Positive Linking

In a complex world, it pays to co-operate. A new book by best-selling UK economist Paul Ormerod published in Co-operatives Fortnight looks at the power of ‘positive linking’ and the role of networks in economic life.

Once one of the UK’s leading economic forecasters, Paul is celebrated for declaring the ‘death of economics’ and the failure of forecasting, long before our present troubles. Rather like a one man UK Sante Fe Institute, he has gone on since to explore new, more open models based on complexity theory and new methodologies for analysis based on more maths rather than less.

Paul grew up in Rochdale and is for example a lifelong supporter of the Rochdale Hornets, now a fan-owned co-operative. Being a fan, or Chair as he was for a while, is never easy and he turned his analytical mind to their success, compiling a statistical account of their track record – noting drily that “they have not won anything since 1922”.

On co-operation, Paul describes to me the lessons of his new book for the co-operative sector:

“Because the shareholder-based company is the dominant form of organisation in the Western world, people often draw the conclusion that it must in some way be superior, be fitter for survival, than other corporate structures such as co-operatives. But the new, biologically-inspired thinking about economic and social processes tells us that this is not necessarily true at all.

“Different, more socially aware forms such as co-ops, have the potential to perform just as well. Whether we adopt these structures more widely is a question of values rather than economics. The key to this, and to a great deal of social and economics policy in the 2st century, is understanding how values either spread or are contained across real-life social networks.

“The current dominance of the shareholder corporation owes a lot to chance and historical contingency. Alternative forms of corporate governance now have a great opportunity to spread and replace the current ‘brand leader’.”

Positive Linking: how networks can revolutionise the world is available from Thursday July 5th for order online from News from Nowhere and of course other, well known / not so co-operative online sellers.

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