Given that Labour are saying “co-operative party principles” will be included in the Labour Manifesto for the coming election I thought it might be worthwhile looking at those principles and at their practical implications. And I do so from the perspective of someone who favours mutual organisations, community ownership and new models of service delivery – something I share, it seems, with David Cameron.
The Co-operative Party has helpfully published their guide – “A Co-operative Party Agenda for a Fourth Term” (so no question as to who they’ll be backing despite the enthusiasm from all three main parties for mutualism). I thought I’d pull out some of their suggestions and give a considered view set against our mixed experience of co-ops.
Promoting co-operative and mutual enterprise. The underlying argument here – although it isn’t quite put that way –is that co-op and mutual models of business are superior to “capitalist” models of business. These models are dubbed “social” – presumably implying that the joint stock company is anti-social. There is no attempt made beyond glib statements about service and lies about profits (co-ops and mutuals are profit-making organisations) to explain the basis for this distinction. In my view Government should not involve itself in how private citizens and private organisations choose to organise themselves yet it is clear that the Co-op Party wished to force unspecified co-operative “values” on private firms and to “reconnect them with stakeholders and society”. Nowhere in all this is there a word about the consumer, the customer – the most important stakeholder in any business.
Employee-ownership. John Lewis has a lot to answer for! This for-profit, quite pricey general store and supermarket chain is held up as a paragon of socialist virtue. We’re told that this shows just how effective employee-ownership can be. Truth be told though – for the amount of real control employees have over the management of John Lewis – the “employee-ownership” model is just a glorified bonus scheme. Don’t get me wrong – if firms wish to organise this way they can – and it clearly works for some organisations. But there is no evidence of more social or economic benefit compared, let’s say, to being owned by faceless Swiss gnomes or big-hatted Texan billionaires.
Remutualisation. Ah, here’s the cheap shot! Those wicked Tories allowed all those nice cuddly building societies to get turned into banks – and look what happened! We must turn Northern Rock back into a mutual organisation pour encourager les autres! Excuse me but do you remember what those mutual organisations were like? Do you recall how unaccountable, producer-led, unresponsive and lazy they were? Mutual organisation works pretty well at the level of the working mans club (or Conservative Club for that matter, most of which are mutuals) but scale it up to a multi-billion financial organisation and you can forget real accountability. These organisations become run purely for the interests of the management not the member or the customer. And certainly not for any wider “stakeholders”. A quick look at the US savings and loan scandals shows just how vulnerable mutuals are to managerial abuse.
Land reform. Now we get the real lefty stuff. Introducing a land value tax to replace council tax and business rates. Apparently the reason for the strange behaviour of the UK’s property market is because the existing property taxes create a system that favours the developer over the user. Leaving aside the scale of destruction in our property sector during this recession, this argument not only shows profound ignorance of how land is valued but ignores the primary reasons for our distorted property market. And those reasons? Our planning system and our preference for freehold models of residential ownership. If the Co-op Party wanted a really radical approach that would allow for more affordable housing in places where people want to live, then they would be proposing the privatisation of property rights through the repeal of the Town & Country Planning Acts and associated guidance and secondary legislation.
Trade Justice. As we might expect from the UK’s biggest recipient of Common Agricultural Policy cash, the Co-op is firmly in the protectionist camp. OK, they call it trade justice but what they mean is that we carry on the protectionist agriculture policies that puff up the Co-op's profits while assuaging our guilt at the damage this does to poor African farmers by promoting so-call “fair trade”.
There is some good stuff in the Co-op ‘manifesto’ too – mutualising the health service would take us back closer to the private (mostly charitable) delivery that existed prior to Labour nationalisation of health and there are some interesting ideas about increasing participation. However, the Co-op's connection to the Labour Party holds it back – they seem obliged to continue to nod in the direction of groupthink and to promote the failed initiatives of socialism.
It seems to me that trying to make party political capital out of the idea of mutuality and co-operation is misplaced. And it also seems to me that, for all the talk of engagement and participation, the one thing not proposed here is the real transferring of power from centralised, monolithic and failing government to ordinary people. Now that would be radical!
The Co-operative Party has helpfully published their guide – “A Co-operative Party Agenda for a Fourth Term” (so no question as to who they’ll be backing despite the enthusiasm from all three main parties for mutualism). I thought I’d pull out some of their suggestions and give a considered view set against our mixed experience of co-ops.
Promoting co-operative and mutual enterprise. The underlying argument here – although it isn’t quite put that way –is that co-op and mutual models of business are superior to “capitalist” models of business. These models are dubbed “social” – presumably implying that the joint stock company is anti-social. There is no attempt made beyond glib statements about service and lies about profits (co-ops and mutuals are profit-making organisations) to explain the basis for this distinction. In my view Government should not involve itself in how private citizens and private organisations choose to organise themselves yet it is clear that the Co-op Party wished to force unspecified co-operative “values” on private firms and to “reconnect them with stakeholders and society”. Nowhere in all this is there a word about the consumer, the customer – the most important stakeholder in any business.
Employee-ownership. John Lewis has a lot to answer for! This for-profit, quite pricey general store and supermarket chain is held up as a paragon of socialist virtue. We’re told that this shows just how effective employee-ownership can be. Truth be told though – for the amount of real control employees have over the management of John Lewis – the “employee-ownership” model is just a glorified bonus scheme. Don’t get me wrong – if firms wish to organise this way they can – and it clearly works for some organisations. But there is no evidence of more social or economic benefit compared, let’s say, to being owned by faceless Swiss gnomes or big-hatted Texan billionaires.
Remutualisation. Ah, here’s the cheap shot! Those wicked Tories allowed all those nice cuddly building societies to get turned into banks – and look what happened! We must turn Northern Rock back into a mutual organisation pour encourager les autres! Excuse me but do you remember what those mutual organisations were like? Do you recall how unaccountable, producer-led, unresponsive and lazy they were? Mutual organisation works pretty well at the level of the working mans club (or Conservative Club for that matter, most of which are mutuals) but scale it up to a multi-billion financial organisation and you can forget real accountability. These organisations become run purely for the interests of the management not the member or the customer. And certainly not for any wider “stakeholders”. A quick look at the US savings and loan scandals shows just how vulnerable mutuals are to managerial abuse.
Land reform. Now we get the real lefty stuff. Introducing a land value tax to replace council tax and business rates. Apparently the reason for the strange behaviour of the UK’s property market is because the existing property taxes create a system that favours the developer over the user. Leaving aside the scale of destruction in our property sector during this recession, this argument not only shows profound ignorance of how land is valued but ignores the primary reasons for our distorted property market. And those reasons? Our planning system and our preference for freehold models of residential ownership. If the Co-op Party wanted a really radical approach that would allow for more affordable housing in places where people want to live, then they would be proposing the privatisation of property rights through the repeal of the Town & Country Planning Acts and associated guidance and secondary legislation.
Trade Justice. As we might expect from the UK’s biggest recipient of Common Agricultural Policy cash, the Co-op is firmly in the protectionist camp. OK, they call it trade justice but what they mean is that we carry on the protectionist agriculture policies that puff up the Co-op's profits while assuaging our guilt at the damage this does to poor African farmers by promoting so-call “fair trade”.
There is some good stuff in the Co-op ‘manifesto’ too – mutualising the health service would take us back closer to the private (mostly charitable) delivery that existed prior to Labour nationalisation of health and there are some interesting ideas about increasing participation. However, the Co-op's connection to the Labour Party holds it back – they seem obliged to continue to nod in the direction of groupthink and to promote the failed initiatives of socialism.
It seems to me that trying to make party political capital out of the idea of mutuality and co-operation is misplaced. And it also seems to me that, for all the talk of engagement and participation, the one thing not proposed here is the real transferring of power from centralised, monolithic and failing government to ordinary people. Now that would be radical!
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