Robb on Cooperation

Mutuo and funding the future

Posted by Alan Robb on 6 January 2010 | 0 Comments

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Mutuo is a British not-for-profit society. Its website at www.mutuo.co.uk provides an interesting introduction to its origin and activities:

● Mutuo brings together the different wings of the mutual sector to promote a better understanding of mutuals and to encourage mutual approaches to business and public policy.

● Through Mutuo, consumer cooperatives, building societies, mutual insurers and friendly societies and other mutuals work together to promote their shared interests to the government, media and other decision makers.

● Since 2001, Mutuo has worked to promote new mutuals. This has led to renewed growth in the mutual sector, with public sector mutuals established in health, housing and education and new community based businesses ranging from football to childcare.

● In all, more than a million citizens have become members of new mutuals.

That’s quite an achievement, setting up new mutuals which have attracted over a million members in eight years.

PUBLICATIONS
Mutuo has also produced a range of publications of interest to those in cooperatives and mutuals which can be downloaded from the web site.

The most recent, Funding the Future: an alternative to capitalism, is well worth reading. It was released in November 2009 and provides an insightful analysis of the underlying causes of the global financial crisis.

The author, Cliff Mills, acknowledges that profit-maximizing investor-owned companies have been very successful at maximizing the return on financial capital. But it is not a system designed to deliver fairness and equity. Private gain is achieved at the cost of other “potentially legitimate – maybe even more important goals.”

“The negative externalities, the costs of exploiting natural and environmental resources, might be a price worth paying if those who bore their cost also shared their rewards; but they don’t”, he says.

Mills provides a succinct analysis of how this situation came about historically.

He shows how mutual societies arose which sought to establish sustainable businesses that were socially responsible. Their funding was markedly different from investor-owned companies.

Members did not think of themselves as owning a share in the underlying value of the business. “The society did not exist in order to create capital value: it existed to provide goods and services, for today and for future generations” he says.

“In truth, this was not just a different way of trading or doing business; it was a different basis for society. It operated on the basis of people behaving as citizens with a collective sense of responsibility for themselves and others, rather than as selfish consumers” he says.

Mills shows how this attitude, and business model, changed in response to changes in the role of the state. He also reminds us that recent events have changed the old certainties on which the postwar market economy was built.

He says, “There is now a more sober and reflective mood.” There is a resurgence of interest in mutual and member-based models of ownership (witness the one million members of new co-ops created by Mutuo). This suggests that the self-help business model may have a contemporary relevance which is “more than just marginal.”

SUGGESTIONS
Mill makes a number of suggestions how community-owned projects such as energy co-ops might be structured. They include redeemable shares with a ten or fifteen year term together with “a modest level of interest payable on the shares providing that the necessary surplus was achieved.”

The concluding paragraphs of his paper are:

“There is an alternative to capitalism: where the reason for trading is not the (selfish) desire to make a profit, but the (self-interested) need for the sustainable provision of goods and services; and where the proactive driver is not the maximization of private gain, but the pursuit of better results for all of us – for the common good.

“This alternative is available if, and only if we – as customers, workers and savers – choose to have it. It requires no act of government, no decision by big business.

“It involves reclaiming the power of democracy. It requires ordinary people to resolve to use their economic powers of everyday decision making to create and support a different economic system, a different way of living, and a different society.”

I believe those words, indeed the whole paper, are very relevant to New Zealanders, whether they are members of a cooperative or not. They are especially important to those working to formulate policy for new laws – a copy should be given to each of our legislators, regardless of party.●

– from the December 2009 Cooperatives News