July 6 is the United Nation’s International Day of Cooperatives
In modern business world cooperation is a suspect word. To regulators it often means that businesses are ripping off their customers by fixing their prices. To businesses it can mean that you stop competing with your rivals, stagnate as companies and become less profitable. Cooperation means taking the easy way that leads to extinction.
The history of cooperatives, however, offers a larger perspective from which to reflect on what we take for granted in business and the economy. In the nineteenth century the cooperative movement was a response to the industrial revolution and to the desire for democracy.
After the French Revolution conflict arose between people who wanted the State to take complete responsibility for the economy and government of society and those who believed that competitive businesses would work efficiently for everyone’s benefit. These broad currents of thought can still be found today.
In the Industrial Revolution people flocked from the depressed rural areas to towns where large factories offered employment but focused exclusively on making large profits. In a society where few laws governed labour relationships and where welfare provisions were almost non-existent, for workers this meant long hours, dangerous conditions, unstable employment and housing dependent on the whim of the company.
One reaction was to fight against private enterprises and make them over to the state and ultimately to the workers. This could produce a tyranny of its own, as was later seen in Communist Russia. Another response was to start enterprises in which workers pooled their resources to buy or build housing, to buy food cheaply and distribute it, or to manage and staff firms that provided employment and produced goods that benefited the community. Workers not only had a vote, but shared responsibility for the conditions of working and for social contribution made by their workplace. This was a more complete form of democracy.
Many cooperatives later failed, partly because they were vulnerable to sudden economic shocks, but also because people were attracted to them mainly for the benefit they received – housing, for example – and lost interest after receiving it. They ceased to take responsibility for the enterprise and left it to managers, who made profit their aim. Many cooperatives were demutualised and made into engines for profit, with consequences that can be seen in the recent Royal Commission.
The challenges, however, remain. Unrestrained capitalism has led to the inequality and to entrenched disadvantage. It engenders the self-focus and disregard for people with disadvantage whom we at Jesuit Social Services serve.
That is why the cooperative ideal nevertheless remains strong in the Catholic tradition. It gives priority to persons over profit, to cooperation over competition and to negotiation over conflict. Successful enterprises, like the Spanish venture in Mondragon, show us in germ what Pope Francis’ vision of the economy as building prosperity for all, including those who are doing it hard, could look like in practice.
Fr Andrew Hamilton SJ writes for Jesuit Communications and Jesuit Social Services.