Economy

Tag: Economy

It’s time for civil society to take over the economy

Part of the purpose of this inquiry is to provide a space for conversation about difficult and controversial subjects which either ignite strong feelings, or get ignored through fear and embarrassment. This article is intended to stimulate an open and respectful conversation about some of these issues, and does not necessarily represent the views of the Inquiry.

Ten years ago the wheels started to come off the UK economy and we saw the beginning of the financial crash. Fast forward a decade and people are beginning to question what has really changed. As Torston Bell put it in the Guardian: “The financial crisis highlighted the big challenge of our time: to ensure the economy delivers for working people. Looking back over the last decade, it’s clear we have far from delivered.”

The biggest shift the economy has seen has been the reform of the public sector. But from Brexit to the general election, more and more people have been calling for a bigger transformation of the economy to one where people have control, one for the ‘many not the few’ or one that ‘works for everyone’. YouGov polling earlier this year showed two thirds of people say they have no control over the economy, and only quarter think they can influence either their workplace or their local area.

Yet this change has not come, or at least not yet. Beyond small regulatory changes there has been no significant shift on key issues like the regulation of the financial sector or steps toward the reduction of inequality.

Over the last two years we at Co-ops UK have been talking with a wide range of people involved in co-operatively-run organisations – worker owned businesses, housing co-ops, credit unions, freelancer collectives, farmer run businesses and the like. There are 7,000 co-ops in the UK in all, working right across the economy and together they turnover £34 billion a year. Businesses like the Queens Enterprise Award winning Suma Wholefoods and dairy giants Arla demonstrate they are already successful players in the economy. What sets them apart, of course, is that they are businesses owned and run by the people most affected by them, who have an equal say in what they do and how their profits are used.

We have been talking to them about how we can grow the number of co-operatively run organisations in the UK, with an aspiration that in 20 years one pound in every ten will be spent in a co-operative or mutual business. It’s an ambitious target, but one drawn from the fact that co-ops are already significant a part of the UK’s private sector and through concerted effort we can extend that number and their reach.

With 550 organisations we have co-created a strategy to help make this happen. Called ‘Do it Ourselves’ it is based on the recognition that we cannot wait for new government policies or a sudden wave of enlightenment; we need to just get on and do it ourselves. There are three guiding principles:

Commit to being great. Existing co-operatives are the inspiration that draw people to start or join a co-op. We need co-ops to be exemplars – in governance, in member engagement, in making a difference. We need existing co-operatively run organisations to keep on doing what they do best, and do more of it.

Be open to new co-operation. Co-operatives are a tool to help people take ownership of things that matter to them, whether that’s accessing decent food, housing, work or healthcare. People co-operate naturally and we need to identify and support people who are coming together to address the issues that concern them by forming new co-ops.

Inspire more co-operation. While co-operation is a natural instinct, it often takes some inspiration to get started. Through campaigns and brilliant examples, we need to inspire more and more people to see how working together can enable them to take ownership of the things that matter to them.

There is no part of the economy that co-ops can’t work in, whether it’s our broken housing market or supporting farmers to achieve economies of scale. But there are three areas that stand out as needing co-operative approaches right now.

First, social care. Almost every day we hear about the social care crisis. In part this is about a lack of funding. But it also about the way social care is organised. Co-operative approaches to social care allow the workers and users to own and control what organisations do, allowing them to be more responsive to the needs of the people affected by it. In Wales, a large charity, Cartrefi Cymru, has converted to a co-op because it has recognised the importance of having input from a range of stakeholders into the running of the organisation.

Second, the gig economy. As the number of people in self-employed work continues to grow so does the number of people in precarious work. Coming together in co-ops – often in collaboration with trade unions – is a way for these workers to achieve financial security and create a safety net for themselves. Indycube is a new co-op for freelancers that is working with the trade union Community to provide back office services to freelancers, offering a model for how co-ops for the self-employed might develop.

Third, technology workers. The number of people working in the digital economy is growing fast, and for many tech workers having a say in what they do is as important as what they do. Worker ownership – which evidence shows leads to greater levels of productivity and staff satisfaction – is a natural way for tech workers to organise. Co-Tech is an energetic new network of technology co-operatives, sharing work and spreading the worker co-op model, with a goal of growing 100,000 jobs in the sector by 2030.

In the last ten years, since the financial crash began, there have been growing calls for a fairer economy over which people have more say, yet there has been little movement toward it. Over the next two decades, through a focus on key areas of the economy where new approaches are needed, perhaps we can start to shift toward a different kind of economy.

10th August 2017

Civil society feels increasingly broken – but we can fix it

Part of the purpose of this inquiry is to provide a space for conversation about difficult and controversial subjects which either ignite strong feelings, or get ignored through fear and embarrassment. This article is intended to stimulate an open and respectful conversation about some of these issues, and does not necessarily represent the views of the Inquiry.

It’s time to unleash the power of mutual aid

Browsing on Ebay in an idle moment, I recently came across an unusual copper token. It was dated 1796, and within a garland of wheat appeared the inscription ‘Union Mill Birmingham’.

This token, I soon discovered, was produced at a time of national crisis.  During the years 1795 and 1796 a series of poor harvests, and difficulties in importing grain because of war with France, produced dramatic rises in the price of bread. Across the whole country many of the people were literally starving.

One response was protest. ‘Bread riots’ broke out in Tewkesbury, Norwich, Berwick-upon-Tweed, Croydon, Cambridge, Carlisle, Nottingham, Newcastle and many other places across the country. Women played a major role, as an angry population occupied markets and demanded that traders reduce their prices. The local militia was called in, and ringleaders were arrested and in some cases executed.

Another response was philanthropy. Edmund Burke claimed that the food shortages were accompanied by a great wave of private philanthropy, producing ‘a care and superintendence of the poor, far greater than any I remember.’ It was the eighteenth-century equivalent of our modern day food banks.

Inevitably there were calls on government to ‘do something’. But at first the national government of the day was unwilling or unable to do much. It brought in a tax on hair powder designed to reduce the use of flour, and it introduced legislation to forbid the use of wheat in distilling spirits and in making starch. At the end of 1795 the government took further action: it released wheat on the London corn market at or just below the market price in order to keep prices steady. For the first time the collection and publication of accurate statistical information became a government responsibility.

Local government acted too. In May 1795 magistrates in Speenhamland in Berkshire introduced a variation on the Poor Laws of the day, providing variable amounts of relief according to the size of a labourers’ family, their income, and the prevailing price of bread. But this was bitterly attacked for its unintended consequences: encouraging large families and incentivising farmers to pay the lowest possible wage.

There were of course the usual establishment injunctions to the poor to change their behaviour, which, it was implied, was the real problem. Surely they could cook rice puddings or eat potatoes instead of bread? At least the English royalty did not urge its subjects to eat cake – the probable consequences of that idea were no doubt fresh in its mind.

But there was another response, and it came from civil society. Friendly societies, established by working people to assist their members in times of crisis, started to bulk-buy grain for their members in order to keep prices as low as possible. For example at Rothley in Leicestershire a friendly society drew £50 from its funds to purchase corn, have it ground, and sell the flour at cost to members. A multitude of similar ‘flour clubs’ were set up across the country. But some went further. In Sheffield, for example, sixteen friendly societies pooled their funds, took out a twenty one-year lease on a suitable site, and built a water-mill.

This was not all. Mutually-owned water-mills and wind-mills were successful, but the most advanced social entrepreneurs of their day realised that to really make an impact they needed to harness the latest technology: steam power. The problem was that this was expensive, well beyond the reach of the modest funds held by the friendly societies. But in 1795 an ‘Anti-Mill Society’ was formed by the poor inhabitants of Hull, who sought both approval and financial assistance from the mayor and aldermen of the town, but most significantly they raised the capital they needed through a share issue.

And not just in Hull. In Birmingham in 1796 more than £6,000 was raised in shares and donation for a new 16-horsepower steam mill operated by the Birmingham Flour and Bread Company. At the time it was probably the largest mill in the country. The example was taken up elsewhere, in Manchester, Whitby, Bridlington, Newport, Beverley, Shardlow, Brentford, Plymouth.

In some of the ‘union mills’ as they became known, bakeries were also established. 38 sacks of flour were baked each week at Birmingham, and holders of five or more shares could have their flour and bread delivered to their houses. A society at Wolverhampton distributed 770 loaves each week, supplying about fifty shops in the area, where members could buy their flour or bread. Cash sales were insisted upon by all societies, to reduce the problem of debt among the industrial poor. In all, at least 46 flour and bread societies and mills were set up, then and in subsequent years of scarcity. Some proved to be of considerable duration: the Devonport Union Mill in Plymouth began operations in 1817 and continued to 1892.

So this was the remarkable story that lay behind the token I found on Ebay. And it made me think about the various ways in which, in modern times, we respond to national crisis and to social injustice, and the role of civil society in that.

We can see many of the eighteenth century responses at play today. Sporadically we experience popular protest, and even riots, when the sense of injustice has sufficiently accumulated and it seems that no-one is listening. The proliferation of philanthropic charities which began in earnest in the eighteenth century continues apace. And of course there are continuing calls on government, national and local, to take action.

But nowadays much less attention, at least by policy makers and investors, and even by many leading voices within civil society, is given to the impulse towards mutual aid, to the spirit which created and sustained the Union Mill in Birmingham. Perhaps it is time to rediscover this spirit, to push it up the agenda, and to place it centre stage in our vision for the future of civil society.

* * *

Why does that feel important right now? To my mind it is important because so much of civil society as it is currently configured, despite all its achievements, is today looking increasingly broken and becoming increasingly discredited.

It has become dominated by philanthropic models of charity which confer power to the most privileged in our society. It has become constrained by a public sector culture which replaces human relationships with regulated transactions. It has become infected with a market philosophy which validates some of the worst behaviours of the commercial sector.

The effect of all this is to disempower ordinary people, leaving them without agency or control or a sense of solidarity, and perpetuating inequalities. If we allow this to continue it seems to me that much of civil society will at best become increasingly irrelevant, or at worst part of the systemic problem that it purports to tackle.

But perhaps we can do something about this. Perhaps we can rediscover and refresh the radical traditions in civil society which have been long suppressed and undervalued. The principles of association, self-help, mutual aid, community ownership, and community enterprise.

There is no lack of evidence of the appetite for this. To take just one example, since 2009, almost 120,000 people have invested over £100m to support 350 community-led ventures throughout the UK through community shares.

So perhaps our task should be to seek ways to shift the balance away from philanthropic models, away from public sector contracting, and market behaviours, in favour of mutual aid.

And what that might mean in practice? Well, for a start it might mean investing in the technologies which can support mutual aid. It might mean creating incentives through the tax system. It might mean that funders and policy makers would celebrate and reward successful mutual aid wherever it can be found.

And then perhaps we can begin to imagine a future where civil society is playing a leadership role in building solidarity, in bringing control back to the people, in encouraging social entrepreneurship to flourish, and in generating a shift in power in favour of those otherwise left behind.

6th July 2017