Humanizing the Economy Through Co-operatives

In Humanizing the Economy: Co-operatives in the Age of Capitalism, John Restakis argues that for those who believe in a just, equitable and humane future that the worldwide co-operative movement is positioned to convert these aspirations into a reality. This realisation is equally dependent, however, on those inside and outside the co-operative movement accepting this possibility.

His challenge for those inside the co-operative movement who accept things as they are and do not have aspirations beyond the status quo. His challenge for those outside the co-operative movement who do not have an alternative economic program and who, instead, pursue models that are not alternatives.

Restakis  is Executive Director of the British Columbia  Co-operative Association in Canada.  A previous book by the author is The Co-op Alternative: Civil Society and the Future of Public Services, Institute of Public Administration of Canada, 2001.

 

"This book is about an alternative. It is a story about how a revolution in human society that began with the rise of democracy in politics continues to unfold as the democratic idea struggles to find its place in the world of economics. If economic democracy is the hidden face of this ongoing revolution, then the history of the co-operative idea is its most durable expression. ( pp 2-3) He argues that  co-operatives are "by far the most durable and most powerful grassroots movement in the world. Co-operatives employ more people in democratically run enterprises than all the world's multinational companies combined. " ( p 3

Restakis argues that alternatives do exist to the self-regulating market. "The effort to construct economic systems with a more human face has been attempted since the dawn of the industrial age" and that all these efforts "reflect the attempt to transcend the self-regulating market by consciously subordinating it to the needs of society through democratic means." ( p 26)

Restakis concludes "that the most enduring and the most promising of these efforts is the use of co-operation as a model for economic and social exchange and the use of reciprocity as the basis for both economic and social reform." ( p 26)

What he attempts to do in the book, therefore, is "to show why this is true, how the co-operative experience is being played out in both advanced industrial societies and in developing ones and in what ways the co-operative movement worldwide is succeeding - and failing - in its mission to construct a humane alternative to free market capitalism." ( p 26)

Restakis provides a profile of real-world examples of co-operative movements that are making a difference:

• Emilia Romagna's co-operative economy in Northern Italy
• Argentina's recovered factory movement
• Japan's consumer and health co-operatives
• Sri Lanka's small farmer movement for fair trade

 The examples of the co-operative movement experience in four countries is convincing about their impact in these countries but not in themselves conclusive about how worldwide the co-operative model could displace capitalist enterprise.

There is, however, further relevant evidence provided by the International Co-operative Alliance of the extent and role of co-operatives beyond the countries examined by Restakis:

• Finland's S-Group has a membership of 1,468,572 individuals - 62% of Finnish households.
• In France, 23 million people are members of one or more co-operatives - 38% of the population and 75% of all agricultural producers are members of at least one co-operative. The co-operative movement has a turnover of 181 billion Euros. Co-operatives handle 60% of retail banking, 40% of food and agricultural production and 25% of retail sales.
• In New Zealand, 22% of the gross domestic product (GDP) is generated by co-operatives - responsible for 95% of the dairy market, 95% of the export dairy market, 70% of the meat market, 50% of the farm supply market, 70% of the fertiliser market, 75% of the wholesale pharmaceuticals and 62% of the grocery market.
• In Norway, agricultural co-operatives hold 96% of the market for raw milk , 55% of the cheese market, 80% of the timber market, over 70% of the egg market and 52% of the seed market. The 130 consumer co-operatives have 24% of the consumer market, 71 co-operative building and housing associations hold 15% of the housing stock in Norway and in urban areas like Oslo hold 405 of the housing market.
• In the United States more than 900 rural electric co-operatives deliver electricity to more than 42 million people in 47 states - 42% of the US electric distribution lines and 75% of the US land mass.

Restakis  concludes about Japan, for example, that with 17 million members consumer co-operatives are the largest consumer movement in the world. ( p 118) More recent statistics from the Japanese Consumers' Co-operative Union strengthen the argument. In 2009 there were 606 consumer co-operatives with 25,839,000 members.

He also refers to health co-ops in Japan - 120 co-operatives with three million members, 13,000 beds, 1,635 doctors and 21,000 other staff. ( p 129) According to the Japanese Consumers' Co-operative Union, in 2009 there were 115 health co-operatives with 2,707,413 members, 12,460 beds, 1,957 doctors and 29.936 other staff.

He argues that "the co-operative vision is contending at a global level with factors that in many ways mirror the conditions of the early co-operatives of newly industrialized England. " ( p 54)

He quotes Stefano Zamagni, Professor of Economics, University of Bologna, Italy,  who argues that there are three possibilities for the co-operative model: ( p 250)

• The co-operative model will continue as it is today - an alternative operating in restricted sectors or pockets of the market.
• Co-operatives will in time become extinct - inherent inefficiencies and anomalies will drive it further to the periphery of economic life.
• The co-operative model will eventually increase its power and influence and will in time come to displace the capitalist enterprise as the primary engine of economic activity.

Restakis is hopeful that the co-operative model will gradually gain ascendance and he believes that this rests on three factors. " The first is the changing nature of advanced capitalist societies and the transition from scarcity to post-scarcity economics. The second is the accelerating crisis of environmental degradation and resource depletion. The third is the growing movement for global justice and the search for economic models that institutionalize fairness." ( p 251)

Restakis does not refer to the International Labour Organization report by Johnston Birchall and Lou Hammond Ketilson - Resilience of the Co-operative Business Model in Times of Crisis. Published in 2009, the report concludes that in response to the financial and ensuing economic crisis - financial co-operatives remained financially sound, consumer co-operatives were reporting increased turnover and worker co-operatives were seeing growth. The report observed that this all indicated that co-operatives are a sustainable form of enterprise able to withstand crisis - confirming Restakis' optimism.

John Restakis, Humanizing the Economy; Co-operatives in the Age of Capital,  New Society Publishers, 2010, Paperback ISBN: 978-0-86571-651-3

)