Humanizing the Economy with John Restakis, 5.31.12


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John Restakis, executive director of the British Columbia Co-op Association and author of “Humanizing the Economy: Co-operatives in the Age of Capital,” asserts that it is the disconnection between conventional economics and social ends that lies at the heart of our economic crisis, and that co-operatives offer a powerful economic model to reconnect and relate social goals with economic practice.

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Humanizing the Economy with John Restakis, 5.31.12

  1. 1. Humanizing the Economy John Restakis Slow Living SummitBrattleboro, Vermont // 31st May 2012
  2. 2. Presentation ThemesSome BackgroundThe Grand DelusionThe Materialization of DreamsThe Crisis of CommunityThe Future of an Idea
  3. 3. A co-op is any enterprise that iscollectively owned anddemocratically controlled by itsmembers for their mutual benefit.
  4. 4. Co-ops in the worldFirst known co-op: 1760; Rochdale 1844800 million members in 84 countriesTop 300 co-ops employ 20% more people than allthe multinationals; over 100 m jobs.In US, 30,000 co-ops employ 2 m.In 2010, the US 100 largest agriculture co-opsreported near record revenue ($118 billion).Largest memberships: India (236 m), China (180 m)High proportions: Canada (1 in 3), Norway (1 in 3),USA (1 in 4)
  5. 5. A beginning: Social conditions in 19th-century BritainMortality rates, Sheffield, 1837-42: – 0-1 years of age 250 in 1,000 – 0-5 years of age 506 in 1,000Causes of death: 1. Consumption 13.4% 2. Convulsions 7.7 3. Inflammation of Lungs 7.3 4. Decay of Nature 6.7 5. Accidents 5.2 (followed by many other infectious diseases: scarlet fever, measles, small pox, whooping cough…)
  6. 6. Life expectancy by region, 1842 Gentry Tradesmen LabourersRutlandshire 52 41 38Truro 40 33 28Derby 49 38 21Manchester 38 20 17Bethnal Green 45 26 16Liverpool 35 22 15
  7. 7. What was going on?Urbanization: rural enclosures, urban slumsIndustrialization: factoriesTechnology, trade, investment“The Great Transformation” (Karl Polanyi):the self-regulating market as a new socialinstitutionGlobalization
  8. 8. The Grand DelusionHomo EconomicusThe Free Market MythThe Separation of Society fromEconomicsThe Triumph of Ideology
  9. 9. The Humane EconomyFirst Principles – Definition: an economy that serves the collective interests of a society, and allows for the self fulfillment of the individual. – Reciprocity as a fundamental economic principle, alongside redistribution (the state) and exchange of equivalents (capitalism).
  10. 10. Efficiency (Exchange of Equivalents)Equality Solidarity(Redistribution) (Reciprocity)
  11. 11. Emilia Romagna FactsPopulation is 4 million1 of 20 regions in ItalyKey city = BolognaGDP per capita is 30%over national average#2 economic region ofItaly; 10th in Europe
  12. 12. Emilia Romagna Facts – During the 1990s, people employed by co- operatives rose by 60.1%, against a general average of 9.1%. – Co-operatives accounted for one quarter of the total rise in employment during the period between the two census years of 1991 – 2001. – In particular, the 1991 census gave the number of social co-operatives employees as 27,510: by the 2001 census, this figure had risen more than fivefold, to 149,147.
  13. 13. Key ElementsEmilia Romagna’s co-op economy canbe conceived as a product of “managedco-operation” working through threeinterlocking spheres:– The co-operative sector & social economy– The public sector– The private sector
  14. 14. The key thread that ties all of theelements together is a cultural andpolitical strategy that focuses oncollective solutions to thechallenges of economic and socialdevelopment.
  15. 15. Key factorsSocialist and communitarian politicaltraditionActivist governmentHigh levels of social capitalFlexible technologyEntrepreneurial skillBraiding of co-operation andcompetition
  16. 16. The Co-operative EconomyThere are 8,000 co-ops in EmiliaRomagnaCo-ops account for 1/3 of the region’sGDP3 of 4 Bolognese belong to a co-opHighest per capita density of co-operatives in Europe
  17. 17. Key Co-op FederationsLega Cooperative - Socialist traditionConfcooperative - Catholic, ChristianDemocrat traditionAGCI - Republican tradition
  18. 18. Capitalist EconomyComposed of small and medium firms(400,000).Organized along sectoral andgeographic lines.Managed through the work of businessand trade associations.
  19. 19. The Emilian Model Key Features:Small firms co-operating in productionnetworksDiversified “cluster” model in industrialdistricts operating through small firms in amixed economyBroad based supportive infrastructure
  20. 20. Design Cluster model Embroidery • Service Centre • Sector supportAssembly Anchor Firm: Design Cutting Dyeing Marketing
  21. 21. Regional GovernmentHistorically, a key player in promotion ofco-operative solutions to economic andsocial issuesCreation of service centres to supportsmall firms in private sector.Implementation of legislation &programs supporting co-operative, non-state solutions to social needs.
  22. 22. Cross-sectoral co-operation Co-operation has been the key strategy for managing region-wide labour relations between firms, labour unions, and the state. Labour, co-ops, capitalist firms, and government have collaborated at sectoral and geographic levels to build the regional economy by supporting local enterprise.
  23. 23. The Co-op EffectIn 2000, a study was conducted comparing the effects ofemployment in co-operatives on the communities in whichthey were situated.Three towns in Northern Italy were compared – Imola,which has 25 per cent of its workforce employed in co-operatives, Faenza, also in Emilia Romagna, which has16 per cent, and Sassuolo in Tuscany, which has no co-operatives.The study concluded that health, education, crime andsocial participation were all better in the towns in which alarger proportion of the population is employed in co-operatives.
  24. 24. The Co-op EffectThe best way to build community, to raise thestock of social capital, and to increase socialcohesion by reducing inequality is to promoteco-operation.Most importantly, this can be done withoutsacrificing prosperity through the use of co-operatives as a model for both commercialand social enterprises.
  25. 25. The Future of an IdeaWhat is the role of co-ops in the age of Capital?What is the essential nature of our currentcrisis?What is the nature of our response?
  26. 26. The essential nature of our crisis is that economics has become antisocial.This a result of the absence ofdemocracy in our economies.
  27. 27. Co-ops & GlobalizationThe globalization of capital todayreplicates the rise of capital in theindustrial revolution during the 1800s.Like then, traditional forms of work (small-scale, village-based), and the operation ofmarkets within a social framework, arebeing disrupted - economic power is beingcentralized in the hands of unaccountablecorporations.
  28. 28. Co-ops & GlobalizationDuring the 1960s and ‘70s, co-ops wereused by governments as a means ofimplementing state plans for economicand social development.Today, co-ops are re-emerging as a socialdefence against the damaging effects ofuncontrolled capital and the free marketsystem.
  29. 29. Co-ops & GlobalizationKey means of protecting local economies (e.g.fair trade, economic diversification)Key means of addressing problems of managingcommon goods & resources (water, pollution,fishing)Key model for the reform of trade practicesthrough the reform of governance (IMF, WTO).Most viable alternative to “free market” model ofeconomics and the enterprise – absolutelycrucial for both sustainability and social justice.
  30. 30. The Co-op ChallengeThe challenge for co-op movements today is how toaddress four key questions:a) to protect the viability of local economies and cultures.b) to create global systems that promote fairness intrade and sustainability in economic development.c) to democratize economies at local, regional andnational levels.d) to find new ways to serve members and to respond totheir changing needs while maintaining their co-opidentity.
  31. 31. Co-op system opportunitiesMany people, especially youth, looking forreal, viable alternatives to corporatecapitalism - Occupy Movement
  32. 32. Co-op system opportunitiesBank Transfer Day: In the U.S. 1 million peopletransferred their accounts between Sept. & Nov.2011.Today, 3 times as many people have joinedcredit unions as the same time last year.Co-op values connect to changing values &demands of consumers (ethical consumption,corporate social responsibility, etc.).
  33. 33. Co-op system opportunitiesCo-ops provide a model for mobilizing thebroader society around common issues - services.Co-ops provide new strategies for smallbusinesses to survive in a global economy.Community empowerment - co-ops offerstrategies to meet the challenges ofglobalization.Co-ops provide a way for people to connect tocommunity; to become proactive citizens.
  34. 34. Co-operation and the Slow MovementCo-ops have been key actors in the rise of the SlowMovement in northern Italy.Preservation of the social & cultural meaning of food.Agriculture and consumer co-ops linking producers toconsumers.Co-operation reinforces the connections among people.Co-operation builds and expands social capital.Co-ops socialize markets to serve communal needs.Co-ops re-orient enterprise to address social as well ascommercial purposes.
  35. 35. The Main Point…The co-op model shows a way tohumanize our economy by re-connecting social values to themarketplace.
  36. 36. Thank You Please visit our web site: bcca.coopSpecial thanks to these organizations for their sponsorship ofJohn Restakis’ presentation at the Slow Living Summit, 2012.