Co-operatives, and the closely related Mutuals, are not a common subject of conversation, but we think they should be.
We live our lives in a very complex economic system, capable of producing an ever increasing diversity of goods and services. Indeed one area that seems a cause for hope in preventing dangerous climate change is the rapid pace, and roll-out, of technological innovation in areas like wind and solar energy capture.
At the same time, there are persistent problems that seem to be beyond solution. There is persistent lack of consensus on what is the best way to manage our economic affairs. Both our politicians and the media have an overwhelming focus on money and economic growth. Yet things like wage stagnation, increasing inequalty, personal financial stress and persistent poverty exist, even in very rich countries such as Australia.
The Global Financial Crisis of 2008 focused people’s attention onto the role of the financial sector in the economy, that it had developed to a state where it isn’t all benefitial, such as with risk taking in profit-driven banks “too big to fail”. Indeed, a day of reckoning for the local financial sector has arrived with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. With our ‘Big 4’ banks so dominant we should ask: What are the benefits and risks of such concentration?
The Green movement, which arose from this contradiction between increasing wealth while at the same time increasing environmental and ecological degration, has struggled to make an lasting impact at the political level in Australia.
So what happens when you start to question this focus on money and profits and instead ask: what goals are really important and can we achieve them in other ways? Many see co-operatives as being one such way, in that they make money to do things, rather than doing things to make money.
A central truth of “the economy” is that without human effort nothing happens. People make and provide goods and services and also consume those goods and services. Money and physical assets are also necessary but without human action they are meaningless. By equating money with power we can tend to ignore our own power of action (or ‘work’). But work is also much more significant to us, as human beings, than just providing money.
Another truth is that by co-operation our human effort is magnified. All organisations benefit from co-operation, its the flip-side of ‘division of labour’, but we don’t speak of co-operation much. Like with money being given precedence over human effort, we tend to see managers as being more significant than the co-operation that they direct.
The value co-operatives lies in these three aspects: We can decide what is important to us (aims) and how we can achieve them (goals); We can find others with shared aims and goals, define them precisely in a legal document to form a co-operative, then direct our efforts to achieving them; By co-operation, maybe with the assistance of managers, we can get achieve the aims more effectively.
As trading entities, co-operatives have to generate a surplus, like any other business they have to survive from year-to-year, but the surplus isn’t the primary goal. Instead it’s to achieve a purpose, one that the individual members probably cannot achieve alone, but can achieve through cooperation. They have a long history, the first was founded in 1844.
To take some examples ...
1. 4 million Australians are members of credit unions, mutual banks and building societies – all financial co-operatives that originally formed to provide access to credit for low and middle-income people. Credit unions collectively own the second largest ATM network in Australia.
2. Nationally, half of the mechanics workshops in the country are members of a co-operative, Capricorn Society, through which they collectively purchase parts.
3. Internationally 100,000 freelancers are members of SMart co-operative in Belgium, giving them 7 day payment services and the benefits of employment status.
4. The majority of Fairtrade coffee, tea and chocolate is sourced from co-operatives of small-scale agricultural producers,working together to secure their own livelihoods.
Tasmania is a regional economy, an island state somewhat remote from the opportunities of international trade, yet sharing a common currency with a much more populous ‘mainland’. As such, the self-help and place-based logic of co-operatives seems a good fit for Tasmanian economic and community development.
Some will say that advocating for co-operation is too simplistic in our complex world. But to achieve shared goals in this ‘self-help’ co-operative way is actually highly pragmatic. Co-operatives can and do play an important part in modern economies. Put simply, if you have a need that isn’t being met others probably do too, so form a co-operative!
For reasons such as these, the United Nations is an advocate for co-operatives. It proclaimed an International Day of Co-operatives on the first Saturday in July. To mark this, the Co-operatives Tasmania group, with support from the Business Council of Co-operatives and Mutuals (bccm.coop), is screening a new Canadian film on co-operatives ‘A Silent Transformation’, at the Ferntree Tavern on July 18 at 8:00pm, followed by a discussion.
*Stephen Cameron has a background in Agricultural Science and Information Technology, he is currently building recreational rowing boats with Witt Design and helping the growth of the co-operatives sector in Tasmania. He plans to help bring some new co-ops to life in the near future, amongst other projects.