The first is a paper by Noreena Hertz who is an economist and has written a best-seller called “The Silent Takeover.” Professor Hertz’s 2005 best-seller “IOU:The Debt Threat” predicted the 2008 financial crisis.
The paper is entitled Co-op Capitalism and proposes that we are in a situation where it is possible that a new economic model could rise from the ashes of the old, spent model.
Professor Hertz believes that we have seen many economic upsets over the decades but this time it is different: it is world-wide, there are no winners and it is affecting a huge number of people.
She argues that there are three reasons for the end of capitalism as we know it:
- For the first time in 30 years we are thinking differently about our approach to the economy and the relationship between the state and markets. That thinking is reflecting a “..greater emphasis … on economic, environmental and social justice and more critical analysis of the previous system than we have seen for decades”
- Previously regulation was a dirty word, an imposition on markets which it was believed could self-regulate. Now more people are convinced that there has to be intervention and it is only right that the state should reign in organisations which are acting against the public interest. This does not only include banks but for example, could include fast food outlets. Denmark has introduced a junk food tax. Food manufacturers have to pay this if their food includes more than 2.3% saturated fat
- The balance of power in the world is moving increasingly towards China, Brazil and India, countries which have different attitudes to the form of capitalism which has dominated western countries. In these countries and Russia, “…15% of their population are member-owners of co-operative enterprises, compared to less than 4% who are shareholders”
Professor Hertz posits ‘co-operative capitalism’ as an antidote to the previous system, for the following reasons:
- the co-operative model emphasises “the collective” because it values individuals and the societies which they make up, by ensuring public goods are accessible to all
- it reflects the thinking that it is not just the bottom line that matters, and that how you do business is important, i.e. values-led business
- it values the connections we make with one another and recognises that more can be achieved as a result
- it values collaboration over competition, encouraging joint working and supportive relationships within the work-place. I have just read an article by Brian Cox about CERN. It is a wonderful article in its own right (you can read it here: http://www.newstatesman.com/sci-tech/science/2012/12/coldest-place-universe). His enthusiasm for what has been achieved through collaboration is compelling.
Professor Hertz makes the point that the value in co-op capitalism is that it better reflects our basic human instinct: “Anthropological studies show that societies that have less, share more.” Neuroscience research is indicating that we derive contentment from helping others.
She accepts that we have a long way to go but gives examples of where this is already happening, for example, the global “free cycle” movement where people are giving away things rather than selling them, the rise of sharing websites, the growth in Japan where people are preferring to job-share rather than lose colleagues.
There is scepticism about what the co-operative movement can deliver from some quarters. Yet, it already is delivering: in Quebec the leading employer, is a financial co-operative. In Switzerland, the largest private employers are co-ops. Here in the UK we have 12.8 million members turning over £32 billion. The same is true of Africa, where one in 13 people are involved in co-ops.
Additionally, co-operatives have staying power, even in the face of the present financial difficulties and people trust them: “79% of shoppers in the UK believe co-operative enterprises will act fairly, compared to only 18% for business at large.”
The message is loud and clear, co-ops are back and they are here to stay.
The paper can be downloaded here
“Co-operatives UK works to promote, develop and unite co-operative enterprises. It has a unique role as a trade association for co-operatives and its campaigns for co-operation, such as Co-operatives Fortnight, bring together all those with a passion and interest in co-operative action.”