned rural electric cooperatives that got their start by borrowing funds from REA to build lines and provide service on a not-for-profit basis. REA is now the Rural Utilities Service, or RUS, and is part of the U.S. Department of Agriculture (1).

This is an example of the government stepping in when there was a need and the free market was not up to meeting the need. Our current situation with the Affordable Care Act (ACA) has similar aspects. Since seniors have Medicare, the ACA is actually concerned with providing access to health care services for poor, young, healthy adults and children This sub-population of the US is another area of need that the free market has not seen as profitable. So again the government has stepped in to do something.

Wondering about the choice of that something brings me to another rural organization. My home owners insurance is provided by Germania Farm Mutual Insurance Association. This association was founded by farmers in 1896 who needed, but were unable to get, farm insurance.  Policy holders are members and they own the company.

There are probably reasons why we are not approaching the issues of universal health insurance and universal health services through the formation of mutual insurance companies and medical cooperatives, but they escape me at the moment. I would off-hand suggest that the in-breeding between Congress and large healthcare and insurance corporations has blinded us to any grass-roots activities more reminiscent of town meetings and direct democracy.

Also, as that 1939 article from Time (10) might suggest, health care today is a lot more complicated and adding to that lots, lots more expensive. The healthcare infrastructure is so huge that grass-roots endeavors just fall apart when faced with the costs of complicated cancer treatments, heart/lung transplants, various sorts of robot-controlled surgery, CAT/PET/MRI scans, etc. But still, there are options and coops and mutuals may have a future. They helped a lot in the past.

Join us for a real-time discussion about questions raised by this essay on Tuesday from 12:00 p.m. to 12:45 p.m. See Discussion and SL tabs above for details. Link to the virtual meeting room:

References and Resources

  1. History of Electric Co-ops.  From National Rural Electric Cooperative Association.
  2. The Tennessee Valley Authority: Electricity for All. From the New Deal network.
  3. History of the cooperative movement. From Wikipedia, the free encyclopedia.
  4. Utility cooperative. From Wikipedia, the free encyclopedia.
  5. Mutual insurance. From Wikipedia, the free encyclopedia.
  6. A History of Germania Farm Mutual Insurance Association.
  7. Health insurance cooperative. From Wikipedia, the free encyclopedia.
  8. China Initiative: Evaluating Community Medical Cooperatives. From Harvard School of Public Health.
  9. Patient Physician Cooperatives of Portland.
  10. Medicine: Cooperative Doctor. Time, Monday, May 01, 1939 (yes, from 1939).,9171,761173,00.html

Image Source: Child by Radio and Lamp. Owner: Franklin D. Roosevelt Presidential Library.