The Strange Death of Co-operative England: comment

The Strange Death of Co-operative England, by Carl Rowlands : . Some comments. (link here , if it does not work please google the article which is put out by New Left Project)

What might help a revival.

  Cooperatives and mutuals have at best secondary supplementary, presence in the economy of England, these in the main the surviving mutuals and consumer cooperatives .  Most are instrumental and corporate with nominal mutual democratic governance and poor membership engagement.  They are survivors of a form of enterprise that grew in cultural conditions that have all but withered.  Rowlands article deals nearly exclusively with the consumer cooperatives that have with a few exceptions lost dynamism and live off assets built up by past generations. Rowlands mentions   Beatrice Webb  as major influence on the understanding of cooperatives in the UK which for her were preferentially  consumer coops.  G. D. H. Cole instead believed that consumer directed cooperatives tends to passivity while a worker directed economic democracy, as “democracy at work” would be liable be more active and vital.   The Webbs, Beatrice and Sidney,  were very effective propagandists and have had a considerable influence. They advocated top down paternalistic technical governance, though this was contextualized within UK’s parliamentary semi-democracy. Late in life they fell in love with Stalinist Soviet Union which they fooled themselves into believing was the socialist future.  Their influence lingers on with a top-dowm manageralism prevalent in public sector and which extends to mainstream cooperatives and mutuals, this has led to poor membership engagement.

  When the general strike failed in 1926 the Webbs celebrated the demise of the influence of the syndicalist and guild socialist movements which campaigned for industrial democracy. The idea of the citizen or worker participation in the administration of their workplace or for that matter citizens in general or tenants having direct part in the running of their housing was dismissed by them. The legacy of this attitude survives, cooperatives in the UK are dominated by the consumer form and are usually seen by the public as such.  Mutual organizations usually have even less membership engagement. While worker cooperatives have a weak presence in the UK and have never developed a mature self-sustaining federative structure based on supporting secondary cooperatives, which include, effective self financing instruments, sourced from the community and workers in a democratic multi-stakeholder relationships. In addition, to a democratic multi stakeholder financial facility, they need a way of developing new enterprises from within this relationship, with research, education, training and cooperative enterprise incubators.  Such a development is liable to attract those with ideas and drive to form new democratic enterprises. This as some have pointed out is the building up of a self forming systemic relationship required to maintain a cooperative culture and practice within a capitalist dominated world.

  The tendency in the long run is to accommodation and absorption. Can there be a cooperative means  of  escaping the Uranian gravity of a corporate capitalist dominated world?  A systemic approach seems the best bet to achieve a density of interrelated and mutually supporting cooperative forms, with viable practice, product and administration  This needs  a change of culture which leads to a more widely engaged membership across the various stakeholder  categories, be they worker, tennent, customer or investor, as appropriate.

 To complete a rough sketch of what belongs to the cooperative spectrum mention can be made of  employee ownership, this path has some very successful enterprises though are ambiguous as part of a worker cooperative movement. There are also a host of emerging cooperatives forms,  most modest, many as vehicles for the preservation of dying services in communities were these have been hollowed out. Subsidies has allowed the emergence of community renewable energy cooperative forms. The Phone Coop and the Energy Cooperative are recent projects at scale but are rare. See Cooperative Economy information on blog roll left on screen Cooperatives UK

Coop  Group Troubles

The recent troubles in the Cooperative Group have led to a watered down version of PLC corporate governance adopted, as advocated by Lord Myners; who signed off Fred Goodwin’s huge salary and bonus as this corporate genius was helping to wreak the RBS bank and the British economy. The appointees of this board will have the appropriate corporate capitalist pedigree with salaries, while the Cooperative Group pays many of their shop floor workers a few pennies above the minimum wage.  There is a nominal supposed commitment to cooperative principles but what that means is open to question.  The cooperative group has been bounced into having a PLC like 10 person board,  7 who will be appointed and three who will be appointees of a supervisor council of no more than 100 elected members. This has all the hall marks of democratic centralism. They had to bring the issue of governance to a conclusion and under the circumstances the result might be understandable.

  There was some opposition and this was illustrated by a 17% vote against registered at the August 3oth 2014, meeting to decide on the new governing rule book  of the Cooperative Group   These opposed the changes as they were proposed, and  argued that the democratic governance was being substituted by  PLC type structure while the cooperative nature and principles of the group is compromised by the changes.The governance of the Cooperative Group has  been poor  and improvements were needed and were poor as cooperative and hardly anything to be defended.  The elections were little more than a sham.  Members were sent a short statement with name and a small photo and unless the member was   in the know through insider knowledge they were hardly able to know who to vote for.  There was no way to get to know the candidates, there was little interaction between members and those elected, who furthermore were bound to confidentiality pledges,  this bound to lead to poor transparency or accountability.  The result is that  at most 3% of the membership bothered to vote. The Cooperative Group was supposedly under the governance of some 500 people in different regional committees who seem themselves poorly informed or able to understand the problems of the Group.  All this hardly a good example of cooperative principles, the issue that those who opposed the reform campaigned on.

A campaign it seems at least in part organized by Cooperative Business Consultants, has been the main drive against the form the recent reforms to the Cooperative Groups governance took. They perhaps with others have organised two conferences on cooperative governance  calling for a deeper understanding and practice more fully compatible with cooperative principles, Way Forward I and II.   They now have scheduled a Way Forward III  conference for January 23rd 2015.  These conferences seem aimed at cooperative consultants and practitioners so will be bound to be a conversation which each other and poorly connect with those outside. A consideration might be making Way Forward : Associating for a Democratic Economy so turning it into an association open to open membership to all who subscribe to a set of principle and objectives and work to make them a practical reality.  It is not as if we lack the problems which beg new types of solutions, more inclusive, equitable, environmentally responsible, building up democratic commonwealth, distributing benefits in kind or financial and that does not have taken-all the power and money administrations. The association can be free of political party affiliation so more open to a wider public.

A first port of call might be to put forward a slate of candidates for election to Cooperative Groups council with a clear committment to better engagement with members and public and declaring clear principles and objectives.  If 6-10% of the Cooperative Groups members voted and demanded to be treated in an adult way, which included a commitment to more accountability, transparency and engagement with membership. This precedent might then be applied to other mutuals and eventually demanded within the public sector. A working example would advance this cause.  Perhaps the We Own It campaign can consider extending their area of interest to large Cooperatives and Mutuals.

  Already The Way Forward people have used the internet lobbying vehicle Change and such internet mechanisms. as  38 Degrees point to ways facilitating better stewardship and engaged membership.  The internet alone will lead to capricious associations, this will need to be supplemented with more direct and substantive association.   A bit of light schism might be stimulating, though what is suggested here will need to be worked into a pragmatic form, structure, culture and practice.

Is there life after all?

PS,  An alarming development:

The FCAs ( Financial Conduct Authority) proposed stipulation of severely limiting interest or dividends to investors in (bencoms?) and IPS type coops will kill them off as a serious option for running an enterprise or building a significant sector on democratic economic principles. This needs an evolved set of self reinforcing relationships between the various stakeholder groups which gives each appropriate  benefits, financial or in kind, based on a symmetry of benefits principle. Cooperatives are enterprises and need to be run on what might be called principled pragmatism. They need to at least to break even financially and are not charities.   They need to be flexibly applied to meet various kinds of needs  and functions, as they arise, and may have more that one stakeholder membership category, each should be given its due as appropriate. They greatly benefit from non dominant patient capital   which comes from IPS type withrawable shares, These are invested usually with the aim of a mutual  benefit on the understanding that the investment is only withdrawble after a lock in stipulation has been met, if there are sufficient funds at the time, and that this is done at risk.  A condition needed to raise venture capital to pioneer new coops. It is an adult and informed relationship all being correct, that does not justify over regulation and the stifling of the citizens right to choose. The returns on investments are pitched to be sufficient to attract and hold what is needed and this will vary with circumstances.  A narrow and restrictive application of the regulations both in regard of how IPS type coops can used and how they remunerate their investor stakeholder members will be damaging.   It might be a living death, if this stands as reported by some.   See Link here


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