Whose economy is this, anyway?

The reason large corporations seem to behave in ways we don’t like is because we don’t own them—a small and remote elite does. We can’t take it away from them without a lot of violence, but we might be able to compete against them peacefully, and cooperatively.

by Kevin Potvin <kpotvin@republic-news.org>

The modern co-operative company may be uniquely suited to confront the most crucial factor undermining the sustainability of our economy today: control.

The reason large corporations are able to run roughshod over environmental regulations that protect the publics’ health, for example, or finance the election of politicians who promise to do away with those regulations, has everything to do with who controls those large corporations.

Apologists for the excesses of capitalism will argue that today, unlike ever before, ownership of the economy is broadly spread out among the middle class through such investment tools as pension funds and mutual funds. But the fact remains that an always shrinking percentage of our fellow citizens own an always growing proportion of the economy. With that narrowing ownership has come a more narrowly focused nexus of control of the economy. That narrowing focus of control has occurred at the same time that the economy has come to perform more poorly for more people, and it’s no coincidence. The two trends are directly related.

The interests of this ever smaller and ever more enriched elite diverge more and more from the interests of the larger society around them. Today, the economy serves the interests of a few people very well, and the interests of society at large very poorly indeed. All capital always serves its owners.

The society at large, for example, is interested in living within a sustainable environment, would like to see personal security enjoyed by everyone, and likes the idea of broad prosperity. The members of the elite who own the majority of the economy, on the other hand, have not shown a great interest in the health of the environment, seem concerned only for their own security and not that of many other people besides, and seem not at all worried about declining standards of living in the West, or very poor standards being sustained elsewhere in the world. Since the elite own more of the economy than ever before, it is no surprise that the economy generates more negative environmental effects than ever before, less security of all kinds for society at large, and worsening standards of living in the West and stalled standards elsewhere in the world.

That the elite who own capital exploit their control of the economy so that it serves their interests at the expense of the interests of everyone else is nothing new. In the past, there have been suggestions made to members of the larger society that they ought to liberate the means of production—the keys to the economy—from the grip of the elites, and that the elites ought to be imprisoned or killed. “Eat the rich” is an old imperative among would-be revolutionaries.

But there is not much taste generally in society for the kind of bloodshed this sort of program would engender, and even in cases in the past where conditions gave revolutionaries the taste for blood, scarcely have their radical programs for seizing the economy worked.

It is by now a nearly inescapable conclusion that if the majority of the economy remains in the hands of the present elites, the fate of the planet is doomed. And yet, it is equally certain that any attempt to wrest control of the economy from them by violent means would bring on only an equivalent doom.

The modern cooperative firm provides a possible solution. By enabling non-elites to begin taking over in peaceful and constructive ways increasingly larger parts of the economy, it may eventually be possible to create a more broadly-based system of control over the economy, such as was envisioned by philosophical originators of political democracy. By gaining control of larger parts of the economy through the establishment of cooperative enterprises, non-elite owners will be able to steer a growing portion of the economy away from the interests of the elite and more toward the interests of the larger society.

Public trusts and non-profit organizations are also meant to distribute control of their functions across a wider spectrum of people. But the coop enterprise model is the safer route. Unlike public trusts and non-profit societies, the cooperative is owned and directed by its members and its users. The boards of public trusts and non-profit societies, by contrast, are susceptible to take-over campaigns by parties interested in outcomes other than those that serve the users of those organizations best. Because of their semi-public status, they are also vulnerable to state interference.

The cooperative, on the other hand, can be a completely private enterprise. It can be as entrepreneurial and as innovative as any traditional capitalist company, and can even be primarily motivated to earn profits for its member owners, if that is what the member owners wish the constitution of the coop company to say.

There are few examples of the wide range of cooperative possibilities in British Columbia, but in northern Italy there is a highly evolved, deeply integrated, and very well entrenched cooperative economy in which can be found many highly successful examples exhibiting the full range of possibilities that the coop model makes available.

During a tour in July of the Emilio-Romagna region of Italy, centered around Bologna, this author toured sites of highly successful industrial, consumer, and social cooperatives. The two deepest impressions from this tour are these: cooperatives of all three kinds can be every bit as energized, agile, efficient, and innovative as any private enterprise company in Canada is; and, to become so, cooperatives in a larger capitalist economy need the support and understanding of a significant proportion of their surrounding society. In other words, broad public knowledge about what cooperatives actually are and what they can actually do is absolutely essential to the success of a growing cooperative sector.

As this author will argue in this and future issues of The Republic, the survival of the larger economy is now dependent on the rise of a successful, large, and vibrantly growing cooperative sector. If that is so, public education about cooperatives, how they are set up, how they function effectively, and what they can be made to do, is crucial to our future.

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