I want to discuss not can coops thrive in today’s global economy but rather how can coops thrive in today’s global economy. And I make that small distinction because I am convinced that yes, of course, coops can and indeed currently do thrive in the real economic world today.
So: no doubts from me that the answer to the original question is a resounding yes. I start from the premise that the world needs business – it needs business to create the things we all need and to give us the jobs and money we all need. What the world in my opinion doesn’t need is the sort of footloose global capitalism run to maximise shareholder returns and therefore concerned only with very short-term profits. These are the sort of investor-owned companies which are rapidly increasing inequalities across the world and which, as we saw less than ten years ago in relation to banking, are able to plunge the world into economic crisis.
So we need alternatives to these forms of business, and coops are one of those alternative business models – one of the most important in my opinion.
But as we also know, just willing coops to be a more dominant business model isn’t enough. I am going to be both an optimist and a pessimist here today. In fact, I am going to use Gramsci’s well known phrase about pessimism of the spirit and optimism of the will (it gets translated often as pessimism of the intellect but optimism of the will, which I think is the version I prefer).
So let me start by being the pessimist. The pessimist might say, small-scale coops are ok at the edges of an economy, but they struggle to get any bigger because they are hamstrung by the lack of investment capital. Coops can’t readily access equity capital. They’re reliant on accumulated profits and loan capital.
The optimist has to agree. Yes, you’re right. But you’re not completely right. Because one of the big initiatives taking place at the moment, being led by the International Co-operative Alliance, is focused precisely on exploring this issue, and on finding innovative ways that coops can access capital without compromising their very nature as a cooperative business. This work began more than a year ago, and already there’s some excellent ideas coming forward. So, you’ll have to do better than that, my friend.
Maybe, says the pessimist, but answer me this. We live in a global economy dominated by multinationals, operating across borders, employing staff all over the globe. Coops remain by and large stuck in their own national economies. How can a national coop compete with a multinational enterprise?
The reply? Well, the optimist could reply that that’s not entirely true. Look at the Scandinavian dairy coop Arla, for example, now also working with farmers in Britain [and among other things trying to persuade us that genuine Icelandic skyr yogurt can be manufactured in Germany]. Look at Mondragon, which among its other businesses outside Spain runs a machine tool company in Peterborough and a packaging company in Worksop. Look at the New Zealand coop Fonterra, operating in around a hundred countries. And look, too, at the tools now available for transnational coops, such as the European Co-operative Society legislation for so-called SCEs.
But the optimist would also add that, just because capitalist business has chosen to grow bigger and bigger, and more and more global, doesn’t necessarily mean that this is also the route which coops need to choose. Coops do things differently. They federate, they work together, they build second-level coops, they don’t necessarily need to get economies of scale by gobbling up smaller firms as conventional businesses do. Oh yes, there’s certainly scope for more inter-coop cooperation. I’m waiting for the time when I’m in Switzerland, for example, and buying something in a local Migros coop supermarket, that I can present my Midcounties member’s card to have my purchases there added to my dividend account. We need to be much more internationally minded, but we don’t need to think we necessarily have to build global giants.
The pessimist looks very sceptical. But you can’t even ensure that large coops in your own country remain genuinely cooperative or genuinely run on behalf of their members. There was a case in Britain recently of this – what was its name?…
The optimist looks slightly defeated at this point. Yes, there are examples of coops that have left their principles behind. But there are also large coops around the world which are well-governed and which have developed innovative forms of internal democracy. If we think democracy is only possible at very local levels, we give up on any attempts to impose accountability over national and international bodies of all kinds. We might not even be able, heaven forfend, to make the Labour Party more democratic.
So there’s a challenge here, but it’s one we can embrace with enthusiasm, not to mention a little creativity.
So the pessimist has a final go. You can have successful coop businesses, you can even have coop businesses which are properly accountable to their members, but even then you can’t assume they’ll be ethical businesses, concerned for their workers, concerned for their communities, concerned for the environment.
True in theory, the optimist replies. But where have you been recently? Haven’t you picked up on the debates in the international movement about the seventh coop principle? Haven’t you seen the guidance notes which the ICA has produced about how coops can and should put this principle into practice? Compared with ten or twenty years ago, there’s a real sense that the coop movement is at last rediscovering its principles and values and its belief system. Though of course there’s still much more to do.
And at this point the chair says that my time is up. The pessimist leaves stage right, the optimist leaves stage left. I think I’m going to tag along with the optimist, and I hope you will too.
Article by Andrew Bibby