Can Co-Operatives Conquer Capitalism And Change The Way The World Works?

Can Co-Ops Prevail? Old Orthodoxies Hold Firm

And so it is. But not gracefully.

The owners of capital are unlikely to cede power willingly.

The Occupy Movement struck a powerful chord. New research underlines the notion that social ills are rooted in inequality. Income gaps weaken society and make things worse for everyone, not just the poor.

“It’s what they’re yearning for out there on the streets of the Occupy Movement to have some active engagement in their community and in their economy,” says Dame Pauline Green, president of the ICA. “That’s what they want.”

Inequality Grows

Yet inequality is growing almost everywhere and those in power refuse to do anything about it. In the US, where belief in free markets reigns supreme, the incomes of the richest 1% of Americans grew 58% from 1993-2010. The rest rose just 6.4%.

Against reason, science and empirical evidence, the old orthodoxies hold firm: ‘The market will sort things out. Economic growth will be our salvation. Technology will save us.’
Yet people sense there is something wrong, even if they can’t quite say what.

People have lost faith in big government, big banks, big business, Wall Street and the City of London.

Karl Marx writes of the dislocating social upheaval of his time that ‘all that is solid melts into air’. It is just as apt today.

Economic Democracy MIA

A central part of what’s missing is economic democracy.

“Our politics and economy are so intertwined that imbalances in wealth and ownership have eroded our political democracy. To fix this we need to democratize the economic aspect of sovereignty,” as corporate critic Marjorie Kelly notes.

Without overstating the case, co-operatives can help do precisely that.

They offer a way to democratize ownership and to counter the divisions and inequalities of the market economy. The co-op model is a challenge to the hyper-competitive, winner-takes-all model of corporate capitalism.

Co-operatives are another way of organizing the market, one where profit is not the sole objective. Theoretically, co-ops are where fairness is institutionalized and people are the center of decisions.

Crowding Out Capitalism

Can co-ops actually ‘crowd out capitalism’?

University of Wisconsin sociologist Erik Olin Wright believes they can play a vital role in expanding democratic space.

Co-ops help rebuild the public sphere and create a wedge between the market and the state. Wright talks of a ‘symbiotic’ transformation where co-ops spearhead a wider democratic surge to help bolster civil society and put down roots in the cracks of the existing system.

Wright points to the need for some key policy changes. for co-ops to really tip the balance. These include access to publicly financed credit markets at below-market rates (to solve the problem of under-capitalization) and more “cross-subsidizing and risk pooling” between co-ops themselves.

There is no question that mutual support works.

The massive Mondragon Co-operative, a $23-billion global operation in Spain’s Basque region, is a case in point. Of the group’s 270 component companies, only one went out of business during the current Spanish crisis. Other co-ops absorbed these workers.

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