BRITAIN AS A CO-OPERATIVE ECONOMY: A MISSED OPPORTUNITY?

by Oliver Steward

The UK’s free-market economy as a whole is facing one crisis after another.  That is why policy makers and businesses need to consider the co-operative option which offers products and services to our economy. Our corporate and political culture’s lack of innovation and strict adherence to the neoliberal free market means this is sadly more of a dream than reality. However, other nations have successfully replicated this alternative economic model to adapt to their own individual needs.

The co-operative model empowers both workers and consumers as they have equal share of the business, and have more of a say of its everyday management. It is seen as a more ethical, equitable business model as it is not based on some people having more of a profit share than others. In addition to the consumers, for the workers themselves it can rewarding to have a say in the business, and being a stakeholder in the company you work for.  For a worker co-operative, each of the members from the general manager to the admin assistant owns a share of the business. Decisions are made democratically and profits are shared among the members or put back into the business. Co-operatives can exist in many areas of business. On the other hand, a consumer co-operative means it is democratically owned by the consumers themselves.

Co-operatives can exist in many areas of business

When David Cameron became leader of the Conservative party he spoke a lot about the merits and obvious utility of co-operatives, and in particular the possibility of municipal services being co-operatives owned.  However, his tenure in the Coalition, and recently the Conservative governments respectively, have seen a missed opportunity in bringing this opportunity forward.  While Prime Minister Theresa May is busy looking at promoting Britain as a place of business, a good innovative alternative for our economy is in the form of co-operatives.

Britain has become too reliant on large multinationals providing services to the public without the public or consumers having a real say on how their services are being delivered by the firm.  However, it does not have to be this way.  I would appeal for cross-party work at Westminster looking at ways to promote a co-operative economy which has both greater sustainability and is seen as more viable, equitable for both workers and consumers.  Why?  In a co-operative, workers or consumers own equal shares in the company and have a stakeholder in the firm, so they have a greater incentive to make it work.

In a co-operative, workers or consumers own equal shares in the company and have a stakeholder in the firm, so they have a greater incentive to make it work.

During the financial crisis in 2008, the co-operative sector globally actually grew in the number of businesses and people employed.  The famous cluster of co-operative firms in the Basque region, otherwise known as the Spanish Collective Mondragon which has co-operative firms in major sectors including manufacturing, finance, education, engineering, and service industry – all of which have a global reputation.  In the United States, there is a long history of co-operative development both in the 20th and 21st centuries.  The co-operative economy has a proven global track record for development, growth and sustainability.  Therefore, the co-operative economy is a model which Britain could emulate at both a local and a national level.  It would kick-start worker and consumer based entrepreneurship in the diversification and promotion of worker based co-operatives in manufacturing services, public utilities, manufacturing, services and education.  Otherwise, if we do not start to rebalance the economy and Britain suffers from another financial crash, it may not be so easy to recover, given the dependency upon large corporations for prosperity.

(via cooperativenetwork)

While this Conservative government talks about entrepreneurship and the country being open for business, it leaves out one important workable business model which is based upon collective ownership – otherwise known as co-operatives.  For an economy to be sustainable it must have a plethora of small and medium businesses with a rich and vibrant business community working together.  This economic climate has become more competitive due to the difficulties of getting a loan from large multinational banks.

However, if you look across the Atlantic at the United States the city of Madison in Wisconsin has been public in their support for cooperatives.  According to Grassroots Economic Organizing, Madison are funding the development of supporting local co-operative businesses at the tune of $1 million dollars a year from 2016 onwards.  So, if a nation that prides itself as a bastion of the free-market economy supports an alternative business model of co-operatives, why are we not following in the same footsteps?

if a nation that prides itself as a bastion of the free-market economy supports an alternative business model of co-operatives, why are we not following in the same footsteps?

The last government did not give local authorities devolved status so they can contribute into directly investing in alternative businesses like co-operatives.  For local councils to help foster a viable economic climate, it must be able to invest in the co-operative model, by providing start-up capital as well as financing the conversion of businesses to co-operatives.  The added benefit of such co-operatives is that they usually have strong local connections and help foster better community relations.

One sector that is ripe for a co-operative revolution is the energy sector, where the centralisation of our energy supply has left us dependent upon large multinationals.  While Denmark and Germany have a comparative advantage in this respect, Britain is lagging behind.  The benefits of having decentralised local co-operatives, is that they can be sustainable and also sell energy directly to third-party consumers.   In addition, while Britain is in the middle of a perfect storm in terms of a housing crisis – one answer to affordable, social housing is in the co-operative sector – whereas in Sweden, one fifth of its housing sector is provided for by co-operative housing.

Sadly the shareholder model of business is culturally embedded within the UK, with a bias placed on multinational banks and large co-operations, and an obsession with private home ownership.  This has restricted the consideration of alternative economic models, such as co-operatives which may ameliorate the difficulties we have in certain sectors in our economy, such as the aforementioned energy and housing markets.

Featured image: via irishmarxism


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