Could a cooperative revolution happen in Australia?

The Australian Secretariat of the 2012 International Year of cooperatives co-hosted a National Co-operatives Conference in Port Macquarie over October 24 and 25. More than 250 delegates attended, representing cooperatives of all shapes and sizes and across many different sectors, including agriculture, retailing, credit unions, building societies, housing, medical practices, automobile associations, renewable energy projects and food .

The theme of the conference was “Our Time to Shine”. Inspiring stories were told of the achievements of individual cooperatives, both here (such as The Earthworker Cooperative) and abroad (such as Mondragon). Many of the presenters were upbeat, bolstered by the release of new research mapping the extent of the cooperative sector in Australia by the Australia Institute.

This research revealed that while most Australians (79%) are members of at least one cooperative or mutual financial institution, a small minority (16%) were aware of that fact.

The report’s authors suggested that this low level of awareness of cooperatives – among cooperative members and the public generally – could be due to the fact that, unlike corporations, cooperatives spend relatively little on advertising and promoting themselves.

The take-home message was one of opportunity for the sector. Because cooperatives don’t have large advertising budgets, they deliver good value for money to their members. For example, the report said that an average mortgage with a building society or credit union costs about $75,000 less over the life of the loan than if it was taken out with a commercial bank. The challenge, it seems, lies mainly in better communicating the benefits of belonging to a cooperative.

Effective communication – selling the message and identity of cooperation - is certainly necessary.

Dr Chris Cooper of the UK Co-operative College explained that a sophisticated re-branding strategy, linked to a high-profile billboard and media advertising campaign called “Join the Revolution”, has, combined with the great financial crisis and the associated loss of trust in commercial banks and corporations, brought about a dramatic reversal of fortunes for Britain's cooperatives.

The Co-operative Group alone now has 6 million members and 6000 retail outlets across Britain, literally providing “cradle to grave” services: from hospitals and early day care to funerals and everything in between – including tertiary education, pensions, banking, insurance, food retailing and pharmacies.

The sector as a whole has 10.5 million members, a phenomenal increase on the 3.5 million members it had in 2007. It has set itself the ambitious target of reaching 20 million members by 2020. Its turnover rose by 20% in 2011 alone.

In a stunning reversal of fortunes, the movement is growing via the acquisition of non-cooperative, or demutualised, businesses.

For example, Britain's Co-operative Bank, which had 109 branches in 2009, now has nearly 1100. Two-thirds of the new branches are formerly demutualised branches that belonged to Lloyd’s Bank. In the 10 months since January this year, the Co-operative Bank has added 61% more personal accounts and 21% more business accounts to its books.

But the bare statistics conceal the deeper story, which is that the recent success came after years of internal debate and reflection, in the midst of a long period of decline from the 1960s to the turn of the century.

The British cooperative movement realised it needed to return to its core values and principles – appropriately updated for the 21st century – and clearly articulate to its members and the public what was distinctive, relevant and exciting about cooperatives in turbulent economic times.

This process of critical self-reflection is desperately needed in the cooperative movement in Australia. In his authoritative survey of the historical trajectory of farmer cooperatives in Australia from the 1880s to the turn of the 21st century, historian Gary Lewis (who was not present at the Port Macquarie conference), delivered a sympathetic, but scathing assessment of the many and continual failures of agricultural cooperatives to build a strong, cohesive, visionary and above all principled cooperative movement.

Lewis identified a strong confluence of external factors – geographical distance, parochialism and states rights, epochal shifts in global trade, ideological and commercial opponents, and a lack of supportive political leadership at the federal level – but it was the factors internal to individual cooperatives, and the movement as a whole, that have probably done most to stifle its potential.

These internal factors include:

• A marked preference for competition over cooperation – a failure of cooperatives to cooperate with each other,
• A first allegiance to commercial industries, and industry associations, rather than to the cooperative movement,
• A failure to invest in cooperative research and development, and cooperative extension services,
• A failure to invest in cooperative education and thus a failure to capture the imagination of younger generations,
• A failure to invest in building umbrella institutions and effective policy advocacy at the federal government level,
• The inability to establish a cooperative bank to finance cooperative ventures – a sine qua non of a vibrant “self-help” movement.

Cumulatively and collectively, these failures reflected “a triumph of the pragmatists over the idealists”, as well as the pursuit of “market share, competitiveness and growth for growth’s sake”, thus resulting in a “degrading of cooperative consciousness”.

Lewis’s final words are damning: “With few exceptions, it was a short-sighted and stingy movement. Efforts to educate the public and opinion makers, particularly the young, were paltry … there was scant evidence of farmer co-operatives encouraging a co-operative consciousness … Similarly, there is little evidence of farmer co-operatives espousing a sense of social responsibility or a concern for the wider community, apart from sponsoring a few sporting events.”

Far from critical self-reflection and democratic debate that such an assessment demands, the Port Macquarie conference was run in a conventional, didactic and non-participatory format. Keynote speakers and panelists spoke for hour after hour on a raised platform, with very little time for questions from the floor.

This pattern contrasted sharply with the Youth Summit, where the 30 delegates spent two and a half hours engaged in highly participatory processes of asset mapping, brainstorming and "dotmocracy" (group decision making) to agree on a series of strategic initiatives to raise awareness of cooperatives amongst young people, and begin building a cooperative consciousness and sense of a movement.

“We actually got asked what we think, rather than being talked at,” youth delegate Kristy Walters, of Northey Street City Farm and Friends of the Earth Brisbane, told me. The brainstormed initiatives include a national road-trip, a youth festival and getting cooperatives on the curricula of university business courses.

Inspiring and empowering as this youth meeting was for those involved, there was disappointment and frustration that it was squeezed right at the end of conference. When the outcomes of the meeting were presented the following day, very few delegates – perhaps less than 10 – were actually present to listen to them, and there was little in the way of concrete outcomes.

“We felt it was a missed opportunity to connect with long-time cooperators, and were left wondering, are the older generation actually supportive of youth initiatives?” said Kristy.

The cooperative movement in Britain is clear about its aim: to transform the economic system.

Youth leaders in Australia, such as Donnie Maclurcan of the Post Growth Institute, are more than ready to have a serious discussion about the need to transition to a sustainable and resilient economy, and the role of cooperatives in bringing that about.

Meanwhile, mainstream (and older, mainly male) cooperative leaders discuss how “cooperatives can save capitalism” and help usher in an era of “responsible capitalism”. As the tide of austerity begins to lap at Australia’s shores, the time to deepen the conversation has arrived.