Taking Stock of the Cooperative Economy in the UK

Source

• A chapter extract from The Cooperative Advantage, edited by Ed Mayo and published in

2015 by New Internationalist.

URL = https://www.uk.coop/sites/default/files/uploads/attachments/taking_stock_looking_forward.pdf

Excerpt

Robin Murray:

"This book breaks down the landscape of the British economy into contours that we can recognise. The great national aggregates of GDP, employment, the rate of inflation and the balance of trade are the data of those who control the macro economic levers in London. They obscure the specific character of the economy of our daily lives – the shops, the buses, the farms and the streets of a city. The chapters here come down to a human level, and describe the hidden structures and forces that are shaping the economy as we experience it. In doing so they allow us to think how things could be done differently and map some of the promising paths opening up for co-operators to follow.

Three features of these sectors stand out when the chapters are read together.

First it is striking how many of them in Britain are dominated by a few large firms. In energy it is the big six, in banking the big five as it is in housebuilding. We learn that the 24 passenger rail franchises are in fact owned by six or seven parent corporations. The top four supermarkets account for three quarters of grocery sales. We would find a similar picture in other sectors touched on this report – the oil companies, the press, book publishers or pharmaceuticals. Economists refer to this as oligopoly. It appears as an inherent tendency of market competition. In Britain it has been naturalised as an inescapable way of life.

Here is the bind. We depend on these companies yet they abuse their position. The banks are the overwhelming case not just for the calamities of 2008, but for the successive scandals of mis-selling and market manipulation.

The oil companies and the electricity majors have been intensifying the problems of climate change not resolving them. In the press it has been the scandal of phone tapping. British housebuilders have produced smaller houses, at poorer quality and at higher prices than those in Holland and Germany principally because the money in the UK is to be made in land.1 All these companies have contributed in their own way to tax avoidance and the growing inequality that, as Thomas Piketty records, is approaching levels last seen in the early 19th century.

There is a consistent pressure driving a wedge between the public and the private interests.

The second striking fact is that in many of the sectors the traditional role of the state of counteracting this divergence has been eroded. In some of the sectors the wedge has deepened as a result of the privatisation of public assets. The social care chapter, for example, shows how privatisation has reached the point where the sector is now dominated by private providers, many of them owned by private equity companies, that have cut pay and the quality of service in order to generate their returns. In education we see the emergence of large quasi corporate chains of academy schools. Public land is being returned to the speculative private market in spite of the need for social housing. Nearly two million council houses have been sold in the past thirty years, and there has been a long-term shift to private renting. Now health care is being opened up to a private market. The chapters give a picture of a state that far from counteracting the wedge between the public and the private interest appears bent on expanding it.

Thirdly, the chapters report on the significance of new technology in shaping the future of these sectors. In many of them a battle has already been joined between the use of information technology by the old majors to strengthen their position and new entrants with disruptive online alternatives. In banking there has been an upsurge of on line banking innovation – so called Banking 3.0 – whose upstart companies threaten the foundations of the old banking models, as they are already doing in Africa and the Far East.

In retailing, Amazon is surging into one sector after another, leaving traditional retailers struggling to catch up. The Education chapter mentions the Kahn Academy and Massive On Line Open Courses (MOOCs), which have the capacity to transform school and university education respectively. There are similar trends appearing in health care, in food production, and above all in energy, where the relevant chapter records how renewable energy technology provides the scope for each village and even each house to become its own power station. Just as itunes has changed the record industry so these innovations are threatening the foundations on which the old oligopolies have been built.

There is a common pattern. The innovations open up spaces for distributed production – where a multitude of small producers are connected through common platforms, grids and protocols. Apple is a new giant, but it has provided the platform for more than a million apps. Coursera, the first MOOC founded 2 years ago, now has 10 million worldwide students receiving 839 free courses supplied by 114 institutions. The renewable energy co-ops in Germany are now pressing for smart grids to support their local systems.

Solar technology is set to be even more distributed. The forecasts are that it will be so cheap by 2030 that like the computer we will find it on every home and building.

The picture that emerges from the chapters of this book is of a private economy that is out of sync with the major issues of our day and in many cases is making them worse. Climate change, the relentless growth of hazardous materials, pollution and waste, of chronic disease and obesity, of inequality, and most starkly the wider uncoupling of well being and growth – all these described by those within them as time bombs – are intensifying rather than being defused.

To put it mildly, this is not an economic system at ease with itself. And the state faced with mobile capital and an eroding tax base appears paralysed, insisting on seeing the problems of ever increasing corporate economic and political power through the prism of 19th century free trade market liberalism. It has all the marks of a Shakespearean economic tragedy, the principal characters unable to escape from their tragic flaw." (https://www.uk.coop/sites/default/files/uploads/attachments/taking_stock_looking_forward.pdf)

The Growth of the Cooperative Schools in the UK

Robin Murray:

"When the history of co-operation in 21st century Britain comes to be written, the remarkable growth of co-operative schools over the past 6 years reported in the Education chapter of this book may have the same inspirational place as that of the Rochdale pioneers in the mid 19th century.

There is the same sense of wildfire growth in them both, of a model that is at the same time visionary and practical, one that is tangibly of the moment. The co-operative movement has from the first highlighted the importance of education. It is the fifth of the seven co-operative principles. The new cooperative schools in England have taken all seven principles and embodied them within the educational process itself. In 1844 the necessities were bread, butter and porridge. Today’s necessities in the information age are the values, the capacities of thought and creativity, which are the bread and butter of a school.

The first co-operative school at Reddish Vale – significantly in Greater Manchester like Rochdale – had no idea that it would be the spark that led to a wildfire. Those who started it did not have a sector strategy, anymore than did the first 28 pioneers in Rochdale. What they had were strong values, and a model of how a self-governing school could work. They had a keen sense of unfolding the future. At each stage Reddish Vale and the many schools that followed moved forward along the paths of possibility, establishing new initiatives, as they were needed. Some were within the school and their communities, some with other co-operative schools.

Where might this remarkable contemporary story of co-operation lead? There will certainly be more schools. The Education chapter points to the opportunities for the extension into other spheres of education, particularly for further education colleges (some of which are already partnering with their local co-op schools). But the possibilities go wider. Education is only one of many relational services. In a relational service the quality of the service depends critically on the relation between the front line staff (the teacher in the case of a school) and the user (the pupil). It also is shaped by the communities in which each are involved (the home and its communities, other users, and the service professions). Multi-stakeholder co-operatives are proving to be a remarkably effective model of governance for services of this kind." (https://www.uk.coop/sites/default/files/uploads/attachments/taking_stock_looking_forward.pdf)