Co-operatives have played a major role in taming problems in capitalist economies, and can do so in the future as well, according to Dr Race Mathews, speaking at an SPC forum on 25 July. This year is the United Nations International Year of the Co-operative.
Against the background of the global financial crisis, Dr Mathews pointed to co-operatives as an alternative way to organise capitalist economies, ensuring people working in an enterprise could share in ownership and management of their firms, enhance their control over their own jobs, and ensure increased equity and social participation.
Co-ops must be seen within the wider context of mutualism, a concept which holds great appeal to anyone interested in social justice. The early origins of this movement were driven by a need to respond to pressing human needs and unequal societal and economic structures, and as a way to enhance equity and participation for everyone involved in a firm.
Race referred to the pioneering Rochdale cotton weavers co-operative in the United Kingdom, providing a prototype for co-operatives that followed. He discussed other types of co-ops: consumer, farming, and house building co-ops, credit unions – even co-ops for funerals. The common themes that spurred their creation were returning control to the providers of the service or goods, and increasing buying power through pooling resources.
Co-ops need not stubbornly persist at their original goals. As competitors appear and fill unmet needs, co-ops can adapt to meeting other needs.
Race outlined the case of a co-op in Seattle which started life delivering affordable milk. As dairies took over this space, the co-op saw another unmet need, that of providing spectacles, and so converted to optometry services. Later, it changed to provide accommodation and care for the elderly. Co-ops need not be weighed down by heavy corporate structures, and can make changes of direction. This of course rests on the outcome of the democratic vote whereby all co-op members have an equal voice.
The desire to cut out the middle man, be masters of their destiny and part of a collective with a mutually purposeful aim spurred the success of this movement across the world. In Australia, co-ops are still a sizeable force, but universally they have managed to fly under the radar. The audience was surprised to hear that, following the latest scandal surrounding Lloyd’s Bank, a British co-operative has acquired 650 branches of Lloyds. This indicates the considerable asset base, success, and continuing viability of some co-ops.
The strong counter-movement of demutualisation in the 1970s and 1980s threatened to bring about the demise of co-operatives. As Race described, even when people know that a structure is serving collective interests well, sadly the lure of a fistful of dollars can be very compelling. Subsequently, many co-ops were dissolved, and capital built up carefully to meet future needs was distributed on a pro-rata basis to the current generation of shareholders.
Even given this unfortunate chapter in the history of co-ops, they have survived, and remain an alternative source of collective funding that can be used for myriad purposes. Race estimated that today in Australia credit union assets are possibly in the vicinity of $60 billion. He warned, however, that this also makes them a likely target in the next wave of demutualisation.
Race reflected on his own personal experience of co-ops, going back to the emergence of credit unions in Catholic parishes. Parishioners pooled their savings and took turns in drawing on that pool. They were so successful that they were expanded beyond Catholic circles.
These initiatives were very much in line with the direction of the Young Christian Workers (YCW) movement. The Cardijn-inspired Inquiry Method of See, Judge, Act meant that, when members saw a need, they sought solutions. In the case of financial need and the post-war housing shortage, credit unions were a very fitting and successful response. Race also noted the success of self-build co-operatives which enabled land to be purchased and sub-divided, and co-op members to build each other’s homes. The chance to be in control of one’s own job was also an important factor in the YCW’s embrace of co-ops.
Race finished by drawing on the success of the Mondragon co-operatives in the Basque region of Spain. In what sounded like the jewel in the co-operative crown, these technical co-ops, started in the 1940s to generate and safeguard employment for metal workers, now employ 83,000 workers across a wide range of enterprises, including high-tech ones. Even through the current economic crisis, these co-ops have been a remarkable success, serving strong social purposes while also being very proficient businesses, including providing the steel for the much acclaimed Guggenheim Museum in Bilbao.