#cooperative development

Monday, March 2, 2015

The Pope to cooperatives: promote the economy of honesty

Vatican City, 28 February 2015 (news story website; audio)

“The Church has always acknowledged, appreciated and encouraged the cooperative experience”, Pope Francis affirmed this morning, greeting more than seven thousand members of the Confederation of Italian Cooperatives who group together a number of different sectors, from agriculture to construction, including fishing and the distribution of consumer goods.

In this regard, Francis referred to various documents of the Magisterium, such as the encyclicals “Rerum Novarum”, with Leo XIII’s appeal for a society in which “All [are] owners, not all proletarians”, and “Caritas in Veritate”, in which Benedict XVI underlines the importance of the economy of communion and the non-profit sector, and the “extraordinary social teaching of Blessed Paul VI”. He went on to urge the members of the Confederation to look not only to the past, but also to the future: “It is a real mission that requires creative imagination to find forms, methods, attitudes and tools to combat the throwaway culture cultivated by the powers that support the economic and financial policies of the globalised world”.

“Globalising solidarity, today, means thinking about the vertiginous increase in unemployment, the incessant tears of the poor, the need to reinstate a development that involves a genuine and full progress of the person, who is certainly in need of income, but not this alone. Let us think about healthcare needs, that the traditional welfare systems are no longer able to satisfy; the pressing needs of solidarity, to place human dignity once more at the centre of the world economy”.

Pope Francis suggested a series of concrete suggestions to help achieve this mission. The first was that cooperatives should “continue to be the motor for lifting up and developing the weakest part of our local communities and of civil society”. This involves “giving first place to the foundation of new cooperative enterprises, along with the further development of those already in existence, so as to create, above all, new work opportunities that currently do not exist … especially for the young, as we know that youth unemployment … destroys their hope”, but also for the “many women who need and wish to enter the world of work. We must not neglect the adults who often find themselves prematurely without work. Aside from new enterprises, let us look also to the companies in difficulty, those that the old owners leave to die, which could instead be revived through ‘workers’ buy out’ initiatives.

Becoming active agents of new welfare solutions was his second suggestion, addressed above all to he healthcare sector, “a delicate field where many poor people no longer find their needs to be adequately met”. The answer may be found in applying subsidiarity, “with strength and coherence”, creating an effective network of assistance and solidarity between cooperatives, parishes and hospitals.

The third suggestion relates to the relationship between the economy and social justice, dignity and the value of the person. “It is well known that a certain liberalism believes it is necessary first and foremost to produce wealth, and that it is not important how, before promoting any form of redistributive policy”, explained the Pope. “Others think that it is the same enterprise that must donate the crumbs of accumulated wealth, thus absolving it of its so-called ’social responsibility’”. However, we know in achieving a new quality of the economy, it is possible to enable people to grow in all their potential. A member of a cooperative must not be merely … a worker … but must instead always be a protagonist, and must grow, through the cooperative, as a person, socially and professionally, in responsibility … an enterprise managed by a cooperative must grow in a truly cooperative way, involving all”.

“If we look around us, we see that the economy is never renovated in an ageing society, instead of one that grows”, he continued, presenting his fourth suggestion: strengthening the harmonisation between work and family within the cooperative movement. “Doing this also means helping women to fully achieve their vocation and to put their talents to use” through initiatives that meet the needs of all, from nurseries to domestic care.

“The fifth suggestion may be surprising. Doing all these things takes money! Cooperatives are not generally founded by great capitalists. … The Pope instead says to you: you must invest, and you must invest well! In Italy certainly, but not only, it is difficult to obtain public funding to compensate for the scarcity of resources. The solution I propose to you is this: unite with determination the right means for carrying out good works. Collaborate more with cooperative banks and businesses, organise resources to allow families to live with dignity and serenity, and pay fair salaries to your workers. … Money, placed at the service of life, can be managed in the right way by the cooperative, if however it is an authentic and true cooperative, where capital does not rule over people, but people over capital”.

“Therefore, I say that you do well to oppose and combat false cooperatives, and to continue to do so; they prostitute the name of cooperative, a very positive thing, to deceive people in the interests of profit, contrary to those of a true and authentic cooperative. … In the field in which you are active, to display an honourable facade while instead pursuing dishonourable and immoral objectives, often associated with the exploitation of labour or the manipulation of the market, or even a scandalous traffic in corruption, is a shameful and serious falsehood. The cooperative economy … if it seeks to fulfil a strong social function, if it wishes to be an agent of the future for a nation and for each local community, must pursue clear and transparent aims. It must promote an economy of honesty, a healing economy in the treacherous sea of the global economy. A real economy promoted by people who have at heart and in their minds only the common good”.

Working on the Co-operative Innovation Project (CIP) has been a real eye-opener for me.

While I have had a long experience with research, and some of it quite applied, I have not worked on a project like this. This project is unique because it requires all of us that are involved – FCL, university researchers, and outside experts (in this case the Plunkett Foundation) – to really pay attention to what the others are saying and to adapt our actions and activities accordingly. Thus, I have come to understand that those outside the university admire the ability of researchers to structure our inquiry so that questions of causation can be addressed. What these people want to know is “Does X cause Y?” Only if these causal relationships are established can efforts be made to influence X in an attempt to change Y. At the same time I have come to admire the insights that those working in the field (e.g., the folks at Plunkett) have developed. And I have come to admire the push for a values-based approach, and the push for insights that can be made operational and that are effective, that FCL brings to the table. The result of this partnership is thus much better research and I believe a much better understanding of the co-operative development process.

Let me give you a sense of some of the things that we have learned in the Co-operative Innovation Project about co-operative development. While the co-operative model, with its unique ownership and governance structure, offers real possibilities for improving the lives of those living in rural and Aboriginal communities, it is critical to understand that co-operatives cannot simply be inserted into a community. Co-operative development works only if a community has unmet needs, possesses the appropriate social and business resources, and is supported by the proper set of activities. The underlying premise of the CIP is that rigorous research can identify the conditions for successful co-operative development.

There are two facets of co-operative development that must be present in order for it to be successful. The first is external to the community and involves, among other things, a regulatory framework with incentives for co-operative development, and legal and accounting professionals with expertise in co-operatives.

The second facet is internal to the community and involves the social, economic, and political characteristics of a community that are conducive to co-operative development. Our initial research has identified three internal community dimensions critical to co-operative development success: (a) community need; (b) business resources; and (c) associative capacity. Unmet needs are, of course, the starting point for co-operative development; however, needs alone are not enough to see a co-operative succeed. For some communities, location, access to skilled labour, or knowledge of the co-operative model may limit development efforts. In other cases, a community may not have the leadership capacity to effectively lead co-operative development activities, the social structures required to allow community members to act collectively, or the political structures necessary for the sharing of authority.

Each of these dimensions, of course, involves multiple criteria. Community needs may involve anything from daycare services to financial services to major public works (e.g., sewage treatment facilities). Business resources include leadership, entrepreneurship, local people knowledgeable about co-operatives, location, workforce quality, market conditions, and market structure. For the associative capacity, key factors include trust, power structures, social sanctions, and social stratification.

What, if anything, do these three dimensions tell us about which communities to target for co-operative development if we have limited resources available? The answer depends on the combination of dimensions found in a community. First, communities that score high on all three dimensions are the most likely places for successful co-operative development. Second, since some of the business factors can be altered as part of co-operative development efforts, communities that score low on this dimension and high on the other two may also be good targets for co-operative development. Third, communities that have few needs should generally not be targeted, since the resources that would be used there could be better used elsewhere.

Finally, and this is the difficult category, what about communities that score low on associative capacity, but possess significant need (as is often the case)? Communities with low associative capacity often do not have the social and political structures to support co-operative development. For instance, strong elites that are protective of their economic and political turf may be very antagonistic to co-operatives, and thus make co-operative development very difficult. Looked at one way, since associative capacity is typically very difficult to change, communities in this last category can be considered poor candidates for co-operative development. Instead, what is needed in these communities is something else, namely the social, economic and political transformation that typically precedes co-operative development efforts. However, looked at another way, co-operative development efforts are often viewed as being an important part of the process of making these social, economic and political changes.