From Corporate Globalization to Global Co-operation by Tom Webb

Author:Tom Webb
Language: eng
Format: epub
Publisher: Fernwood Publishing
Published: 2016-02-22T05:00:00+00:00

Chapter 5

ENVISIONING A CO-OPERATIVE ECONOMY

The trends sketched out in Chapter 1 are horrifying and daunting. That said, the co-operative business model offers a healthier alternative. It does not drive the worst trends. Its different purpose, values and principles, lack of need for a growth economy, bottom-up nature and ability to put people and nature before profits, are an enormous opportunity. People in co-operatives can choose to do bad things, but they are in a business model that not only allows them but encourages them to do the right thing. An investor-owned business management or board that consistently does the right thing is to be admired. A co-operative business, board or management that does the wrong thing has to answer to its membership for going against its purpose, values and principles.

ECONOMIC STABILITY

During the 2008 Great Recession, my retirement savings, along with those of millions of others, shrank as a result of criminal and immoral corporate activity. In the casino world of corporate finance and on the stock and bond markets, chaos erupted. But one part of my investments remained stable — my small investments in co-operatives. But why were my investments in co-operatives so small compared to my “capitalist” investments? The answer is that Canadian taxation policies and regulation of financial instruments makes investment in co-operatives difficult, as does the failure of co-operative financial institutions to create co-operative capital funds. My casino economy investments fell by 24 percent. But, the market speculators, out making windfall profits for the already exceedingly rich, could not get at my co-operative investments. Although the co-operatives in which I had investments were impacted by the economic chaos around them, they remained stable while many capitalist firms lost a third of their value in a month, week or even days. Dividends on those investments in co-operatives dropped and recovered later, but the value of those co-operative shares remained the same.

This experience was the same for co-operatives around the globe. The following traits of co-operatives are worth noting in terms of economic stability:

• They do not cause instability. They did not pump out bad mortgages to inflate short-term profit, nor did they pump out the derivatives based on the bad mortgages.

• They continue to invest and make loans based on meeting member need in spite of recessions and without the massive subsidies of taxpayer funds to banks and tax breaks that failed to stop the capitalist investment strike after 2008.1

• Their share value does not collapse or fluctuate wildly based on irrational or predatory speculation. Co-operatives are more difficult to start but have lower failure rates than private capital start-ups. There needs to be more research on this, but the studies that have been done all confirm the lower failure rate, as does the remarkable record of the Mondragon group of co-operatives in Spain and the co-operatives of Emilia Romagna region in Italy.2 Studies in Canada3 consistently show that the failure rates for co-operatives are lower than for investor-owned firms.

• When co-operatives, especially worker-owned co-operatives, do fail they are less likely to treat their workers with callous disregard.

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