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Co-op Policy Blog #2: Co-ops, markets and the common good

Ignore this ‘market vs state’ nonsense, says Co-operatives UK’s James Wright, as the furore of the main party conferences comes to a close. It creates damaging confusion at a time when we need to build a bold political consensus around the idea of a genuinely inclusive economy for the common good.

The Conservatives are distancing themselves from Labour by claiming to be the defenders of free markets against Corbyn’s radical socialism. In the media this is already being framed as an old-school battle between free markets and state intervention. Don’t be fooled! As the CEO of the Co-op said earlier this week, deep down both parties know major economic upheaval is coming and that the current iteration of global capitalism must change into something much more sustainable and inclusive.

Despite the posturing we see a possible convergence in UK politics centred on the notion that power, opportunity, ownership and wealth needs to be shared more broadly, especially in the face of disruptive technological change and environmental crisis. But this is not the cosy middle ground of yesteryear. We’re going somewhere very new and no amount of political conservatism or traditional socialism will stop it.

Co-ops are by far the best tool we have for applying social responsibility, solidarity and democracy to decision-making in a market setting.

Co-ops and markets

The emergence of the misleading ‘free market vs state’ narrative over the past week prompts us to clarify how co-op can relate to markets. Here are a few propositions (provocations maybe) to help us do this:

- First off, there is nothing inherent in free market exchange that contradicts our co-operative values, though too many mass markets driven by big money currently operate in ways that are dangerously unfair and irresponsible. Crucially 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. We should be clear: 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 inform many of our economic choices. 

- Co-ops are savvy businesses that compete very effectively in markets. But as organisations that create member value rather than shareholder value and empower workers, producers, consumers and communities instead of investors, co-ops cannot be considered capitalist. So, corporate capitalism can’t simply be equated with free markets and doing so only adds damaging confusion to important economic debates.

- 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. 

- At the same time we must champion the growing number co-ops and related practices, such as participatory economics and the commons, that create pockets where economic exchange can take place outside of mass markets altogether. These can deliver huge environmental, economic and social goods. They tend to operate at a very local communal level or in the ‘de-commodified’ collaborative economy. Digital technology is making this easier than ever.

- We should also be very clear that 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. Co-ops offer a practical, democratic way to organise activities and resources in these spheres around the pillars of relationships, reciprocity and community.

Click here to read in full our 'Co-ops and markets: eight provocations'

An inclusive economy for the common good

Rather than being defined by divisive party politics, co-ops should demand a bold political consensus around the idea of a genuinely inclusive economy for the common good, in which individuals are free to flourish without their life chances being determined by disadvantage, prejudice or privilege, where solidarity and community are strong, and where we all live well within the capacity of our planet. We don’t need ‘isms’ to do this, we need practical solutions.  We need co-ops. 

Some people 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. What should not be doubted is that if co-ops do become significantly more prevalent in every aspect of economic life, this will constitute a significantly transformed, more inclusive and more sustainable economy for the common good. Politicians across the spectrum should focus less on the ‘isms’ dear to their base and work together to achieve this, before developments overtake us completely. 

Let us know what you think, either by emailing me direct or posting on the Facebook discussion.

Thank you for supporting our policy work through your membership of Co-operatives UK. 

James Wright, Policy Officer

Written by James Wright
Updated: 05/10/2017