Co-ops and markets: eight provocations

Where should we position co-ops in the big debates about free markets, competition, state intervention and global capitalism?

Motivations for being involved in co-ops vary significantly. Some use co-ops to make the economy work better for themselves and their communities. For many others, co-ops are a means of reimagining a small part of the economy to better correspond with their values, in the hope that one day their niche becomes the norm. Disparate standpoints mean the following eight statements could appear fairly abstract or absolutely fundamental to how we remake our world for the better.

The statements - or provocations - could be viewed as pretty technocratic or intensely emotive and politically charged. This makes setting out concrete positions on the relationships between co-ops and markets difficult, but all the more worthwhile. More than ever we see a potential consensus in UK politics around the need to create a more inclusive economy for the common good. But to get there we need to be pragmatic and clear about how co-ops relate to free markets. These propositions will help us do this.

Co-ops and markets: eight provocations 

1. Corporate capitalism can’t simply be equated with free markets and doing so adds damaging confusion to important economic debates.

2. Markets do not necessarily operate in ways that contradict our co-operative values. There is nothing inherently irresponsible, undemocratic or unfair about free market exchange. But crucially we must be very clear that too many large markets driven by big money currently operate in ways that are dangerously unfair and irresponsible, with real blind spots when it comes to environmental and social impact. However, these shortcomings are less a defect inherent in the act of market exchange and more a consequence of the motivations and values of the individuals and corporate entities involved and the power imbalances between them.

3. Co-ops are a model of economic organisation that actively seeks to make financial capital subservient to people and so restore imbalances of power. They do this by prioritising the creation of member value over returns to shareholders, by giving equal power to people rather than to their shareholdings, and by retaining autonomy and independence from external capital. In this sense co-ops are not ‘capitalist’. But some forms of financial capital are still vitally important to co-ops as a practical tool. And crucially none of this means that co-ops are anti-market. Most co-ops operate very effectively in markets with real savvy.

4. Co-ops are by far the best tool we have for applying social responsibility, solidarity and democracy to decision-making in a market setting. When we engage in economic activity in the world beyond our personal relationships, well-functioning and appropriately regulated markets can be really useful. They are an effective way to set lots of prices and thus informing many of our economic choices. What really matters is who is making those choices and to what ends. One of the great things co-ops do is give workers, producers, consumers and communities control and power in economic decisions, most often in a market setting. They provide the means to make meaningful choices and act more effectively in markets, guided by values and principles that can build a better world.

5. We should not surrender to the idea that market diktats must always decide out fate. At any given moment market forces actually allow for a wide range of possible outcomes.  More often than not what happens depends on who has the means to make choices and act effectively, or to put it another way, who has ownership and control of the stuff that really matters, like capital, legal personhood, organisation and scale. Whether its local residents trying to control property development in their neighbourhood, taxi drivers trying to secure decent work in the platform economy, or coffee growers in developing countries trying to earn a fair return, this is where co-ops come in. 

6. Markets are really useful at the point at which communities lack the capability to facilitate fair and effective economies (‘community failure’ rather than ‘market failure’). A growing number of co-ops and related practices, such as participatory economics and the commons, create pockets where economic exchange can take place outside of mass markets altogether. These tend to operate at a very local communal level or in the ‘de-commodified’ collaborative economy. Digital technology is making this easier than ever. These co-ops and related practices can create economies in which the various agents rely less on impersonal mass markets, which while often necessary are also powerful and risky. We need these co-ops and related practices to develop and thrive because they can deliver huge environmental, economic and social goods. 

7. In many cases competitive markets can help to foster a more inclusive economy by preventing activities that create, entrench and abuse positions of economic power. This can be especially good for small players in mass markets, such as consumers and micro enterprises. But cut-throat competition between agents driven by profit alone, unguided by responsible values or a commitment to the common good, can be very damaging environmentally, economically and socially. And as mentioned in point 6 above, co-ops can be part of a strategy to localise, socialise and even replace markets, so that we have viable alternatives to mass market production, consumption and exchange. 

8. Many social and economic activities are ill-suited to commodification and marketization, most notably in civil society and the creation of public goods like health and social care. This applies both to public procurement and to end user interaction.