This article comes from WeChat public account: 706 Youth Space (ID: qnkj706) , the original title “after the demise of capitalism, cooperatives will dominate the world do ① | traditional cooperative performance under the economic crisis”, author: fifth, transcripts: YINLI, Ake Jia

The content of this article is based on the on-site audio recording of Sharon’s Decade of Cooperatives: Growth, Challenges, and New Trends by the sharing salon, with additions, deletions, and adjustments based on the audio recording.

There are three articles in this series:

(I) Performance of traditional cooperatives under economic crisis

(II) Revival and challenges of the global cooperative movement

(3) New breakthroughs: platform and open cooperationism

Everyone knows that the 2008 economic crisis can be said to be an important turning point in the global situation. Since then, more people have begun to reflect on what problems exist in the current social operation system, what methods can be used to deal with or solve them, and find alternative solutions. Cooperatives, as an alternative economic operation method that has existed for more than 200 years, have been valued again and more and more people have come to practice it.

Today ’s sharing is divided into three parts: the first part is how the traditional types of cooperatives perform under the economic crisis, the second part is the challenges that cooperatives face, and the third part is that the cooperatives are facing a new environment, especially The development of Internet technology and the monopoly of transnational capital in the process of globalization, what changes has it undergone and what updates will it have.

I start with the Occupy Wall Street movement. In 2011, a very important grassroots movement event occurred in the United States, which was the occupation of Wall Street. Most people believe that the economic crisis was first caused by the financial crisis. Numerous reports point out that Wall Street’s financial capitalist elite has actually made a lot of profits for itself through opaque black box operations. This process also caused the instability of the entire financial operation, and finally the large-scale economic crisis can be said to have uncovered the bottom of the black pot. But after the economic crisis broke out, instead of punishing Wall Street’s elites, the government provided huge financial subsidies to bankrupt banks, so the people at the time were actually very dissatisfied. My impression is that only the elected government of Iceland actually put a few bankers in jail, and the other governments did not take any tough measures against the financial industry elite. In fact, some people have proposed cooperative banks in the Wall Street Movement. This is what we usually call the savings and credit cooperatives, which can be one of the alternatives for mainstream financial banks.

For many years after that, not only some grass-roots theorists and sportsmen, but also more mainstream official institutions, have also mentioned the tremendous role that cooperatives can play in economic recovery and employment. The United Nations designated that year as the International Cooperative Year in 2012. (International Cooperative Alliance, ICA) has released a document called “Vision 2020: Blueprint for Cooperative Development in the Next 10 Years”. With some assumptions, I hope that cooperatives can become a mainstream economic organization to support the sustainable development of the economy, society, and ecological environment, become a more popular economic model, and become the fastest-growing enterprise form. It can compete with those existing capital companies and eventually play a substitute role. The document also mentioned several major dilemmas currently facing the world, including environmental damage and resource depletion, and an unstable financial system.Social inequality has intensified, the global governance gap has continued to widen, the rights of the younger generation have been significantly lost, and traditional political and economic institutions have lost faith. Cooperatives are considered an important force that can positively change existing dilemmas.

We are now in 2020. Judging from the goals mentioned in the document, the implementation situation varies greatly in different regions of the world. Next, we mainly talk about the actual performance of cooperatives.

1. The performance of traditional cooperatives under the economic crisis

“Cooperatives and Sustainable Development Goals: Contributions to Post-2015 Development”

This is a document issued by the International Labour Organization that mentions massive unemployment after the economic crisis. A total of 202 million people were unemployed worldwide in 2013, which is actually a large number. The employment gap continued to increase in that year, reaching 62 million.

Stabilizing and promoting employment

What about the employment situation of cooperatives? We generally refer to cooperatives and may tend to think of it as a very marginal form of organization. butIt is through some existing statistics that we find that it is not as marginal as we think.

From the chart above, we can see how many jobs the cooperatives provided to countries in 2014. The United States has 2 million, France has 1 million, Italy has 1.1 million and so on. Statistics from the official website of the International Cooperative Federation indicate that 10% of the world’s employed population are employed through cooperatives. In the economic crisis, cooperatives also showed obvious advantages in terms of employment. We look at a continuous set of data.

In Italy, France, Germany, Quebec, Canada, and Colombia, job growth in the cooperative sector performed better during the economic crisis than in the overall economy. The bold black line representing the employment growth data of cooperatives is basically above the other lines in each graph.

Then we can see some more specific data. For example, the employment of cooperatives in Italy increased by 17.7% between 2007 and 2015, while the employment of other forms of enterprises decreased by 6.3% during the same period. Between 2008 and 2013, the number of Italian cooperative jobs increased by 76,197, and the proportion of long-term employees increased by 8.6%. A common view today is that the performance of cooperatives in many aspects is actually an anti-capitalist cycle, that is, during the capitalist economic crisis, cooperatives can instead increase employment and promote income.

Live Discussion

Audience A: I want to ask a question, why is the cooperative society anti-capitalist cycle? Is it because when many people are unemployed, he will join a cooperative?

Shared by: This is one reason. But itsIt is mainly because of the internal mechanism of the cooperative, because it is jointly owned by the members. You cannot say that we were fired because our business conditions were not good for the time being.

Audience B: A company like capitalism is inherently poorly stable. It is affected by the cycle. When the economy is low, they will lay off a large number of employees, and there will definitely be some Flow into other business forms.

Sharer: In fact, we are talking about a problem. The reason for the company’s large number of layoffs is that he wants to reduce labor costs, but from the perspective of cooperatives, labor is never a cost. It is not a burden, but every member should enjoy dividends and share risks. In fact, our last sharing session mentioned Mondragon, which achieved zero layoffs during the 2008 economic crisis. It is a very large-scale cooperative. Through internal consultation among members, if our overall revenue has decreased over this period of time, then we should not lay off staff because everyone does not want a colleague to be laid off, so we will reduce it by a percentage. Personal income, through the difficulties together. It can prevent a small number of people from getting trapped in unemployment because of unemployment. But for the company, it chooses to lay off some people, regardless of what they will do in the future.

The examples I mentioned earlier are relatively good, but there are also countries that are not very optimistic. For example, you can see in Spain that the employment situation of cooperatives is not as good as other countries. This may also be the case. It has something to do with Spain itself being the worst country in the European debt crisis at the time. As can be seen in the figure below, after the 2007 economic crisis, the number of cooperatives and employment of Spanish cooperatives declined.

Even so, apart from the government-supported large-scale employment-absorptive service industries, the employment situation of cooperatives in Spain is still relatively better than that of companies. From 2008 to 2009, the unemployment rate of the Spanish industrial cooperatives was 6.4%, while the unemployment rate of other types of enterprises reached 11.9%. We can also see this trend in the figure below.

Despite heavy losses, cooperatives are recovering faster than companies. In 2007, there were 15.3 cooperatives out of every 1,000 workers in Spain, compared to 16.3 in 2015, which is equivalent to an increase of 6% in the total number of cooperatives in the total number of employees during 2007-2015. According to data from the Spanish Ministry of Employment in 2015 and 2016, cooperatives added 22,800 jobs. The number of cooperatives created has also increased year by year, from 711 new cooperatives in 2007 to 1,058 in 2016.

Startup Survival Rate

After the economic crisis, more and more people are choosing cooperatives as a form of startup business. The survival rate of cooperatives in start-ups is actually higher than that of ordinary companies.

This chart is a good proof of thisPoint, statistics for the Quebec region, the United Kingdom and Italy. The start-up survival rate of all three local cooperatives is much higher than the overall survival rate of start-ups. The situation in France is similar. The survival rate of employees and multi-stakeholder cooperatives (scop and scic) is very high, and 67% of the cooperatives are still alive five years after their establishment. In comparison, the national average of non-cooperative enterprises is 60%. According to the French Workers’ Cooperatives Alliance (Les Scop) , two-thirds of employees created between 2012 and 2017 have all cooperatives in 2017 It was still active at the end of the year.

Live Discussion

Audience A: Why is the survival rate of start-ups in the form of cooperatives higher than ordinary companies?

Sharer: I think it’s still related to the mechanism of the cooperative. We may have another share next time, specifically to discuss this issue. I do n’t actually have an accurate answer yet.

Audience B: I have an idea, is it because capitalist companies generally start their business with expansion as their goal. For example, there have been many domestic entrepreneurs in the past few years. I have met some of these friends. What they think about is how to do it for one year and two years, how can a round b round get investment? Just thinking about getting a lot of money. One of their initial goals was to get a large amount of investment, but this goal was actually difficult to achieve, so 10 startups and 9 died. Maybe the starting point and goal of the cooperative are different from it, not for crazy expansion or how much investment it gets.

Audience C: There are many entrepreneurial teams, for example, he is in the scheduled entrepreneurial planIf the goal is not reached, his team may be dispersed and then no longer exist.

Sharer: So because the starting point is different and the goal is different, everyone may agree with the cooperative and the company with them differently. The driving force is actually different, which is one reason.

Audience A: It should also be related to the fact that investors’ requirements are often contrary to the ideas of entrepreneurial teams. For example, investors require the company to do so, but those on the startup team are not too agreeable. However, cooperatives of this kind will not exist, because cooperatives are members’ own, and conflicts can be discussed internally. Even if he invests in a cooperative, he may not only invest in gains, but also hope to support the cause.

Takeover of a bankrupt business

Another phenomenon has emerged after the economic crisis. In addition to the creation of new cooperatives and the provision of new employment, many employees have taken over bankrupt factories or enterprises.

Of course, this phenomenon did not appear after the crisis broke out in 2008. In fact, a similar situation occurred in Argentina as early as the beginning of the 21st century. At that time, Argentina accepted the assistance of western-led international economic and financial organizations and implemented a series of neo-liberal reforms. Instead, many economic problems occurred. After many factories went bankrupt, some workers became unemployed, but these factories were still there, and some of the equipment and machines were still there. Then they went to take over the factories and carried out self-management, which was actually a cooperative. A documentary film reflects this situation, and the Chinese translation is called “Worker-In-Charge”.

After the crisis of 2008, this situation has also emerged not only in the southern countries, but also in the northern countries, which are the traditionally developed major economies. There is a very new book called The History of Alternative Labor: Worker Control and Workplace Democracy, which mentions many of these employees taking over factories and businesses. At the time, this phenomenon spread across Europe.Europe, including France, Italy, Spain, Switzerland, Germany, the United States, and Canada.

I take a quote from the book: “All takeover processes and the workplace after takeover are democratically managed. Decision-making is always based on a direct democratic form and among all participants, whether through the council or parliament, Voting rights are equal. These direct democratic mechanisms employed by employee-controlled companies raise not only questions about individual companies, but also important questions about how decisions are made throughout society. Doing so not only challenges capitalist companies, but also challenges ‘Democratic’ governance of liberalism and representativeness. “

According to data, the French have established 160 employee cooperatives in this way between 2012 and 2015, and their survival rate is also higher than other French companies.

Live Discussion

Audience A: I want to ask a question. After these people have taken over the business, is there a process of playing games with the government?

Shared by: Everyone can go and see if the documentary is free, and the conflict is actually mentioned in it. When the boss is in a bad business situation, he abandons the company and the employees, and the employees lose their jobs. The employees themselves want to take over the business by themselves, and they are working well and are profitable again. Then this time the boss came back and said that this company is mine. The situation in Argentina at that time was through several election cycles. After the wave of takeovers, a right-wing president was elected in the first round of elections. He supported the boss, so he passed a bill saying that these taken over companies should be returned to the boss, and then broke out between police and employees conflict. But after the second round of elections, a pro-labor president came to power, and he said that these enterprises should still be owned by employees. In fact, changes will occur according to changes in the political situation. While the boss claimed the ownership of the enterprise, many employees defended it stubbornly, and many enterprises were retained by them.

Another noteworthy phenomenon is mentioned in the book The Class Strikes Back: Self-Organised Workers’ Struggles in the Twenty-First Century: not only in this kind of capitalism as we usually call it In the corporate environment, and in such state-owned enterprises in Venezuela, as well as in the cooperative system, including Italy, there will be some new employees requesting self-management. Why is there also in the cooperative system? At that time, the logistics department of a cooperative employed foreign immigrant workers. These migrant workers are treated differently from regular members. They do not actually manage themselves, so they will require self-management. Like Venezuela’s state-owned enterprises, although they are nominally owned by the entire people, in fact, due to the influence of the bureaucracy, employees have not achieved real management.


Stability of financial cooperatives

Now we are back in finance. I mentioned at the beginning that the 2008 economic crisis was first caused by the subprime mortgage crisis. Some people have proposed replacing traditional banks with savings and credit cooperatives. There is strong data to prove that cooperative banks can maintain a relatively stable state even during the crisis, and can increase their assets and customers.

In April 2009, although many traditional European banks were struggling, the cooperative bank’s rating was still A or higher, and Rabobank maintained an AAA rating. From 2007 to 2010, the assets of cooperative banks increased by 10%. Cooperating bank customers increased by 14%. Credit union reserves have increased by more than 14%. Credit union savings increased by 1% in 2008, 15% in 2009, and 7.3% in 2010. Credit union loans slightly down in 2008Down, and then increased by 7.6% and 5.3% respectively over the next two years. During the crisis, only 7% of European cooperative banks suffered losses, but most of the financial losses of cooperatives were made up within one or two years.

Resilience in Downturns: The Power of Financial Cooperatives, published by the International Labour Organization, states: “The continuous development of savings and credit cooperatives and cooperative banks has enabled credit to flow to SMEs and create indirect employment opportunities in the world. Financial stability has been maintained everywhere. The unique combination of member ownership, control, and benefits is at the core of its resilience and offers a range of advantages over competitors. With financial cooperatives occupying an amazing share of the global banking market, we An urgent and in-depth understanding of the model is needed. “

Stability of consumer cooperatives

Consumer cooperatives have also shown significant advantages. The book “Capital and Debt Trap-Learning from Cooperatives in the Global Crisis” states that although consumer cooperatives in Europe have been greatly affected, especially in hypermarkets. However, the sales ratio and membership of cooperatives have increased. Everyone knows Carrefour, a multinational retail giant. In 2008-2009, Carrefour’s global sales fell by 24%, and it has withdrawn in many countries, laying off many employees. However, sales of consumer cooperatives in Italy rose 0.9% and the number of employees rose 1.1% during the same period.

Provide housing

Housing cooperatives also play an important role. We see that because of the subprime mortgage crisis, many people in Western countries have lost their homes and become homeless. If you have watched the documentary “American Factory” some time ago, you will find that a female worker lost her home during the economic crisis. She first moved to a basement, then moved to a relative’s house to lodge, but this is actually a story that happened to many people.

Then housing cooperatives actually solve this problem. Housing cooperatives jointly purchase ownership by all residents, carry out common management and even construction, thus avoiding the risk of lending to large banks.

Apart from these performances we mentioned above, some of the advantages recognized by cooperatives are at least these aspects: elimination of social inequality, women and youth empowerment, workplace democracy, and so on.

This article comes from WeChat public account: 706 Youth Space (ID: qnkj706) , the original title of “traditional cooperative performance under the economic crisis”, author: fifth, transcripts: YINLI, Ake Jia