A Reply to Dr. Wulker by Jacques Moreau

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This document has been made available in electronic format
     by the International Co-operative Alliance ICA
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                     January 1996


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         The Social Economy: A Reply to Dr. Wulker
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In the last issue of the ICA Review (88-2), Hans-Detlef Wulker set out very
clearly the position of his organisation concerning the concept of the
Social Economy.  It was an article worthy of interest, which could spark a
long debate or even an entire seminar.  The references which he made to the
French position concerning this theme have stimulated me to reply to him,
from a strictly personal point of view.  Since I have already dealt with
some of the problems he raised in a recent essay (1), I shall limit myself
here to the key issues which he raised.

First I shall deal with the points on which we are in agreement, and then
with the major differences.  I shall try to conclude with some positive
thoughts.

Three Points of Agreement:
1.   Our colleague is quite right in saying that the term "Social Economy"
can give rise to as it has in the past quite different interpretations.
Some of these go very much beyond those defined in the CNLAMCA Declaration
of 1991, the text of which can be almost entirely found in the new Charter
which we have just adopted (2).  All these conceptions are legitimate, and
everyone can choose the one which best suits him.  In France, however, the
only definition officially approved by all the responsible national
organisations is that contained in our current Charter, and it is therefore
this version to which I shall refer.

2.   He is also quite right in challenging the inclusion in the Social
Economy of organisations which are not based on the principle of voluntary
and open membership.  Our Charter excludes all those based on other
principles, whether they are part of the public sector or not.  These
organisations can be included in a vast "Third Sector", but not in the
Social Economy in its strictest sense, which should include only voluntary
associations of persons.

3.   Finally, he is right in thinking that the common representative bodies
of the Social Economy should not replace those of their members.  The
common bodies should only intervene when there is a common problem that
requires coordinated action.

This is how we operate in France.  CNLAMCA, which represents the entire
Social Economy, does not replace the Groupement national de la Cooperation
on issues dealing only with co-operatives.  Neither does this group act in
the place of one of its federation members in an area of its own
responsibility, unless it is expressly requested to do so.  The basic
principle which must motivate our institutions is that of subsidiarity.

Three Points of Difference:

Dr. Wulker will hopefully not mind if I tease him for being too influenced
by the "Cartesian" mind-set for which we French are often criticised, and
which can lead to exaggerated affirmations.

1.   He exaggerates, I believe, the differences which exist among
associations, co-operatives, and mutuals.  First of all, the respective
definitions of the three families vary from European country to country,
and therefore the dividing line between their respective activities is not
very clear.  Depending on the country, insurance is carried out by
co-operatives or by mutuals.  Popular tourism is, depending on the country,
the responsibility of co-operatives or associations.  These are not the
only examples.

     Also, there are considerable similarities with respect to their
operation.  If one takes the example of the French insurance mutuals, which
are significant legal and market forces, it is difficult to see how they
are different from most co-operatives.  It is true that they do not have
equity capital; but in Europe there are many co-operatives which similarly
do not have equity capital, as was (I believe) the original wish of F.
Raiffeisen.  Similarly, many associations operate in France, in the service
of their members, in the same way as do co-operatives.

     Above all, these three families have one fundamental characteristic in
common they are associations of persons, not societies of capital (at least
for the local organisations).

2.   Their collective activity has nothing to do with "collectivism", even
when they have relatiionships with the State.  The fact of dealing with the
State does not imply a situation of subservience.

     There have always been private companies in Europe which have had
contractual relationships with the State, as in the case of public service
concessions whereby the State enters into an agrement with a private
company in order to meet a public need.  It is hard to imagine why this
should be possible for capitalist companies but not for co-operatives,
mutuals, or associations.

     It is true that, in the past, there have been cases of State
interference.  However, the objective of the Social Economy is to bring an
end to this situation by introducing a contractual framework in those cases
where, for historical reasons, other kinds of relationships have existed.
The history of Co-operation has witnessed a similar evolution, as can be
seen in the case of the German Raiffeisen banks and the French Credit
Agricole.

3.   The differences within the Social Economy, whether in terms of kinds
of activities or goals, do not prevent the co-operatives, associations and
mutuals from having in common a certain number of concerns resulting from
their being societies of persons.

     We all know that, today, the capitalist company is viewed as the ideal
model of business, and that all rules are designed with it in mind.  This
carries great risks for our organisations, which are of a different
character, and which are threatened with disappearance.  Recently, for
example, co-operatives representing individual and family businesses have
been threatened by the appliation of competition legislation.  In each of
our sectors, our Brussels associations have been hard-pressed to obtain
provisions which respect our unique nature as societies of persons.

     Looking beyond the issues which concern each of our sectors, the three
families share common problems which require them to adopt a common front
on certain issues.  Can one go further?

Some Perspectives:

I personally believe that there are many reasons for us to move beyond a
simple marriage of convenience:

1.   The fact that a co-operative is an association of persons and not of
capital means that it cannot be indifferent to certain problems which are
not only economic in nature it is an enterprise in the service of its
members, but the needs of its members can be greater than only the economic
objective which inspired its creation.

     Although a co-operative's purpose is essentially economic, an
association of persons cannot assume that human needs are limited to those
of the homo economicus as conceived by the old liberal school of economics.
Man has other concerns which must not be forgotten.  One need only think
of F. Raiffeisen to remember this spirit, which was shared by all our
founders.

     To give a simple example, a truck-owner who belongs to a co-operative
is obviously seeking a financial benefit, but he also hopes that the
co-operative's services will enable him to remain an independent
businessman and not be forced to become the employee, however well-paid, of
a large company.  The co-operative thus serves not only his economic needs
but also his social need for independence.

     One could give many other examples, which is why each cooperative
family can regard its activity to be within a certain conception of
society, which can of course  vary considerably from organisation to
organisation.

     For similar reasons, co-operatives can hardly be indifferent to the
well-being of the profession or the region within which they operate or
even their country, or Europe.  This does not mean that a co-operative will
subordinate its management to an external interest.  It means that, while
carefully respecting its business needs, the co-operative will try to
reconcile its strategy with the more general objectives of the community
within which it operates.

     The fact that, in Brussels, an association of agricultural
co-operatives (COGECA) and an association of farmers' unions (COPA)  share
common services provides an excellent example of this common concern.

2.   The same ideas could be developed with respect to other families
within the Social Economy.

     Some, like the insurance and health-care mutuals, and many
associations, are designed to offer various services to their members,
exactly like co-operatives.  These organisations must provide the best
possible services, but they cannot ignore general problems.  A health-care
mutual, for example, is obviously concerned with general health policies.

     The same is true of charitable associations, which enable people to
carry out a social activity more effectively through group action.  Their
members receive a definite service, but one which comes within a more
general framework.

3.   These similarities obviously reflect a sharing of values. This emerges
clearly from the ICA Statement on the Co-operative Identity, adopted in
Manchester, which is based on principles very similar to those expressed by
most associations and mutuals.  There can be no better example of this
commonality than the joint adherence to the concept of solidarity.

     It is these shared values which have made us in France support a
coming together of these families, while respecting fully the
characteristics of each.  Such a grouping must never be used to support a
policy imposed from the outside; it must be based on a strict adherence to
the principle of subsidiarity, intervening only in cases of common interest
and when a joint action is more effective than individual efforts.  Based
on similar structures and values, such a grouping is basically designed to
obtain the recognition of our unique organisational characteristics.  This
is the underlying basis of the Social Economy.

     Can one go further?  It must be admitted that a sharing of values does
not lead automatically to shared objectives.  The Social Economy must
accept the existence within its ranks of different conceptions of the
common purpose which is quite natural when one remembers that its members
are based on the principle of freedom of choice.  Those who wish to go
beyond the common base are as legitimate as those who do not.  The
important thing is not to confuse representative institutions, which must
have a common base and the unanimity of their members, with "like-minded"
organisations, which are both more free and less responsible.


In Conclusion:
Unlike Dr. Wulker, I do not believe that the disagreements which have been
engendered by the concept of the Social Economy stem from fundamental
historical or geographical differences between our countries.

Historical differences are very difficult to analyse and characterise.
Although the Republican governments of 19th century France favoured the
creation of different co-operative families based on economic or social
policies, this was somewhat in line with the more imperial Prussian
governments which had already moved in the same direction (3).  In France
at the same time, very liberal Republican governments supported the
creation of health-care mutuals, which they controlled while still
respecting the principle of pluralism and freedom of association; at the
same time, for the same social purposes, the Imperial German government
managed to create compulsory state institutions.  In short, history cannot
explain the origin of these problems.

But neither can geography.  The problems facing co-operatives,
associations, and mutuals are not basically different from one country to
another, even if there are differences in local conditions.  Nowhere is
there a contradition between the concept of the Social Economy and the
structure of economies, since in today's Europe the economic structures are
becoming everywhere more and more similar.

I believe the real reason for our disagreement is to be found elsewhere.
The concept of Social Economy, which was the subject of a lengthy debate in
France before being officially accepted, did not give rise to similar
debates among European organisations before it emerged on the public scene.
It therefore quite naturally aroused concerns among those who had not,
either directly or indirectly, participated in its development, and who
feared a weakening of the co-operative idea even though the objective is
completely different.  This gap must be filled.

The process has at least begun.  The publication of the article by our
colleague, Dr. Wülker, constitutes an excellent beginning of a debate for
which I thank the ICA Review, and to which I hope this article shall also
contribute.
Notes:
(1)  "L'economie sociale face a l'ultraliberalisme", Syros 1995

(2) Available from CNLAMCA (Comite national de liaison des activites
mutualistes, cooperatives et associatives), 6 rue Mesnil, 75116 Paris.

(3) The Prussian law of 31 July 1895, which created a "Caisse centrale des
associations cooperatives", with the support and control of the State, is a
good model of European practice of that time.  These practices are so old
that one could easily forget them, even though they have left traces, in
France as in Germany.  Are not the German Lander still represented in the
Raiffeisen banks?

by Jacques Moreau
President of CNLAMCA (Comite national de liaison des activites mutualistes,
cooperatives et associatives), President of GNC (Groupement national de la
cooperation), and Honorary Chairman of the Caisse Centrale de Credit
Cooperatif in France.