A Challenging Future (1992)

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This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
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October, 1992
(Source: Co-operative Values in a Changing World (1992)



                 I. A CHALLENGING FUTURE 
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Introduction
----------------
  
"The true problem is not the preservation of co-operative
institutions, as they have been or as they are, but the
application of essential co-operative principles in
appropriate forms for contemporary circumstances. The
challenge is not only material, but intellectual. The
history of movements, as of nations and civilizations, is
the story of their success or failure to rise to the
challenges which confront them as generations and
centuries roll by."

(W. P. Watkins 1967)
  
We are living in a period which offers more challenges to
the Co-operative Movement than it has had for a long
time. Although this has been said before, this time, the
radical, dramatic and far-reaching changes make such
statements more valid than ever. As W. P. Watkins said in
another period of radical change: our co-operative task
is to apply 'essential co-operative principles' in forms
appropriate to the contemporary society. And our capacity
to manage that task will determine, now as then, the
co-operative future1.

  
1. A mixture of experiences
-------------------------------------  
The past 25 years have seen an increase in co-operative
membership and number of societies. At the beginning of
the 90s the Co-operative Movement had more than 700
million individual members, with organizations in most
countries fulfilling a huge variety of needs. The numbers
are even greater if we also include co-operative
organizations which do not belong to the ICA, as well as
all the various self-help organizations with more-or-less
co-operative characteristics which have emerged in recent
decades.
  
This picture is composed of a mixture of good and bad
experiences. The former is especially true for the Credit
Union Movement, which has experienced a veritable
explosion in most parts of the world. It is also, to a
large extent, true for the co-operative insurance
organizations and the housing co-operatives, if still
mostly in the industrialized countries. We have also
witnessed a growth in workers' productive co-operative
organizations, especially in southern Europe. There are,
furthermore, lots of individual success stories for
co-operative organizations, e.g. the co-operatives in
South-East Asia and the Japanese Co-operative Movement,
the hosts of the ICA Congress 1992. 
    

Table 1: Indicators of world co-operative development
     (millions of members, rounded figures)
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Types          1960      1970    1980    1986
 -------------------------------------------------------- 
Consumer       88        120     133       122
Agricultural     31        48        65         60
Workers           4           6          6           6
Fisheries           2          2          2           2
Credit              48        83        123     170
Housing            3          7          15        15
Multipurpose    -        -         -             133
Others               8        17          16        32
  
Total             184       283       360       540
  
 (Source: ICA Statistics)
  
These experiences show the relevance of, and confidence
in, co-operative ideas. For the purpose of this report,
however, such overall pictures are too general and a
little too optimistic. Because, as we move closer to
reality and focus on the qualitative aspects, we will
observe that large parts of the world Co-operative
Movement have experienced unusually deep troubles during
this period in terms of their adaption to the changing
environment.
  
An unusual number of challenges and subjects for debate
await the Co-operative Movement. The approaches to these
will shape the future co-operative identity.
  
2. Challenging perspectives
-------------------------------------  
This report will now outline some of the challenges
facing the Co-operative Movement: 
  
2.1.    Viable contributions for developing countries
---------------------------------------------------------------------  
We can clearly observe that there is an increasing
division between rich and poor countries. The
contributions of the Co-operative Movement to  developing
countries have begun to have an effect during the last
2-3 decades,  and the ICA, individual co-operative
organizations, the International Labour Office (ILO),
governments, etc. have targeted more resources to support
this development. At the same time, however, we cannot
shut our eyes to the fact that the overall process of
growth has been slow for various reasons; mainly because
of the general economic, social and political problems in
these parts of the world, but also because of
difficulties in identifying efficient co-operative
approaches. 
  
There is now a pressing need to revise the co-operative
models, to identify the true and viable co-operative
ways, and to regain confidence in them. The next century
should become one in which developing countries will
benefit from the contributions of a strong Co-operative
Movement. Steps have been taken in that direction during
recent years, but a great deal remains to be done.
  
Table 2: BNP per capita 1980 and 1990
US Dollar, 1980 prices; population share expressed as %
----------------------------------------------------------------------------  
Region/country    Population     1980    1990     Change 
  
World, total              100.0        2,650      3,000    1.3
Major industrial          13.8      10,870    13,574    2.3
Western Europe           5.3       10,830    13,330    2.2
Eastern Europe            8.6         3,190       4,010    2.3 
Japan                           2.7         9,110     12,700    3.4
China                         23.0            290          600     7.5
Developing                 50.6           970          980      0.1
Above  700 US$          8.7         2,100      1,980     -0.6
00-700 US dollar         9.2            460         540       1.6
Below 300 US dollar  22.7           240         300       2.5
Least developed         10.0            250         240      -0.3
  
(Source: UN 1990, p. 33)
  
2.2.    New co-operative identity in state-planned economies
--------------------------------------------------------------------------------  
We are only at the beginning of the dramatic changes in
the (former) USSR and in Eastern and Central Europe,
which nobody could have foreseen as recently as five
years ago. For a long time, co-operative organizations
have played important roles within these parts of the
world, and they have constituted a considerable part of
the ICA membership. Although many of the established
co-operative organizations have disappeared, at the same
time new and challenging possibilities are emerging. The
co-operative way will become more relevant as large
numbers of people discover that their needs are not
properly taken care of by the emerging, and for some time
to come unstable, market economy. 
  
The pressing issues are about the identification of the
proper areas and roles for the co-operative movement
during this process of transformation, and subsequently,
and the demonstration of the co-operative values in
practice. One may say that the challenge which
co-operators and co-operative organizations in this part
of the world are facing is no less than the establishing
a new co-operative identity. The same type of
transformation might be expected in some of the new
states with planned economies.
  
2.3.    Revitalization of established co-operatives
-----------------------------------------------------------------  
Recent decades have been unusually problematic for the
mature co-operative organizations of the industrialized
world: the traditional basis for the ICA. The rapid
structural changes in their environments have forced many
of them to adapt in ways which have challenged their
basic co-operative characteristics and identity. This is
particularly true for the well-known and crucial task of
optimizing both economic efficiency and the democratic
people-based character of the co-operative way. 
  
The shocking and partly depressing and reactive
experiences of the 70's and the 80's, especially for the
consumer co-operative organizations, seem to have been
largely overcome and the outlook is now more optimistic,
proactive and constructive. Now, the challenge is to
demonstrate to the world outside, and to co-operatives in
earlier stages of development, that these third and
fourth generations of co-operative organization can play
an important part in making the world a better place. It
is mainly a question of revitalization, and of regaining
credibility for the co-operative alternative in these
large and developed forms, in both the eyes of the public
and of the members. There are as many possibilities as
ever. Of special interest in this context are the new
challenges to be found within the European Common Market. 
  
2.4.    Towards post-industrialism
---------------------------------------------  
In the highly industrialized world we are experiencing
the beginning of a transition to a new epoch in the
history of mankind and of the Co-operative Movement: the
post-industrial society. In this society the majority of
people have achieved quite high standards of living:
their basic needs are fairly well provided for and their
requirements have become more varied and flexible. The
traditional class structures are not as evident as
before, and the values of younger generations seem to
relate more to the freedom of the individual than to the
strongly emphasized values of social security held by
older generations. The question has consequently been
raised, for the first time in the co-operative history,
and supported by some negative experiences, as to whether
there is still a need for the co-operative way,
especially for the large, class-based, consumer
co-operative organizations. Are they a product of the
industrial society and indivisible from this type of
context? Is this part of the co-operative mission
concluded with the end of the industrial society?
  
The answer is in the hands of the co-operative
organizations and the co-operators themselves; there are
no answers to be found in history. It is true, however,
that the Co-operative Movement cannot be organized in the
same way as before. A more pluralistic method is needed
to meet the various needs of people in post-industrial
societies. The challenge for co-operative organizations
is more than ever to approach this new situation with an
open and flexible mind. The possibilities are numerous,
and this is no time for dogmatic inward-looking
attitudes, when it comes to practice. Are we ready?
  
2.5.    New co-operatives
---------------------------------  
During recent years lots of new co-operatives have
emerged in most parts of the world. These have usually
been created outside the established co-operative
organizations and are to quite an extent carried out in
ways which more-or-less correspond with the essence of
the traditional co-operative principles. From the
established co-operative perspectives they are often
called "wild" co-operatives, "pre-co-operatives" or
"quasi-co-operatives". Anyway, it is high time to realize
that these are encouraging illustrations of the fact that
co-operative ideas are inspiring points of departure for
people's approaches, often young people's, to satisfying
economic and social needs. 
  
The challenge for the established co-operative world is
to take these new co-operatives seriously as a part of
the Co-operative Movement and to offer co-operation and
mutual support. To some extent, these are reminiscent of
the infancy of today's established co-operative
organizations. We must not behave in the same way as the
hostile environment did during the late nineteenth and
early twentieth century.
  
2.6.    Global solidarity
--------------------------------  
It is obvious that the problems and needs of mankind have
become more global in nature, and consequently so have
the solutions. We have touched upon the deeply unfair
distribution of wealth in the world. Such issues also
relate to environmental destruction and the rapid waste
of natural resources. This cannot continue. All
co-operative organizations as people based organizations
have a responsibility to tackle these problems.
  
To meet this challenge the world co-operative sector
needs co-operators and co-operative organizations capable
of overlooking local and national conflicts, and who are
ready to use time and resources in order to identify
themselves with common global aims. This can be looked
upon as a basic priority behind all the other basic
values: to act together in order to make the world a
better place.
  
3. Crucial issues and priorities
-----------------------------------------  
The basis for successful approaches to these problems is,
now as before, committed co-operators and viable
co-operative organizations. Co-operative contributions
must be carried out by co-operative organizations; a
truism, certainly, but the past decades have demonstrated
crucial issues in this context, which demand answers: 
  
1) What is the co-operative meaning of economic
     efficiency? As economic organizations co-operatives have
     to economize with scarce resources, as do all other
     organizations. What is the special co-operative way? Or
     is it necessary to adopt more of the capital associative
     approach also in co-operative contexts? 
  
2) Will the co-operative society form of organization
     continue to be viable? From an early stage we developed
     the co-operative society and the co-operative federation
     as the basic forms in which co-operative activities were
     organized in line with co-operative values of democracy.\
     Now we are witnessing an on-going transfer into other
     forms. Is this necessary in modern societies and
     economies? 
  
3) How should co-operative capital be raised? From the
     outset, methods of capital formation have been
     considered, particularly by those outside the
     co-operatives, as one of the main weaknesses in
     co-operative organization. We have coped, but during
     recent decades these weaknesses seem to have become more
     problematic. Which new methods might be more in harmony
     with the essence of Co-operation?
  
4) Can co-operatives take on a special social
     responsibility? Co-operative organizations are
     traditionally looked upon as economic organizations with
     social characteristics and aims. Will it be possible for
     a viable co-operative to promote special social aims and
     the members' economic needs at the same time? Or is it
     time we abandoned those social ambitions and oriented our
     activities to the economic self-interest of the members? 
  
5) How may participatory democracy be encouraged? It is
     commomly believed that democracy, and particularly
     participatory democracy, is part of the essence of
     Co-operation. Some co-operative organizations, however,
     have entered a situation in which the members have
     "handed over" power to the management, in particular, the
      responsibility for improving  democracy and member
     participation. So, how does management view its members?
     As a subject for co-operative development, or as an
     object for management? What constructive methods might be
     used to improve democracy? 
  
6) Why aren't more women in responsible positions?
    Women often constitute the majority of the users and
    members in various types of consumer co-operatives
    societies, and are active at 'grassroots' level.
    However, they are seldom represented at higher levels of
    co-operative decision processes. In this way, women might
    be seen as 'hidden resources' for the co-operative
    future. How can they be given a more prominent role in
    co-operative development?
  
7) What is the proper place of the employees in
    co-operative democracy? In private business, employees
    have the opportunity to participate in the distribution
    of profits. Co-operative organizations cannot ignore this
    if they are to attract and keep the most competent
    personnel. How can this problem be tackled? This also
    highlights the traditional concept of a membership based
    on the 'user' of the co-operative society. How can we
   develop forms of co-operative organization within which
   the membership is a mixture of users, employees and
   financiers?
  
8) Are co-operatives localized by nature? Co-operative
     activities are usually oriented towards local and
     domestic needs and markets. This is natural, since
     members' needs are mostly local and domestic in
     character. Co-operatives, however, have always had a
     spirit of internationalism, reflected in the development
     of international structures. The strong on-going trends
     towards the international economy demand more such
     structures. Co-operatives, however, seem to lag behind.
     How can this be rectified?
  
9) How may proper relationships with governments and
     states be identified? In many parts of the co-operative
     world, especially in developing countries, the
     co-operative movement needs collaboration with, and
     support from, states and governments. This raises the
     question of the proper degree of co-operative autonomy
     and self-reliance. What are the viable models of
     government support to facilitate valuable contributions
     from co-operatives to members and to the community?
  
10) Co-operative Principles for universality or for
       selectivity? We are facing a future which will require
       even more diversified co-operative approaches. How, then,
       should such principles of co-operative organization be
       developed, so as, on the one hand, to embrace as many
       kinds of co-operative association as possible and, on the
       other, to maintain a co-operative identity in comparison
       with other kinds of organization? How should we consider
       this delicate balance between universality and
       selectivity in defining the co-operative way? 
  
11)  What are our goals for the future? Co-operative
        organizations are about people with expectations for the
        future, ultimately for a better society. This is a part
       of the co-operative identity and is also a precondition
       for members and potential members. Without visions we are
       left to the more-or-less self-interested calculation of
       economic benefits-- important motives, but not acceptable
       as the only motives for committed co-operators. So, what
       are our prospects for the co-operative future: locally,
       nationally and internationally? 
  
12)  How may human mobilization and emancipation be
        encouraged? The main resources of the co-operative
        movement are human resources: members, potential members,
        employees, representatives and leaders. The consciousness
        and the understanding of Co-operation constitute the
       basis for a successful co-operative performance, that is
       the competence to participate in and to manage
       co-operative activities. This implies education in all
       its forms: practical training, theoretical knowledge and
       information. What are the means by which such activities,
       in local as well as global perspectives can be encouraged
       and improved? 
  
4. An inner challenge
----------------------------  
The perspectives and issues outlined above constitute the
framework for this report. My task is to concentrate on
the basic values behind these, to explain them and to
discuss them as 'essential co-operative principles' for
the future. In practice we all make decisions,
consciously or unconsciously, about the priority of the
co-operative values. It is our duty to make such
decisions consciously.
  
Many co-operators and co-operative researchers have
described recent decades as a period of serious
challenges to the co-operative identity, expressed as:
  
*  An increasing uncertainty about the co-operative
    task and its relevance to the society at large,
  
*  A widening gap between intended co-operative values
    and co-operative practices and
  
*  Various problems in the relations between
    co-operative members and their societies3.
  
  
I agree with them, and I consequently do not consider it
an exaggeration to say that a serious review of values
and principles is more necessary than ever. We need these
when we want to identify the main areas in which the
co-operative way can contribute to society, and to
establish which co-operative organizations have most to
offer in each instance.  I have made my suggestions for a
review of values and principles with reference to changes
within the co-operative environment. However, as Ian
MacPherson rightly emphasizes, the future is ultimately
about an inner challenge: about the minds of committed
co-operators. We must never allow ourselves to forget
this, and its implications for efficient co-operative
practice.
  

("The challenge is within ourselves; it is ultimately
whether we have the vision, the confidence, and the
discipline to enter more aggressively into the world or
wait until it overwhelms us."
  
-Ian MacPherson, ICA Review of International Co-operation,
1989)
  
Notes   
******  
1)   This chapter serves as an introduction to the main
perspectives and issues. I have been much influenced by
the Laidlaw report (1980), which I have supplemented with
experiences from late 70's and the 80's.

2) Ahnlund 1990 and ICA Statistics 1960-80 and from
1986. 
The statistics are incomplete as only members of the ICA
are included. A more complete statistical survey from
earlier periods (made by ILO) demonstrates that the ICA
figures ought to be increased by 10 - 15 % in order to
cover the whole sector of world co-operatives (Desroches
1969). Workers' co-operatives in particular are
underestimated, which probably explains the decrease
between 1980 and 1986.

Insurance and banking co-operative organizations are not
included, but these are probably reflected to a large
extent by the membership of other type of co-operative.
Among "others" the el-co-operatives especially in USA
account for the majority. The increase of multipurpose
co-operatives in 1986 is explained by the new membership
in the ICA of the Chinese co-operatives, which have been
classified as multi-purpose co-operatives. Despite all
these weaknesses, however, the statistics are intended to
indicate the overall trends in co-operative development
in terms of membership. 
  
3) I look upon these as common statements. They are to
be found in most articles and books dealing with
relations between values and practice.
  

  
  Ahnlund, M.: How co-operatives develop and survive in
  different surroundings. Statistical indicators. Special
  report of the project. ICA 1990.
  
  COPAC:  The Co-operative Network in Developing
            Countries: a Statistical Picture. Rome 1987.
  
  Desroches,H.:     Le Duveloppement Intercooperatif. Chapter
                      1. L Universite de Sherbrooke 1969.
  
  Laidlaw, A.: Co-operatives in the Year 2000. ICA London
                 1980.
  
  ICA Statistics 1960 - 1986
  
  Thordarson, B.:   Global Review of the Role of
                      Co-operatives in Economic and Social
                      Development. COPAC 1987.
  
  UN:            Global outlook 2000. UN 1990
  
  Watkins, W. P.:   Co-operation in the European Market
                      Economies. ICA 1967.