Co-operatives could be the basis for a new economic model

By 
  • September 26, 2012

In designating 2012 as The Year of Co-operatives, the United Nations has recognized that co-operatives are a powerful force for positive social and environmental change and thus instruments for building a better world.

Canadian experience gives clear witness to this truth. The pioneer Alphonse Desjardins established the first caisse or credit union in Levi, Que., in 1901, following the innovative European financial model of savings and credit owned and governed by its members.

Recognizing that French Canadians had no tradition of saving and that many were forced to leave Quebec in times of economic crisis, the Catholic clergy endorsed the new caisses and received Pope Pius X’s approval for priests to manage local branches. By 1963, Quebec had 1,248 caisses with assets of over $1 billion and 1.5 million members. Co-operatives soon spread across Canada.

Despite many trials, the movement prospered and today Canada has 9,000 co-operatives with a combined membership of 18 million and annual revenue of $50 billion. And so the Canadian Association has good reason to celebrate The Year of Co-operatives with an international summit Oct. 6-11 in Quebec City. The theme is “The Amazing Power of Co-operatives.”

In reading the promotion literature for this event, one discovers a remarkable resonance between it and recent teaching by Pope Benedict in his social encyclical Caritas in Veritate. He sees the promotion of social or civic economy as a way to modify, indeed civilize, our present economy. For him, business may or may not aim at profit, but it should have the primary goals of social and human welfare.

In co-operatives and credit unions, where members are owners, there is a more communal appeal to taking initiatives, making decisions and sharing earnings. Co-operative leaders and Benedict both foresee a real possibility for the co-operative approach to grow and become powerful enough to influence mainstream business into becoming more civilized and less focused on monopolistic markets.

The Pope writes in Caritas in Veritate: “Without prejudice to the importance and the economic and social benefits of the more traditional forms of business, they (social or civic business) steer the system towards a clearer and more complete assumption of duties on the part of the economic subjects. And not only that. The very plurality of institutional forms of business gives rise to a market which is not only more civilized but also more competitive.”

The co-operative movement can take many forms, including mutual insurance, agriculture, housing, many kinds of consumer and production goods, including housing and hotels, and financial institutions. In 600 municipalities in Quebec and 380 in the rest of Canada, credit unions are the only financial institution. And credit unions are ranked 18th among the 50 safest banks in the world.

Co-operatives are guided by seven principles: voluntary and open membership; democratic member control; autonomy and independence; education training; information; co-operation among co-operatives; and concern for the community. Thus they promote democracy, self-help, equality and solidarity, all of which reflect Pope Benedict’s own expectation for social economy.

In recent years, co-operatives, especially credit unions, have developed rapidly in poor countries. Nelson Kuria, CEO of the co-operative group in Kenya, who will be coming to the Quebec Summit, states: “I have no doubt that the co-operative model provides a most effective institutional mechanism for responding to the development challenges of the African continent on a sustainable basis. Co-operatives can simultaneously promote wealth creation, poverty alleviation and more equitable distribution of resources.”

Tom Webb, who helped create the international Master of Management, Co-operatives and Credit Unions program at Saint Mary’s University, Halifax, says: “It’s time to unplug ourselves from the old global economics and plug into the enormous potential of cooperative economics to truly build a better world.”

Is Tom dreaming? Probably not. If the co-operative movement were able to collaborate effectively on the international level — with one-billion members and $1.6 trillion annual income (counting only the largest 300 co-operatives) — it could significantly influence the future global economy.

And so the Quebec summit will be emphasizing how co-operatives weathered the economic crisis better than ordinary business and banks, and planning how co-operatives can have a much greater impact on economic thinking, planning, policy and action taken by business, government and international agencies in Canada and around the world.

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