Co-operative Enterprises Build a Better World

Here's an image I hope you are going to see a lot more of during the next year and a half. The UN has designated 2012 as the Year of Co-operation and the global trade body for co-operations, the International Co-operative Alliance, has set itself the target of massively increasing the visibility of co-operatives during this year.

The ICA has some extraordinary statistics on the level of participation in co-operatives across the world. Over a billion people are members of co-operatives worldwide, including 9.8 million in the UK and 239 million in India. 1 in 4 Germans is a member of a co-operative, and 62% of Finns belong to their leading co-operative, the S-Group. In Japan 91% of farmers are members of co-operatives, and in Korea it is 90%. In Kenya, co-operatives are responsible for 45% of economic output including 70% of coffee production and 95% of cotton. Co-operatives appear to represent something like 20% of the global economy.

It is easy to ignore co-operatives just because they are under your nose. But in fact this form of economic organisation represents a solution to the crisis in capitalism and a humane approach to the improvement of the situation of the poor world. Co-operatives allow people to work with dignity and without exploiting others. Because they do not need to extract surplus value for shareholders they are also a sustainable way of producing and consuming goods and services.

Why are co-operatives so invisible? Part of the reason is obviously that the dominant global media system is part of the corporate economy and so has no incentive to give space to the co-operative economy. But I think a deeper reason is that mutual activity is so natural to us that we take it for granted: we marvel at the cut-throat competitive capitalist economy partly because it is so exceptional--and not in a good way.

If, as I do, you believe co-operatives represent a way of organising economic life that is just and sustainable, then please organise an event or two in your local area in the coming year. And if you are a co-operative or are involved with one, please add the logo to your marketing for this year. Although the logo is not the most attractive I have ever seen, if it appears on every co-operative-related site, whether virtual or real, co-operatives should have a chance of getting around the corporate media blocks.
. Tweet

The Value of Land: A Taxing Debate

Here's an issue we shouldn't lose sight of. There are many reasons for supporting a tax on land, and there are noises from various quarters that suggest such a policy might be gaining the sort of support it needs to receive serious political attention.

Well, yes, I know you are not going to take me seriously if I follow up that enthusiastic opening by telling you that Land Value Tax is to be debated at the Liberal Democrats annual conference this year. But it is fairly historic that a government party should debate in public this very radical approach to taxation.

Of course there are many variants of how a tax on land might work and why it might be useful. To liberal economists, those who live from rents are not economically productive, so land tax encourages them to put their land to the most productive use and is thus a stimulus to economic growth. To more redistributively minded conventional economists, the windfall gains from planning decisions should not be privatised to developers but shared with the community: a tax on land values enables this.

But the reason I like land value tax is that I believe it would operate like a transitional demand. While it could be seen to be part of a market approach to the economy, in fact land ownership enables people to escape the market system and meet their needs directly from the land. Hence any move that suggests that land is a public resource, rather than a private one, and implies the value of land as a part of the common wealth moves us towards the non-market society that will maximise human happineess and protect the planet.

If this debate is new to you, you might like to read a special issue of the newsletter Tax Justice Forum which focused on the issue. If you're in the mood for something a bit more rousing and rhetorical you can check out a short speech I gave at the House of Commons during a meeting on the same theme several years ago.
. Tweet

News from the Finland Station

I have a running joke with colleagues and students about the Joanna Lumley society. This draws on a sketch from the Mitchell and Webb show, where various young men engaged in socially destructive but highly lucractive activity are reduced to ashes by a roomful of grey-haired ladies. How excellent, we thought, if derivatives traders had to seek licences from a committee of such women, chaired by Dame Joanna herself.

I had been trying to imagine what a society run along these principles might be like, and I am beginning to think I may have found it in Finland. If the USA is the testosterone-fuelled adolescent of nations, then Finland is surely the babushka: wise, caring and quietly in control. I was surprised by Finland: it is not the laid-back happy-go-lucky society I had imagined a Scandinavian society to be. Saunas are places of meditation and business, not of sensuality and titillation.

Being in a country where everything happens as planned, where trains and buses run to the minute and where good design is second nature is immensely reassuring. I had reached the point after a few days where, when I felt the need for something, whether a left-luggage locker or a napkin, I looked about to see where some foresighted Finn had placed it. And mostly I was not disappointed.

What is most skilful about the way the Finns approach the 21st century is there ability to portray themselves as successful players in the globalised corporate economy, when really they have retained much of what was good about a socialist approach to life. But this is not an oppressive state socialism, rather one informed by self-reliant and mutual values.

Finland has a greater density of co-operatives than any other economy: the number of members far outstrips the population of the country. Its dominant corporation, the S-Group, is itself a co-operative. So I was able to stay in co-operative hotels, shop in the S-market shops and the bus we travelled in refuelled at ABC!, the S-group's national network of filling stations. In total the S-Group is a €10.5bn business with interests in farming, retail, and tourism, as well as department stores.

Women play a powerful role in Finnish political life, with nearly 50% of the members of parliament being female. Data from the Fawcett Society indicates that, in terms of a ranking of the percentage of women in national legislatures, the four Scandinavian countries are all in the top five, together with Rwanda. Since 2000, Finland has also had a female President, Tarja Halonen. The influence of women is obvious in small ways, such as the children's rooms on trains and the special wall seats for babies in women's showers.

I would not like to paint Finland as a utopia, however. It seemed to me that the public imposition of social awareness had squeezed out more human neighbourly responses. For example, Finns have a joke that they emerge from their flats in the spring and greet their neighbours with 'Oh, I'm glad to see you have made it through the winter'. When everything works so well, there is no space for the shared whinge or the mutual self-help that we Brits rely on. There is also a sense of heavy social control which, while reassuring, might be stifling if a part of one's everyday experience.

Finland also has problems in its political system, with a massive vote - out of nowhere - for a nationalist party in this spring's elections, as has happened in the other Nordic democracies. The 'True Finns', who rode to success on the back of opposition to the Eurozone bailouts to become the largest opposition party in the parliament, are a frightening hint of the vulnerability of a democracy, not matter how strong, in terms of economic crisis.
. Tweet

Who's Fooling Who[m]?

This posts begins with a conversation I had with my daughter about whether Banksy would be elected as Mayor of Bristol if he chose to stand. Everybody wants to know Banksy, to be like him. The pride we feel in somebody who manages to make political argument witty and accessible is unexpected in an era when we are told that people are not interested in politics.

Banksy's variety of street politics is more appealing because it is more open, and also more directly challenging without having any apparent victims. His anonymity adds to the allure as well as to the appeal. He has become an Everyman character: like Charlie Chaplin's tramp, standing up to authority and using ridicule to emerge victorious. We would all like to feel that we could legitimately claim 'I am Banksy (and so is my wife)'.

The trickster character plays an important role in mythologies across the world. In West Africa he is Anansi, who plays tricks on the Gods and takes the form of a spider. In Japanese mythology he is Kitsune, the fox. Tricksters are cunning and witty, but often end up with joke on them. In native American cultures Coyote often plays this role, while in historic mythological systems the Norse cultures had Loki and the Greeks Hermes.

The role of the trickster, like the fool in Medieval courts, is to prick the pomposity of those in authority. He is the antidote to hubris. Perhaps it is because our society, with all its scientific knowledge, has lost the wisdom of being able to laugh at itself that Banksy is proving so popular. He also tempts us to revel in, rather than eliminate, doubt and uncertainty. His first foray into film-making, the Oscar-nominted Exit through the Gift Shop, could itself be one extraordinary hoax. But whether the joke is on the duped majority, the art establishment, Mr Brainwash, or even Banksy himself, is hard to tell.
. Tweet

Which side are you on?

Has anybody learned anything from the riots? The responses across the political spectrum suggest that people are reading into the events what they need to see to reinforce their prejudices. This is happening to me to: I am warming to Ed Miliband with his soothing words about diverse families and immoral bankers, and snorting involuntarily as Nadine Dorreys tells us about the Good and Bad uses of Twitter, as though she had barely left kindergarten.

In times of stress it is predictable that we will cling more strongly to what we know, rather than being opening to new ideas. The research into brain function initiated by Colin Firth as a playful attempt to discover what was biologically wrong with people who didn't agree with him in fact generated interesting results about the security levels of those who identify with Labour or Conservative world-views.

Clearly, I am not a neuro-expert, but it appears that the amygdala, the primitive part of the brain that was found to be enlarged amongst Tory voters, is associated with the foundation of emotional memories, and how we relate these to our responses. if the neuro-scientists will forgive me, I would like to suggest that this relates to our decisions about what should make us afraid and how we should act as a consequence.

The performance by a range of Conservative spokespersons in the past fortnight can be read as a live demonstration of their insecurity and need for strict boundaries. When we hear Iain Duncan Smith being so firm about the difference between Right and Wrong we should remember that, as a Catholic, he believes that these are clear categories determined by the Pope. For his emotional security he needs to believe that, just as he needed to join the army to gain some sense of structure.

Similarly, the talk of absent fathers is interesting coming from politicians whose busy work schedule makes it questionable how much they can really be there for their own children, and whose fathers were also presumably rarely present. For those who were sent early to boarding schools, family life must be something they yearned for, a yearning they are now happy to project onto others.

Might it be going too far to suggest that joining a political party is itself like joining a gang. Each party has its own code, its own set of firm beliefs, a togetherness gained from adversity - except for the Green Party they even have a whipping system to prevent failures of group loyalty. Nothing can repair the damage caused by a dysfunctional childhood, but clinging to a dogmatic belief system can certainly help you feel less insecure.
.
Tweet

Man or Superman?

In the wake of last week's riots there have been no shortage of supermen rushing forward to suggest how the rest of us might live. I have found many of the prescriptions, frankly, sickening. The focus on the failure of families is especially troubling, because it slides so easily into blaming women for their failure to be adequate parents.

I also find the use of the phrase 'underclass' troubling. Like the idea of the 'undeserving poor' that preceded it, it suggests a natural hierarchy in society that actually arises as a result of a capitalist economy. The easy way with which Duncan Smith and Cameron talk about Right and Wrong, as though these were generally agreed categories, identifies them clearly as members of the dominant class and its hegemonic ideology.

The Wrong values are, apparently, about selfishness and greed; whereas the Right values are about hard work and supporting your community. I can't be the only person who questions whether the wealthy are more likely to find themselves in the first value set or the second.

As Cameron styles himself as some sort of Nietzschean Übermensch, the 'creator of new values' striding forth to save us mere mortal from chaos, I am reminded of the balancing word Untermensch, and the danger of defining human beings into more or less worthy categories. How much more wholesome is the Yiddish word Mensch, that comes without qualification or hiearchy and means, according to the Webster-Merriam online dictionary: a 'good person, human being, person'.

That is where most of us are at: struggling to do our best in a hostile economic system and without the advantages of wealth or elite status. We haven't broken society and, through our daily acts of mutual kindness, we make and mend it anew. Tweet

Strange Fruit

I think it was Arthur Scargill who said that if people start attacking you, you are obviously shaking the right tree. The interesting thing is that when you post a plan to stabilise the global financial system it is Austrians who fall out of the tree. They feel duty bound to contest the fact that politicians can have any kind of positive impact on the situation.

I have some time for the Austrians because at least they are intellectually consistent. Their position appears to be that banks should be free to make money in a money market system with no inteference from politicians. If the banks fail, those foolish enough to deposit money with them lose it. Similarly, those who in vest in duff businesses lose their investment. The market is ruthless but fair, as are the Austrian theorists themselves.

The problem with this view of the world is that it is ethically, socially and politically untenable. What Hayek learned from the financial chaos of the 20s and 30s was that politics and economics did not mix. What he failed to learn is that unmitigated market chaos generates extreme politics, of both right and left. The role of politicians in a democracy is to mediate that, and they cannot do this without involving themselves fundamentally in the economic framework within which market transactions take place.

My ten-point stabilisation plan is no doubt flawed - and I am grateful to initiate a debate to identify and remedy those flaws. For fear of being seen to be fools, politicians are singularly failing to rush in and sort out the financial crisis. At the risk of appearing a fool I have made a proposal for others to support or attack.

Lee the Austrian makes some points typical of his intellectual wordview. However, when he responds that 'Suspension of government bond trading would push lending costs through the roof, bankrupting all world governments and ending the welfare state for good' he seems to miss my point about suspending such trade in sovereign debt. Perhaps he cannot imagine a world without markets, but I see this as analogous to the situation when a company is going bankrupt and trade in its stock is suspended. So there is no market and hence no price - so there cannot be an increase in the price of lending.

Tim Worstall raises another point that is worth debate in his comment that 'If we stop trading currencies then we've got to stop trade'. This suggests that most of the trade in foreign exchange is directed to settle external trade balances, rather than for speculative reasons. I don't have the proportions to hand, but the residual quantity of exchange between, say, pounds and Ukrainian Grivnya that relates to exchange of goods could surely be suspended for the six-month period, held as an external trade debt? Alternatively, IMF special drawing rights could be used for the purposes of external commitments, until a new global reserve currency has been negotiated.

The tone of the Austrians' comments is harsh, to match their philosophy. I would invite those holding other positions to join the fray. Surely it is worth the risk of appearing a fool!
. Tweet