Co-operatives, Mutualism and the State

Well, I've been fretting for a few days about the bits I missed out of my talk at the Oxford "Speak Easy" last week. Those who were there early enough heard me begin with a few lines from my notes, before I went rambling off elsewhere and lost my place, so whilst I mentioned that I'd like people to disassociate for the purposes of the discussion the (big-m) "Mutualism", the successor to the Individuality Anarchist movement, and the (small-m) "mutualism" that describes the use of a particular co-operative business form. For whilst there are similarities, especially in their theoretical basis, there are also differences, especially in the way the Co-operative Movement in the UK operates.

But I think it is important to compare and contrast them, and I intended to do this on Wednesday night, but didn't get to that. At the moment, politicians from all the main parties are talking about embracing mutualism, using co-operative businesses to deliver certain public services and so on. And what worries me is that people will get the wrong idea about both co-operative businesses and about "Mutualism" and if these attempts to use co-ops in public policy do not work out as well as they are now being touted will be disillusioned with the idea of mutualism, and Mutualism, itself.

There has also been much discussion of this around the blogs and media recently, so I thought I would add my tuppence worth.

So some thoughts…

First the Co-operative Movement is innately anti-statist. This may not appear to be the case in the UK where the Co-operative has established a political party, called, unsurprisingly, the Co-operative Party, and which many years ago now hitched itself to the party of the big state, the Labour Party. But in its early years and, as some would say its hey-day, in which co-operative business forms were founded from the ground up, by ordinary people wanting to meet all sorts of their needs, for food, for insurance, for health care, housing and so on they worked in spite of the state which most often seemed to grant privilege to those who would rip them off.

Indeed, the first of the seven Co-operative Principles, based on those set down originally by the Rochdale Pioneers and now guarded and promoted by the International Co-operative Alliance reinforced that a co-operative is based on voluntary, open membership, for all people who are able to make use of the benefits the society is created to deliver. It is inherently voluntarist – anarchist – the complete opposite of which is the sort of compulsory collectivist state socialism engages in. Even when that state is apparently "democratic", it is still not voluntary in the same sense. If you really don't like a democratic decision of your fellow co-op members, you can, ultimately part company; go and get whatever services or goods they deliver from somewhere else, or start another co-op. Try doing that if you don't like the "democratic" decision that leads to one party running the country however they like.

So in this sense, the co-operative business form is a very useful one for those of us who see co-operatives and social enterprises not as a way of delivering government policies, but as a way to develop truly voluntarist means of doing what the state often does by coercive collectivism. But it is only one business form of many, and to a large extent Mutualist-anarchists are agnostic about what business form should be used in any particular instance, just so long as it is not coercive.

That said, there are some areas in which the co-operative form seems to me to give particular benefits; where for example a good or service is too big or difficult to procure individually, or where the different interests in an organisation, the workers, consumers, financiers and so on want to align their interests in the ongoing management of the organisation because of the nature of the sort of transaction they are involved in. And schools might very well be a good example of this. It's not something you want to change your supplier of every day. You can buy your newspaper or groceries from a different person every time, but you will want some stability for your children's education. So you may want to agree to participate in setting policy and direction in your chosen school alongside teachers and managers.

Second, a co-operative business or a social enterprise is not a "not-for-profit". I know that people have qualms about things they perceive as public services being delivered by organisations that aim to make a "profit", but it is simple fact that you cannot run a business without aiming to make a "profit" – to aim for "break even" is to fail. What matters is what you do with that profit, perhaps. And sure, in a shareholder owned limited company, the whole purpose of the business is to make financial gain for its investors. But the same could be true of a co-operative. There is nothing that prevents a co-operative business distributing its surplus to its owners. In the case of the ubiquitous Co-operative Group retail businesses this usually involves sending us members discounts off our future purchases, but there's no reason why it should not be a cash dividend if that is what the co-operative membership decided.

But there are lots of other things that could be done with "profits" – there could be a policy to help finance other co-operatives start up, or local community activities or charities, or to reinvest everything into the profit generating organisation itself. The really key thing about a co-operative is that it is owned by the members who join it because they benefit from the goods or services it delivers, as opposed to it merely being a financial investment where shareholders may have little interest or intention, or even ability, to use what their limited company produces.

And so, finally, to the various noises being made by political parties about "embracing mutualism", "encouraging co-operatives" and so on. Of course, as someone who does not believe the state has legitimate roles in delivering what they call public services in any case, I also do not believe it has the right to control who delivers them, or to whom to devolve responsibility for some of them to. The most state-collectivist activists would not accept a co-operative as a compromise in any case. They would say that it is wrong in principle to incorporate what is currently delivered by a unique sort of an organisation – public custodians elected by everyone – because it creates an organisational form that is itself vulnerable to take-over. Even if you establish your public service delivery co-operative as, to start with, a business whose rules say they must reinvest surpluses and so on, they will point to the demulualisation of our former mutual financial services sector as an example of where member/owners can be tempted out by big money and big business.

But more importantly, as in my first point above, co-operatives are about voluntarism and grass roots action by people who want to work together to secure some kind of a benefit more difficult or less satisfying to achieve on their own. They are not, and should not, be agents of state policy, of top down devolution of something in which the state will then, inevitably, want to retain a significant amount of control.

It has been incessant growth of state action in the spheres in which very many people were already making their own voluntary arrangements that has extinguished much of the thriving co-operative and mutual self-organised culture that previously flourished. When Lloyd-George promoted unemployment insurance for example, he quoted in his budget that 90% of the people likely to benefit from the proposed state system were already covered through friendly societies and so on – so his state action was to replace all of this voluntary co-operation in order to fund a statist way of ensuring the other 10% had cover.

Whenever I was asked, such as in those "go round the table and introduce yourselves" moments, as a director or chair of Oxfordshire Social Enterprise Forum, or as a director of Social Enterprise South East, I would make the point that I was not a promoter of social enterprise for delivering on government commitments, but as promoting self-organised social market alternatives to government action. And I hope other would be co-operators and social entrepreneurs will sup with a long spoon when the man from the government comes along offering them the chance to "run their own public services".