Co-oppundit 2012

WHY WE NEED CO-OPERATIVES AND MUTUALS MORE THAN EVER BEFORE

Co-operation is an activity that is based upon the concept of ‘self-help and mutual-help’ - people coming together to get a better deal rather than just hoping that a commercial business, a charity or the state, will do something for them. Co-ops & mutuals are uniquely positioned to act in the collective best interest of their members. Only co-ops & mutuals have the inherent commitment to serve the ‘common interest’, which is the basis of membership. There are many situations where co-ops & mutuals offer the only credible option for redressing failures within the market. In many cases the existence of effective co-ops & mutuals ensures that a degree of balance is maintained within the market wen all of the other participants modify their behaviour if a co-operative or mutual provides an alternative.

Engines for growth

Nations waiting for investors to revitalize their economy could have a long wait and are likely to be falling behind in terms of their competitive position in the world. It need to be understood that globally mobile capital has no home and gravitates to where profits can be maximised. All nations need to deploy the best available engines for growth, if they are to be competitive. Where nations are totally reliant upon a single model of enterprise, especially when it is the investor-controlled model, they are likely to remain in the economic doldrums for the foreseeable future. Reliance upon the investor-controlled model is a high risk strategy for any nation. Investors are not seeking returns from investments in the real economy, which is the result of investing in efficient and profitable businesses. Instead, they are chasing super-profits generated by speculating on the movement of share prices and commodities.

So what are the alternative engines for growth? Other models of enterprise include the state model, which has been tried and almost universally discarded. Then there is the member-controlled enterprise model, which is at the heart of all co-ops & mutuals, which is the model that drives a range of different of forms of enterprise, including: co-operatives, mutuals, community enterprises, etc. The advantages of co-ops & mutuals include the fact that they are fuelled by the needs of their members, they operate entirely within the real economy and have a geographical home (a commitment to a specific place). Also, they are based upon self-help and mutual help, and can provide the opportunity for economic empowerment when business investors are moribund. They are designed to deliver whatever outcomes their membership determines, this can be a better deal, a more honest deal, better housing, better health, a better education, a decent job, or securing access to services (for example in rural areas), etc.

The incapacity of the State

The belief that the State has an infinite capacity to solve all of our big problems is now being replaced by a new sense of realism. People now realise that even governments can become bankrupt and cannot keep on borrowing to pay for current expenditure. We now need to accept that many of our most essential needs may in future only be met if we deploy self-help and mutual solutions. Co-ops & mutuals should expect to have a more important role in all of our futures. However, they shall need to become far more effective in terms of delivering outcomes that ordinary people really want.

Co-operatives and mutuals - to be valued for what they deliver
last updated: February 2012 © Edgar Parnell 2012