Cooperatives: the other Best Kept Secret

Dec 2012/Jan 2013, Volume V, No. 2

Did you know that the cooperative movement is at work in more than 100 countries, and that it has more than 800 million members? Would you be surprised to hear that four out of every ten Canadians belong to at least one co-op? In Quebec, actually, co-op membership includes 70% of the population. The cooperative movement is a reality that accounts for approximately 100 million jobs world-wide. So how come the mainstream press is so quiet about it? The United Nations tried removing this cloak of silence by naming 1012 The International Year of Cooperatives.

Back in the 20th century, Catholic social justice advocates used to joke that the strong social teaching of the Catholic Church was so little known, and so rarely preached in most parishes, that it was “the Church’s best-kept secret.”  

Well, the Catholic Church’s vision of a just society isn’t the only great idea for a civilized economy that doesn’t get a lot of press.

Did you know, for example, that the cooperative movement is at work in more than 100 countries, and that it has more than 800 million members? Would you be surprised to hear that four out of every ten Canadians belong to at least one co-op? (In Quebec, co-op membership includes 70% of the population.) Bet you didn’t know that the World Council of Credit Unions includes 49,000 credit unions serving 177 million members in 96 countries, or that 4,200 banks that are members of the European Association of Cooperative Banks serve 149 million clients—and that their banks did not get hooked or wrecked in the notorious banking scandals/collapses of recent years. And credit unions are today ranked 18th among the 50 safest banks in the world. 

So although the co-op movement is visionary, it isn’t just a dream. It’s a reality that accounts for approximately 100 million jobs world-wide.  So how come the mainstream press is so quiet about it?

The United Nations took a stab at removing this cloak of silence by naming 2012 The Year of Cooperatives, with the theme “Cooperative Enterprises Build a Better World.”  UN Secretary General Ban Ki-moon told the world that “Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”

The Canadian Association of Cooperatives responded to the UN initiative by bringing together an International Summit of Co-operatives, October 6-11, in Quebec City.  This ambitious world gathering aimed to make co-operatives more effective economically and socially – and more influential in international and domestic political, economic, educational and other cultural institutions. They came, 2800 co-op leaders from 91 countries, big and small, including China and Nepal, loaded with studies and surveys to inform each other and make their co-ops better known. The lead Canadian organizers included St. Mary’s University in Halifax (which offers a graduate program in Cooperative and Credit Union Management) and the enormous Quebec-based Desjardins Group of cooperatives.

But first a little history of co-operatives.

In 1844, three economic models, which have dominated the world for the past 150 years, took shape. First, the British parliament passed the Joint Stock Act which facilitated the birth of modern capitalism by developing the basis of the modern corporation. Second, in that same year Karl Marx published his German Ideology and Friedrich Engels his The Conditions of the Working Class in England, which together provided the seeds for The Communist Manifesto in 1848. And, third, just before Christmas of 1844, twenty-four workers founded the Rochdale Equitable Pioneer Society by opening a small co-op store selling only butter, sugar, flour, oatmeal and candles. From their simple experiment the idea of the modern cooperative movement developed.

Some claim its inspiration came from Charles Dickens’  A Christmas Carol, published a year earlier. You remember the story of Mr. Scrooge, the mean-minded capitalist who was terrified into generosity by his encounter with the “ghosts” of Christmas, past and future.

The prophetic “ghosts” showed Scrooge the consequences in his own life of his habit of putting financial profit ahead of human need and, indeed, ahead of all human relationships. And you remember the innocent and vulnerable Tiny Tim, crippled but beloved by his poverty-stricken family, who saw that everyone is part of the same family, and, if only they would live in unity the world would have a better ending.

The moral of the Christmas Carol parable was very clear! But the Pioneers were after practical solutions as well as morality. Seeing how quickly the shelves in their new store emptied, the Pioneers were already searching for change more real than Dickens’ warm feelings and less horrific than Marx’s revolution.

Despite many trials the movement prospered and soon diversified and spread to the New World. The development of co-ops in Canada is a sterling example of the strength and creativity of the movement. The pioneer Alphonse Desjardins established the first credit union (caisse, in French) in Lévis, Quebec, in 1901 – creating an innovative financial model of savings and credit, owned and governed by its members.  The Catholic clergy in Quebec gave their full support to the new caisses—even to the extent of seeking Pope Pius X’s approval for priests to manage local caisses. By 1963, Quebec had 1248 credit unions with assets of over $1 billion and 1,539,000 members. Nor did the co-op movement restrict itself to cooperative forms of banking. Agricultural co-ops, housing co-ops, consumer co-ops and many other structures for economic solidarity, mutual support and stimulus grew to be a major dimension of Quebec’s economy, as they still are today.

In Atlantic Canada, the cooperative idea was spearheaded in the 1920s by the Antigonish movement, with illustrious leaders like Father Moses Coady, and strong support from other Catholic leaders and people. Coady particularly emphasized that the co-op movement consists of action that is a consequence of cooperative learning (study clubs spread like mushrooms) by the people involved. St. Francis Xavier University in Antigonish took this idea so seriously that in 1928 it opened an Extension Department to back up the growing movement of study clubs and co-op business ventures. Years later, the Coady Institute opened its doors to students from all over the world, thousands of whom have returned to their homelands to start and/or develop co-ops suited to local conditions.

By the beginning of the 1930s, cooperatives were spreading across Canada, particularly in the Prairies. (That is a story for another time.) Through many hardships, the Canadian  movement prospered and presently has 9,000 cooperatives with 18,000,000 members, 155,000 employees, 100,000 volunteers, and $50 billion in annual income. 

And so the Canadian Association of Cooperatives had good reason to celebrate The Year of Cooperatives with a huge International Summit with the theme “The Amazing Power of Cooperatives.” 

The promotional literature for this coming-together of cooperative leaders from round the world reveals a remarkable resonance between it and recent social teaching by Pope Benedict in his social encyclical, Caritas in Veritate. (The English title is Integral Human Development in Charity [Love] and Truth.). He sees the promotion of social or civic economy as a way to modify, indeed, to civilize our present economy. In Pope Benedict’s definition, social or “civic” business is economic enterprise that aims primarily at goals of social and human welfare, whether it is organized in a non-profit model or seeks a modest profit.  The concept of social business includes cooperatives, credit unions, etc. where the members are owners and where there is a communal approach to taking initiatives, making decisions and sharing earnings.  

Can the cooperative approach grow and become powerful enough to influence the way business is done in the economy as a whole? Can it help to civilize the behaviour of markets? Theorists of the co-op movement aim at that, and Pope Benedict considers it a highly desirable possibility. He writes in Caritas in Veritate, “Without prejudice to the importance and the economic and social benefits of the more traditional forms of business, they [social or civic businesses] steer the system towards a clearer and more complete assumption of duties on the part of the economic subjects. And not only that. The very plurality of institutional forms of business gives rise to a market which is not only more civilized but also more competitive.” [45]

Here are the seven principles that guide cooperatives around the world:

  1. voluntary and open membership 
  2. democratic member control 
  3. member economic participation
  4. autonomy and independence 
  5. education, training, and information (transparency)
  6. cooperation among cooperatives 
  7. and finally, concern for the community. 

Through these practical principles, co-ops intend to promote democracy, self-help, equality and solidarity – all of which we find in Pope Benedict’s own expectations for a social economy.

The first half of the International Summit was organized by St. Mary’s University of Halifax. Called “Imagine 2012”, this part of the Summit was a reflective seminar for about 700 participants on present global crises and the challenge for co-ops therein. It was led by some of today’s most influential thinkers, including Canadian Thomas Homer-Dixon. 

The central concern for the participants was the inadequacy of capitalist markets to confront today’s financial chaos, high unemployment, the growing income gap between rich and poor and the need to fit economic activity within ecological limits, especially in the use of fossil fuels. We seem to have forgotten that the economy is a subsystem of society, not the other way around--and that human society itself depends on nature’s own systems and must respect ecological limits. We are, to our peril, letting multinational corporations, with the help of technology, attempt to reverse this universal order. “Imagine 2012” saw the leadership of the cooperative movement as looking for a new economic paradigm complementing the work of other groups such as the New Economic Institute, the Institute for New Economic Thinking, the Degrowth movement, etc. in proposing a more encompassing view of the economy as a complex set of relationships that people use to provide themselves with the goods and services they need to live meaningful lives in their communities.

Whereas conventionally organized corporations in the so-called private sector are obliged to aim, first and foremost, at optimum return on invested capital for the profit of their shareholders, co-ops may have multiple goals. To survive, they have to be sound and accountable business enterprises, but they may also exist for specific social, communal and ecological goals. During the present global economic crisis, co-ops performed better than the dominant economy both in providing income, holding their employees, and reducing their carbon footprint on the planet. 

And yet co-ops are still little known and misunderstood – at times, even by their own members.

The second half of the co-op Summit, with the full assembly of 2,800 co-op leaders, was spent in strategizing how to make co-ops still more effective and better known. They urged better education and formation of their own members, especially the younger members. More broadly, they plan to work to get cooperative economics taught in business schools and universities (and in high schools too, for that matter).  They will also interconnect and cooperate globally much more than in the past. And they will use their increased growth and strength to have access and influence with UN agencies such as the International Monetary Fund, the World Bank and the International Labour Organization, as well as with domestic governments. They want to be seen a part of a real pluralistic market economy, not just a marginal alternative, to use the Pope’s language referring to social enterprise in Caritas in Veritate.

The later sessions of the Summit were focussed almost exclusively on how to make co-ops more visible and resilient throughout the world. There was still much talk and planning concerning the unique social goals of the co-ops and the necessity to cultivate and build trust and loyalty with co-op members and their customers,  but much less about ecological concerns and limits than earlier.  

And the non-voted Declaration of the Summit was devoted entirely to the future of the co-ops themselves, with little mention  of the present global crisis, the inadequacies of the present capitalist markets and concern for ecological limits.

"We have so much knowledge with so little understanding."

Early in the gathering, Chilean Manfred Max-Neef, the first economist to speak, said he had difficulty finding hope because “We have so much knowledge with so little understanding.” However, the final word came from a revered French ‘ecosocio-economist’, Ignacy Sachs, speaking at the closing lunch. He had been the assistant to Canada’s Maurice Strong, the Secretary General of the Stockholm Environment Conference in 1972.  When asked if he has hope for the future he replied, haltingly, “yes” -- on condition that in the coming decade the nations of the world manage to reduce the growing income gap between the rich and the poor in the world so that it might become possible for all peoples to begin to engage seriously in necessary planetary planning.

Finally, I was both surprised and disappointed that in this very important global conference there was no room for God or explicitly religious language – only Rochdale co-op values, which coincide substantially with Catholic social teaching. Nevertheless, it was a sign of the times that the first international speaker at the Summit was an Italian economist from the University of Bologna, Stephano Zamagni. In describing social enterprises, Zamagni used very much the same language as Caritas in Veritate. When I pointed out this likeness to him, Zamagni smiled and admitted that he had helped to draft that part of Benedict’s encyclical. 

It’s clear that the Church and cooperative movements have similar economic concerns and proposals for creating a more socially responsible economy for people and for the planet. History tells us that these proposals are realistic as well as visionary. Mutual support between churches and co-ops has often been fruitful in the past, and can still be fruitful in generating social hope in the midst of today’s frightening crises. 

In Dickens’ Christmas Carol, the Ghost of Christmas Past shows Scrooge a vision of the young woman he had once intended to marry. She was breaking off their engagement, lamenting that the Scrooge she had loved had been seduced by “a golden idol”, and that greed had made him incapable of genuine love. She despaired of him ever returning to true humanity. But in the Dickens story, powerful examples of love and family devotion convert even Scrooge, leading him to the joys of sharing and heartfelt cooperation. Conversion can apply also to economic life. May we all live to witness and support many such conversions!

Bill Ryan sj