Emilia Romagna, Italy where a third of GDP is Coop

In a current  july 2016 edition of the magaze Yes there is an interesting Article on the co-operative element of the regional economy of Emilia Romagna,   This region of Italy has the highest density of  cooperatives in the world.  As such this example illustrates the current limitatios and obstacles to constructing an enonomy based on democratic governace of an economy, both collective and distributive.

A final concluding blog will follow, summing up the attempt to picture and establish the criterion which are needed to establish a viable process of self forming democratic enterprises to a significant extent and scale. The original question was : Is there a Mutual Road to Economic Democracy? The article in the Yes magazine implies that there is some more work and experimentation to do before such a process can make significant further progress. There are problems to be solved.

sorry link does not work please google Current Yes magazine or see link to Yes on left hand side of screen

 

Can the Cooperative Bank be saved?

Congratulations to the Save Our Bank  campaign, who are crowd funding to pioneer a novel approach to recovering the Cooperative Bank as cooperative, by creating a Customer Union for Ethical Banking. In some ways it’s even better than that as the Union is to be a multi stakeholder cooperative which includes the bank’s  workers , and also has the support of the Unite Union. The plan seems to make full use of electronic and network technology to faclitate membership involvement. An aim is to gradually build up a mutual shareholding in the bank. This has also has the support of the Ethical Consumer magazine.  Despite reservations here (blog/notebook)  about privileging the category of customer/consumer over other categories such as members and workers, they have never the less done a fine job,  moving to accommodate this criticism. Customers have a purchase over the market in proportion to their capacity to pay, governance of mutual enterprises are based one person one vote. All too often this is a dead letter. This concern will not doubt be dismissed as quirky. When these principles are operational the enterprise will tend to be more equitable and democratic .

We can lie down and be passive as our commons are destroyed, be they the environment, NHS, public sector, housing associations, cooperatives and mutuals, allowing the process of privatization.  Putting these assets into play on the Financial markets is a modern form of enclosure, this process always favours those well placed and already wealthy, with a following tail of petty beneficiaries but which usually does not reach beyond half the population.  Resistance to this process can be oppositional, based on protest or it can be proactive and based on counter positional activity, so constructive. Both are desirable

Setting up the Customer Union for Ethical Banking gives this a formal organization set up as a democratic enterprise. The objective to bring the Cooperative Bank under a significant element of cooperative governance will be a challenge. The Bank never was a cooperative but a PLC owned by the consumer Cooperative Group which remains a cooperative in a nominal way. The cooperative Group has a 20% stake. The CUEB will need the support of other stakeholders to have any influence. The very act of setting it up gives a platform that can be built upon and a change of circumstances might facilitate its aims. The enterprise plans seems to have the contingency that if the Cooperative Bank cannot be recovered as such, then other ways of recovering a cooperative banking will be explored. Whatever the outcome this is a brave and imaginative pioneering enterprise which we are obliged to try to support rather than just remain passive victims of financial corporate agendas. Let us try taking the initiative  to shape a better future by doing, even if it starts on a modest scale. This process is what is called action research for an evolutionary reconstruction (Alperovitz) towards a democratic economy. We learn by doing! We need a paractical movementent of counter enclosure to create new commons for socially and ecologically benign outcomes.

The Occupy movement generated  excitement and froth and now has faded.  The Union for Ethical Banking may be an idication of an evolution of the Occupy sprit into something more prosaic but practical.

 

Mutual Solidarity Micro Pension for an emergent Democratic Economy

  A back of envelope sketched plan : a mutual solidarity micro pension for an emergent Democratic Economy

The suggestions below were written half in jest in response to a questioner sent out by the Ethical  Consumer Their request were for ideas of what products they should pay attention to.  The response below instead is an attempt to define a way of what might make the productive process more “ethical”. How might a micro pension work which is inclusive and practical, to support a beyond capitalist economy, in an age dominated by neo liberalism? What follows is an attempt at an answer.

Lessons can be learned from the mainly working class practice often inspired by non conformity in the C19. They formed their own self-help enterprises based on mutual aid and mutuality, these were based on democracy, one member one vote before the right to vote for parliamentary elections was conceded to all adults.  They constructed their social enterprises by putting their pennies together in solidarity for the mutual benefit. This type of strategy is the basis of running friendly societies which provided welfare insurance before the welfare state, which itself was itself built upon these foundations. The pre condition of the modern welfare state was  pioneered by autonomous self-help mutual action.  The pioneering of autonomous social enterprises was well established as a  cultural practice. Can this be recovered in a modern form so that communities and workers can begin taking the initiative to build enterprises that provide work and benefits relevant to current needs? Historic enterprise based on these principles are mutual societies, cooperatives and trade unions. All these are ways to create a democratic financial “field” which empower objectives of member participants.  It is a way to underwrite the formation of a network of mutually supporting democratic enterprises committed to agreed principles.

A micro pension scheme as a secondary mutual enterprise can become a supporting hub to hold these relationships together. This can be a means of bringing democratic enterprises, (cooperatives)  in a mutually supporting relationship which also includes supporters as investors and customers. This thickens and extends the cooperative relationship both between cooperatives,  in all their forms, but also to their constituency of support such as investors and customers. For this to become viable and more extensive there needs to develop a “symmetry of benefits” for all stakeholders bound by democratic based governance. The relationship between stakeholders which can roughly defined as those between the  factors of  production, capital, labour, or land ( as environment) to be mediated though democratic governance so that each gets its appropriate dues. These, if these relationships are operative and alive, favour a culture of trust, supporting transparency, accountability, competent administration and membership engagement. A micro pension is a way, to build up  sufficient socialized capital through  voluntary association, to underwrite the beginning of a counter positional economy. What are the practical implications?

How can it be done? What effect might be expected?  Are these  viable as ideas and practice?  There are examples of current established practices that show that micro pension schemes suggested might be doable.  It would require that this as a form and practice became established as  costume and  establised practice.  Currently charities are given and raise £13 billion, often with poor transparency, ambiguous aims and no democratic accountability. Despite a hostile political governmental policy verging on persecution trade unions retain over six million members sustained by voluntary contribution. The City dislike this residual empowerment field of workers autonomy which counter poses them. New options are needed which buildi a  plurality of viable new economic forms  as democratic enterprises  that bring more inclusive benefits.  But a weakness of trade unions are that they are limited in what they do, which in the main is defensive and reactive.  They are generally  do not directly initiate a counter positional economy. It is instructive to visit the Trade Union Certification web site and an examination of their annual accounts will illustrate the amounts a contribution system can raise.  Trade Unions raise some £600 millions annually. A micro pension for democratic enterprises will take some mutual form such as   an IPS cooperative or Bencom ( Community Benefit Company). it’s function would be to raise savings and buy holdings  as Withdrawable shares in other cooperative enterprises or bonds.  Some of the savings might be held back as side as loan funds for example to help make loan funds to bridge a shortfall when a community or cooperative share issue fall short.

A contribution system based on modest contributions will be more inclusive than the standard cooperative withdrawable community share issues, these usually require a minimum investment usually £500 in one payment.   This is will tend to filler out people who cannot afford such payments at one go. Members contributions can also be topped up by larger one-off payments into their micro pension when they are able to do so. Members might be allowed to direct some or all of their micro investments into areas of social investment that they support. The assumption here is that mutual micro investor will save and have their investments committed (locked in) over a the span of their working lives but as a secondary pension to support the development of enterprises based on democratic economy. The risk is limited. It is inevitable that pioneering new cooperative enterprises entails some risk though this can be mitigated for with competent administration, with development of good products and services.  A range of investments will  spread risk.  The administration  of the micro pension will need to develop the skills to asses the quality of enterprises and be able to inform the membership and help guide areas of investment.

A simple model can give a rough illustration of what can happen given the assumptions implied by the model. It will need  a build up of sufficient popular support  to ” critical mass” the micro pension into viability within a medium term.  Apart of critical mass of support the scheme needs an acceptance of a longterm perspective with patient investments,  based on  long-term  saving, though some provision might  be built-in for withdrawals to meet emergent needs. The intended expectation will be that most members will committed their stake until retirement when provision needs to made to allow the member to claim back their investment . The hoped for expectation is that the member would be able to withdraw the amount paid in, principle, plus accumulated interest/dividend.   The aim would be to support a democratic economy that brought a symmetry of benefits to all stakeholders and that any surplus  and benefits be shared equitably though a negotiated process. and directed by membership. All suggested here needs scrutiny and improvement but the aim here is to  sketch a possible potential. It is a thought experiment, a  hypothetical possibility, but only if the social and cultural conditions allow.  A simple modal can illustrate what can happen.

An enterprise plan will include, raising start-up funds, this implies a group of people able and willing to get this going. Initial funds might be raised through crowd funding and some grants.  In the USA Federal Credit Unions  can only be chartered if they gather 2500 pledges of probable membership.  Such a process a.t a lesser level might be prudent as a micro pension will need a minimal critical mass to become viable.  This modal assumes that this is possible and that there will be year on year growth of membership. These assumptions are not too far-fetched as can be seen with the growth of the Ecology Building Society,  Shared Interest,  and some of the larger credit unions.

Assumptions

  1. This modal assumes no inflation.

2.  An average membership over the first 10 years of 7500 members during the period. Paying on average £3 a week. (step 1,  10 years from start)

2.1   During the first 10 years each member invests an average of £200 as  lump sum investments over and above their subscription payments. (10 years from start))

3.   An average membership from the start of  15000 members after 20 years paying on average £3 per week subscription.  (step 2, 20 years from start)

3.1  During the period from the start of the micro pension that on average members hold £300 as lump sum payments over and above their subscription.

4.   An average return of 4.5% return on investments.

4.1   The distribution of the interest/dividend return to be distributed as following.   1.5% to investor.

1.5% to support administration and development costs,  1.5% to cover miscellaneous costs, such as bad debts and reserve build up.

5.  That 5% of subscribed investment be put aside to cover administration costs.  One off lump sum investments to be exempt (from this modal.

6.   That 0.75% of miscellaneous cost are drawn upon to cover bad debts, while 0.75% is put into reserves. aside into a reserve fund.

********************************************************************************************************

First 10 years from start

Total in investment :   Contributions £11,115,000 + lump sum investments £1,500,000= £12,615,000

+ total interest/ dividends  £1,892,250 = total in investment funds £14,507,250,

Average investment per member = £1934.3

Average sum for administration per year :   from 5% of contributions  £63075 +  1.5% of interest/dividend £63075 * = total admin= £126150 (this *sum is based on 1.5% interest on accumulated total accumulated contributions (principle)

Reserve funds total after 10 years = £630750

*******************************************************************************************************

First 20 years from start

Total  in investments :  Contributions  £46,800,000  + lump sum investments £4,500,000 =

Total contributed investments (principle) = £51,300,000

Total investment funds plus interest £58,995,000

Average investment per member = £3933

Average sum for administration per year : £117,000 based on 5% of contributions + £769500 based on 1.5% of interest on accumulated investment as contributions.(principle)

Reserve funds total after 20 years =  £7,695,5000  NB some of this reserves  might be held as capital assets, as buildings and land for example a centre and a small farm.

******************************************************************************************************8

This modal is a simple and crude modal and can only give an approximate sketch but hopefully is useful as an illustration of a hypothetical potential which can be in the realms of the possible given the right conditions, especially cultural. The averaged out figures obscure the variations over time but as crude as the modal is, it does point to possible development trends. As a social investment there may be opportunities for tax advantages. In addition having a self sufficient and viable  organization might garner support from grants and state support. It would be important to maintain self sufficiency, autonomy and an innovative culture.

A Mutual Solidarity micro pension fund will act as democratically governed investment trust.  It could invest in a host of cooperative enterprises. These could be such as land trusts, housing cooperatives, worker cooperative support funds, (and  with a direct stake if worker cooperatives can be put into a multi stakeholder form), community energy companies, Phone Cooperative, Cooperative Energy, take a stake in the Cooperative Bank in partnership with the proposed customer union. There are a host of other potential  enterprises, housing being a dire need especially for the younger generation as political solutions are liable to be inadequate to many people’s needs.  This allows the pioneering of new pragmatic ways of helping others in a mutual way, getting some basic return  but putting ones own resources to work in a way that others can share in the benefits.

There is scope to underwrite the development of an association of enterprises spread throughout the country based on clones or franchises of enterprise which are already established and have a strong public profile such as Suma and Essential food cooperatives. ( An example are the Arizmendi bakeries In the Bay area of California USA) . This may need a more pro active development modal which supports incubators that spin-off new enterprises bound by a democratic multistakeholder relationship. Should something like this take hold other schemes could be established to serve different geographical areas or interest.  A mutual solidarity pension can begin to create a financial field conducive to supporting an emergent sector based on economic democracy and driven by direct agency, people doing it themselves and working this into practical solutions.

There are benefits to be gained by having a long term perspective .  Care must be taken to keep such ventures  democratically alive and corporate light.

Summary of possible benefits of a Mutual Solidarity Micro Pension. (MSMP)

Associative ways of fund building through modest contributions are well understood, these are potentially open to for the participation of the major of people.

Given competent adinistration and sound enterprises to invest in these can build up significant patient capital to underwrite democratic enterprises.

Democratic enterprises working as they should will build up community wealth as commons while aiming to distribute benefits monetary or otherwise in an equitable way, overseen by democratic governance.

Democratic enterprises will benefit by being dependant on a debt relationships which is internal to their culture and aims

A MSMP creates a financial field that supports mulitistakeholder relationships aiming to give mutual support and benefits to all parties.

A MSMP is a means of spreading risk.

A MSMP can be scaled up and replicated after a pioneer pilot stage and when political climate becomes benign.

Active Economic Democracy can begin to lay foundations for a politics of emancipation

“elections cannot change anything” :  Wolfgang Schauble, Geman finance minister

The  UK elections in May 2015 has resulted in a government with a small parliamentary majority committed to neo liberal austerity policies. Underwriting their success is a flawed electoral system which allows a parliamentary majority based on a minority votes. They have sufficient support because enough people feel that their interests are vested in the economy as it is. This constituency is based on a portion of the population who are house owners, have been co-opted into taking out private pensions and are likely to have some investments. This state of affairs is likely to remain as long as a feel good factor based on house prices rising and bull stock market continue, pumped up by QE. Should this speculative economy go into reverse  moods could change as more people are financially pinched. The current economy at the same time is failing a large minority but opposition to these policies and practice is confused and fragmented; there is no effective opposition and as important, what is counter positional is feeble.

Opposition alone is unlikely to be effective unless it is built on a counter positional economic emergence as principle and practice. Ideas are as good as these can be effected in a congenial and fruitful way. This can only be done though trial and error. If institutional political power is in neo liberal hands then a lesser path is collective self empowerment.  There is a potential to do this by development of new strand of democratic enterprises, cooperatives and mutuals independent of institutional power, based on a secular non conformity. 1.This can have the potential to create an autonomous space for economic democracy. There are sufficient legal instruments to allow this process to begin. Within this emergent space, finance and investment can be democratized to support enterprises based on democracy at work, in  the workshop, heath services which complement the NHS, office, mutual housing, building and maintenance,mutual finance, farming, food production and for the shopping customer. This could create a democratic multi stakeholder relationship which gives a symmetry of benefits. We can begin doing this and build a growing body of self-educated people culturalized to make this possible. Upon this a new social economic politics can develop to meet the onrush of problems, in a way that seeks to be inclusive and environmentally responsible. This needs a strategy to generate a degree of do it ourselves devolution in the world we live in, do this in effective ways which make people want to do so. But we are some way off.

Today financial capitalism touches most aspects of our lives controlling political outcomes. For the last thirty five years there has been a drive to integrate a majority into dependence on finance dominated corporate  markets. A consequence  is that we are bound to an economy driven by narrow  profit seeking considerations that privileges asset owners to the degree of their holdings. This formalized relationship sets up a tendency to exploit human and  environmental resources.  Capitalism forms its own field of governance beyond formal government, by economic means, it recreates itself and seeks to turn everything into profit centres. Corporations, banks and financial markets, protected by international set treaties, are active day and night directing the way society is formed, whatever formal government is in place.   They have captured mainstream politics. The form of the economy is a scaffold for creating conditions that favour outcomes such the recent elections. The result, an austerity  policy with the ideologically aim of weakening the state and society as an agent of mitigating the effects of market failure and delivering goods that are common.

The prevailing reaction is opposition, campaigning against governmental policy. This includes raising public awareness and general protest against the implementation of policy. The protest is directed at those who have every intension to realize their agenda and not another.  A party in government especially that which has a policy in line with the vested interests, and all the mainstream parties of institutional power fall to some degree in this category, will have the means to force their policy with the support from those that control finance and though that the means of production.  Institutional power as the finance markets and corporations are well-integrated within the apparatus of state, other interest groups have a weaker influence if any.  Opposition can represent a majority but one that often is incoherent and divided. Sometimes an opposition begins to focus on an issue and will force institutional power to retreat. Institutional power only makes concessions under pressure and then the minimum to head off dangerous instability.

Opposition alone has its limitations , so a viable counter positional  program based on direct agency, doing it ourselves is a precondition for a new direction for democratizing wealth and the economy.  This will not by itself solve all problems but is a potential way to begin develop more inclusive and equitable solutions that can later be scaled up by means of a sympathetic politics. An emergent autonomous democratic economy can lay foundations by developing the products, services, administration, good practice and general culture of support to do so.   The practice then can then later be applied to an emergent democratic economy, be it public, municipal and in the market.

The culture of autonomous self-help provision was alive in the 19c. It was a period when an array of mutual, cooperative, friendly societies and trade unions arose, these varied from purely practical self-help to more radical platforms of working class empowerment. A non conformist attitude such as those of the primitive Methodists inspired  this movement,  among others.  Needs drove people to mutually support each other.  They were direct descendants of people who had been driven off their small farmsteads and commons into the growing industrial towns. They were cultured into the custom of self-reliance and reciprocal obligation for the mutual benefit, around commons, spaces were the commoner had rights and obligations as custom. Mutual and cooperative enterprises grew out from a culture that instinctively  understood  mutual solidarity as a practice, which allowed people of modest means to pool together funds that created substantial enterprises for the common benefit. These included cooperatives, friendly societies, penny banks, building societies and trade unions. They recreated enterprises with commons built within.  They self organized because the “social principe”  prevailed instead of top down  by state management.   This process formed a culture that created a natural constituency for the emergent Labour Party at the beginning of the 20 century. Democratic socialism started as mainly associative, based on mutual do it ourself enterprise. Several factors undermined this quality and allowed top down authoritarian socialist forms to prevail. The militarization of society during two world wars favoured a hybrid of Marxism and Asiatic despotism and in the UK the so very British patronising Webbian paternalism, a polite Stalinism.

In recent years this has mutated into triangulation, paternalism , charity and managereralism as palliatives to social problems, which are then often put into a top down form  and sold as community action! We can do otherwise but need to make an existential choice to do so, not just talk, papers, conferences but doing, with or without support of governmental institutions. A sufficient number of us need to dedicate our work with some  financial investment to make this happen, some may do both but others can support these developments more passively through investment, being supporters  and being customers.  A politics that does not have an active pragmatic  base is flawed by not having its practice worked out as custom, done willingly. Otherwise the delivery will be liable to become a top down imposition rather than  as common practice, as do it ourself empowerment. A congenial politics will be mainly about empowering people to do benign construction and stewardship, otherwise politics will tend to power for its own sake. Boosting Democratic  enterprises under the present conditions through popular engagement and support can be the pre condition for an emancipating politics that works for the longer term. Work needs to be done on how this quality can become more viable.

A fuller democracy many not solve all problems but democracy generally is the best condition to favour more inclusive and equitable solutions and needs to be extended to cover the economy.  Sufficient wealth needs to be held back as  democratic common trusts, to serve all people. In addition, all those touched by economic administration must have the right to help determine the direction of the enterprises that they work in or are served by, both in the market and public sectors. An active movement for economic democracy that promotes the ideas and also puts these into practical form gives a foundation that can influence  institutional  politics. This can be an economic movement rather than explicitly political, a do it ourselves autonomy, horizontal  devolution and community self empowerment.

Dissent by doing!

  1. This article by George Monbiot in the Guardian “A model for political change? Try born-again Christianity” is directed at the new politics that seems to be emerging , instead of, about a new democratic economic emergence as suggested above, but it gives  an approximation of what secular non conformity means,  though without the outright religious connotations.

Account of inspirer of Mondragon Cooperatives

The Mondragon federative complex of worker cooperative, despite some problems is an impressive achievement. They have been able to establish at scale a counter example of how enterprises can be run on the basis of democratic governance. While their modal grows out of conditions unique to the Basque region there is much to be learned from them and features of their modal can  be incorporated to fit circumstances in other countries.

Father Maria Jose Arrismendiarreta worked with the Mondragon community in the early 1940s and went on to inspire and mentor his former pupils to set up the Mondragon federation of coops. The  January / february 2015 magazine of Modragon  Corporation TUlandkide, celebrates the centenary of Jose Maria’s birth with an issue dedicated to him .

Mutuals Manifesto: Road to Economic Democracy or Zombie Mutualism and Privatization?l

Mutuo ( see link on blogroll) have published a manifesto for 2015.  The advocates of mutual enterprises, based on one member one vote and not based on one share one vote, will often claim that this is a way of socializing a service or enterprise through voluntary association.  Membership is implied but all too often these days the emphasis is on as client or customer. They claim that this brings  an element of market discipline and the service in closer relationship to customer and or sometimes as an enterprise with employee ownership. The other advantage it is claimed because mutuals are owned through associational  trust relationships and have a “commons” element there is  fairer sharing of benefits.  Mutuals  are partly self owned, by accumulated surplus earnings being  retained, so  not under the same pressures of share owned companies which are under pressure to maximise profit and share value. This it is claimed allows  a more long-term perspective and wider consideration of stakeholders.

The public services are increasingly being pushed in this direction. It is far from clear if the agenda behind this process is without ambiguity and dangers.   Some trade unions and supporters of state directed pubic services fear that this is a trojan horse process to privatization.  This fear seems to have some foundation. For some mutuals are just another business form with some stake holding by members, be they customers or employees.  These will all to often be managed and directed in a paternalistic way as ‘trust” bodies so that appointments to governing bodies and management is in effect closed to ordinary members.  A consequence is that accountability and interaction between the governing mechanism is top down and membership engagement is poor and passive. These rolls are then confined to the “right” people who are deemed “professional” and selected by those who have self designated themselves as so.  In some cases what is called mutual is a farrago of partnership between ordinary share owned business with a minority stake held by employees in some mutual trust. Employee mutuals working in supplementary services with the NHS have often  been frozen out from acquiring new contracts as they do not have the resources to make complex bids. Furthermore employee mutuals also are restricted by their ability to access mutual friendly finance and capital.

Now with laws in place that allow the  dissolving the NHS it will mean that when the NHS subcontracts come for bidding, by default most will fall into hands of corporate PLCs, such as Virgin. A processs of privatisation by stealth is underway. The NHS is on the way to becoming an empty brand. Shallow talk of membership engagement is banded about by the mainstream advocates of mutualism. Much of this is superficial and their main constituency is the establishment that dominate institutional power. The are copying the Webbs, who in the early twentieth century used the tactic of “permeation”, influencing establishment institutional power to allow conditions favourable for the imposition of solutions onto a passive recipient constituency.  The reality is that managerialism rules. It goes without saying that enterprises of whatever sort need good administration, but ways of promoting meaningful membership engagement are generally absent, democracy is all but nominal.

Elections to the broads of most mutuals are in effect closed and the governing bodies are in effect self selecting. The election to the Cooperative Groups board and governing council of 100 is a sham.  The governing council which is supposed to elect three members to the  ten member board, 7 who are corporate executives, from 6 nominated. but this council have had this reduced to 3 out of three so reduced to a Soviet type election, the winning candidate pre-selected by board. The idea originally was to allow 6 nominations from which the three were to be elected by an elected central committee of a hundred elected members, this in itself a very restricted example of democracy. It is not clear what powers if any the supervisory elected committee will have. These will be “mandated” by most likely by a tiny proportion of those entitled to vote, at most 3% of the membership, if this follows the trend in recent coop elections. This hardly surprising as there is little information about the candidates and hardly any means of communication or interaction before or after election with membership.  Apathy rules and the cooperatives and mutuals are under the grip of small coteries that claim democratic legitimacy based on rotten bough democracy. The previous set up in the Cooperative Group failed both as democracy or effective governance so leaving the route open to naked corporate executive take all.

At the 2015 AGM of one of the larger credit unions a proposal was on the agenda that only those deemed qualified would be considered to be elected/selected to serve on the governing body/board.  This  social exclusion proposal is puzzling but it illustrates the mindset, as the board is in effect self selecting, one wonders why they bother with this  maneuver.  It seems that board members are co-oped and then this is rubber stamped at a  poorly attended AGM; usually some 40 people out of a membership of 9000 plus, half of these staff and those on the governing body.   One staff member of the credit union said that there was no was interest in the governance of the credit union , people were only interested in the money! This may be true but then this becomes a problem for the integrity and vitality of what is and should be a democratic enterprise.

When the Bath and North East Somerset council turned over its housing stock to the Somer Housing Association ( now Curo). a councillor of a ruling party stated that the intension was to have three directly elected tenant members on the governing body. The end result was a provision of one or two tenant selected by and co-opted by the board,   There are rumours of floating housing association on the stock market just as happened with the building societies, And now there is the possibility of a decree that forces housing associations to fire sell their stock to tenants that can afford the debt, this a form of bribe to engineer political bias. Do we have a housing crisis?  What started as common-wealth in the form of council housing is being edged towards privatisation. Housing  associations already in some cases allow tenants to buy their rented houses but this done in a way that does not undermine the common stock of housing, which will in due course be there for following generations who need economic housing. Would this threat to undo social housing be happening if there was a degree of tenants co-determination? The tenants might then have a sense of real mutual stakeholding, unfortunately this cultural norm is weak, and where present promoted as a paternalistic solution for the “socially excluded”.

Is it important for mutuals and cooperatives  to be democratic?

Participatory Democracy has often been advocated as an ideal, there are few succesful examples at any scale.   Democracy is just a means and outcomes depend on how it is operated, but probably a condition more conducive to social and ecological better practice. As regarding cooperatives or mutuals, these enterprises need to be guided by cooperative and mutual  principles while also being practical, delivering services and products that people want.  They are a way of solving problems in an equitable way and this needs an egalitarian  “commons” as a base to operate as such. This also requires active support by membership to remain so. If this culture decays and dies, functionaries take over and this can set  a drift toward the norms laid down by the prevailing ideology, at present what is loosely called neo-liberalism.  The end result is de-mutaulisation of cooperative forms of enterprises as happened in the 1990s   The privatisation of the public sector is a closely related development . The culture and practice that upheld them had decayed.  The public forgot that they owned these. But this is hardly surprising as these forms of enterprises have been and remain in the hands of a social bureaucratic mindset.  Better membership and citizen engagement and stewardship is a precondition to the re-construction of common-weal, as mutuals, cooperative or a democratic public sector. This will need the  direction and support of a substantial informed constituency.  Platforms such as 38 degrees may be pointing the way to revitalizing citizen and membership engagement.  Aneurin Bevan said  “It (the NHS) will last a`s long `as there are folk left with the faith to fight for it” ,  This also applies to democratic forms of enterprises. More people will need to wake up, economic democracy needs something like cooperative principles as a guide but this needs practical application in the world as it is and as people doing as such.

NB : Bevam formed the NHS from a patchwork of mutual, municipal and charity clinics and hospitals. He disliked the capricious paternalism and uneven quality of services these provided.

Updating Cooperative Principles : Alex Bird

Alex Bird has an article i  “Why we need to update the Cooperative Principles” in Cooperative News and on his blog site which in the main are compatible with suggestions made on this blog/notebook.  These updated Cooperative principles seem inspired by the 10 Mondragon cooperative principles, which include the principle of capital or investment as a servant of labour and community and not as master. Another important principle he highlights is the principle of wage solidarity suggesting a human scale differential of 1:12 .  He also highlights the importance of healthy member engagement for cooperative enterprises, this includes member workers building up investments within the worker coops which are withdrawn at retirement. These conditions will help retain cooperative vitality. These revised principles if implemented might help inspire a revitalization of democratic enterprises in the UK and further afield.