Co-op ends the divi

[ALB]

http://www.theguardian.com/business/2013/nov/10/co-operative-bank-dividend

What's the point of being in the co-op, then? Not very "ethical" is it either? People like me have been buying stuff at the co-op just to get the cash dividend and now they say they're not going to pay it. I should have gone to Tesco or Sainsburys.

What a disastrous failure for the "co-operative" model of business, but as a Marxist I should have expected this, I suppose. But there are still people around advocating it:

There's also the supposed "Marxist" Richard Wolff of "When Capitalism Hits the Fan" fame:

http://www.thenews.coop/topics/Richard%20Wolff

The question is: are they fools or scammers?

[Dave]

The Co-operative model has never really worked for years now so it's no great surprise that they are behaving like any other capitalist buisness. Of course the dream of somehow insulating the Co-op from capitalism was never really viable as Marx pointed out in the Povert of Philosophy when he argued against Proudhonist ideas that there can be islands of co-operation in a capitalist sea. Using this analogy I would say that the capitalist sea has swallowed the co-operative movement just as it should have done.

[alanjjohnstone]

Am i right in recalling that they once in the past did away with the dividend, replacing it with stamps, with the only part of the co-op retaining the divi being the co-op  funeral directors which wasn't much use to the deceased !! Indeed they are not only advocating it but some actually believe its a new idea !!! But will the lesson be learned? Can we effectively counter its nefarious spread within "radicals"? I know i often suggest special propaganda efforts on specific topics but again does not these co-op shemes warrant special attention with a pamphlet, or special devoted issue of the Standard that could be quickly produced into a pamphlet. – the COP-OUT OF THE CO-OPTED CO-OP as an alliterative title.Again i don't think it would take that long to compile a decent-length text. Maybe a joint venture with Andrew Kliman who has also produced critiques of those proposals by Wolf etc. 

[Dave]

While not a member of the SPGB I do think that an article on the Co-op with its historical development and the reasons why it had to fail using it's own criteria would be quite useful. It was or should have been no surprise to any Marxist that the end result of the Co-op would be that it would become another capitalist business whether it took a hundred years or a shhorter time frame. Although I'm certain that the Rochdale pioneers would have been disgusted how their beloved enterprise would turn out. After all they did genuinly believe that co-operative businesses could be run using co-operative principles that would also be applied not only to retail but also to the productive sector of the economy.I'm not too certain however whether to give over a full issue of Socialist Standard would be all that productive.

[admice]

My sympathies. I hope you do a pamphlet on why, that at some point they are crowded out by for-profits if they dont fade on their own."ceding control of 70% to bondholders – led by two US hedge funds "Complicty, force or bungling still shouldn't have happened.

[alanjjohnstone]

We may have not done a dedicated pamphlet to the co-operative idea but our blogs have not been idle in offering analyses. But it can all be summed up as that co-ops offer some people some form of temporary relief  through the coping mechanism of co-ops but as for them being a stepping stone towards socialism, workers will be sadly disappointed.http://www.socialismoryourmoneyback.blogspot.com/2013/07/utopian-capitalism.htmlhttp://www.socialismoryourmoneyback.blogspot.com/2011/06/co-opting-co-ops.htmlhttp://www.socialismoryourmoneyback.blogspot.com/2009/04/worker-co-operatives.html http://socialist-courier.blogspot.com/2013/09/self-managed-exploitation.html http://socialist-courier.blogspot.com/2013/04/the-co-op-cop-out.html http://socialist-courier.blogspot.com/2013/06/co-ops-are-for-coping.html http://socialist-courier.blogspot.com/2013/06/the-new-economics-dusty-old-ideas.html

[ALB]

Here's Rosa Luxemburg's take on co-operatives, from her pamphlet Reform or Revolution:

Quote:

Co-operatives – especially co-operatives in the field of production constitute a hybrid form in the midst of capitalism. They can be described as small units of socialised production within capitalist exchange.But in capitalist economy exchanges dominate production. As a result of competition, the complete domination of the process of production by the interests of capital – that is, pitiless exploitation – becomes a condition for the survival of each enterprise. The domination of capital over the process of production expresses itself in the following ways. Labour is intensified. The work day is lengthened or shortened, according to the situation of the market. And, depending on the requirements of the market, labour is either employed or thrown back into the street. In other words, use is made of all methods that enable an enterprise to stand up against its competitors in the market. The workers forming a co-operative in the field of production are thus faced with the contradictory necessity of governing themselves with the utmost absolutism. They are obliged to take toward themselves the role of capitalist entrepreneur – a contradiction that accounts for the usual failure of production co-operatives which either become pure capitalist enterprises or, if the workers’ interests continue to predominate, end by dissolving.

[alanjjohnstone]

We can now add the Lefty-capitalist's favourite model Mondragon, to the casualty list. http://www.economist.com/news/business/21589469-collapse-spains-fagor-tests-worlds-largest-group-co-operatives-trouble-workers One of the group’s  constituent co-ops—has found its limit. Fagor has lost money for five years and has run up debts of €850m ($1.2 billion). Its sales have fallen sharply because of Spain’s property bust and low-cost competition from Asia. Even pay cuts of over 20% have not been enough to turn it around. Its factories all ceased production three weeks ago…In the past, losses in one part of the group have been covered by the others, but this time Fagor’s pleas for a €170m lifeline were rejected, even though the Spanish and Basque governments were ready to step in as part of the rescue. Eroski, another co-operative in the Mondragon group and one of Spain’s largest retailers, is also struggling in the face of stiff competition, and it and two other co-ops vetoed Fagor’s plan.

[alanjjohnstone]

Oh , i should have added that those who put the knife into them wasn't the government . They were willing to help out with a bail-out but their fellow co-operatives in Mondragon. …"One for all, all for…."…oh forget it….

[ALB]

This news from Spain should be filed and sent to Clifford Slapper for the debate with Peter Tatchell on 5 March as co-ops were one of the things Tatchell (a Green Party member now, I think) advocated in his talk on "Economic Democracy".  Capitalism is continuing to back up our case that it can't be reformed to work in the interests of the workers.

[ALB]

An editorial in the business section of yesterday's Daily Telegraph attributes the Co-op's current plight to its democratic structure, arguing that is not possible to run a business of its size on such lines:

Quote:

Its democratic structure, with a Byzantine relationship between area committees, regional boards and the group board, was held up as a paragon of virtue. It was, as has been proved, a recipe for disaster.

Quote:

It is difficult to imagine any corporation with a business of this magnitude being governed by archaic gouvernance standards more suited to a village charity than an organisation with its sights on major expansion.

Although the way the Co-op was run wasn't that democratic at least it was far far more democratic than any normal capitalist enterprise.The Daily Telegraph is right: it is not possible to run a big capitalist enterprise on anything like democratic lines and the plight of the Co-op has shown this to be the case. Confirmation of the arguments we have used against people like Peter Tatchell (and no doubt will be using when we debate him on 5 March next year) who hold up co-operatives as one way to "economic democracy".

[alanjjohnstone]

The run on the bank continues.  "local authorities across Britain have been warned by financial advisers to urgently remove their money from Co-op bank accounts"http://www.theguardian.com/politics/2013/nov/23/labour-faces-co-op-cash-crisis But who is running the co-op – the Tories are  "the Co-op Group after it emerged that the mutual is now being advised by Quiller Consultants, whose senior executives include David Cameron's former special adviser, Sean Worth, and George Bridges, a close friend of George Osborne and former campaign director for the Conservatives under Cameron when in opposition." But every crisis has a silver lining – Co-op donations to the Labour Party is to be cut

[ALB]

alanjjohnstone wrote:

We can now add the Lefty-capitalist's favourite model Mondragon, to the casualty list.

Here's more on this failure of a co-operative to buck the economic laws of capitalism. (Warning: despite its name this site has nothing to do with us, but is a Trotskyist one as its subtitle makes clear)http://www.wsws.org/en/articles/2013/11/26/span-n26.html

[alanjjohnstone]

Mondragón president Txema Gisasola stated, “We receive visitors from many companies and many countries, and some come here with a magical idea of what Mondragón is. This is not magic. We are in this market, competing in the capitalist world, and the only difference is how we do things and why we do things. We have to be competitive, we have to be efficient, we have to have quality in our products and give satisfaction to our clients, and we have to be profitable. In that sense we are no different from anyone else.” Says it all, doesn't it and if he is truly honest the how they did things and why they did it isn't that much different , either

[ALB]

Mondragón president Txema Gisasola stated:

Quote:

We receive visitors from many companies and many countries, and some come here with a magical idea of what Mondragón is. This is not magic. We are in this market, competing in the capitalist world, and the only difference is how we do things and why we do things. We have to be competitive, we have to be efficient, we have to have quality in our products and give satisfaction to our clients, and we have to be profitable. In that sense we are no different from anyone else.

The source of this quote (which members can use in discussions with those who see co-operatives as some sort of alternative to or way out of capitalism) is an article in the Financial Times of 21 March 2013 by Miles Johnson entitled "Drivers of Change: Workers united".http://www.ft.com/cms/s/0/d7d2fbcc-85b9-11e2-bed4-00144feabdc0.html#axzz2lvDgVAVs

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