Review of Co-operatives in a Post-Growth Era

Co-operatives in a Post-Growth Era : Creating Co-operative Economics
Edited by Sonja Novkovic and Tom Webb

London: Zed Books, 2014, 312 pp.

Review by Eric Laursen

bokk3jpgCo-operatives—not to be flippant—are big business. They exist in 100 countries, have more than 800 million members, and provide some 100 million jobs. Co-ops market half the world’s agricultural production, and 120 million people in 87 countries go to credit unions for their banking and financial services needs. Health care co-operatives service some 100 million people in more than 50 countries. In the U.S. alone, some 30,000 co-ops provide over 2 million jobs; in Kenya, 63 percent of the population derive their living from co-ops, directly or indirectly.

The co-operative economy is huge, but it’s generally invisible in the corporate news media, where it’s either ignored or where co-ops are identified more or less generically as businesses, leaving out their distinctive method of governing and setting goals for themselves. Yet some studies show that co-ops are more robust than standard, shareholder-owned businesses during periods of economic crisis. Employment in co-operatives grew 8 percent in Italy from 2007 to 2011—a time when services, the only industrial sector that increased employment, grew only 3.2 percent.

Co-operatives get beyond “the either/or of top-down management versus laissez-faire,” which “for centuries has taken humanity in the wrong direction,” argues Co-operatives in a Post-Growth Era, a new book from which the numbers above are taken. They are more effective at promoting equality and broad public welfare than the welfare state, better at distributing goods and services than the capitalist economy, and more effective at long-range economic planning than either. They are locally controlled and focused, not run by a global managerial elite. Co-ops are less prone to create debt bubbles and financial instability that can crash the economy, respond better to non-financial considerations like the health of the ecosystem, and don’t depend on relentless growth to improve living standards.

What are co-operatives? Sonja Novkovic and Tom Webb, professors at Saint Mary’s University in Winona, Minnesota, and editors of the new book, don’t offer a precise definition, because co-ops come in different forms in different places. But they are unlike other businesses in that they aim to meet both member and community needs, not just those of shareholders. They can be owned by workers, consumers, families, or community members. They tend to be run more democratically than shareholder-owned businesses.

Unlike capitalist enterprises, co-ops value each member’s welfare, not just the flow of profits to shareholders. “This is a business model that reflects the fullness of the human spirit rather than simply the acquisitive slice of individualism,” Novkovic and Webb write.

The editors, and the 16 other academics and co-op members who contributed to Co-operatives in a Post-Growth Era, want to see co-ops grow and proliferate, taking on more of the functions of the privately-owned and state-owned enterprises that dominate most economies. Although they don’t use the word, the model they sketch out is very close to the one that Pierre-Joseph Proudhon, the pioneering French anarchist, outlined more than 150 years ago, and which came to be known as “mutualism.” Proudhon envisioned an economy made up of small co-operative producers, community collectives, and other affinity groups, democratically run, that could also federate at the regional and national levels to carry out large-scale projects that they can’t carry through on their own. He envisioned a “people’s bank” that would supply credit to these small entities instead of favoring the largest capitalists and speculators.

Proudhon would have agreed fully with one of their contributors, Vera Negri Zamagni, professor of economic history at the University of Bologna, that a “basic theoretical flaw” of Marxist-Leninism was “that it confused capitalism with the market as such, a misconception that the theorists of capitalism themselves had engendered when they spoke of the ‘iron laws’ of the market, which were in fact the laws of capitalism.” The market predates capitalism and “is an indispensable prerequisite for economic progress,” Negri Zamagni writes, “but the market may be institutionalized in a number of different ways, and the capitalist way is only one of the possible forms.” Proudhon, however, insisted that a society built on mutual aid—even one that retained markets—would have to eliminate capitalism and the state. Novkovic, Webb, and their collaborators don’t go that far.

“The question here is not one of ‘eliminating’ capitalist enterprise,” Negri Zamagni argues—“this can continue to operate in those areas characterized by high levels of standardization and mechanization in capital-intensive sectors.” We merely need to “prevent capitalist enterprise from taking over those areas of economic activity where the quality of human relations and the role played by the human factor are of key importance.” Does that mean that the more capital-intensive the activity, the less it ought to consider the “human factor?” Zamagni doesn’t say. Yet another contributor, Stefano Zamagni, professor of economics at Bologna, suggests that co-op managers could be “seized by the mania for emulation and a sense of inferiority and stress monetary incentives only” for the co-op members—turning them, more and more, into mere employees.

We’ve seen this happen time and again: a co-op gradually transforms into a standard, for-profit business as its managerial structure becomes more hierarchical and professionalized. The solution, says Negri Zamagni, is to install a form of corporate governance—“democratic stakeholding”—that, presumably, includes non-members who are affected by the co-op’s activities. But she never defines the terms “stakeholding” or “stakeholder,” nor are they clarified elsewhere in the book. So the authors never really address the problem of how to keep co-ops on the straight path of direct democracy and community accountability.

Or, for that matter, how to develop a culture that can stand up to the pressures exerted by the much larger capitalist economy: consumerism, social atomization, and the depoliticization that accompanies the ever-increasing pressure to maintain an acceptable standard of living. Reading this book, many people will be surprised to learn that co-operatives make up as big a chunk of today’s economy as they do. If their role is to grow into something economically transformative, however they must become more than just relatively benevolent, democratic places to work. In the early 20th century industrialized economies, unions, mutual aid societies, and worker- based political parties created an alternative, cradle-to-grave culture that included unionized workplaces, co-ops, and extensive benefits systems for workers and their households. The people who lived within these webs of association didn’t need to feel dependent on the larger capitalist economy—not so much, anyway. Are today’s co-ops creating anything like this? Without knowing the answer, we can’t know possibly the most important thing about the place of co-ops in today’s economy: whether they play a role in the creation of desire. What enables capitalism to continue generating big profits is its capacity for instilling new desires in the population—the perceived need for the latest gadget, toy, fashion, financial instrument, or “lifestyle” choice. Co-operatives may enable workers to earn a better living in a more democratic setting, but do those workers live differently from the rest of the people in any other respect? Do they have more of the leisure time that’s needed to take an active role in making decisions for their community? Or do they use their earnings to cut a better figure in the consumer economy? Are co-ops, in other words, creating a new society, or just making it easier to live in the present version?

Given the size of the co-operative economy, it’s also worth asking what keeps it from becoming more dominant. Negri Zamagni tells us that high capital requirements make it harder for co-ops to compete in manufacturing, for example, while state-owned enterprises and large corporations with access to capital and political power crowd out even those co-ops that could otherwise compete.

Another contributor, Neva Goodwin, co-director of the Global Development and Environment Institute at Tufts University, proposes some general reforms that might correct the balance: greater government support for co-ops, a more progressive tax structure, prioritizing sustainable development, recognizing the value of unpaid work, getting money out of politics.

These measures could help restore something of the (limited) commitment to social and economic justice that the U.S. embraced in the New Deal and Great Society eras. But that may be asking a lot, given that the state today is more thoroughly dominated by capital than ever. It’s also not clear exactly how this would enhance the economic role of co-ops.

What’s missing from Co-operatives in a Post-Growth Era is any suggestion that co-ops themselves need to change if they are to take on a larger social role—for instance, becoming more inclusive of people from disadvantaged communities, and using their unique ability to collaborate and scale up, while retaining local control, to take vital infrastructure projects out of the hands of the state or the corporate economy. If they do not, but their economic footprint does grow, they are more likely to find themselves in direct competition with each other. Will they then move toward a more collaborative approach—or compete more aggressively, and in so doing, take on a more “corporate” profile?

None of this is to say that co-ops aren’t doing good work just as they are. Novkovic, Webb, and their co-contributors make a strong case that the difference between co-operatives and the corporate sector is not cosmetic: they are motivated differently and behave in fundamentally different ways. An economy with a heavier co-op presence would be more equitable, humane, and environmentally friendly. But they leave me skeptical that co-ops, unless they take on a larger social role and consciously work to displace the corporate sector, can form the building blocks of a post-capitalist, post-state economy based on mutual aid.



Eric Laursen is an independent journalist and activist whose articles have appeared in In These Times, Huffington Post, and Z.