Threats to the Co-op Movement - general discussion and heads ups for context
This is some of the stuff that it's useful to have in the back of our minds when we're thinking of shiny and happy co-operative solutions to various problems in the world. This thread specifically is about threatening things actually aimed at the co-op movement, by government, corporates or others.
There's probably scope for a general 'threats to the Co-op Movement by the Co-op Movement itself' thread, but i don't have anything to put in that just yet...
Cath M in Bentley (A Commune in the North/Radical Routes/Platform6) Thu 15 Aug 2019 11:04PM
i'm adopting it. 'Anarchism with a smile, John'.
Nathan Brown (Co-op Culture) Wed 28 Aug 2019 3:58PM
If you ain't smiling, it's probably not anarchism
Tomas Remiarz Thu 15 Aug 2019 3:59PM
yes, that's always a possibility with a rightwing government. better not to have one i guess. and now, onwards with my permanent residence application ...
Leo Sammallahti Thu 15 Aug 2019 8:42PM
The increased regulation that disproportionally burdens small banks and pushes credit unions and other cooperative banks for mergers is a big problem. In the US, starting a new credit union is almost impossible - the number of CUs grew until the Federal Credit Union Administration was started, after which every year more credit unions have disappeared than being set up. Same problems with the cooperative banking sector across Europe.
Here's relevant parts from my article :
"The state reaction in the aftermath of the financial crisis was similarly perverse. The taxpayer bailouts combined with increased regulation that were put in place due to the “Too Big To Fail” problem only made the matter worse in two ways:
By giving the big banks an advantage of the implicit assumption that they, unlike their smaller competitors, would be saved by the taxpayers if they were to fail
By implementing regulation that burdened the small banks most, although they were the least responsible for the crisis. Had the market forces taken their course the cooperative banking sectors market share would have grown substantially. For example, Rabobank, a cooperative, would have been the only major bank in Netherlands that survived. "
"Market concentration and the low rate of new cooperatives being established is also a problem that the cooperative sector is facing, especially in the financial sector. Between 1945 to 1970 the number of credit unions in the US increased from 9 000 to 24 000. However, since then, the number has declined to 5 475, although the share of the population who are members of credit unions has increased ten-fold since 1960, from around 3% to around 30%. Between 2008 - 2017, just 28 new credit unions were created. Between 2017 to 2018 the number of credit unions declined by 175. Compare this to the fact that between 1946 and 1969, the year with the slowest growth in the number of credit unions was 1946, with the number of credit unions growing by 121. The record breaking year was 1953, with 1410 more credit unions established than had disappeared. The trend began immediately reversing as the Federal Credit Union Administration, a federal body responsible for regulating credit unions was started in 1970. After that, the number of credit unions has declined every year. Similar trends are found across Europe, where cooperative banks are merging, driven mainly by regulatory burden.
A tragic example of this was the Internet Archive Credit Union, founded by the founder of the Internet Archive and Alexa, Brewster Kahle in 2012. With top tech talent and an abundance of energy and ideas, such as enabling low commission international money transfers for migrant workers, the credit union failed. It was not due to lack of capital or experience. In the words of the founder, “with abundant capital… and experience from Jordan Modell, a banker of over 20 years, we built a great team, board, and partnerships, we gave it a whirl. We were encouraged by how generous the other credit unions and community members were.” The credit union founders had to spend around three times more time dealing with regulation than serving their customers and were allowed to offer few services. The credit union had to close down in 2015.
Jim Blaine, the former CEO of the second largest credit union in the world is critical of mergers, centralisation of decision making, lack of credit unions distinguishing themselves from banks and the difficulty of setting up a new credit union. One solution he offers is to make it easier for people who want to set up new credit unions to take over old ones, instead of them merging with existing ones."
Graham Fri 16 Aug 2019 5:54PM
I guess what Leo is talking about is probably an example of the state (under pressure from powerful private interest lobby groups) suppressing cooperative development - a sort of proxy action. Investor-driven business may also provide a direct threat to cooperative success where the co-op is competing for trade, but that's probably just viewed as competition?
For me the idea of faux co-operatives is potentially a major threat as they can be very damaging in terms of reputation and trust, things that real co-operatives hold dear. And yet it seems that the co-operative movement doesn't seem to be very interested in policing this issue, something that I've never understood.
The other things that are important in my mind aren't really threats because they are internal, so in a SWOT context they would be classed as weaknesses rather than (external) threats.
Chris Croome (Webarchitects Co-operative) Wed 21 Aug 2019 4:45PM
No doubt you will all be super shocked to find that Policy Exchange has been funded by Drax, Energy UK, E.On, Centrica, the Energy Networks Association and Cadent Gas, from Vice:
While Policy Exchange doesn’t like to divulge its funders, VICE can reveal that the think-tank receives funding from some of the UK’s leading energy firms.
They include Drax, the power generator planning to build a huge gas power-plant in Yorkshire, and Energy UK, the lobbying group for all British power companies.
Alex Lawrie Fri 30 Aug 2019 6:13PM
I wonder if this is the right place to bring up Co-op Energy. I've yet to see the terms of the sale / partnership to Octopus, but on first sight it appears to be the abrupt demutualisation of a unique asset - the Coop Bank fiasco all over again.
It poses the question: is the biggest threat to the movement the state, or its own so-called leadership?
I'm tempted to say that it seems like a small group of cooperators panicked by a profit warning have damaged the social economy more in a few weeks than capitalists have managed in decades; but maybe I should find out more about the role that Price Waterhouse Cooper played behind the scenes first...
Cath M in Bentley (A Commune in the North/Radical Routes/Platform6) Sat 31 Aug 2019 12:21AM
aha - the first of many posts in the 'threats to the Co-op Movement by the Co-op Movement itself' thread that i suggested in the intro...
Graham Sat 31 Aug 2019 5:53PM
I've not followed this story, but if it is as you suggest @Alex Lawrie then the move is deplorable. Co-operatives are distinct and separate from conventional shareholder-value-led businesses, and so to get twitchy because profits warning indicates clearly to me that the people in control have no understanding of that difference and shouldn't be in charge of a co-operative enterprise.
Michelle Parkin-Kelly Mon 2 Sep 2019 9:12AM
It looks as though the branding and administration will remain the same, retaining the existing member benefits, share in profits for members, and Co-op community power tariff. So, the main concern would be one of ownership and control, the degree to which members could engage democratically.
I'm not particularly well versed in the rules around this, but I believe that if membership still stands, then members are still able to vote in the Midcounties elections and theoretically stand for election as a Director assuming they meet the usual requirements. Through that, the Utilities Committee would presumably retain the same set up.
So, no real change unless subsequent negotiations after the fact which would be speculation. So it's important current members use their co-operative rights and benefits to ensure the continuation of the co-op difference as they see fit, and that the community energy procurement continues (if that's what the members want, of course!) which seems to be gaining more investment in this move.
Leo Sammallahti Sun 1 Sep 2019 3:54AM
Regarding global platform cooperatives. Coops could consider carefully looking carefully successes, solutions, problems and weaknesses Wikipedia has had in regards to user-governance. What are the tactics that have been used by special interests to manipulate Wikipedia governance? What are different ways different Wikipedia communities govern themselves, and how user governance in regards to Wikimedia funds is handled? etc.
Cath M in Bentley (A Commune in the North/Radical Routes/Platform6) · Thu 15 Aug 2019 3:07PM
Hi folks - I heard this interview on 17th July 2019 on the Today Programme after my friend sent me a copy of the report in question, 'Extremism Rebellion', by the right-wing 'Policy Exchange' think tank.
I suppose things could get bad quite quickly if these guys actually have any weight to throw around. However, judging from the police response in Leeds, the WY Police didn't share this opinion.
But who knows what would happen under Boris... co-operatives might not do very well if he's worried about 'the more radical proposals' on p17.