Co-operative economics

Co-operative Federalism is the school of thought favouring consumer co-operative societies. Historically, its proponents have included JTW Mitchell and Charles Gide, as well as Paul Lambart and Beatrice Webb. The co-operative federalists argue that consumers should form co-operative wholesale societies (Co-operative Federations in which all members are co-operators, the best historical example of which being CWS in the United Kingdom), and that these co-operative wholesale societies should undertake purchasing farms or factories. They argue that profits (or surpluses) from these co-operative wholesale societies should be paid as dividends to the member co-operators, rather than to their workers.[33]

Co-operative Individualism is the school of thought favouring workers' co-operatives. The most notable proponents of workers' co-operatives being, in Britain, the Christian Socialists, and later writers like Joseph Reeves, who put this forth as a path to State Socialism.[34] Where the Co-operative Federalists argue for federations in which consumer co-operators federate, and receive the monetary dividends, rather, in co-operative wholesale societies the profits (or surpluses) would be paid as dividends to their workers.[33] The Mondragón Co-operatives are an economic model commonly cited by Co-operative Individualists, and a lot of the Co-operative Individualist literature deals with these societies. This one in Spain has drawn so much attention because in 2010 it was the seventh-largest corporation. It consists of about 250 different worker cooperative businesses. The business model they provide includes "extensive integration and solidarity with employees", worker involvement in policy and committees, a "transparent" wage system, and of course "full practice of democratic control".[35] These two schools of thought are not necessarily in opposition, and that hybrids of the two positions are possible.[33]

James Warbasse's work,[36] and more recently Johnston Birchall's,[37] provide perspectives on the breadth of co-operative development nationally and internationally. Benjamin Ward provided a formal treatment to begin an evaluation of "market syndicalism." Jaroslav Vanek wrote a comprehensive work in an attempt to address cooperativism in economic terms and a "labor-managed economy."[38] David Ellerman began by considering legal philosophic aspects of co-operatives, developing the "labor theory of property."[39] In 2007 he used the classical economic premise in formulating his argument deconstructing the myth of capital rights to ownership.[40] Anna Milford has constructed a detailed theoretical examination of co-operatives in controlled buyer markets (monopsony), and the implications for Fair Trade strategies.[41]

In addition to customer vs. worker ownership, retailers' cooperatives also utilize organizations of already constituted corporations as collective owners of the produce.

Socialists and left-anarchists, such as anarcho-communists and anarcho-syndicalists, view society as one big cooperative, and feel that goods produced by all should be distributed equitably to all members of the society, not necessarily through a market. All the members of a society are considered to be both producers and consumers. State socialists tend to favor government administration of the economy, while left-anarchists and libertarian socialists favor non-governmental coordination, either locally, or through labor unions and worker cooperatives. Although there is some debate as Bakunin and the collectivists favored market distribution using currency, collectivizing production, not consumption. Left libertarians collectivize neither but define their leftness as inalienable rights to the commons, not collective ownership of it, thus rejecting Lockean homesteading. See Centre for a stateless society

Utopian socialists feel socialism can be achieved without class struggle and that cooperatives should only include those who voluntarily choose to participate in them. Some participants in the kibbutz movement and other intentional communities fall into this category.

In some Co-operative economics literature, the aim is the achievement of a Co-operative Commonwealth; a society based on cooperative and socialist principles. Co-operative economists - Federalist, Individualist, and otherwise - have presented the extension of their economic model to its natural limits as a goal.

This ideal was widely supported in early-twentieth century U.S. and Canadian leftist circles. This ideal, and the language behind it, were central to the formation of the Co-operative Commonwealth Federation party in 1932, which became Canada's largest left-wing political party, and continues to this day as the New Democratic Party. They were also important to the economic principles of the Farmer-Labor Party of the United States, particularly in the FLP's Minnesota affiliate, where advocacy for a Co-operative Commonwealth formed the central theme of the Party's platform from 1934, until the Minnesota FLP merged with the state Democratic Party to form the Democratic–Farmer–Labor Party in 1944.

Co-operative Commonwealth ideas were also developed in Great Britain and Ireland from the 1880s by William Morris, which also inspired the guild socialist movement for associative democracy from 1906 right through the 1920s. Guild socialist thinkers included Bertrand Russell, R.H. Tawney and G.D.H. Cole.

Some economists have argued that economic democracy could be achieved by combining employee ownership on a national scale (including worker cooperatives) within a free market apparatus. Tom Winters argues that "as with the free market more generally, it is not free trade itself that creates inequality, it’s how free trade is used, who benefits from it and who does not."[42]