Co-operatives and externalities.

I am struck by what an amazing opportunity it is to go back and revisit an experience that had a profound affect on one’s development. Nine years ago, my trip to visit the co-operative sector in Emilia-Romagna deepened my knowledge and understanding of coops and gave me a springboard to get more deeply involved in the coop movement. Now, with all the knowledge and experience I’ve developed over the last few years, I am back here and soaking in all I’m learning and seeing, framed by my more nuanced eyes.

Tours to coops start tomorrow. So far we’ve had two days of lectures by Stefano Zamagni, Vera Negri Zamagni and Flavio Delbono on the history of coops and co-operative economics.

In Stefano’s lecture, he spoke about coops as a complement to the standard corporate practices within the capitalist world. I have long thought of coops as serving market failures. I once had someone in the world of coops tell me that no one ever started a coop who wasn’t pissed off. As part of a market failure, a group of people can’t get something they need join together and do for themselves what no one would do for them. If their needs were being met somehow, they wouldn’t have started the coop. Virtually every Credit Union and coop I’ve ever met has a genesis story like this. In the 1940s, people couldn’t get credit to buy houses east of Main Street in Vancouver so they started Vancity. In the 1990s, a group of residents in Vancouver’s West End wanted to try sharing cars amongst themselves so they started Modo. Anyone who knows a coop well should recognize this narrative within their origin story.

What Professor Zamagni linked was beyond the small market failures that necessitated the development of local co-operatives, and spoke to the systemic market failures that capitalist enterprises produce such as income inequality and environmental exploitation. I am not an anti-capitalist, but I do see the flaws in the system. Things I care about deeply and believe are vital to the kind of society I want to live in and to a planet hospitable to people and animals are considered to be externalities in the capitalist model. They aren’t measured or given a cost and therefore become issues to be dealt with by governments or the commons.

Coops are a necessary complement to the capitalist model. They are governed by people who have aligned themselves around a common cause and so those externalities are often internalized. They operate at a human level. Worker coops will deal with the relatively shrinking wages faced by workers. Coops of all kinds are usually rooted in a place and so they care about the treatment of the environment their members live within.

One major challenge coops face is how to compete in an economy where people want cheaper and cheaper goods forcing down wages and creating a system where many people have less earning power to buy goods and services. If we join this race to the bottom, we’re not living up the co-operative principles. There are no easy answers, and coops face serious challenges, but are needed more than ever as a complement or counter balance to the downsides of capitalism.

One thought on “Co-operatives and externalities.

  1. […] things we’re seeing here that could be imported to support growth of coops in BC. Like I wrote in my previous post, a stronger coop sector in BC would be an important complement to the capitalist system and create […]

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