International Year of Co-operatives 2012

This year has been officially designated the International Year of Co-operatives (IYC 2012) by the UN. With much widespread global discontent about the injustice of a financial system that works for the 1% but not the remaining 99%, many people have been asking themselves how to build a different economy – one that works for everyone’s interests rather than the minority.

The UN, and the wider co-operative movement, think that co-operation as a business and social model with ethics embedded in the way it operates, is one way to do just that. But what is a co-operative? In a recent book on the history of co-operation home and abroad, co-ops have been called ‘the hidden alternative’ because while certainly a vibrant and popular business model, it is still not widely understood.

Broadly speaking, a co-operative is a group of people united to meet their mutual interests. In terms of a business model, then a co-operative business is one in which a group of people own and operate the business for their own mutual benefit. What is central to this ownership model is that it is democratic: all members of the group have an equal say in the business, on a one-member-one-vote model. This is in clear contrast to a shareholder model, in which shareholders have greater vote-share according to their initial buy-in.

Why this matters is that a co-operative business is owned and managed by the very people it aims to benefit: its members. In the case of a consumer co-operative, any customer of the co-operative can be a member. This means that you become a part-owner of the business, by definition of becoming a member. You have democratic voting rights – a say in the business. It is accountable to you – and if you wish, you can become elected to represent other members (which is typical of large consumer co-operatives with many thousands, if not millions, of members).

A co-operative business is therefore one which is uniquely placed to respond to member interests, by virtue of its democratic structure.
A co-operative operates under the following values, democracy included:

Voluntary and Open Membership
Democratic Member Control
Member Economic Participation
Autonomy and Independence
Education, Training and Information
Cooperation among Cooperatives
Concern for Community
Since a co-operative is owned and managed by its members, it is only accountable to members, not shareholders. It has no shareholders to answer to, who may not be sensitive to local needs, concerned only with maximising their own profit regardless of ethical operation, environmental sustainability or fairness. However, a co-operative recognises implicitly that co-operation rather than competition is actually a more robust business model: when the benefits are shared around, then it really is good for everyone.
To prove the fact that co-operatives mean business, then the UN and the co-operative movement wish to promote understanding of the economic and social importance of co-operation. For example, roughly 1 billion people worldwide are members of a co-operative, co-operatives employ more people than all the multinationals put together and globally are equivalent to the economy of Canada (the world’s tenth largest).
Also, the co-operative financial sector globally has managed to weather the financial crisis of recent years better than most others, showing that they have huge consumer trust compared to the conventional high street bank. The widespread anger at the big banks has inspired the ‘Move Your Money’ movement: http://www.moveyourmoney.org.uk/, which highlights co-operative finance as a better way to bank, rather than the big 5.
In conclusion, co-operatives are vital to the world’s economy, are vital to securing incomes and livelihoods and deserve to be much better recognised for their huge economic clout.
With this in mind, building a more socially responsible economy can surely only be done by changing business models. Co-operation is one such alternative business model. It already has a proven track record, and in the words of the UN IYC 2012 slogan, can ‘build a better world’.
For more information, please visit: http://www.2012.coop/. The official news hub for IYC 2012 is here: http://www.thenews.coop/