25 November 2010

Can we really create a co-operative economy?

All the talk at the moment is about public service co-ops and mutuals. How the co-operative model would be great for driving up performance, lowering costs, but at the same time keeping these new businesses accountable and lets be honest ethical.

I agree with this generally and particularly if the employees get a real sense of ownership and control of their work life. But the question I'd like to ask Dave and George is: If its so great for the public services (especially in this time of budgetary constraint) why is it not a great idea for the rest of the economy and particularly those areas of high capitalism that got us into this mess in the first place?

I know a number of you must be thinking the same, in a recent SEC survey showed 2/3rds of people want more employee owned business in the private sector.

We are not the only ones who want to create a more co-operative economy either.  Fidel Castro at the other end of the spectrum admits Cuba's centrally planned economy is not working and worker co-operatives should be promoted.(I find it slightly bizarre that a communist and a Conservative could agree on a economic model.)

Some people like the Basques in Mondragon and Emilia Romagna in Italy have been creating a worker co-operative economy on a regional level for years. Hugo Chavez in Venezuela is also a convert:

"When he took office, there were 762 co-ops in Venezuela with 20,000 members. Many of these were more credit unions than worker-owned cooperative work places. By mid-2006 there were 108,000 co-ops with 1.5 million members with half in the service sector and a third in production.
More information on his Bolivian Revolution here and here.

So creating a worker co-operative economy is doable, but is it doable in the England or the US?
Well some in the US are giving it a try; the steel worker union of America is looking to partner with Mondragon.  There is also an experiment going on in Cleveland to create a Mondragon like network of co-operatives, the first group of co-operatives are focused around The Evergreen Co-operative.

So is it achievable in the UK and what could it look like?  
Co-operatives UK is releasing a paper (more of a tomb) written by Robin Murray who was heavily involved in the formation of the fair trade movement: Twin Trading, Cafe Direct, Divine Chocolate etc. Its called Co-operation in the Age of Google,

Co-operation in the age of Google shows that we are living at a time of profound transformation. The information and communication revolution, widespread concerns about private sector greed, public sector finances and impending climate chaos present a wide range of possibilities for co-operative expansion.

Robin argues the UK Co-operative movement is not yet in a position to make the most of these opportunities. It needs to be more innovative, more integrated, more internationalist, to get better infrastructure and to find ‘the idea’ that can mobilise support for co-operation. The review proposes a series of practical initiatives for 2011 and 2012 to strengthen the co-operative sector.

Have a read and in true co-operative style add your own comments, thoughts and ideas.

Another report released by MIT in October looks at Mondragon and the Evergreen Co-operative Model case study them and then create a theoretical framework for what creating a worker co-operative economy.

"The most important lesson from Legacoop and the Mondragon is the importance of developing an economically integrated network of cooperatives rather than a single cooperative."

I've added a diagram from this report as it sums up their framework.But do have a read of that too.

We live and vote in a country run democratically and we may well soon have a public sector run in a more democratic and mutual way.  Why should we not work in a business that is run in a democratic and co-operative way?

Wider Reading
Co-operation in the Age of Google (Co-operatives UK) 
Sustainable Economic Democracy: Worker Cooperatives for the 21st Century (MIT Co-lab)


Unknown said...

Thanks for this John. A couple of comments. I've read Robin's report, and while it's very thought provoking I'm not sure he has a prescription for halting the death march of the UK co-op movement - but I think it's a bit much calling his report a 'tomb'.
Secondly, 'lowering costs and driving up productivity' is what the coalition sees as the payoff for spinning off social and public services into mutuals and co-ops. The co-operative movement's aim, on the other hand, is for people to take wider ownership and control of their lives as economic subjects. We do need to reinvent the language of co-operation; but we won't get far if we parrot capitalist managementspeak.

Anonymous said...

Great work John, although I suspect you meant tome not tomb (although tomb is much, much funnier).

John Atherton said...

Thanks for the comments and apologies for the typos (written last night)I meant its quite a weighty document at 130 pages.

re: use of language, I don't think there is anything wrong with driving up performance, lowering costs in a business and I don't think that's at odds with a co-operative ethos and giving workers the renumeration and quality worklife they deserve.

If people have real ownership and control over their worklife, I think they can achieve both.

Unknown said...

I would agree that co-ops, as opposed to traditional companies or non-profts, are best suited to balance the needs of community, resources and workers.
I also agree that there is great work happening in Cleveland. I would like to add, however, that Evergreen Co-operative Corporation is only one example of co-op development here in the US. Those at the ECC have done a lot of solid work around rooting jobs and reviving Cleveland's downtown with an environmental awareness. There is another model, however, that is directed, funded and accountable to co-ops themselves. For more information: email info@valleyworker.org or to see an example of a co-op driven system that is growing in both members and revenue during this economic downturn, go to: www.valleyworker.org.

John Atherton said...

Hi Thanks for that,

I know there is a lot more happening in the US at the moment, and it seems to be growing after the recent annual conference.

also noticed www.america.coop recently.

Personally I think Evergreen is a bit too top down and seems heavily dependent on the supporting organisations. Nevertheless will be a very intersting experiment to watch and i wish them well.

I'm particularly inpressed with the

Unknown said...

Hi John - 'There's nothing wrong with driving up performance and lowering costs in a business'? Sounds great, but what does it mean? If not the kind of thing MBAs, CEOs and governments fancy themselves as 'drivers' of (beep! beep!) then what?

Bob Cannell's blog and paper on the malign implications of systems thinking, particularly for co-operatives, is spot on - http://s.coop/5re

Lowering costs in a business - if that doesn't mean putting the screw on workers, shafting suppliers and giving 'customers' a haircut, then what? Abolishing the cadre of professional management? Expropriating investors?

When we're talking about social provision and 'services', we shouldn't roll with this bollocks about the 'need' to 'reduce costs'. We should be asking, whose 'need'? Whose 'costs'? The debate needs framing around the co-creation of really excellent provision, instead of the crap education, crap healthcare, crap housing and crap social support many people get now.

Hope you don't mind the strong language. Great blog, keep it up!

Graham said...

I would argue that Mr Murray's thesis is also essentially proposing a top-down approach. It is an interesting debate.

I guess we all want to see many more cooperatives being created, and it remains my view that too many people in the UK movement lack ambition in this regard. How many cooperatives created in the last year? 100? 200? maybe even 400? How about aiming for 10,000?

To make that sort of step change demands a certain amount of top-downness, although I'm not sure the Murray method is the right recipe.