Monday 14 April 2014

Something is emerging beyond conventional capitalism

The co-operative sector is having a tough time at the moment.  Not because the 6,000 or so mutuals in this country are in any difficulties - quite the reverse - or even because the biggest and most impressive employee mutual in the country is failing to thrive.

On the contrary John Lewis and Waitrose are storming ahead.  But there is no doubt that the Co-operative Bank (not actually a co-op at all, but owned by a co-op) is causing a sense of crisis for everyone else.

And because the bank is having a torrid time, its 30 per cent owners the Co-operative Group are in some disarray as well.

It has a hugely complicated democratic structure, the regulators are crawling all over the board, and the whole edifice has been funnelling money pointlessly to the Labour Party for years.

But to make matters worse, there is the business press urging them to adopt precisely the same dysfunctional structure as every other plc - a choice, as far as I can see, like the Devil and the Deep Blue Sea.

Lord Myners' proposals, as I understand it, are a potential middle way forward, at least as he explained it in the Guardian this morning.

I agreed with the long-standing co-operator Vivian Woodell in the radio last week, when he said that he thought the way forward for the Co-op would be to be more like a co-op not less like one.  There is certainly no point in the Co-op at all if it is exactly like every other bog standard company in the UK.

So let's take a deep breath and a longer view, because there was a moment a century ago when the co-operative movement was poised to hold the line between conventional capitalism and state socialism, especially in housing.

Backed by Liberal politicians like Henry Vansittart Neale and Henry Vivian, there are records of over 8,600 homes built by co-partnership societies between 1901-12, and there are were 35 other societies whose records have been lost. Six are still in existence.

Vivian was MP for Birkenhead, an ally of Liberal reformers like George Cadbury and Joseph Rowntree who were determined to unleash a new kind of working class mutualism that could provide for people’s needs and fight the causes of poverty. The co-partnership societies had their own direct works departments, playing fields, club houses and garden parties – and lectures: this was the great age of the lantern slide.

The co-operative movement was just the tip of a burgeoning iceberg, and the engine of much else besides. Within weeks of the start of the First World War, the Co-operative Wholesale Society was turning out 10,000 tunics a day for the army and its ships were rescuing the survivors of torpedoed vessels.

But the co-op movement went head to head with the Fabians, which took a different view.  The alliances between Liberal business leaders and working class institutions like consumer co-ops, which had been the route by which people like Vivian – a carpenter by profession – had reached parliament, began to look naïve.

Meanwhile, the co-operative movement was about to be bludgeoned out of existence by the new totalitarians across Europe. Fascists in Italy burned out co-operative stores. In Vienna, where half the population was supplied by consumer co-ops, the leaders were arrested within weeks of the Anschluss

In Russia, where the co-operative movement ran its own university and central bank, all co-op property was confiscated by the Bolsheviks. Only in Iceland and Scandinavia did mutualism survive on any scale. 

By the 1930s, even George Orwell was parroting the Shavian ridicule of any radicalism that was not Fabian: “If only the sandals and pistachio-coloured shirts could be put in a pile and burnt,” he wrote in 1937, “and every vegetarian, teetotaller and creeping Jesus sent home to Welwyn Garden City to do his yoga exercises quietly."

Yet there is an emerging narrative in the USA that mutuals are once again the way forward, driving a Liberal wedge between conventional capitalism, which seems unable to meet our needs, and state socialism which has failed.

Watch this clip of Gar Alperovitz, one of the the interesting of the political commentators in the USA, with years in Washington behind him, talking about the new mutuals emerging in the stricken city of Cleveland, Ohio.

There is an unusual clarity about his vision, especially for these compromised days.  "Capitalism is dying," he said.  "But something a lot better is taking its place."

I also think he is right.

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