Thursday, December 5, 2013

Is This an Alternative? (2013)

Book Review from the December 2013 issue of the Socialist Standard

People over Capital: The Co-operative Alternative to Capitalism. Rob Harrison, ed. (New Internationalist. £9.99.)

To mark the International Year of Co-operatives in 2012, the organisation Ethical Consumer held an essay competition on the topic ‘Is there a co-operative alternative to capitalism?’. Most of the chapters in this collection were entries in that contest.

Co-ops are described by Ed Mayo as ‘member-owned businesses with some distinctive characteristics in terms of form and ethos’. The general theme of contributions is that co-operatives do indeed represent an alternative to capitalism, though there are some dissenting voices, as we’ll see. Co-ops apparently employ 100 million people worldwide, and account for 21 percent of GDP in Finland, for instance. There are various suggestions here for expanding their role, such as creating a parallel currency or establishing peer-to-peer lending.

It is also pointed out that much open-source activity is co-operative-based. Nic Wistreich imagines a pitch on Dragons’ Den for a system where millions of people would contribute their ideas, opinions and videos free: it would surely have been laughed out of court, but in fact Twitter works pretty well. Wikipedia is another example of a massive co-operative venture.

An initial reaction to the view that co-ops really represent an alternative to capitalism might be that they involve wage labour and the production of commodities, just as any capitalist business does, so they can hardly constitute an alternative. They also necessarily involve profit-making but not, some would claim, profit maximisation. One point often made is to do with pay: Cheryl Lans notes that in the Mondragon co-op in Spain the highest-paid employee earns just 6.5 times what the lowest-paid gets. But this is still a sizeable disparity, and not all co-ops are so ‘egalitarian’ as, according to Chris Tomlinson, the CEO of the Co-operative Group in the UK was paid over £2m in 2010.

Tomlinson’s is the most critical of the chapters here, and he argues that being a co-operative is not a shield against recessions. The recent travails of the Co-operative Bank certainly demonstrate this, as the Co-op Group has lost control of it to hedge funds and other bond-holders. He also refers to American Crystal Sugar, an agricultural co-operative that locked out 1300 workers in 2011 for the best part of two years (see ACS gave over $2m in political contributions in 2012, to both Democrat and Republican candidates.

With a fair amount of imagination, it is possible to imagine a world of co-operatives, where pay differentials are far smaller than today and there is some semblance of democratic control by workers (and maybe also consumers). But it would still be a world of wages, prices and profits. Why not strive for socialism instead? 
Paul Bennett