Cooperatives must be centerstage as the 21st century unfolds

Cooperatives offer more resilience during crises such as the current pandemic and can empower workers on an unprecedented scale.

The British Cooperative Movement has a long and well established history. A cooperative is an alternative business model in which individual members and other cooperatives own the enterprise, as well as controlling and running them. Cooperatives are influenced by internationalist values. They are present in multiple industries, in countries across the world. In the 21st century the model can also be applied in the digital realm. DiEM25’s concept of a Digital Commonwealth imagines the proliferation of platform cooperatives which are democratically owned.

The COVID-19 health crisis and the ongoing development of the digital age means there are greater numbers of people online than ever. Platform cooperatives can become standalone enterprises and/or extensions of existing ones.

The first cooperative of the pre-industrial age was set up in Fenwick, Scotland in 1761 by 16 weavers. In England, one of the early cooperatives came in the form of a flour mill set up in Hull in 1795. Over the course of the 19th century cooperatives became increasingly common, with socialists such as Robert Owen, encouraging their formation. He would come to act as a figurehead to the growing working class cooperative movement.

One of the most successful expressions of the cooperative movement in the UK in the 19th century was the founding of the Rochdale Equitable Pioneers Society, which opened its first shop in 1844. In this era the British working classes did not have the right to vote nor any system of organised education. The formation of a cooperative empowered them through voluntarist and democratic means, especially important given the backdrop of the industrial revolution.

The movement has continued to grow and in 1863 the Co-operative Wholesale Society was established, now known as The Cooperative Group. It values the participation of its members and encourages the values of democracy, self help and solidarity. A member is eligible to vote once they’ve spent £250 a year, which amounts to only £4.80 a week. The John Lewis Partnership, which owns the well known department store John Lewis and the supermarket Waitrose provides an interesting example. It is not strictly speaking a cooperative, although there is an element of employee involvement and a culture of transparency. This does not match up to the example of The Co-op Group, but it can be seen as an example of progress towards the ideal of greater democratic control of the workplace. The long history of the cooperative movement, its inception dated from 1761, and its current standing in the British economy, shows its resilience and strength.

Cooperatives do however have limitations and weaknesses. The democratic component means decision making can take longer as more people need to be consulted about the running of the enterprise. This is in contrast with a commercial business which has a freer hand to pursue profit and need only consult with the owners or managers during the decision making process. In addition, another issue is the limited availability of capital. Those involved in cooperatives may not have access to the same level of capital which a commercial enterprise does. As a result, cooperatives may be outcompeted. These are general issues however which are not unsolvable and do not undermine the wider potential of the sector in the UK.

A 2020 report outlines the strength of the cooperative sector in the UK. The sector boasts 7,063 co-ops which employ 241,714 people, collectively with an annual turnover of £38.2bn. The size and resilience of the sector shows its future growth potential.

DiEM25’s purpose of ‘promoting self-government (economic, political and social) at the local, municipal, regional and national levels’ can be actualised through the cooperative scheme, which gives ordinary people more power in their lives.

It is important to understand the distinctiveness of cooperatives in order to make an argument for their proliferation. They are private, in the sense that they are non state actors, but they act for the common good of its members and wider society. And crucially, it consists of individuals choosing to contribute their efforts to an enterprise that they will benefit from economically and socially.

DiEM25’s Green New Deal for Europe, established in April 2019, argues for a sustainable future in which economic activity no longer exploits and destroys our environment. Cooperatives and community projects are put forward as a key component of this undertaking. The cooperative model of economics ‘can increase job security, empower workers and be at least as productive as capitalist business models.’ The benefits therefore, are threefold; continued economic prosperity, greater democratisation of work and a sustainable approach to our environment. For these reasons cooperatives must be centerstage as the 21st century unfolds.

This contrasts with state ownership where workers act in a public capacity, paid by the taxpayer, but in service to the government. It also contrasts with private enterprise in the free market wherein corporations hire workers but do not engage with them beyond the labour they provide and remuneration offered. In both arrangements the individual is held at an arm’s length, and is not permitted — for a multitude of reasons — to participate and shape the workings of the organisation they are a part of.

Cooperatives have spread far and wide beyond Britain, with some of the largest cooperatives in the world based in Europe. Japan, the US and South Korea also have notable examples, such as the National Federation of Agricultural Co-operatives, Wakefern Food and National Agricultural Cooperative Federation, respectively, which suggests cooperatives are feasible as an alternative business model. This is an ongoing development with extraordinary growth potential, with the promise to empower workers on an unprecedented scale.

Photo Source: fauxels on Pexels

This article has been edited in light of some additional information concerning the cooperatives mentioned. 

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