By Ed Speed
Few thinkers saw the mysteries of human behavior more clearly than Elias Canetti (d. 1994), the Nobel Prize–winning author of “Crowds and Power.” He spent a lifetime probing why people are drawn into crowds, why leaders both need and fear them, and how institutions so easily forget their purpose.
His insights into equality, survival, and the symbols that bind us together remain startlingly fresh—and they shine a revealing light on the state of today’s credit union movement.
Elias Canetti’s 1960 classic, Crowds and Power, is not an easy book, but it is a profound one. He saw what many of us miss: that human beings are drawn into crowds not only for practical ends, but for deep, almost spiritual reasons. Crowds dissolve our distinctions, give us a taste of equality, and unleash energies that are otherwise locked away in ordinary life. They are necessary, intoxicating, – and they are sometimes dangerous.
Insights After 40 Years
I have spent more than 40 years at senior executive and board levels in the credit union world. I have seen our movement at its best—when it acted as a genuine crowd of members, gathered in solidarity to meet each other’s needs. And I have seen it at its worst, when institutions hardened into shells, boards forgot their fiduciary duty, and leaders grew enamored with survival rather than service.
Reading Canetti alongside the current state of the credit union movement, I cannot help but see striking parallels. His language gives us a grammar to describe what we have lost and what we must recover.
The Original Discharge
Canetti begins with the concept of “discharge” —that moment when a collection of individuals becomes a crowd. In that instant, all the separations of rank, wealth, and position melt away. Everyone feels equal, and a new energy flows.
That is what the early credit union pioneers must have felt when they pooled their dimes and dollars. “My small savings and your small savings are equal when combined. One member- one vote.”
When I came into the credit union movement 40 years ago, I had the privilege to walk with giants such as Chip Filson, Ed Callahan, Bucky Sebastion, Jim Blaine. They nurtured a movement where the common bond was not just a legal category; it was a lived equality. The “discharge” was palpable: we can do this together, and no one is excluded because of their station. Discharge for credit unions was the manifestation of a common bond. Without it, a credit union is just another financial firm.
From Open Crowds to Closed Crystals
Canetti distinguishes between two kinds of crowds. “Open crowds” stretch outward, eager to grow, drawing people in with a genuine sense of welcome and belonging.
Conversely “closed crowds” are bounded by walls, rules, and rituals. They guard their edges carefully, and when they admit new members, it is not for fellowship but for utility, a calculation of what the newcomer can provide rather than who they are.
Credit unions began as open crowds. They sought growth in membership, but not indiscriminately. Growth came through the expansion of a shared bond: a factory, a parish, a neighborhood, or a profession. The openness was to people, not to market segments. That openness was the very life of the cooperative spirit.
Canetti also uses the image of crystals—small, rigid structures that can “seed” a crowd. Think of a crystal of salt dropped into water that makes the whole solution crystallize.
In the social world, a crystal might be a fixed group, a ritual, or an organization that can quickly summon a (“discharged”) crowd around it.
Today, CU trade associations and even some CUSOs function as crowd crystals: they can summon professionals to conventions or organize lobby days (Hike the Hill), but they are often disconnected from the member-crowd that originally gave them life. Instead of being seeds of solidarity, they risk becoming structures that serve themselves. I previously addressed this here.
The Survivor Instinct
One of Canetti’s most haunting insights is the figure of the survivor: the leader who stands when others fall, and who draws his sense of power from that posture.
This instinct has infected much of our leadership. CEOs and boards measure success by whether theirinstitution survives, whether they outlast banks, and especially sister credit unions. Survival becomes the story. But the cooperative story was never about the survival of the shell; it was about the thriving of the members.
The board’s fiduciary duty is not to perpetuate the entity but to serve the member. When policies are justified as protecting the institution rather than the people, the survivor instinct has trumped the cooperative ethos.
The Loss of the Common Bond
For Canetti, crowds cohere around symbols that give them density: flags, songs, dates, or landmarks. For credit unions, the great symbol was the common bond. It was both legal and sacramental, a visible sign of invisible solidarity.
As the movement expanded into diffuse fields of membership, the bond became abstract. “Anyone who lives, works, or worships in…” is not a bond; it is geography.
The result is that members are no longer sure what unites them beyond being customers. The crowd dissipates when its symbol no longer carries meaning. Without the bond, credit unions risk becoming small banks with cooperative window-dressing. You can read more here.
Baiting Crowds and the Danger of Targeting
Canetti describes the “baiting crowd” —a gathering that unites around punishing a target. Crowd energy spikes when a victim is named.
In our own movement, I worry when credit unions, especially small credit unions, define themselves chiefly against banks. When our credit union’s crowd’s energy is fueled only by targeting others, we have slipped into a baiting mode. The cooperative spirit cannot survive very long on resentment. Our energy must come from serving members, not from punishing competitors. America’s Credit Unions is our baiter-in-chief.
I personally witnessed and condemned (along with Jim Blaine) the “baiting crowd” when CUNA flogged “bankruptcy reform” to whip up the crowd and fill their coffers.
Where the Member Fits Today
The member has largely been displaced in today’s movement. Policies are written to create fortress balance sheets rather than to relieve the member in distress. Marketing campaigns present generic products rather than genuine solidarity. National conferences convene far more executives and vendors than grassroots members.
In Canetti’s terms, the “crowd of members” has been replaced by a professionalized “crowd of managers.” That is not a credit union. That is a trade guild with a cooperative logo.
Recovering the Discharge
If we are to reclaim the credit union soul, we must restore the sense of members experiencing equality and solidarity. How?
- Loan policies must once again be written with members in mind. NCUA itself says the primary consideration is providing prudent relief to members while protecting safety and soundness—not the other way around.
- Boards must reassert their fiduciary duty to members. Policies and strategies are not to perpetuate the institution but to serve the union of people.
- The common bond must be honored as more than a legal convenience. If it cannot be geographic or occupational, then it must be cultural, spiritual, or value-driven. Without a real bond, there is no real union.
- Trade associations and CUSOs must remember they are crystals, not crowds. Their legitimacy depends on serving the member-crowd, not perpetuating themselves.
The Way Forward
Canetti reminds us that leaders both need and fear the crowd. Leaders draw energy from their members, but they also fear losing control of them. This ambivalence explains much of the institutional drift we see. But it is precisely here that courage is required.
Credit union leaders must dare to trust the member and the front-line employee again. They must risk the openness of the true cooperative crowd, rather than the safety of closed crystals. They must relinquish the instinct to survive at any cost and remember the covenant to serve. It was service, not survival, that first gave us life, and it will be service that makes us worthy of survival now. Nothing exposes this fear more than self-perpetuating Boards and tightly scripted annual meetings.
If we trust our members and our front-line, member-facing employees who serve them, the movement may recover its soul. If we do not, we will continue to drift towards becoming another corner of the financial services industry—respectable, regulated, lifeless.
Canetti gave us a vocabulary for crowds, power, and meaning. I believe it can help us see what has happened to our movement. The credit union was once a true crowd: alive, equal, and bonded. It has too often become a dead crystal: rigid, self-protective, and removed from the people it was meant to serve.
It’s Not Complicated, It’s Clear
The remedy is not complicated: return to the member, return to the bond, return to the solidarity that makes us more than the sum of our parts.
Our choice is clear. Either we live as survivors guarding shells, or we live as servants nurturing a union. Only the latter deserves the name credit union.
Edward Speed is the retired CEO of a multi-billion-dollar credit union and holds a master’s degree in theology. These days, he spends his time serving food, washing dishes, and sweeping floors at a Catholic Worker House, helping homeless senior citizens. [email protected]
