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Cooking the Books 2: Co-opting the Co-op.

Co-opting the Co-op

Robert Owen, the person who introduced the word “socialism” into the English language, must be turning in his grave. “What we have to create is a different kind of capitalism” read an extract in big type introducing an article in the Co-operative Movement Magazine (Autumn 2007). The author was Sir Jonathon Porritt (knighted for his services to Prince Charles).

In the article Porritt wrote of the “worsening inequality, collapsing eco-systems, negative climate change, unchecked self-interest, obscene spending on arms and war, the protection by world leaders of the inconceivably rich minority, and the failure of globalisation to deliver its promise to the world's poorest countries“ and that this provided “an ideal opportunity for the ethos of the Co-operative Movement to inform and inspire a very different kind of globalisation, one which puts people first, prosperity and planet next, and profits after that.”. He went on:

“The truth of it is that our particular model of capitalism today is stuffed! It's inconceivable that it could deliver the kind of equitable, sustainable society that nine billion people will be hoping to live in by 2050. However, capitalism is – quite literally – the only economic game in town. So what we have to create (ideally over the next ten years) is a different kind of capitalism  – and what better inspiration is there for that kind of transformation than the principles and practices of the Co-operative Movement?”

The theorists of the original co-operative movement saw it as a movement that would eventually outcompete and replace ordinary capitalist businesses, leading to the coming of “the Co-operative Commonwealth” (which was an alternative name for socialism, and not a bad one at that).

We know what happened. Instead of the “ethos of the Co-operative Movement” transforming capitalism, it was the other way round: the ethos of capitalism transformed the co-ops. This was because they had to compete with ordinary capitalist businesses on the same terms as them and so were subject to the same competitive pressures, to keep costs down and to to maximise the difference between sales revenue and costs (called “profits” in ordinary businesses, but “surplus” by the co-op). The co-operative movement was outcompeted and is now trying to survive on the margin as a niche for “ethical” consumers and savers, leaving the great bulk of production, distribution and banking in the hands of ordinary profit-seeking businesses.

Porritt says that it is not capitalism as such that is stuffed, but only “our particular model of capitalism”. But, in the end, there is only one model of capitalism: the one we’ve got, where production is in the hands of competing enterprises which are forced to reduce costs so as to maximise profits in order to have the resources to invest in further cost-cutting. Making a profit, not satisfying needs, is the aim of production, and as measures to protect the planet add to costs they are not taken.

The political and legal framework within which this economic system operates does vary, but the above is a feature of all possible forms or “models”. In all of them, profits can never take third place, as Porritt would like, to people and the planet. They must always come first, with the luxury consumption of the rich second, and the planet and the needs of the rest of the people third. To avoid the negative effects that he lists, the whole profit system itself must go.