Under the bed buyout

Listening to Norman Watson at our Autumn Forum here in Manchester. He has been a pioneer of employee buyouts, where the workforce can take control of enterprises as a cooperative.

One of the businesses Norman worked on was Tower Colliery which from 1995 became the largest worker cooperative in Wales. Miners used their redundancy, or some took personal loans from the Co-operative Bank, to invest £8,000 each to buy the mine and run it together. Some brought the money in on the Saturday afternoon in cash and given that the Coop Bank had closed at lunchtime, the cash was kept under a bed until the Monday morning.

All too often, he says, “people don’t know what a co-operative is, true, but they have a fair idea of what it could be.”

Who loves advertising?

I have been on a panel this evening with Jon Alexander and others at an event at the Royal Society of Arts on advertising.

Jon is the co-author with Guy Shrubsole (pictured here) of the report Think of me as evil? opening the debate on ethics in advertising which is published by the Public Interest Research Centre and WWF. This is the best written report on any social cause for many a year and raises all the right questions around the place and role of advertising in society.

The report has helped to achieve what it wanted, which is to stir debate – including from the chairman of the Advertising Association, Tim Lefroy; from Futerra, the sustainability marketing agency Ed Gillespie; and with David Jones, head of comms agency Havas.

When I had to deal with the advertising industry, in the lead-up to the book Consumer Kids, I came across my fair share of cat-stroking evil apparatchiks outraged that complaints about marketing to children represented an attack on their freedom to advertise. It is genuinely great news that the industry has moved on.

We have some welcome, practical steps forward, such as banning the recruitment of children to sell to other children (something Agnes and I exposed in the book) and extending the reach of the Advertising Standards Association online (again, something we championed in an open letter to the industry). We now have an open and intelligent debate.

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We love to celebrate

On the platform, with great fanfare, charm and charisma, is President Calderon of Mexico.

He says, alongside a range of concrete actions to harness the role of co-operatives in the economy and in tackling poverty, “we will celebrate the International Year of Cooperatives. Of course we will. We love to celebrate.”

Mexico, 2012. Ten million cooperative members. Party nation.

Northern Rock free to go rogue again

I am pretty dismayed by the government’s decision to sell Northern Rock to Virgin Money, because it means that the UK has missed a perfect opportunity to get a little more diversity into the financial services market.

Since the start of the credit crunch, co-operatives have grown by 21% whilst the UK economy as a whole has stagnated. But the banking sector has changed very little. In the long term, we are promised reforms to create degrees of internal separation. But the immediate policy of requiring high capital ratios has been a permission slip for banks to fleece their customers and is anyway, harder for mutuals who build capital slowly over time from members and retained earnings rather than external shareholders.

Good luck to Virgin Money, but the risk is that Northern Rock and the other PLC banks are simply free to go rogue again.

An invaluable presence

I am here in Cancun, Mexico, with two thousand two hundred others from across the world for the International Co-operative Alliance global congress.

The United Nations Secretary General Ban Ki-moon sends his welcome and best wishes by video, saying that “co-operatives are a unique and invaluable presence in today’s world. They help to reduce poverty and generate jobs,”

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Cut short

I was so sorry to hear of the death in the last few days of Richard Douthwaite, the great analyst and advocate for renewing the local economy.

I remember when I met Richard for the first time in the 1990s when I was at the New Economics Foundation. He told me that the global economy was going to crash and that he wanted my help to write a handbook on what we could do to prepare for this.

The result was the book Short Circuit, now a classic of localisation. It was a remarkable work, and innovative because Richard was able to look round the corners of orthodox mind sets and thinking. He had originally moved to where he lived in Ireland, buying land because he had thought before that the global economy was at risk of collapse. So he had lived out and thought out economic survival tactics.

To this, he added not just charm and gentility but his brilliant touch as an economics journalist and writer. For example, he looked at the question as to whether in a world with oil scarcity, the horse would make a come-back as key to local economies – for transport and power. Well, he did the numbers on energy and prices and concluded that no, on balance, the mass use of horses would remain a feature of the past and not the future. It is an entirely reasonable question and only someone who had the courage and imagination to think through how the world would change around him could have answered it with rigour and insight.

His ideas around energy, money and climate change, his work with Feasta in Ireland will live on.

The global, oil-dependent growth economy has outlived Richard, but it may not be for long and if so, his contribution will endure far longer.

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Occupy business

What is, as I see it, the co-operative view on the occupy protests?

First, we recognise that this is a social movement – fluid, based on values, open and creative. Many of the great changes that underpin society today – votes for women, tackling racism, the recognition of human rights – have emerged from social movements. The co-operative sector is also a social movement and it is an economic actor. We have opportunities both to offer and to learn in our overlapping engagement with the protests.

Second, we endorse the fundamental questions the protests ask of today’s economy. In simple terms, if capitalism is the idea that economic activity should be directed solely towards a return on capital, then not only is it a nonsense, but we have never lived in a capitalist society. Family, state, and community shape every aspect of economic life. Money, money, money is not just a poor proxy for well-being, it is an impoverished and flawed account of individual behaviour and meaning. The greatest co-operative enterprise is about finding ways for the people involved in a business to be masters and not slaves to the cold and inappropriate logics of distant finance.

Third, we applaud the focus on the inequalities between the one and the ninety nine per cent. We know, as enterprises, that since the 1980s, with the removal of financial market regulation and capital controls, that the gains from business in orthodox markets no longer go to the workers. It used to be that wages by and large tracked productivity increases. The gains were shared. But in the last two decades, the productivity gains in an economy are taken by the shareholders. It becomes a winner takes all economy. The spread of credit has allowed the rich to lend to the poor, to let them into consumer lifestyles and entitlements, but it has been a house of cards. The way to tackle debt crises, as we knew from the Jubilee 2000 campaign, is to share responsibility between creditors and debtors – not to impose self-defeating austerity that costs only those in pain already.

Fourth, having visited St Paul’s in London over the period of the protests, I would say that we welcome the maturity that has generally been shown in the actions to date, not least in terms of using models of participative and consensual democratic engagement. Every business could learn from what it really takes to treat people with respect and equality, what it takes to develop responsibility – some in theory of our fundamental co-operative values. Nothing is perfect, but the protests have shown that if previous years of complaint – Seattle and beyond – were led by non-governmental organisations, this movement is different. It is a spread of self-governing organisers and they are on the rise.

When protest turns to the reinvention of business and markets, co-operatives can welcome home all those who believe in a people-centred economy. We have huge challenges in years to come – the instability of markets is small compared to the volatility of habitats, climate and resources under pressure. We had better all start protesting – and all start co-operating.