Sunday, 18 March 2012

Co-operative Capitalism: A Straw Dog in a Paper Kennel

As part of its Think Piece series, Co-ops UK recently published a pamphlet by star Cambridge economist Noreena Hertz. It sets out a view that the current era of what Hertz calls 'Gucci Capitalism' will and should be followed by the ascendancy of 'Co-op Capitalism', which is characterised by four ideas in action:

- Community is valuable of itself
- The network has worth
- How we interact matters and
- Collaboration can trump competition.

This is interesting, because as far as I know capitalism is a system  for valorising, monetising and capitalising on human creativity, community, collaboration and networks. The nature of the beast is that the portion of peoples' work (not to mention natural resources) capital doesn't compensate for in the form of a social wage, is what it takes and transforms into profit.

To put it another way, if we all worked to our contracts and didn't donate unpaid labour to the masters of the universe by collaborating, co-operating, thinking creatively and generally behaving like human beings rather than robots, capitalism would fall over tomorrow. Hertz and those moral economists and pundits, from Will Hutton to Phillip Blond, who see co-operation as a cure for capitalism's malfunctioning - well, they've got it the wrong way round. Co-operation is both absolutely necessary for capitalism, and one of the last aspects of humanity that capital hasn't completely worked out how to colonise.

Isn't it interesting that the word 'capitalism' is back in the papers, after its twenty-odd year retreat to a cave somewhere on the tundra of the left? Only now, it's capitalism's supporters and improvers who use its name, not so much its opponents. Although usually the term isn't seen on its own, but qualified. So the main debate in the papers and blogs isn't about capitalism as such - it's about 'good' versus 'bad', 'predatory' versus 'sustainable', 'short termist' versus 'long termist', 'ethical' versus 'exploitative' capitalism. Which tends to crowd out any talk of anything else, and that's probably the point.

I don't think Co-operatives UK was completely wrong in putting the pamphlet out. These Think Pieces are part of its mandate to 'mainstream' the movement and stimulate fresh thinking (God knows, we were starved of that for a long time). Hertz is, they say, a heavyweight economist, though I don't rate her as a commentator (she was prescient on the debt crisis! Big deal!) 'Gucci' versus 'Co-op' capitalism is a prime slice of mystification pizza. But it got me thinking. It scrapes on the reef of one or two movement taboos. The co-op movement is a 'broad church' - a political home for all kinds of socialists, anarchists, millenarians, liberals, greens, feminists and displaced persons, as well as normal people; but the deal is that nobody mentions the c-word. When we really do start to take lumps out of Barclays, Tescos, Ben & Jerry's and Powergen, it will be interesting to see how our co-operative unity is tested.

To get to that point, we should worry not at all about making capitalism more co-operative, and focus minds and acts instead on making co-operatives more co-operative, so we can make them a better vehicle for meeting peoples' real and self-defined social, cultural and economic needs. The values and principles are a very powerful formula. Developed over decades and continents through trial and error, as Ed Mayo says the real movement is 2% theory and 98% practice. Hertz's pamphlet demonstrates little understanding of co-operation as a social change movement, but maybe our own is a bit perfunctory in the day-to-day. Scratch a bit below the surface of action principles like democracy, autonomy and member economic participation - get below the 'lowest common denominator' definitions of co-operative identity - and you'll find ideas and methods, not just for running half-decent capitalist enterprises, but also for understanding capitalism and the ways humanity can overcome it.

The pioneers didn't only set out to run a good shop; their stated and realistic desire was also to overturn the system of politics and economics.

You can download Noreena Hertz's pamphlet at


  1. excellent blog Sion and great response to Noreena Hertz's piece. This kind of discussion, and the mainstream interest it generates,  is exactly the reason why Co-operatives UK does and should  publish these papers and think-pieces.

    For me ( in a personal, entirely non work) capacity, your response raises two questions.

    1. There seems to be a new collaborative economy emerging - from pop up shops to the rise of freelancers collaborating, independent businesses like local bookshops coming together to the activism of move your money or Occupy. The question is, is this emerging collaborative  economy capitalist or anti capitalist?

    My feeling is that it's a spectrum - some of it is capitalist, some entirely anti capitalist, most inbetween. But all are very much an example of how people are working together, sharing for mutual benefit more than ever (take for example - a conventional private business that employs 100 people and supports 2,500 small independent creative businesses  - it's capitalism, but one that supports good, interesting, meaningful, local work).

    So maybe your blog highlights the diversity of the new collaborative economy and the fact that it cannot be easily slotted into a category.

    2. Are co-operatives, as opposed to this collaborative economy, capitalist or anti capitalist? Although co-operatives can be anti capitalist, if they give a vision or strategy for economic and political change alongside their business needs, most don't and in fact compete within a capitalist system against capitalist businesses, often working with and for capital.

    At best co-operatives seem to be kind 'a-capitalist'. They can create an island within the existing capitalist system that as far as possible is not colonised by capital or its values of individualism and short term private profit. At the same time though, co-operatives do work with and for capital and so are part of that system. perpetuate the capitalist system.

    So, basically Noreena's paper and your response Sion, raise questions and highlight the fact that the emerging collaborative economy and co-operatives are organisations that operate in the real world and cannot easily categorised into capitalist or anti capitalist ideal types.

  2. Absolutely agree, Sion about the important task being to make co-operatives more co-operative rather than trying to make capitalism more co-operative. One of the problems in this debate seems to me that people use the term capitalism quite loosely. My dictionary defines it as ‘dominance of private owners of capital and production for profit’ or (probably rather over-) simplifying Marx: Capitalism uses money to make things in order to make money. The co-operative business model is based on people using money to make useful goods & services for people. So promoting the concept of co-operative capitalism is like promoting the latest fox&chicken coop :-)
    Giles point about whether co-operatives are capitalist, anti-capitalist or a-capitalist I think can be addressed by recognising that the co-operative sector is indeed a broad church – or a continuum where some co-operatives are more co-operative than others. I think the most important task is to explore ways of helping co-ops move along the continuum – so they become more of a challenge to capitalism and can more effectively – as the IYC2012 logo has it – ‘build a better world’.

  3. Thanks Kate, Giles - I was worried that I should have made the post 5 times longer to explain the view that capitalism depends on co-operation, but co-operation is a social technology that could help us overcome capital. You both get it, and thanks for helping make the point clear. Calverts has paid 20 times more to rentiers and bankers than it has retained as surpluses, but that slim 5% financed the relative autonomy which enabled the members to provide 'decent' jobs. Although anticapitalist attitude was perhaps more crucial.

    1. ""Calverts has paid 20 times more to rentiers and bankers than it has retained as surpluses, but that slim 5% financed the relative autonomy" This statement illustrates an important point; probably a reason why the Worker Coop sector has never developed beyond being a tiny sector. They mainly exist as isolates and unwitting are organizational egotistic. If the rents, loan repayments plus interest had been payed by primary Worker Coops to secondary democratic commonwealths as some form of financial coop and cooperative land/building trust of which the primary coop was a member/ stakeholder then some of the benefits of the payment of 95% would feedback from the secondary coop to the primary coops and it members. Coops in all shapes and forms are likely to thrive in association with each other and where there is a high density of mutual enterprises. One hopse that coop folk are on the case.

      Never mind the triangulation stuff coming from some quarters, if a more radical and traditional aspiration to build a commonwealth of worker and multi stakeholder coops is there then there is the challenge to taking this from the "utopian" into a practical reality. The problems are there and people are in pain; from Merther to Middlebrough. AW

  4. For me the debate about whether cooperatives are capitalist or anti-capitalist is somewhat sterile. Right now we all swim in a capitalist ocean, and while we work to build islands of cooperation, they are necessarily dependent upon the ocean for their existence.

    The financial/economic crisis, peak oil and climate change (all of which are interlinked) has highlighted some of the key weaknesses of the current dominant model. The people of Greece are seeing the sharp end of that failure right now. The cooperative model offers robust people-centred solutions and is gaining favour from what we can see. In the wake of the crisis, social movements such as Transition, the growth of community renewables and the collaborative economy that Giles mentions are all part of a bigger shift that is discussed in Jeremy Rifkin's "Third Industrial Revolution" that I would encourage you to read. Giles - you should try to get him as a keynote at the Cooperatives United do in the autumn. for me he is bang on the money. "The future is distributed and collaborative"

    For me Hertz's piece was a useful contribution, in that most can't conceive of a world without capitalism, so in that case it seems fair that we should be presenting a paradigm that says "OK, let's just have a different type of capitalism. We'll call it cooperative capitalism." That's just presentational stuff.

    The shift towards a network-centric paradigm, facilitated by the internet and global ubiquity of low cost digital tools, takes power from old-school capitalist models and hands it to consumers and communities. It is inevitable, although not without its struggles, the more prominent among them including the current battle over obsolescent copyright law being fought by "Big Media". In Europe the Pirate Party is the fastest growing political group, and much to the chagrin of the old established parties, it has captured the attention and support of the under 25s, the digital natives that live in a Wikinomics world. These are the people that will build the cooperative commonwealth of the future.

  5. Agree with your first point Graham. A 'straw dog' is a flimsy or irrelevant business idea, asking to be to be knocked down, and that's what I think Co-operative Capitalism is. It's a linking of two ideas on the basis of empty parameters, like a faulty database macro. The trouble is, the connection isn't quite as obviously beside the point as 'Co-operative Pajamas' or 'Co-operative Religion'. But I think people like Hertz genuinely want to save capitalism, so it's not merely presentational. The real questions, as you point out, are about how fit the co-operative principles are as a practical guide to collective action in the face of big changes like the flight of jobs, skills and wealth to China and the 'emerging' capitalist economies; the emergence and contestation of disruptive and potentially revolutionary technologies; resource depletion, intensifying alienation and social atomisation.