Co-operative economics — BrandWiki

Co-operative economics — BrandWiki

Cooperative federalism versus co-operative individualism

A major historical debate in cooperative economics has been between cooperative federalism and co-operative individualism. In an Owenite village of cooperation or a commune, the residents would be both the producers and consumers of its products. However, for co-operative enterprise other than communes, the producers and consumers of its products are two different groups of people, and usually only one of these groups is given the status of members (or co-owners).

The differences in goals, purpose, and power between worker and consumer cooperatives has led to a debate between those who support consumer co-operatives (known as co-operative federalists) and those who favor worker co-operatives (pejoratively labelled 'individualist' co-operativists by the federalists[93]).[94]

Cooperative federalism

Cooperative federalism is the school of thought favouring consumer cooperative societies. Historically, its proponents have included JTW Mitchell and Charles Gide, as well as Paul Lambert and Beatrice Webb. Co-operative federalists argue that consumers should form co-operative wholesale societies (co-operative federations in which all members are co-operators, the best historical example of which being CWS in the United Kingdom), and that these co-operative wholesale societies should undertake purchasing farms or factories. They argue that profits (or surpluses) from these co-operative wholesale societies should be paid as dividends to the member co-operators, rather than to their workers.[95]

Cooperative individualism

Cooperative individualism is the school of thought favouring workers' co-operatives. The most notable proponents of workers' co-operatives are, in Britain, the Christian socialists and later writers like Joseph Reeves who put this forth as a path to state socialism.[96] Where co-operative federalists argue for federations in which consumer co-operators federate and receive the monetary dividends, rather, in co-operative wholesale societies the profits (or surpluses) would be paid as dividends to their workers.[95] The Mondragón Co-operatives in Spain are commonly cited by co-operative individualists and a lot of co-operative individualist literature deals with these societies. The Mondragón Cooperative Corporation has drawn so much attention because in 2010 it was the seventh-largest company in Spain. It consists of about 250 different worker cooperative businesses. The business model they use includes "extensive integration and solidarity with employees", worker involvement in policy and committees, a "transparent" wage system, and "full practice of democratic control".[97] These two schools of thought are not necessarily in opposition, and hybrids of the two positions are possible.[95]

Other schools

Socialism and anarchism

Socialists and anarchists, such as anarcho-communists and anarcho-syndicalists, view society as one big cooperative, and feel that goods produced by all should be distributed equitably to all members of the society, not necessarily through a market. All the members of a society are considered to be both producers and consumers. State socialists tend to favor government administration of the economy, while anarchists and libertarian socialists favor non-governmental coordination, either locally, or through labor unions and worker cooperatives. Although there is some debate as Bakunin and the collectivists favored market distribution using currency, collectivizing production, not consumption. Left libertarians collectivize neither but define their leftness as inalienable rights to the commons, not collective ownership of it, thus rejecting Lockean homesteading.

Utopian socialists feel socialism can be achieved without class struggle and that cooperatives should only include those who voluntarily choose to participate in them. Some participants in the kibbutz movement and other intentional communities fall into this category.

Co-operative commonwealth

In some co-operative economics literature, the aim is the achievement of a co-operative commonwealth, a society based on cooperative and socialist principles. Co-operative economists – federalist, individualist, and otherwise – have presented the extension of their economic model to its natural limits as a goal.

The term "co-operative commonwealth" came into more-general use due to Laurence Gronlund's popular 1884 book, The Cooperative Commonwealth.

This ideal was widely supported in early-twentieth century U.S. and Canadian leftist circles. Upton Sinclair's 1924 book Millennium envisions the few survivors of an apocalypse forming a "co-operative commonwealth." Gronlund's ideal, and the language behind it, were central to the formation of Canada's Co-operative Commonwealth Federation party in 1932, which became Canada's largest left-wing political party, and continues to this day as the New Democratic Party. His ideas were also important to the economic principles of the Farmer-Labor Party of the United States, particularly in the FLP's Minnesota affiliate, where advocacy for a co-operative commonwealth formed the central theme of the party's platform from 1934, until the 1944 founding of the Democratic–Farmer–Labor Party.

Co-operative commonwealth ideas were also developed in Great Britain and Ireland from the 1880s by William Morris, which also inspired the guild socialist movement for associative democracy from 1906 right through the 1920s. Guild socialist thinkers included Bertrand Russell, R. H. Tawney and G. D. H. Cole.

Employee ownership

Some economists have argued that economic democracy could be achieved by combining employee ownership on a national scale (including worker cooperatives) within a free market apparatus. Tom Winters argues that "as with the free market more generally, it is not free trade itself that creates inequality, it’s how free trade is used, who benefits from it and who does not."[104]