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.

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