The Birth of a New Cooperative Economy

They say we are self-interested, we’re always out to win.
Always individualistic, though it used to be a sin.
They say we need free markets, the better to compete,
and the economy will flourish if we only think of greed.

This is Economics 101, the way it’s taught today. Not a word about nature, community, caring, sharing, or cooperation.

During the mid 19th century, advances in science, democracy, education, literacy, public healthcare, labour unions, technological breakthroughs, banking, and the power of fossil fuels to generate rapid economic growth certainly made it seem that after ten thousand years of economic stagnation the competitive pursuit of profit was improving life for all. In the 1760s it took eighteen hours of human labour to transform a pound of cotton into cloth. By the 1860s it took one and a half hours. Today, it probably takes five seconds.

As we approach the mid 21st century, however, we look with dismay at how the single-minded pursuit of profit is destroying nature, wounding the atmosphere, shattering communities and causing increasing loneliness amid an over-abundance of ever-cheaper goods.

A Gothic Horror Story

The old economic story that competitive profit-seeking in a free market will solve all our problems by generating economic growth has shed its coat to reveal a Gothic horror story offering nothing but misery, death and collapse. We are long overdue to toss it in the recycling, and build ourselves a new story.

The new story starts with syntropy, the incredible anti-entropic process that causes all forms of existence to cooperate with others within their empathic reach to increase their organizational capacity and reach, from atoms and molecules to the first living organisms. Syntropy generates Nature, and after several billion years it generated humans, not as selfish individualistic profit-seekers but as the most cooperative, altruistic species that has ever lived.

Are You a Full or a Conditional Altruist?

Scientifically applied game theory demonstrates that a quarter of us tend to be selfish and self-interested; a quarter are fully altruistic; and half are conditionally altruistic, preferring to cooperate with others on condition that others do the same and the social rule-breakers are punished. This behavioral preference has arisen because of the evolutionary effectiveness of altruistic cooperation within groups facing conflict, and presumably also because being kind and cooperative brings friendship and companionship while being a selfish jerk does not.

Recall the last time you stood in a queue. Someone barges in front of you. Do you feel indignant and want to call out that it’s unfair? This is how conditional altruists respond. Do you take a kindly attitude and assume the person has a good reason for queue jumping? This is how full altruists respond. Or are you perhaps a queue-jumper yourself, believing in your need to be at the front? This is how the self-interested respond.

When social and economic conditions are secure the conditional altruists align with the full altruists, and together they nurture a cooperative way of living that tends towards kindness. When people are insecure, however, when they experience fear and hurt, some conditional altruists align with the self-interested, especially when they promise to end their miseries by blaming and persecuting others, be they Jews, Muslims, Yazidis, Rohingyas, Blacks, bankers or rich elites.

This adds urgency to the search for a new story and a new model for our future economy. What makes the task easy is that it has been hiding in plain sight ever since Robert Owen and the Rochdale Pioneersformalized the workers cooperative movement in 1844, and Henry Schulze-Delitzsch developed the first credit union in Germany in 1852.

The New Story

The new story is simple. It tells us that most humans like to live cooperatively, a preference we developed during our hunter-gatherer past. When we started farming the competition over land for cultivation and grazing caused conflict and war, bringing warriors, warlords, kings and feudal dynasties, and later industrial capitalists and bankers, under whose rules and on whose land we were obliged to live.

Our inner selves persistently whisper that life could be better, however, and whenever the opportunity arises we rise up and attempt to build a better world. Step-by-step, we have learnt how to shape conditional altruism into economic and financial institutions that work.

What is the New Cooperative Economy?

So what is this new cooperative economy? It is big and small, varied and diverse. It’s as multi-colored as the rainbow and it’s happening all over the world.

It is happening in a small town such as Hardwick in northeast Vermont, where farmers and foodies are working together to build a local food economy, growing not just food but also affection, community and a network of mutual support. It’s happening in farmers’ markets everywhere, wherever people prefer locally grown food and conversation to the soulless supermarket aisle.

It is happening in consumer cooperatives such as the Seikatsu Club Consumer Cooperative in Japan, whose 300,000 members share the distribution of safe, healthy affordable products and meet together in small ‘hans’ to support each other with childcare, food education and business activities.

Seikatsu-structure-2_0

It is happening in the village of Hudswell in England’s Yorkshire Dales, whose villagers refused to accept it when their local pub the George and Dragon was forced to closed following the 2008 financial crash and who chose instead to buy it and run it as a community-owned cooperative – one of seven thousand cooperatives in the UK.

It’s happening on Vancouver Island where the nine worker-owners of the Viridian Energy Cooperative are busy installing solar panels, sharing their income and decision-making. It is happening in Austin Texas, where taxi drivers responded to the greed of company owners and the dishonesty of Uber by forming the ATX taxi cooperative. It is has been happening since 1955 in Mondragon, Spain, where seventy thousand people work in a trusting network of a hundred cooperatives, owning their own businesses, banks, university and welfare system.

It is happening in banks that have changed their core motivation, such as Vancity in BC, and the Triodos Bank in Europe, which has no shareholders, is owned by a trust, lends the savings of its customers to regenerative enterprises that benefit people and the environment, whose management team is 40% women, and which had thirteen billion euros under management in 2015 and a net profit after taxes of twenty-nine million euros.

It is happening in the Emilia-Romagna region of Italy (south of Venice, north of Florence), where seven thousand cooperatives and a host of privately owned businesses have worked cooperatively in partnership with local governments to build one of Italy’s happiest and most successful regions.

It is happening in Bologna, where thousands of health and social service workers meet people’s need for care and loving attention through hundreds of social service cooperatives.

It is happening in New York’s Rolling Jubilee, whose people have raised funds to abolish $14 million of medical debts for pennies on the dollar and bought and abolished $13 million of student debt, freeing ten thousand students from their burden.

It is happening in the non-profit sharing economy, such as Victoria’s Tool Library and Car-Share Cooperative (Modo), and among the 800 members of the Lyttleton Time Bank in Canterbury New Zealand who have shared 11,000 time exchanges.

It is happening in housing coops, community land trusts, shared communal houses, ecovillages, cohousing projects, and a myriad non-profit housing initiatives.

It is happening in non-corrupted democracies where money no longer fuels the hubris and greed of billionaires and where governments govern in a more participatory manner, as they strive to do in Norway, Iceland, Sweden and New Zealand, ‘the world’s strongest democracies.’

It is happening in 2,358 B Corporations, including 200 in Canada and 38 in Vancouver, which use the power of business to solve social and environmental problems as well as generating a necessary profit.

It is happening wherever people are farming ecologically, generating energy renewably, tackling the climate crisis, protecting wetlands, creeks and rivers, and protecting and regenerating Nature’s ecosystems and her amazing brilliance.

It is happening in European nations where workers have decision-making seats on the company board, varying from every company with 25 or more employees in Sweden to every company with 1,000 or more workers in France.

It is happening in a community such as San Francisco, which is close to achieving zero waste by 2020, and Amsterdam, which is working to create a circular economy.

Until about ten years ago it was happening in Germany, where the central bank used credit guidance to target the bank’s money-creation powers for productive purposes, rather than to serve the interests of bankers, asset-holders and shareholders.

And it is happening every day whenever people are kind to each other, including strangers and people with different incomes, different colored skins, different religions, different abilities, different mental struggles and different sexual orientations.

I could go on, but this should be sufficient. Once you know where to look, the evidence is everywhere. Our task now is to tell this story, and to convert it in a coherent political and economic platform, so that governments can embrace the vision and set their sights on making it happen.

*

Worker Co-ops and Cooperative Banks Perform Better

In Europe, during and after the 2008 financial crash, cooperative banks outperformed investor-owned banks. From 2007 to 2010 their assets grew by 10%, and their customers and reserves grew by 14%. Only 7% of the co-op banks suffered losses, and no bailouts were needed. Between 2003-2010 their average annual returns were 7.5%, compared to 5.7% for investor-owned banks.

When Spain’s economy collapsed following the 2008 crash and unemployment rose to 26%, nobody in the Mondragon network of 100 cooperatives lost their job. Instead, the worker-owners forsook their dividends and took an average 5% reduction in income. When one small co-op did have to close, its workers were absorbed by other co-ops.

First published in The Watershed Sentinel, January 2018. https://watershedsentinel.ca/articles/new-story/

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Top Image: Coffee Handler with Beans from Timor Coffee Cooperative | Photo: United Nations Photo (via Flickr)



Guy Dauncey is author of the novel Journey to the Future: A Better World is Possible. (www.journeytothefuture.ca). He is currently researching his next book The Economics of Kindness: The Birth of a New Cooperative Economy. He lives in Yellow Point, near Ladysmith on Vancouver Island in Canada.

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