VI Assets and Rivals

The co‑operative economy is like a wood with deep roots. It faces competition from a new, less rooted industrial ecology. But many of its assets cannot be reproduced overnight, and well marshalled, provides it with a potential competitive advantage. There are five that are immediately relevant:

•         The ethic. Co‑operatives have always had a social meaning. It is not just about co-operating to further a particular interest, but about relating to the general interest. The movement’s goal has been to develop a different type of economy, one that was fairer, more democratic and addressed social needs. And it has done it in practice. It is this which has attracted so much of the current interest in mutualism.

•         A diverse and distributed network.   There is scarcely a town or village in Britain that is not touched by some aspect of co‑operatives. Here where I write, the village shop and post office is a co-op. So is that of the neighbouring village. In the small market town four miles away the main store is a Co‑operative supermarket, and on its front street are two local mutual building societies and a whole food store stocking co‑operative bread.  5 miles to the North is a co‑operative hotel. 10 miles to the East is a co‑operative broadband network. There are as yet no co‑operative doulas to help bring children into the world, but there is a local co‑operative funeral service to take us out. All this some way away from Rochdale, and it is not untypical of many parts of Britain, each with their own variants.  In all there are now 4,990 registered co‑operative businesses in the UK, each a living centre of co‑operative growth.

•         Democratic structures and experience. Co‑operatives are democratically literate. They know the value and the limitations of direct democracy, of the commune, the workplace, and the shop. They have experienced the strengths and weaknesses of the 19^th century concept of representative democracy as applied to the economy and have experimented in innumerable ways of involving a wide membership in decisions. They are no strangers to issues of corruption, transparency and accountability. They have had to deal with the tension between consultation and action, between the ordered custom of the everyday and the disorder of innovation. At a time when the forms of representation and accountability in large corporations and the state are in question the co‑operative movement’s range of practices, and its unique structure for engaging workers, users, and the wider community in its governance, is a major asset.

•         A presence in key sectors. In the contemporary economy, co‑operatives have a limited presence in the information and communications sectors, and in the research intensive and creative industries. But they are well established in two other commanding sectors, retailing and finance and have a significant presence in different parts of the food chain.

•       Connections. The scattered microcosms of co-operation are connected by organisational threads, some strong, some much weaker. Many are part of the Co‑operative Group, which alone accounts for 40% of the movement’s  £33.5 billion turnover, and of the other principal retail societies. Others are clustered in mutual Federations. Some 500 are members of Co‑operatives UK, the umbrella organisation that provides further connections and notably organises the annual Co‑operative Congress. These connections could be much stronger, but they provide a platform for one of the crucial areas for development.

From a macro point of view, co‑operatives may still be marginal. But these assets together provide a powerful ‘starter base’ for the expansion of co-operation as a whole. 

Evolutionary competition.

The argument in part 1 is that the new economy has refashioned the economic landscape in ways that have opened up major opportunities for co‑operative development. Yet this is contested territory. While there is the potential for a new wave of distributed production, the forces of scale are still strong.  Centralised corporations are using the new technologies to strengthen their models of production and distribution, and their political influence to secure regulatory structures that favour them. 

In sector after sector the alternative paths are colliding: large nuclear plants versus the distributed energy systems; incinerators versus source separated recycling; ever larger hospitals as against networks of cottage hospitals and home care networks;  ever larger farms and centralised food processing factories as against micro plants and local food networks. The alternative architectures of these new systems represent the second industrial divide.

In evolutionary terms, co‑operative systems face the competition of giant centralised structures. They also face competition from of all kinds of firms that are responding to the new economy with transformed corporate models. These firms are establishing interactive relations with their users, as well as increasing autonomy in the workplace, in order to promote innovation and increase labour retention. They are offering – albeit in a different form – some of the qualities of economic life which so distinguished co‑operatives from the mainstream in a previous era. [1]

This is most evident in companies where innovation is the pivot of competition, in the creative industries for example, or the informatics sectors in firms such as Hewlett Packard, IBM, and Google. A company like the Japanese Hamamatsu Photonics, with its multitude of semi-autonomous teams of innovators, its technologists doing spells on the productionline and collective incentives paid to all employees, from night-watchman to managing director, is another that sets a benchmark for the organisation of innovation.[2] 

Such firms have not only been exploring how to make collaboration work at a micro level, but how a system with distributed nodes of activity can work together as a whole. They have been thinking of firms as systems, connected to many other, wider ever more complex systems.

These firms are rich with experience of great relevance to co‑operatives. Their models are a source of competition, both ideologically and in fields where they challenge co‑operatives for markets. 

Co‑operatives also face competition in the labour market. Firms like the above attract labour not by offering a share of ownership but rather promising experience, an experience that provides an opportunity to realise a worker’s expressive aspirations and at the same time contributes to his or her cultural and cognitive capital. You can see this palpably in the great number of people applying for a job with Apple, for example, where the lengthy and unconventional selection processes make no mention of wages until the selection is made; or in Emilia Romagna, where the employees of Ferrari, all in their red uniforms, see their spell with the firm as an investment in the acquisition of skill and association with the leading firm in the industry. 

Further, the co‑operative proposition of worker ownership is only one among many ways in workers can be offered stakes and a say in the governance of an enterprise. And whether the co‑operative proposition of worker involvement proves a decisive attraction, partly depends on the definitions and the processes of economic democracy, and the significance given to it in an era of ‘liquid modernity’. Here then is another challenge for co‑operatives - how to attract and retain labour with all its different creativities.

There is a sense too in which much of the new civil economy can be seen as a competitor as much as an ally of co-operation. The civil economy shares the values of co‑operatives and the primacy each gives to social goals.  But the civil economy is organised with a wider range of structures – some as community of interest companies, some as associations, some as conventional limited companies, some as charities, some as companies limited by guarantee. Those in informal ‘co-operation without frontiers’ those involved may work collaboratively, with shared values, but without any formal structures, while making their living on the side individually or in conventional commercial ways.

The general point is that there are many informal and formal value driven initiatives that have emerged in areas open to co‑operative development.  While there is much in the new economy that shifts the ground in favour of co‑operatives, they face major ‘evolutionary’ competition in many of these spaces, a competition which in part is economic but in the case of many sectors like food, or energy, or transport, or any of the social care and cultural services, is political as well.

There is no clear run for co‑operatives. It is the John Lewis model rather than that of consumer co‑operatives which is being widely recommended as a new model for public services as well as for firms that wish to convert to some form of mutuality. When it comes to converting public services into some version of ‘big society’ services we already see that it is large conventional consultancy firms and others with alternative social models of organisation that are contending as advisors as much as established co‑operatives. We have to understand why this is and whether it matters.

Faced with such pressures, one option would be to focus on those areas where co‑operatives are already well established and where the contesting forces are weaker. Initiatives in rural areas are an example or schools – in both of which the movement has been making striking progress. Care services are another sphere where the multi-stakeholder co‑operative model has shown itself to offer decisive advantages.

But I think it would ill-advised to stop there. Fields such as energy production, or new forms of waste management, or many branches of the creative and knowledge industries where the contesting forces are more powerful, are ones where co‑operatives have a distinct and persuasive role.  Taking on these forces should be part of a programme of ambition.