Sustainable development demands institutions manage the conflicts and struggles that inevitably arise over material and ideal interests. While current cooperative theory privileges the economic element, a political economy of cooperation emphasizes cooperatives' tentative bridging of economic and political spheres with a democratic ethos. The cooperatives' democratic political structure exists in tension with a capitalist economic structure and other sites of friction. These contradictions are: in the realm of social relations, between production and consumption; in the realm of spatial relations, between the local and the global; and in the realm of collective action, between cooperatives as both traditional as well as new social movements. Where neo-classical economic models seek to eliminate or reduce these tensions, political economy views these tensions as functional to sustainability by creating an "institutional friction" that facilitates innovation, flexibility and long-term adaptability. This political economy of cooperation is intended as a step toward the development of a multidimensional sociology of cooperation.