Co-operatives: a possible future to note

Speaking last week to various emancipation gatherings, President David Granger sought to strike a note of optimism about the impending oil bonanza, but this backfired when he admonished his largely African audiences for spending too much time and money on liming and drinking rather than educating themselves to take advantage of the forthcoming opportunities. Coming from a priest, that kind of sterile moralistic message might barely pass muster, but from a president it indicates that after years in opposition and government, he and his party do not have any meaningful programmes to extricate the poor - and particularly his own constituency - from their poor condition. Indeed, his statements are suggestive of the kind of failed laissez faire approach I mentioned last week in relation to co-operative development and that instigated my promise to in this column suggest how ‘cooperatives can contribute to the required mix of positive efforts to aid in the emancipation of the working people.’

The conceptual foundation of my effort here takes into consideration certain indigenous and exogenous, past and contemporary conditions and aspirations. Two of these are firstly, the era of globalization has brought with it a massive movement of people, global and local inequalities and growing political disassociation. As a result, it is now widely recognised that new approaches are necessary if we intend to live in prosperous cohesive societies. ‘(I)f today’s egalitarian politicians, … are to succeed in their projects of taming markets and revitalizing social democracy for the twenty-first century, it will not be with the politics of the past’ (https://www.foreignaffairs.com/articles/world/2018-06-14/marxistworld?cid=nlc-fa_twofa-20180719).

Secondly, my emphasis on the poor should by no means suggest that I believe that citizenship and class are the sole criteria for policy differentiation in modern multiethnic societies. I do recognise that concrete plans will have to be democratically designed and implemented to bring comfort to all sectors and groups in society. Thus, some time ago, in attempting to provide tentative evidence of the PPP/C’s effort to establish ethnic/political dominance, and conceding that Indian dominance of the private sector was not of that party’s making I said ‘Lest I be misunderstood, I am not here condoning the fact of African marginalisation in the business sector: I believe that governments should have a commitment and a policy geared to establish equitability in all areas of social life’ (SN:29/06/2011).

The co-operative department in Guyana was established after the Second World War mainly to help the working people to use their limited resources to improve their circumstances. Of course, poor people had long recognised the need to pool their limited human and financial resources in order to improve their condition, and the early village movement in Guyana is a good example of this. Many formal co-operatives, even school thrift societies intended to imbue thriftiness in the young, existed before Guyana was designated a Co-operative Republic and although the early co-operative department was much more activist, it was essentially left to individuals to recognise their need, seek registration and properly manage their societies. This is basically the approach to co-operative development that existed and still exists. However, I have long supported another approach if cooperatives are to make a substantial contribution to the welfare of the poor.

In 1941, the Roman Catholic hierarchy in Spain sent a young priest, Jose Maria Arizmendiarrieta, to the impoverished Basque region of Mondragon, and in order to help his parishioners he finally adopted the co-operative mechanism, and his early endeavours have resulted in the present day co-operative arrangements in industry, retail, finance and education that are considered the most successful example of co-operative ownership in the world. In 2015, co-operatives employed about 75,000 people, had assets of US$25 billion and revenues of US$12 billion. In 2013, 71.1% of turnover came from sales from exports and they had 125 subsidiaries - 15 in China, 17 in France, 5 in Brazil, 3 in UK, 4 in Germany, etc. From its inception, education to imbue a realistic, humanist, business culture was very important and today Mondragon University has about 4,500 pupils and films about alternative living have been made about this cooperative experience (https://www.youtube.com/watch?v=PR40zAeeGSM).

Mondragon’s co-operative structure is based on the usual international co-operative principles: open admission, democratic organisation, the sovereignty of labour, instrumental and subordination of capital, participatory management, payment solidarity, inter-cooperation, social transformation, universality and education. And, as a result there exist agreed-upon wage ratios between the highest and lowest paid with an average of about 5:1, its low rate of business failure is enviable and empirical evidence suggests that the system is less susceptible to perverse incentives and many of the other organizational governance problems usually associated with traditional private sector businesses.

There has been much debate about whether the Mondragon model, embedded as it is in a kind of Catholic humanism and the specific condition of the region, is replicable. However, I agree with the general position that some important lessons can be learnt. ‘[W]hat we can learn from Mondragon is the approach to democracy at work. I do think we need to pay more attention to their approach to human values and business. This is particularly true when it comes down to being inclusive with people of colour and immigrants, and in terms of gender equity, etc. … We ought to build community democratic approaches to business that take into account the issue of race, class, gender and others; and develop community owned businesses based on values for tackling those issues affecting this society’ (https://www.ownershipassociates.com/mcc-intro.shtm).

I believe that Mondragon type institutions could be important aspects of the new cohesive politics but the main lesson that is applicable to Guyana has to do with the ‘support institutions’ that were organised to aid cooperatives throughout their operational life. ‘[P]erhaps the most important of these support institutions, especially in the first two decades, was the group’s bank, the Caja Laboral.’ Employee-owned firms usually found it very difficult to acquire adequate financing and starting very small, Caja Laboral now has some 370 branches that serve the wider Basque region. The bank’s ‘entrepreneurial division’ encourages the formation of cooperatives and provides extensive management and technical consulting to new and expanding ventures, and to troubled firms in the network. ‘The assistance of the Entrepreneurial Divisions was crucial to the long-term success of many enterprises in the group’ (Ibid).

The APNU+AFC government needs to do less preaching and more positive doing and the co-operative sector is one area upon which it may choose to focus. Co-operatives are private sector arrangements that adhere to unique founding principles and those involved in their development should eschew overly political interventions and behave more or less as the private sector does towards governments, i.e. focus laser-like on issues that will lead to the development of the sector. However, more than the conventional private sector, cooperatives are uniquely placed to facilitate a less materialistic approach to living that is necessary to overcome the massive alienation that has arisen with a more literate and connected world. With their usual emphasis on membership education and involvement, cooperatives could also improve, particularly among Africans, the business culture of the poor. However, co-operation cannot succeed without well designed and directed ‘supportive institutions’.