Showing posts with label co-operatives. Show all posts
Showing posts with label co-operatives. Show all posts

2 December 2013

Smile: It's a Co-operative Bank

It's been a challenging few weeks for those of us who hold an ideology to the left of the political spectrum. I don't know whether I was more astonished to discover that the road to serfdom goes via the Brixton Maoist Centre or that my apparently ethical bank was actually being run by the 'crystal methodist'. I'm only waiting to discover that Shelley was an incestuous just peadophile for my despair to be complete.

I would hazard a guess that you shared my frustration after the financial crisis to hear from many economists and their media supporters that the answer to the disaster was not fewer markets but more markets. So I hope you will forgive me if I will paraphrase this response and argue that the answer to the crisis in the co-operative sector is more mutualism not less.

Ed Mayo, Director of Cooperatives-UK has been quoting the Financial Times's comment that the problem with the Co-operative Bank was not that it was a co-operative but that it was a bank. I would take issue with this comment on the basis that the Co-operative Bank a co-operative in the sense in which I understand that term. It was the bank of the Cooperative Group but it was never a membership organisation and I could never influence it policy although I have had my account there for years.

As an earlier guest post on this blog demonstrates the bank was following its market competitors by engaging in a whole range of activities that I feel its customers and members would never have sanctions have they been offered a choice. The contrast between the activity of the Co-operative Bank and the Nationwide Building Society, a large but none the less mutual organisation, is instructive. The Nationwide, a genuine mutual which has more than doubled its 'profits' this year, is anxious that it is not tarnished by the problems at the non-co-op Co-operative Bank.

For me the principles of co-operation are not challenged by the antics of Mr Flowers. Businesses run by the members for the benefit of the members and that do not deliver services to external shareholders are still the ideal form of economic organisation in my book. I have an account with the Co-operative Bank because it was part of the movement that subscribes to these values; I was always disappointed that it was not a genuine cooperative.

The problems for the co-operative movement is that it appears to have lost it sense of purpose and its ethical stance is now under challenge. To save its reputation it needs to divorce itself from those who would influence it, whether market players or Labour Party insiders. We need the cooperative to become truly ours. It is our job to wrest control back from those who would use it in their sectional interest and to make it the truly mutual business sector it has always promised to be.
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28 April 2013

Solidarity Economy in Brazil

One of our most stimulating meetings during the Latin American tour was at the social economy incubator (ITCP: Incubadora Tecnologica de Co-operativas Populares) at the Universidade de São Paulo. The incubator was established in 1998 by Paul Singer, who now works as the minister for social economy as part of the federal government. We met with Diogo Tsukumo, who will shortly be moving to Brasilia to work with Singer, and Reinaldo Pacheco da Costa, who is a professor in the engineering department.

ITCP is engaged in developing small businesses in the favelas along the lines of genuine auto-gestion, including the production of soap and herbs and services such as cleaning. They support the businesses with finance, capacity-building and networking. The history is that in 1998 a group of Singer's students discussed the economic situation with unemployment at 25% and suggested new forms of working, especially co-operatives. They explored the history of co-operatives in Brazilian agriculture and found that they were really consortia of producers and not economically empowering for the poor. They wanted to encourage the development of real grass-roots autonomous co-operativas and so set up the incubator.

Their well-meaning intention was to to do what they call 'extension work' in an urban context on the basis that, as a public university, USP has a duty to create knowledge in collaboration with society. An opportunity presented itself closer than they had imagined: one of the communities they work with is a favela right next to the university that was built by unskilled wokers who built the university! Once it was built they were out of work so the students worked with then to set up a restaurant and organised a grounds-maintenance service. They spread this model across the city and into the southern favelas.

Like many things in Brazil the scale of the solidarity economy is somewhat overwhelming. In 2007 there were 22,000 co-ops compared with 30,000 in 2011. Today there are more than SSE incubators in Brazil. They have recently worked to have a solidarity economy law passed through congress, and the level of support in terms of funding, fiscal advantages, and funded co-operative development work is also impressive.

The ideology of this grassroots economic empowerment is also somewhat unexpected. There are three main influences on the solidarity economy in Brazil:

• liberation theology;
• anarchism;
• communism.

In a synthesis that would seem impossible in any other society, in Brazil somehow they manage to create a positive synthesis between these three.

28 March 2013

Ecuador Leads the World


I first heard of the exciting developments in the Ecuadorian economy through my investigations of the proposal for a citizens' audit and debt repudiation. Ecuador was the first country to reject the debts that the Correa government inherited from the previous regime it replaced in 2005. But this was just the first step in a process of reorganising the economy so that it serves the interests of the people rather than those of the market and profit.

This was the proposal of Milton Maya, Assessor in the Ministry for the Co-ordination of Political Economy. The very existence of such a ministry suggests the leadership that this small Andean nation of 15 million people is showing global leadership in response to the depredations of the globalised capitalist economy. He considers the task of economic policy to be to construct a more humane and just society to counter neoliberalism. On a global basis he identifies a rapid decline in the output of the productive economy matched by a growth in the speculative financial economy: 'speculation has overtaken production'. This requires a new economic model to prevent the use of finance to extract value from the productive economy, leading to greater inequality and economic crisis. In Ecudaor the objectives of economic policy-making are:

Promote the transition of the popular economy into a solidarity economy;
Encourage the solidarity economy organised through the territorial dynamics of production, distribution, finance, consumption of goods and services, and improving the employment and incomes of the population;
Ensure that the solidarity economy contributes to the consolidation of the system of social support

The co-operative sector is thriving in Ecuador, which has more than 5,422 co-operatives; the whole social economy including associations, foundations etc. comes to 29,193. They are listed on a public register and receive public investment. Between 2009 and 2011 the government invested $27.9m in co-operatives and $51.5m in total in the whole social economy. They are in a range of areas including production, consumer co-ops, housing co-ops, transport and credit. The transport co-operatives run the public transport system. The co-operative law was passed in 1976 but was only used extensively after President Correa came to power.

Maya argued that constructing a more humane and just society to counter neoliberalism is a political duty. He identifies across the world a rapid decline in the output of the productive economy matched by a growth in the speculative financial economy: 'speculation has overtaken production'. In some respects the Ecuadorian economy is still highly production: sales from smallholdings represents 25.7% of GDP and 10% of net total income. The economy is focused on meeting human need not on generating profit and not directed towards the market. This is a social and solidarity economy under the Plan Nacional para el Buen Vivir. Ley Organica de Economia Popular y Solidaria y del Sector Financiero Popular y Solidario (LOEPS). To support this vision the government has invested $27.9m between 2009 and 2011 in co-operatives and $51.5m in total in the whole social economy.
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18 February 2013

Co-operative Basics

How disappointing it was to hear that the Co-operative had withdrawn products containing horsemeat that had been on sale in their stores. At least in Britain, the history of the co-operative began as a response to food contamination in the new industrial cities, so it is particularly unacceptable for the shop to undermine standards for the sake of costs and competition. It was welcome that Peter Marks was the first boss of a food company to make himself publicly accountable, but, after their pioneering role in the areas of fair trade and trenchant opposition to food contamination, we expected better from the Co-operative and have been let down.

Part of the reason I am a member of my own Midcounties Co-operative is that I am expect them to adopt higher standards in terms of the way they treat their suppliers as well as their staff. As a business with members rather than shareholders the Co-operative is able to do this, even though being part of a competitive market puts pressure on its high standards. While corporates are legally bound to maximise value for shareholders, co-operatives are obliged to meet the standards required by their members.

This is one of many reasons why I have been involved in supporting co-operatives for the past decade, both through my own economic decisions and through undertaking research and publishing articles. I am now working as part of the Co-operative Commission set up by the Welsh Government. It has a wide remit: to find ways to strengthen the co-operative economy in Wales on the basis that a co-operative economy is more socially beneficial than a capitalist one. We will also be exploring the potential for taking mutual models into the realm of services currently provided by the public sector.

The Commission recently launched a call for evidence. What would be particularly useful is ways that political authorities in other countries have found ways to support the sector. Given that autonomy and self-help are guiding principles of the movement it is not always easy to see what role politicians can legitimately take, but many countries offer fiscal advantages to co-operatives on that basis that they achieve positive social outcomes. If you have examples of such policies please do respond to the call for evidence.
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11 September 2012

Co-operative History Tour

Radio 4's Farming Today recently focused on the role co-operatives might play in supporting the incomes of farmers, especially dairy farmers, and increasing their ability to withstand the oppressive power of the supermarkets. In the Year of Co-operation this is to be welcomed, and the comparisons with the situation in other countries, where more than 90% of dairy farmers sell their milk through co-operatives, are particularly useful. However, it is not just a question of transferring a business model: we need to understand how our politial and economic history has left us with a different attitude towards co-operatives.

Rather than milk co-operatives, until 1994 UK farmers had the protection of the Milk Marketing Board, which set a national price for milk and thus supported production and farmers' livelihoods. Like defence and energy, milk was considered a strategic resource - too vital to national well-being to be left to the vagaries of the market. This was a typical example of the statist approach to constraining the power of the market that was favoured in Britain in the post-war period, and no doubt an interesting comment on our changing food culture to vegan readers of this blog.

The vision of socialism as being exercised through one party and at the state level was particularly strong in Britain, where the Fabian socialists fought and defeated the guild socialists during the early years of the 20th century. I have written a longer academic piece about the intellectual links between the guild socialists and the modern green movement. Take, for example, this quotation from William Morris's 1890 pamphlet News from Nowhere:

'that individual men cannot shuffle off the business of life on to the shoulders of an abstraction called the State, but must deal with it in conscious association with each other ... Variety of life is as much an aim of true Communism as equality of condition, and ... nothing but an union of these two will bring about real freedom.' (Morris, 1890).

As the centralised state bastions were challenged and defeated one after another through the Thatcher years, both consumers and producers were left up vulnerable to the chilly winds of untrammelled market capitalism. This has led to excessive market power by banks, supermarkets, developers, and energy companies. In other countries where the market had always been more powerful, citizens had already combined to defend themselves. We are now in a situation of having to catch up.

We also need to remember the political lesson from the Blair years: while unity is strength, uniformity is weakness. The centralisation of the model of state ownership and democratic control by one party left a whole range of organisations from the Milk Marketing Board to the Labour Party itself vulnerable to takeover by those who sought to neutralise rather than reform them. The co-operatives, for all the snide criticisms they faced from the Fabians for compromising with the market, have proved more resilient. It is now the Green movement rather than the socialists who maintain this tradition of mutualism and local control.
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24 August 2012

University Rent-Seeking: This Time It's Personal

As a university professor who is also the mother of an 18-year-old daughter, I am experiencing the anxiety of the university admissions season more than most this year. My daughter has her place, and yet I feel uneasy rather than jubilant. My visit to the institution of her choice convinced me that it is one of those rapacious London-based universities that profits from the rent paid by its own students while competing to out-rank Harvard in a meaningless international comparison. I try to explain the meaning to her life of a debt that may well reach £100,000 over her lifetime.

With my political hat on I have written a report for Green House thinktank that argues strongly for free third-level education for those young people who would benefit from it. My research into this issue blew away many of the myths that were propagated during the debate about raising students fees in the UK. I discovered that the UK’s spending on higher education in 2008 put it in 26th position out of the 33 members of the OECD. The figure illustrates these comparisons and offers some interesting evidence. Perhaps most striking is the high proportion of GDP that the US and Canada spend on tertiary education. While we are following the US models in terms of fee rates, we are not following their level of investment in education, which is around 2.5 times as much. It is important to stress that these data relate to a period before the 40% spending cuts introduced in 2011/12.

Now a paper published in the autumn edition of the Journal of Co-operative Studies explains where all our public money is going, and why we cannot afford to fund our young people through education. It exposes a process of self-endowment by senior academics, who have used the cover of the shift from collegiality to managerialism to massively increase their salaries. The absence of checks on managerial autonomy has enabled the moral hazard of self-serving rent-seeking:

'The levels of vice chancellors’ pay provide material evidence of this hazard. In 1994-5 the
median VC pay was £92,000 and in 2009-10 their average pay was £254,000. Over the same period, the top of the senior lecturers’ pay scale rose from £33,000 to £55,500. In 1994-5 VCs earned 2.8 times the pay of a senior lecturer at the top of the scale, whilst in 2009-10 the comparable multiple was 4.6. In 1995 the Prime Minister’s salary was £82,000 and 29 out of 103 vice chancellors earned more than £100,000. In 2010 the Prime 20 Minister’s salary was £142,000, but every single VC was paid more than him, as were a further 800 other university employees.'

The authors find deep-seated problems with the governance of universities that they argue can only be addressed by a change in the ownership structure: the John Lewis University. The assets of every university should be placed in a nonrevocable trust that would hold the formal legal title to the organisation’s assets. The university's academics and students would become the Trust's beneficiaries. The trust deed would 'affirm the university’s status as a community social asset and an element of the knowledge commons'.

The authors conclude that 'Current turbulence in higher education organisations in the UL opens up potential spaces in which such alternatives might flourish. What is needed is
imagination and the determination to make change happen.'

As ever, if you would like to read the paper but cannot get beyond the corporate firewall that encloses academic knowledge, please contact me.
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14 August 2012

It's the Green Economy, Stupid!

It is widely agreed that the Rio +20 conference was a disastrous failure. What it proved most convincingly is that the people of the world cannot have 'the future we want' without taking the power back from the corporations who currently dominate the global economy. The ideological battle over what the green economy means must be fought and won: a sustainable economy is different in kind from a global capitalist economy. Although many who went to Rio were fighting hard for this agenda, the conference itself was unresponsive to their message.

My own small contribution to the Rio process was to call on some of the best co-operative studies researchers to contribute towards a special issue of the Journal of Co-operative Studies, drawing attention to why proposals for a green economy need to focus on how economic resources are owned and controlled. In my editorial I argue that:

'Much of the discussion around what the green economy means has focused on the need to achieve efficiency in the use of materials and energy. At the more conservative end this can mean simply a form of 'green capitalism', where the economy operates much as it does now, but with a different range of products on sale and powered by a different range of electricity-generating technologies. For others, however, this is too limited a vision, and the growth dynamic and profit drive that characterise a capitalist economy can never be compatible with a sustainable future. That is where the co-operative movement comes in, because two of its central concerns—with accumulation and allocation—are also central to the debate about the restructuring necessary to make our global economy green.'

The special issue also includes my thoughts on links between co-operation and the green economy from my keynote address to last year's ICA research conference in Mikkeli, Finland. Professor Mary Mellor outlines what she considers to be 'co-operative principles for a green economy'. Two more detailed papers describe what the co-operative business model has to offer networks of organic food distribution (in the USA) and local agricultural regeneration (in Spain). The paper also includes two papers from co-operative activists describing the co-operative contribution to renewable energy development and the encouragement of pro-environment behaviour.

The main reason for the failure of the Rio conference was that it was not organised co-operatively and not controlled by the people whose futures were at stake. For many of us, this was clear from the outset. The more fruitful way to achieve change in the short term, whether in terms of economic empowerment or sustainability, is in your own community. And in the longer term, we need to be focused on the ownership and control of resources--issues that were notably absent from discussions at the top table in Rio.

The green economy is not something we are planning or dreaming about: at the local level the real green economy already exists. We just need to expand it so that it takes over from the corporate, unsustainable economy that is so powerful at projecting itself but so socially destructive. All the practical examples you need are covered in a wonderful new book The Resilience Imperative, from Pat Conaty, who also contributed to the JCS special issue, and Michael. JAK banking, community land trusts, shared home ownership, and the Danish windpower revolution: all are covered to provide detailed guidance and inspiration.

If you would like copies of any of the papers in the JCS special issue please email me. 
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1 February 2012

Move Your Money!

At last - something you can actually do to show your revulsion against the destructive behaviour of bankers and financial engineers. Today the Move Your Money campaign is launched. Its aim is to recreate the enthusiasm for an entirely alternative, non-capitalist economy that was typical of the early days of co-operative - beginning with the finance sector.

As Ed Mayo, Secretary-General of Co-operatives-UK says, 'Move your money is the new fair trade. It is THE campaign for our time.' So if you still have a bank account with a bank it really is time to change that. And then you can move your mortgage into the mutual sector as well.

Once you've started there is no stopping: mobile services, internet, phone, insurance: they are all available via mutual or co-operative providers. With the launch of Co-operative Energy you can sign up to electricity and gas tariffs that don't line the pockets of any shareholders. And of course there have always been The Co-operative food shops and John Lewis for household goods.

This is an important step on the road to defeating capitalism: not by a revolution but by just deciding we don't want to play along any more and using the alternative, co-operative economy that has always been there.
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7 September 2011

Co-operative Enterprises Build a Better World

Here's an image I hope you are going to see a lot more of during the next year and a half. The UN has designated 2012 as the Year of Co-operation and the global trade body for co-operations, the International Co-operative Alliance, has set itself the target of massively increasing the visibility of co-operatives during this year.

The ICA has some extraordinary statistics on the level of participation in co-operatives across the world. Over a billion people are members of co-operatives worldwide, including 9.8 million in the UK and 239 million in India. 1 in 4 Germans is a member of a co-operative, and 62% of Finns belong to their leading co-operative, the S-Group. In Japan 91% of farmers are members of co-operatives, and in Korea it is 90%. In Kenya, co-operatives are responsible for 45% of economic output including 70% of coffee production and 95% of cotton. Co-operatives appear to represent something like 20% of the global economy.

It is easy to ignore co-operatives just because they are under your nose. But in fact this form of economic organisation represents a solution to the crisis in capitalism and a humane approach to the improvement of the situation of the poor world. Co-operatives allow people to work with dignity and without exploiting others. Because they do not need to extract surplus value for shareholders they are also a sustainable way of producing and consuming goods and services.

Why are co-operatives so invisible? Part of the reason is obviously that the dominant global media system is part of the corporate economy and so has no incentive to give space to the co-operative economy. But I think a deeper reason is that mutual activity is so natural to us that we take it for granted: we marvel at the cut-throat competitive capitalist economy partly because it is so exceptional--and not in a good way.

If, as I do, you believe co-operatives represent a way of organising economic life that is just and sustainable, then please organise an event or two in your local area in the coming year. And if you are a co-operative or are involved with one, please add the logo to your marketing for this year. Although the logo is not the most attractive I have ever seen, if it appears on every co-operative-related site, whether virtual or real, co-operatives should have a chance of getting around the corporate media blocks.
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6 July 2011

University Futures

The hiatus in posts was caused by a brief trip to Cambridge to see my son graduate. The ceremony was typically bizarre in a way only Oxbridge can manage. The graduands were gowned and robed, but had little sense of what they were undergoing, since the ceremony took place in Latin. Much of this seemed entirely appropriate to a ceremony which is one of the few rites of passage that remains in our civic life and would have provided excellent subject material for an anthropological study.

More fun might be had designing the robes for the co-operative university, which has been under discussion here and elsewhere. The UK Society for Co-operative Studies held a session at Co-operative Congress last week as part of an ongoing debate about the need to establish a co-operative business school for the UK. The document produced there for discussion, and the report Co-operation in the Age of Google to which it in part responds, can be found on the Social Exchange Repository.

One aim of the Society is to take forward the debate about the structure of education: 'An educational programme, therefore, is not simply an opportunity to accredit what is already taking place. It is a mechanism by which those who have spent years on co-operative development activities can contribute their knowledge in a way that informs the development of higher education.'

In this regard there are interesting developments already underway in Lincoln's Social Science Centre, which is 'run as a ‘not-for-profit’ co-operative and managed on democratic, non-hierarchical principles with all students and staff having an equal involvement in how the Centre operates'. Staff donate their time for free, but such models could be developed as alternatives to the elite private universities that the government is encouraging.

Perhaps more important, though, is to build up our research knowledge about alternative economic models. So much of the existing neoclassical framework, from economies of scale to the concept of profit itself, have no meaning in the context of co-operative businesses. Until we can create our own concepts and coherent intellectual framework we are not equipped to replace the destructive and defunct capitalist paradigm with a new business model that we can teach with confidence in our universities.
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28 June 2011

Wales: A Co-operative Nation?


Since I'm a bit short of time I thought I would share a short speech I gave earlier today at a meeting in Cardiff Bay for the Assembly Cross-Party Co-operative Group.

Last week we had the Chief Executive of the co-operative development organisation in British Columbia giving a lecture called 'Co-operation and the Wealth of Nations' here in Cardiff, in fact in the building where I work at UWIC in Llandaff as part of a nationwide speaking tour. He made an interesting and important point about the failure of our economy in recent years and how this is linked to the failure of our political system.

Restakis looked back to the first half of the 19th century, when the franchise was extended beyond the wealthy elite and when the co-operative movement was founded. This parallel is not a coincidence, since both were a response to the development of capitalism and the way it concentrated power and resources in a small number of hands.

Restakis's conclusion was that, while we did gained the right to elect our government we did not see the extension of a similar level of democratic involvement in the economic sphere. And more importantly, he argued that so long as economic power is concentrated and unresponsive, it can feed back into our democratic system and poison it. Whether we think of the ownership of media outlets by the super-rich or the ability of politicians to use their influence to buy themselves well-paid directorships we see evidence of his argument all around us.

While I'm in the business of mentioning our impressive new teaching building I should tell you that the Co-operative Group will also be using it for their conference called Wales: A Co-operative Nation this coming weekend. I'd like to link this title to that of an inaugural lecture by one of our Professors, which he called 'Entrepreneurship: Do we have a word for it in Welsh?' This title had a question mark at the end of it, and I'd like to answer what may have been a rhetorical question with the word 'co-operation'.

When I wrote my thesis some ten years ago now I concluded that the reason successive entrepreneurship action plans had not been successful in Wales was that they focused on individual self-advancement, whereas the culture of Welsh people is that we should all advance together. I found during my research that the Branson model of enterprise was viewed as getting on at the expense of others and was widely despised. I coined the term 'associative entrepreneurship' to describe the creative energy that could be released through shared enterprise for the good of the community, and I used Tower Colliery as a practical example of this associative entrepreneurship.

The destructive impact of the globalised, autocratic economy has become clear in the past few years. Both the financial crisis and the economic crisis it has produced are consequences of economic power being in too few hands. They are also products of the 'myth of the market' which states, in the face of all historical evidence, that we no longer need politicians and that the market will solve all problems, that individual self-interested behaviour will lead us all to the promised land.

We are living in an important historical moment. The last time we saw an economic collapse on this scale it took the dislocation and suffering of the 1930s and the Second World War to put the uncontrolled market back into its box and the tensions in the Eurozone are indications of the sorts of passions that result from economic failure provoked by selfishness and greed.

I understand that I am not the only person who has been re-reading Karl Polanyi's account of this period, The Great Transformation. It is said that this book is also favoured reading for Ed Miliband's economic advisors and I sincerely hope that this is the case. Polanyi's favourite economist was Robert Owen. He argued that Owen was the only commentator of the time who recognised that we are primarily social rather than economic beings and to try to understand what this means in the era of an industrialised and complex society. His very practical answer was the co-operative movement.

So in closing I would like to emphasise another important point that was made by John Restakis and that is that what we need most as co-operators is to have the confidence that our model is what the world needs right now. And we need to use that confidence to argue for our model as the alternative that people are seeking. Whether as academics, through our political parties or in the media the time is right and we should have the confidence to propose co-operation as the expression of a revitalised democracy in the economic sphere.
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21 June 2011

Co-operation and the Wealth of Nations

John Restakis, Executive Director of the British Columbia Co-operative Association, is on a lecture tour of the UK as part of the events to celebrate Co-operatives Fortnight. His recent book, Humanizing the Economy, raises a number of useful questions in terms of how the co-operative form can offer solutions to the disastrous failure of the market. He is lecturing at the House of Commons tonight, Edinburgh on Wednesday and Rochdale on Thursday. His lecture is powerful and inspiring and well worth a trip.

For me, his most powerful question was why the democratisation which took hold of political systems in the 19th century did not also take hold of economic systems. The co-operative movement, of course, was one example of successful economic democratisation, but John's view that we need to focus on 'taking the democratic revolution beyond politics and into economics' demands attention from politicians of all colours who espouse the democratic vision.

The failure of economic democracy has led to the atrophy of political democracy, as corporations buy politicians: we are 'citizens in politics but subjects in the marketplace'. (This reveals John's North American outlook, since I fear that in Britain we are still formally subjects in both realms.) While we enjoy voting rights in our political systems, 'our economic systems are still stuck in the 18th century'. Challenging the ideology of free markets, he asks how can we claim to have free markets when firms are still stuck in the ideology of command and control?

So much for John Restakis's theory. In terms of practice he shared the powerful example of the co-operative economy of the Italian region of Emilia-Romagna, Italy's most productive region. The regional capital of Bologna has a dynamic economy, with one enterprise for every 10 inhabitants. Across the region as a whole, 40% of GDP is generated by co-operative enterprises, mainly of small and medium size. The construction, agriculture, food processing, transport and social care sectors are all dominated by co-operatives.

There is no attempt to enforce a co-operative monoculture, however, with a variety of different types of owner-managed and worker-managed firms thriving in a vibrant and diverse local economy. John draws an analogy between this and a healthy ecosystem, where a variety of different species co-exist without any dominating the others.

The success of the co-operative businesses in Emilia-Romagna has spilled over into the wider economy bringing about what John referred to as 'the socialisation of capital'. There are high average pay rates, low levels of inequality, high levels of female employment. Co-operation has led to economic dynamism, with Bologna figuring 10th in the list of Europe's economic regions in terms of its productivity.

In conclusion, John Restakis offered a challenge to the movement as a whole to have more self-confidence in celebrating its successes. But beyond this there needs to be a development of co-operative theory and a willingness to argue politically and theoretically for co-operation as a more successful and more innovative form of economic life, as well as having the social and community advantages that it has long been known for.
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31 December 2010

Answers Still Blowing in the Wind

Technical reports about wind-power present a classic picture of statisticians dealing with the unpredictable. Aside from a helpful opening sentence in a BERR advisory note informing us that 'The UK is a very windy country' and a range of pseudotechnical concepts, it is hard to get accurate figures about how much of our electricity could realistically be generated from windpower. But what is fairly clear is that we have a lot of wind 'resource' availabile and, because we have a large Atlantic coast, the wind blows relatively more consistently here than in Denmark and Germany, which both have considerably more installed capacity than we do (Germany has 16.2% of the global total compared to our 2.6%).

This year's annual Ethical Consumerism Report indicates that spending on most areas of fair trade and ethical goods shows large increases (organic food is the exception), but the report's funders Co-operative Financial Services identify renewable energy an example of area that has 'failed to make significant progress'. So what is holding us back, and what can be done to break through these barriers?

Assuming that we are not going to have a government that will see this as an opportunity to create jobs and reduce our carbon impact and thus provide state investment to the sector, we will have to rely on a combination of good will and financial incentives. So in order for this market to take off we need what a technologically constipated economist might refer to as a 'triple coincidence of incentives'. We need the right sort of wind (fairly consistent and not gusty), where people consume large amounts of electricity and where there is spare capital for them to invest in the hardware.

In an earlier post I argued that the main hurdle to be overcome - the resistance of local communities to 'unsightly' windfarms in their vecinity - could best be addressed by a co-operative model but it seems that, even with the generous terms currently available via the feed-in tariff, we still do not have the right model to garner sufficient support to see the response from local communities that would enable us to match Germany's capacity over the next five years or so.

One disincentive for local communities is that cost of the environmental reports needed to get a planning application on its way, when the possibilities of success are still unknown. This might amount to £40,000 or so that must be found from local small investors, who may just be throwing their money away. What we need is a group of Public Interest Planners who can afford to do this work pro bono and, where this is relevant, provide templates for the parts of the reports that are not site-specific. A Community Renewable Energy Toolkit for England and Wales, along the lines of that already produced by the Scottish government, could also help the process.

But rather than knowledge or expertise it may be the financial engineering that is most necessary. On this front, I heard an interesting pitch recently from Tim Helweg-Larsen, formerly of the Global Commons Institute and now at the Public Interest Research Centre. His model, called the Energy Bank, connects well-intentioned investors with local communities in windy places, at least achieving a double coincidence. Whether this turns out to be more successful than the payments offered to smooth the path to planning permission in reluctant communities remains to be seen.
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11 August 2010

British Broadcasting Co-operative


There is something intensely depressing about the way Labour politicians seem so much more comfortable in opposition. As though they collude in the Tories' long-held view that they are the natural party of government, even the ruling class? Suddenly, now that they no longer have the power to do anything about it, Labour seem to have all the answers.

The lastest example is the suggestion by David Milliband and Tessa Jowell that the BBC should become a co-operative. How disappointing that Tessa Jowell didn't think of this excellent idea when she was Culture Secretary, and so had the power to make it happen. Are we to assume that if, by some miracle we were to have another election and Labour were to win, she would forget the idea again as she moved through the revolving doors into her department?

Cynicism aside it is an interesting idea and could be taken in a number of directions. Will this be a worker co-operative, where decisions about programming will be made by journalists and producers? Or will we all be offered shares and then enabled to stand for election to the board which will decide what we will be watching. Could it be, and I admit I am going out on something of a limb here, that I could put myself forward to be part of a monitoring panel to check the balanced nature of reporting about Palestine?

Ed Mayo, of Co-operatives-UK welcomed the news in typically measured tones:

'It is brilliant to see such senior Labour voices raise the stakes in terms of the potential for co-operative action. This proposal does address the current weakness of BBC governance, which leaves the BBC open to the unedifying spectacle of growing bullying over recent years by government. If the BBC were answerable to members and license payers in a democratic way, its independence would be strong.

'Making this happen could only take time, because co-operative membership is built from the bottom up, not the top down, and should be voluntary not compulsory, but it would be inspiring to see the public trust and sense of ownership of the BBC turned into a genuine engagement and co-operative ownership stake.'

Since we pay the licence fee directly we might be argued to have already paid for our ownership stake in the Corporation. Translating it into a Co-operative and giving us control as well might be seen as the natural next step. Perhaps Mr/s Milliband and Jowell should turn their attentions to the banks next?

24 April 2010

Putting Capitalism in its Place


Canvassing is always a salutary experience since it teaches you that people are far smarter than the pundits give them credit for. This reminds me of my once-held belief that we would be far better off if we engaged in some sort of periodic job exchange scheme, where every ten years or so our politicians would become hairdressers and vice versa. Except for the quality of our haircuts of course.

This morning, while waiting in a queue at the cashpoint, I had a very interesting conversation with a local voter. He was critical of politicians' reluctance to admit exactly how much our public services were going to be cut. I responded by pointing out that, had we not experienced an extraction of value to our banking sector, we would not be needing to cut at all.

My mention of the word 'capitalism' was not well-received. I had to explain that I was not for a centrally planned system where every bicycle would be made in Conventry and sold through a state-run and utilitarian shop. My concern was rather that capitalism should be pushed onto a socially benign path. Here we were able to agree.

Capitalism needs to be contained within social limits. If the prevailing economic system benefits only a very small proportion of the citizens of a country - or of the world - than that system clearly needs radical revision. Although I might style myself as 'anti-capitalist' it only takes a few moments to consider the history of societies where social ownership is ubiquitous to realise that we may not be ready for that yet.

It seems to me there are three criteria which we can use to examine whether a capitalist business is socially acceptable: its size, the scope of its activities, and the extent of its profits. All three can easily be enforced by a just taxation system combined with an effective Office of Fair Trading. And our economy would also benefit from greater diversity, so that there were more social businesses, social enterprises, and co-operatives.

However, the economic system that dominates the UK in 2010 is not capitalism in any recognisable sense. It is a financialised system of exploitation where, rather than using money as a medium of exchange to facilitate the exchange of goods, a tiny minority are using money corruptly to extract the overwhelming majority of the wealth of the world for their private enjoyment.

My cashpoint friend seemed reluctant to consider how the monetary system might be used to suck our money out of us, so that we will face losing the services we value and the quality of the society we share. The issue feels too big; most do not have the courage even to consider it, much less to dare to argue for something better.

We should resist the intimidating behaviour of the masters of capital, whether exercised in print or via credit-rating agencies. Capitalism is not working: we deserve something better. Just because these issues are not raised as part of the election campaign should not lead us to think that we have no right to debate them.

15 February 2010

The Tories: Good for Your Health?

In his inept and inarticulate way, George Osborne is doing his best to portray the Tories as the public sector's friend. Nurses and teachers are encouraged to forget the fact that he has a large knife in his back pocket and listen to his honeyed words about them being able to enjoy greater control.

The co-operative economy was and still is about ownership and control. We still own the Co-operative shop, the Phonecoop and the Nationwide Building Society. Our votes decide who is on the board and, broadly, what policies the businesses follow. Of course we also, in a broad and indirect sense, own the schools and hospitals which George Osborne is suggesting can become co-operatives. While they remain in the public sector, our votes can make a difference - if a far too indirect one - to how they function and the services they offer.

In the UK the strength of the co-operative movement has been on the consumer side, yet the co-operatives George Osborne appears to be suggesting for the public sector will be worker co-operatives. If the Tories meant this, it could mean that your surgeon or job counsellor would decide what operation you needed or how long you could claim benefit before you were struck off the list.

But of course he does not mean it. This is not a proposal to empower public-sector workers, but a cynical first step on the road to the privatisation of the health service. With US corporations eager to take over hospitals and clinics - and pharmaceutical corporations already dominating the policy agenda (viz. the recent massive waste of money buying unnecessary and ineffective anti-virals) - we should be very cautious indeed about responding warmly to Osborne's weasel words.

Many of our public services began as mutuals - working people joining together to pool their resources and provide each other with health and education when the state did not. Especially in health, these local and empowered solutions were swallowed up into the National Health Service, and the mutual impulse and local accountability were lost. This history offers a sense of the potential of co-operatives, but it would require a much greater shift of political power than the Tory proposals countenance.

This is the first attempt during this election campaign for one side to claim the laurels of the co-operative movement, which has drawn increasingly positive attention since the advent of disaster capitalism. But if it was the private sector that screwed up so badly in recent years, why is mutualisation being suggested for the public sector? George Osborne might gain considerably more credibility with the co-op movement if he gave support to the campaign to remutualise the Royal Bank of Scotland and introducing financial support for employees who wish to take over their own workplaces, rather than offering public-sector workers a share in schools and hospitals which his own policies will make unmanageable

11 September 2009

Extraction of Value(s)

Two reports are published today that are implicitly linked, and yet I wonder how many media commentators will make that link explicit? The first is the lengthy and damning report into the buyout of MG Rover by the team led by John Towers. Known as the Phoenix Four, since the final collapse of the car company in 2005, their reputation has turned back into ashes.

Yet what we witnessed during the five years of scavenging, while the suited vultures stripped the value out of Rover was no different in type from what happens every day in capitalist business: the extraction of the value of workers' expertise, skills and commitment by a small number of people who have the control of capital. That's why the system is called capitalism rather than labourism.

Ok, in this case the scale of the rip-off draws public attention, and the fact that Rover was an inconic national company that had also received public support added to our interest, but the model is the same in every shareholder-owned business in the world.

Which brings me to the second report, published today by Demos, and called Reinventing the Firm, it presents a strong case for the movement of a much larger proportion of what is currently the private sector into some form of worker ownership. There are several strong arguments presented, an interesting one being the nature of current ownership. Since shares are now so commonly held by institutions (70% as compared with only 25% in 1963) power over companies is now distant, consolidated and purely profits-driven. Why should a pension-fund manager whose bonus and continued employing relies on delivering a fixed percentage return show any regard to the human or environmental consequences of his investment decisions?

The report also makes clear the significance of the broadly defined mutual sector of the economy, which has annual revenue of £84bn. and £476bn. in assets. This is a whole alternative economy and one which has performed better financially during the economic crisis, and routinely performs better in ethical terms. Demos cites an index of productivity performance since 1992 which shows that mutual companies have out-performed the FTSE by an average of 10 per cent over that period.

Worker ownership is not a panacea - we all know examples of people who merely exchange hiearchical exploitation for self-exploitation when they set up a social enterprise or co-operative - but it is certainly a model for reorganising corporate life that has demonstrable advantages over the limited liability corporate model. It is time that co-operatives ceased to be Britain's best-kept secret and moved into the mainstream of our economy.

5 September 2009

Labour or Ownership

I had an interesting time yesterday, revealing myself at the conference of the UK Society for Co-operative Studies (of which I am an Executive member) as not being a member of the Labour Party. I was invited to address a political panel as the Green Party economics speaker. The other parties declined the invitation, which left me hitting it out with Co-operative Party researcher Robbie Erbmann.

The curious thing was how Robbie felt bound to defend The Labour Party, in fact New Labour, which should be even more troubling for a co-operator. The arcane relationship between The Co-operative Party and The Labour Party has been the best kept secret on the British Left since Mandelson was revealed as gay on Newsnight.

The Co-operative Party was set up by co-operators, whose aim was to take direct control of the productive forces of the economy and thus undermine the power of the capitalists to extract their labour as surplus value. The party, set up in 1917, was their political wing, to lobby for a supportive environment to build co-operatives. But in 1927 it made the fateful mistake of signing an agreement not to stand against Labour candidates. Although there are 29 MPs today who are officially Co-operative/Labour, nobody would tell the difference. They are probably more likely to raise questions about the killing of innocent civilians as a result of resource wars in Iraq and Afghanistan, but they are still there at Westminster keeping the government who made the decision to launch those wars in power.

Why is it assumed that if you support co-operatives you must support Labour? Way back in the mists of the dawn of the last century the genuinely political working people of this country who were busy organising their own alternative economy (which made up some 30% of the economy during the 1930s) were utterly shafted by the Webbs and their ilk, who sold them out to a political party which took their power in return for a vote once every five years. But there is no reason why today's co-operators should support New Labour.

At a time when it is clear that the interests of working people in reclaiming control of the value of their labour, rather than merely their pay and terms and conditions, are coinciding with those of the planet, which cannot take the pressure from the extraction of surplus value, I find it bizarre that co-operators are still unquestioning about their commitment to Labour. Co-operatives are clearly a part of the future sustainable economy; the Labour Party is not. My proposal for the stranglehold that Labour has on the Co-operative Party was not favourably received, but may perhaps resurface during the bloodbath that will follow the next election.

25 July 2009

Wind Power is Our Mutual Friend

Bob Crow, whose RMT union is representing the workers occupying the Vestas wind turbine factory on the Isle of Wight, asks with understandable frustration why money can be found to keep RBS afloat when the much smaller sum that would be needed to keep this industry of the future in Britain is denied. The answer is simple if unpalatable: the interests of business prevail over those of the people. We might say that capital is dominant and labour discounted.

From a green economics perspective we might look at this in different terms. Our current economy is dominated by money; a green economy would have energy as its central value. If you remove the distorting lens of a capitalist vision the decision to premit the redundancy of skilled workers who produce machinery that can turn moving air into energy is absurd.

It almost makes you join Bob Crow in yearning for the days when there was political direction over vital areas of public life, whether energy, water, or transport. Certainly, many whose own lives have been dedicated to the political freedom of others have looked enviously at the rapid progress towards a sufficiency economy that Cuba made following the ending of cheap oil imports from the Soviet Union. And China seems best placed to shift its economy rapidly towards a low-carbon future precisely because it does not have to worry about selling these changes to a sceptical electorate.

But the answer is not to sign away from our hard-won right to power over our lives, or to return to the days of public ownership and central planning, it is rather to call for ownership and control at the local level. Vestas offers a perfect example of how a mutual future would achieve the advantages of rapid change without the political opposition that arises when people feel they are powerless pawns in another move that is for the benefit of others.

It seems incredible that the market for wind turbines in the UK is too small to keep the plant in production. The reason is the slow rate of agreement on the siting of these desperately needed energy plants because of local planning opposition. Communities will not agree to having windfarms in their 'view' when the profits are extracted and they gain nothing in return. If the turbines are community owned, research indicates that this opposition evaporates.

And if Vestas central - and how strange it feels that the bad guys in this particular story are Scandinavian - has no need of this plant because it is receiving a better 'green new deal' from President Obama, then it should be passed on to the skilled engineeers and lathe-turners who are the heart of the company. Like the workers at Tower Colliery in South Wales, there is no doubt that they will be able to keep the factory going without the dubious skills of managers and money-men.

There are numerous reasons why capitalism is unsustainable but perhaps the most pressing is that, in pitting the interests of labour against those of capital, it slows the process of change. In a time when a rapid transition to a low-carbon economy is essential this could truly be a fatal flaw. As the new Co-operative advert says, the answer really is blowing in the wind.

17 July 2009

Ten Ways to Challenge Capitalism That Wouldn't Frighten Your Grandmother

It appears that the salesmen of capitalism have not been entirely successful. Despite the many years of propaganda we have not abandoned care for our fellow man or woman. We still overwhelmingly support a health service paid for from taxation and would rather a decent pension for all was organized along the same lines than be left to the wolves of the financial markets.

Money is at the heart of the economic system that is not called 'capitalism' by accident, and this is the place where you can begin to extract your own life from that destructive and damaging system. It has also been most conspicuously displaying the tendency towards inequality that is the beating heart of capitalism in the past year.

Below I list some further ideas for challenging capitalism in your everyday life in practical ways. It is important not to be daunted and to maintain your awareness that, as you extract your energy and money, along with millions of others, you are weakening the system. From my perspective everyday actions against capitalism, aside from being less risky and more morally acceptable, are far more threatening than violent revolution.

Those who oppose capitalism have the advantages of creativity and imagination, as well as mutual support. It will always be impractical to oppose capitalism by taking on the state with violence, since the state will always be far better equipped in that department than we are. Such action will actually give energy to the growth dynamic, through policing and medical care of the injured, not to mention sales of weaponry.

So here are ten ideas in domestic subversion. Start today and within a year you can be in the clear for a large part of your daily life.

1. Arrange to buy your vegetables through the nearest organic box scheme
2. Switch all your bank accounts to the Nationwide or Co-op/Smile Bank
3. Shop at the Cooperativebetter still, join your local coop.
4. If you work in the private sector, cut your hours of work at least by half
5. Cook more at home, for yourself and your friends
6. Don’t vote, unless the party you vote for has stated anti-capitalist economic policies
7. Whenever you are talking to somebody involved in business, ask them if their business is a cooperative, and have something to back yourself up if they ask why you asked this question
8. Get an allotment
9. Cut down on your coffee intake, and make sure that what you do buy has been fairly traded
10. Before you buy anything ask yourself how much you know about who made it and how, and move towards products where you have more information and closer ties