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Can co-operatives beat capitalism? Part 2

There is now a great need for co-operatives. However, there are still problems. The rich and powerful will probably not want to give up power. The Occupy Movement made people think and new research shows that social problems come from inequality. ‘It’s what they really want out there on the streets of the Occupy Movement – to be active in their community and in their economy,’ says Dame Pauline Green, president of the ICA.

But inequality is growing almost everywhere and people in power refuse to do anything about it. In the US, with very strong belief in free markets, the incomes of the richest one per cent of Americans grew 58 per cent from 1993-2010 while the rest rose just 6.4 per cent.

Against scientific evidence, people still think that the market will solve its problems; economic growth and technology will save us. But people feel there is something wrong even if they can’t identify the problem. The middle-class have money problems; young people can’t find work or housing; the poor are increasing; social services are cut and the welfare state is broken down. People no longer believe in big government, big banks, big business, Wall Street and the City of London. Karl Marx wrote of the social change in his time that ‘all that is solid melts into air’. It is just as relevant today.

We need economic democracy. Marjorie Kelly, business critic, said: ‘Our politics and economy are so closely linked that we have lost political democracy because of lack of balance in wealth and ownership. We need to make the economic aspect of power more democratic.’

Co-operatives can help do precisely that. They are a way to make ownership democratic and to work against the inequalities of the market economy. The co-op model is difficult for the very competitive model of corporate capitalism to accept. But co-operatives show there is another way of organizing the market, where profit is not the only objective, and where, theoretically, everything is fair and people make the decisions.

But can co-ops actually push out capitalism? Erik Olin Wright, sociologist at the University of Wisconsin, believes they can really help to expand democratic space. Co-ops help rebuild the power of the public, and separate the market and the state. Wright talks of a two-way transformation where co-ops lead in developing democracy to help improve civil society and help improve the existing system.

Co-operatives can be the centre of a community and they can bring life to the local economy. When the owners of Fonderie de l’Aisne (in Trelou-sur-Marne, northeast of Paris), wanted to close it, a group of 22 former workers thought of a brave plan. They bought the factory and reopened it as a co-operative. Now they run the place. The workers are ‘really motivated and provide solutions to problems,’ says manager Pascal Foire. ‘We work for ourselves and for our own future.’ But for co-ops to have a real effect, Wright says we need some important policy changes. These include access to better credit markets and more financial links between co-ops themselves.

Mutual support definitely works. The massive Mondragon Co-operative, a $23-billion global operation in Spain’s Basque region, is a good example. Of the group’s 270 linked companies, only one has gone out of business during the current Spanish crisis. And all these workers were employed by other co-ops.

However, we live with an economic system that is against the spirit of co-operation. People see competition and efficiency as more important. Our system is, in fact, unco-operative, as it is based on individuals working for their own self-interest.

Ayn Rand (famous rightwing thinker) said capitalism is the best thing about freedom; Margaret Thatcher, when she attacked the “nanny state” (overprotective government) in 1987, said “there is no such thing as society”. The present Prime Minister, David Cameron is clever: in his “Big Society”, he is asking citizens to help each other as the state takes away money from social services.

But we humans are naturally very co-operative. We can survive well in every corner of this planet, from the frozen Arctic to the hot Australian outback. Martin Novak (Harvard maths and biology professor) says co-operation is the ‘master architect’ of evolution.

Of course, reality is not always like the theory. Co-ops work inside markets and rely on human beings to make them work. The competitive market is difficult and if you can’t compete, you don’t survive. Co-operation can sometimes become lazy and selfish. Co-operation for mutual benefit is a good idea, but it can be difficult.

Mark Pagel (evolutionary biologist) says in his recent book Wired for Culture that culture is made possible by social learning, which depends on co-operation. Evolution makes it easy for co-operation to work well inside groups – but not always between different groups.


Recent thinkers say that biology and evolution prove we are natural co-operators. Jorge Martin

The same motivation that makes people work together can also make people attack anyone who is different. There are many examples: Stalin’s Gulag, antisemitism in Nazi Germany, the killing in Rwanda and in ex-Yugoslavia. The co-operative motivation is strong and natural, but is not always positive. People can co-operate for bad as well as good. Street gangs co-operate, but so do medical teams. We need to make efforts to understand each other and break down barriers between groups.

Where factories are closed down, worker co-operatives can reopen them. The ‘recovered factories’ co-op movement is spreading in Latin America. There are 69 ‘recovered factories’ in Brazil, around 30 in Uruguay, 20 in Paraguay and several in Venezuela.

We have many problems, problems which need us to co-operate at a global level if we are going to survive the next century. Climate change, lack of resources, ecological collapse and increasing consumerism: these are challenges that not many business or political leaders have the courage to face. The UN is one attempt to unite the peoples of the world in a common project of peace and prosperity. It has been difficult to do this.

We can no longer afford the free-market problems of the past decade, the state-capitalist Chinese model or traditional communism. We have to do much better.

Co-operatives can lead towards a different economic model, where people control capital and not where capital controls people.

A little real democracy would be good.

As this article has been simplified, the words, text structure and quotes may have been changed. For the original, please see: