Co-operative economics
Encyclopedia
Co-operative economics is a field of economics
, socialist economics
, co-operative studies
, and political economy
, which is concerned with co-operatives.
, Pierre-Joseph Proudhon
, Charles Gide
, Beatrice
and Sydney Webb, J.T.W. Mitchell, Peter Kropotkin
, Paul Lambart, Race Mathews
, David Griffiths
, and G.D.H. Cole. Historical co-operative movements, such as the Rochdale Pioneers
, have also contributed to the field.
and co-operative individualism. In an Owenite village of cooperation or a commune
, the residents would be both the producers and consumers of its products. However, for a co-operative, the producers and consumers of its products become two different groups of people, and thus, there are two different sets of people who could be defined as its 'users'. As a result, we can define two different modes of co-operative organisation: consumers' cooperative
, in which the consumers of a co-operative's goods and services are defined as its users (including food co-operatives, credit unions, etc.), producer co-operatives
, in which the producers of a co-operatives goods and services are defined as its users. (Some consider worker co-operatives, which are owned and run exclusively by their worker owners as a third class, others view this as part of the producer category.) .
This in turn led to a debate between those who support Consumers' Co-operatives (known as the Co-operative Federalists
) and those who favor Producers Co-operatives (pejoratively labelled ‘Individualist' co-operativists by the Federalists ).
, as well as Paul Lambart and Beatrice Webb
. The co-operative federalists argue that consumers should form co-operative wholesale societies (Co-operative Federations
in which all members are co-operators, the best historical example of which being CWS
in the United Kingdom
), and that these co-operative wholesale societies should undertake purchasing farms or factories. They argue that profits (or surpluses) from these co-operative wholesale societies should be paid as dividends to the member co-operators, rather than to their workers.
, putting this forth as a path to State Socialism
. Where the Co-operative Federalists argue for federations in which consumer co-operators federate, and receive the monetary dividend
s, rather, in co-operative wholesale societies
the profits (or surpluses) would be paid as dividends to their workers. The Mondragón Co-operatives
are an economic model commonly cited by Co-operative Individualists, and a lot of the Co-operative Individualist literature deals with these societies.
Please note that these two schools of thought are not necessarily in binary opposition a priori, and that hybrids between the two positions are possible.
s also utilize organizations of already constituted corporations as collective owners of the produce.
and anarchists
see society as one big cooperative, and feel that goods produced by all should be distributed equitably to all members of the society, not necessarily through a market. All the members of a society are considered to be both producers and consumers. Many Socialists tend to favor government administration of the economy, while Anarchists and Libertarian socialists favor non-governmental coordination, either locally, or through labor unions and worker cooperative
s.
Utopian socialists feel socialism can be achieved without class struggle
and that cooperatives should only include those who voluntarily choose to participate in them. Some participants in the kibbutz
movement and other intentional communities fall into this category.
and socialist principles. Co-operative economists - Federalist, Individualist, and otherwise - have presented the extension of their economic model to its natural limits as a goal.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, socialist economics
Socialist economics
Socialist economics are the economic theories and practices of hypothetical and existing socialist economic systems.A socialist economy is based on public ownership or independent cooperative ownership of the means of production, wherein production is carried out to directly produce use-value,...
, co-operative studies
Co-operative studies
The purpose of Co-operative education and Co-operative studies, according to the ICA's Statement on the Co-operative Identity, is that Co-operative societies "provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the...
, and political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...
, which is concerned with co-operatives.
History
Notable theoreticians who have contributed to the field include Robert OwenRobert Owen
Robert Owen was a Welsh social reformer and one of the founders of utopian socialism and the cooperative movement.Owen's philosophy was based on three intellectual pillars:...
, Pierre-Joseph Proudhon
Pierre-Joseph Proudhon
Pierre-Joseph Proudhon was a French politician, mutualist philosopher and socialist. He was a member of the French Parliament, and he was the first person to call himself an "anarchist". He is considered among the most influential theorists and organisers of anarchism...
, Charles Gide
Charles Gide
Charles Gide was a leading French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France.- Academic work :...
, Beatrice
Beatrice Webb
Martha Beatrice Webb, Lady Passfield was an English sociologist, economist, socialist and social reformer. Although her husband became Baron Passfield in 1929, she refused to be known as Lady Passfield...
and Sydney Webb, J.T.W. Mitchell, Peter Kropotkin
Peter Kropotkin
Prince Pyotr Alexeyevich Kropotkin was a Russian zoologist, evolutionary theorist, philosopher, economist, geographer, author and one of the world's foremost anarcho-communists. Kropotkin advocated a communist society free from central government and based on voluntary associations between...
, Paul Lambart, Race Mathews
Race Mathews
Charles Race Thorson Mathews, always known as Race Mathews is a Co-operative economist, and former member of Victoria's State Parliament and Australia's Federal Parliament for the Australian Labor Party...
, David Griffiths
David Griffiths (co-operative economist)
David Griffiths is a Co-operative economist, who has contributed a number of books and articles on the subject of unemployment, the history of Victoria's Co-operative movement, and 'social care co-operatives' amongst other subjects...
, and G.D.H. Cole. Historical co-operative movements, such as the Rochdale Pioneers
Rochdale Pioneers
The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement....
, have also contributed to the field.
Co-operative federalism versus co-operative individualism
A major historical debate in co-operative economics has been between co-operative federalismCooperative Federalism
Cooperative federalism is a concept of federalism in which national, state, and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately but more or less equally or clashing over a policy in a system dominated by the national...
and co-operative individualism. In an Owenite village of cooperation or a commune
Commune (intentional community)
A commune is an intentional community of people living together, sharing common interests, property, possessions, resources, and, in some communes, work and income. In addition to the communal economy, consensus decision-making, non-hierarchical structures and ecological living have become...
, the residents would be both the producers and consumers of its products. However, for a co-operative, the producers and consumers of its products become two different groups of people, and thus, there are two different sets of people who could be defined as its 'users'. As a result, we can define two different modes of co-operative organisation: consumers' cooperative
Consumers' cooperative
Consumer cooperatives are enterprises owned by consumers and managed democratically which aim at fulfilling the needs and aspirations of their members. They operate within the market system, independently of the state, as a form of mutual aid, oriented toward service rather than pecuniary profit...
, in which the consumers of a co-operative's goods and services are defined as its users (including food co-operatives, credit unions, etc.), producer co-operatives
Worker cooperative
A worker cooperative is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making in a democratic fashion, or it may refer to one in which...
, in which the producers of a co-operatives goods and services are defined as its users. (Some consider worker co-operatives, which are owned and run exclusively by their worker owners as a third class, others view this as part of the producer category.) .
This in turn led to a debate between those who support Consumers' Co-operatives (known as the Co-operative Federalists
Cooperative Federalism
Cooperative federalism is a concept of federalism in which national, state, and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately but more or less equally or clashing over a policy in a system dominated by the national...
) and those who favor Producers Co-operatives (pejoratively labelled ‘Individualist' co-operativists by the Federalists ).
Co-operative Federalism
Co-operative Federalism is the school of thought favouring consumer co-operative societies. Historically, its proponents have included JTW Mitchell and Charles GideCharles Gide
Charles Gide was a leading French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France.- Academic work :...
, as well as Paul Lambart and Beatrice Webb
Beatrice Webb
Martha Beatrice Webb, Lady Passfield was an English sociologist, economist, socialist and social reformer. Although her husband became Baron Passfield in 1929, she refused to be known as Lady Passfield...
. The co-operative federalists argue that consumers should form co-operative wholesale societies (Co-operative Federations
Cooperative federation
A co-operative federation or secondary co-operative is a co-operative in which all members are, in turn, co-operatives.Historically, co-operative federations have predominantly come in the form of co-operative wholesale societies and co-operative unions...
in which all members are co-operators, the best historical example of which being CWS
The Co-operative Group
The Co-operative Group Ltd. is a United Kingdom consumer cooperative with a diverse range of business interests. It is co-operatively run and owned by its members. It is the largest organisation of this type in the world, with over 5.5 million members, who all have a say in how the business is...
in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
), and that these co-operative wholesale societies should undertake purchasing farms or factories. They argue that profits (or surpluses) from these co-operative wholesale societies should be paid as dividends to the member co-operators, rather than to their workers.
Co-operative Individualism
Co-operative Individualism is the school of thought favouring workers' co-operative societies. The most notable proponents of this latter being, in Britain, the Christian Socialists, and later writers like Joseph ReevesJoseph Reeves
Joseph Reeves was a British Labour Party politician. He served as member of Parliament for Greenwich between 1945 and 1959....
, putting this forth as a path to State Socialism
State Socialism
State Socialism was a term introduced to describe Otto von Bismarck's social welfare policies. The term was actually coined by Bismarck's liberal opposition but later accepted by Bismarck...
. Where the Co-operative Federalists argue for federations in which consumer co-operators federate, and receive the monetary dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
s, rather, in co-operative wholesale societies
Co-operative wholesale society
A Co-operative Wholesale Society, or CWS, is a form of Co-operative Federation , in this case, the members are usually Consumers' Co-operatives...
the profits (or surpluses) would be paid as dividends to their workers. The Mondragón Co-operatives
Mondragón Cooperative Corporation
The MONDRAGON Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. Founded in the town of Mondragón in 1956, its origin is linked to the activity of a modest technical college and a small workshop producing paraffin heaters...
are an economic model commonly cited by Co-operative Individualists, and a lot of the Co-operative Individualist literature deals with these societies.
Please note that these two schools of thought are not necessarily in binary opposition a priori, and that hybrids between the two positions are possible.
Retailers' cooperatives
In addition to customer vs. worker ownership, retailers' cooperativeRetailers' cooperative
A retailers' cooperative is a type of cooperative which employs economies of scale on behalf of its retailer members. Retailers' cooperatives use their purchasing power to acquire discounts from manufacturers and often share marketing expenses. It is common for locally owned grocery stores,...
s also utilize organizations of already constituted corporations as collective owners of the produce.
Socialism and anarchism
SocialistsSocialism
Socialism is an economic system characterized by social ownership of the means of production and cooperative management of the economy; or a political philosophy advocating such a system. "Social ownership" may refer to any one of, or a combination of, the following: cooperative enterprises,...
and anarchists
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...
see society as one big cooperative, and feel that goods produced by all should be distributed equitably to all members of the society, not necessarily through a market. All the members of a society are considered to be both producers and consumers. Many Socialists tend to favor government administration of the economy, while Anarchists and Libertarian socialists favor non-governmental coordination, either locally, or through labor unions and worker cooperative
Worker cooperative
A worker cooperative is a cooperative owned and democratically managed by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making in a democratic fashion, or it may refer to one in which...
s.
Utopian socialists feel socialism can be achieved without class struggle
Class struggle
Class struggle is the active expression of a class conflict looked at from any kind of socialist perspective. Karl Marx and Friedrich Engels wrote "The [written] history of all hitherto existing society is the history of class struggle"....
and that cooperatives should only include those who voluntarily choose to participate in them. Some participants in the kibbutz
Kibbutz
A kibbutz is a collective community in Israel that was traditionally based on agriculture. Today, farming has been partly supplanted by other economic branches, including industrial plants and high-tech enterprises. Kibbutzim began as utopian communities, a combination of socialism and Zionism...
movement and other intentional communities fall into this category.
Co-operative Commonwealth
In some Co-operative economics literature, the aim is the achievement of a Co-operative Commonwealth; a society based on cooperativeCooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...
and socialist principles. Co-operative economists - Federalist, Individualist, and otherwise - have presented the extension of their economic model to its natural limits as a goal.
See also
- History of the cooperative movementHistory of the cooperative movementThe history of the cooperative movement concerns the origins and history of cooperatives. Although cooperative arrangements, such as mutual insurance, and principles of cooperation existed long before, the cooperative movement began with the application of cooperative principles to business...
- Rochdale PrinciplesRochdale PrinciplesThe Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844, and have formed the basis for the principles on which co-operatives around the world operate to this day. The...
Further reading
- Consumers' Co-operative Societies, by Charles GideCharles GideCharles Gide was a leading French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France.- Academic work :...
, 1922 - Co-operation 1921-1947, published monthly by The Co-operative League of America
- The History of Co-operation, by George Jacob Holyoake, 1908
- Cooperative Peace, by James Peter WarbasseJames Peter WarbasseDr. James Peter Warbasse was an American surgeon and advocate for cooperatives. He founded the Cooperative League of the United States of America and was its president from 1916 to 1941.-Early life:Warbasse was born on November 22, 1866 in Newton, New Jersey to Joseph Warbasse and...
, 1950 - Problems Of Cooperation, by James Peter WarbasseJames Peter WarbasseDr. James Peter Warbasse was an American surgeon and advocate for cooperatives. He founded the Cooperative League of the United States of America and was its president from 1916 to 1941.-Early life:Warbasse was born on November 22, 1866 in Newton, New Jersey to Joseph Warbasse and...
, 1941 - Why Co-ops? What Are They? How Do They Work? A pamphlet from the G.I. Roundtable series by Joseph G. Knapp, 1944
- Law of Cooperatives, by Legal Firm Stoel RivesStoel RivesStoel Rives LLP is a U.S. business law firm with 11 office locations in seven U.S. states. Headquartered in Portland, Oregon in the Standard Insurance Center, it is the 134th largest law firm in the United States, making it the largest law firm in the state of Oregon, and one of the largest in the...
, Seattle - For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, PM Press, by John Curl, 2009