There are some who say that this current global financial recession — this recession stroke depression that is being felt in London and New York, in Rome and Madrid, Berlin and Athens — will not impact upon the nature of capitalism.
That we have been here before, faced and navigated our way through economic downturns, and that capitalism emerged unscathed. And that five years from now capitalism will basically look like it did before the economic crisis began.
I understand this caution about predicting anything new, a reluctance to call the past era of capitalism's demise. But I do not agree with it. I believe the conditions are in place for a markedly different economic model to emerge from the carnage currently being wrought.
For I do not believe that what we are seeing today is just a variant of the Russian crisis, the dot com crisis, the Japanese crisis — crises that happened and had consequences but did not impact upon ideology or the fundamental trajectory of political and economic policy.
This first full crisis of globalisation, this first collective lose-lose, this first blue and white and multicolour recession is so profound, is already negatively affecting so many people all over the world, and raises so many fundamental questions about the ideological doctrine of the past 30 years, that I believe it has a good chance of catalysing a radical change of capitalism, catalysing a radical change of the relationships between government, business, and society. Which will have massive implications for nations, supranational institutions, corporations and individuals.
I have named the past era of capitalism, Gucci Capitalism. Gucci Capitalism was an ideology born in the mid-1980s, the love child of Ronald Reagan and Margaret Thatcher with Milton Friedman its fairy godfather and Bernard Madoff its poster boy.
An era whose fundamental assumptions were markets should be left to self regulate, governments should be laisse faire, and human beings are nothing more than rational utility maximisers.
But attacks and bouts of self-awareness can be short lived and paradigms are notoriously hard to shift. Are the conditions in place for a new form of capitalism, a form that I have named Co-op Capitalism with values of co-operation, collaboration, coordination, community and communication at its heart, to emerge in its stead? I believe they are.
What shape might this new form of capitalism take? What are its defining characteristics? Let me take you through just four ways in which Co-op Capitalism is distinctly different to Gucci Capitalism.
Whereas Gucci Capitalism values the individual above all else, Co-op Capitalism sees value in the collective. This means outcomes such as inequality or policies such as the selling off of public space such as forests to private corporations - something the UK conservative government has recently threatened to do as way to raise moneys for public coffers - are seen as corrosive and detrimental.
But not just because of impact on individuals, but because they also harm social cohesion and the collective, which itself is perceived as valuable. Co-op Capitalism believes that public goods must be managed in ways to ensure fair access and use by all.
How we interact matters
Gucci Capitalism is concerned with the outcome of transactions but neither their nature not the process. Co-op Capitalism, on the other hand, recognises that the quality of relationships — how an exchange takes place, the relative power of each side — also matters of itself and because this will impact or distort the outcome. It understands that how a company relates to its employees, whether it supports them in times of trouble, whether it invests in a long term relationship with them, whether it provides training, will impact how loyal the employees are, how hard they work, levels of turnover and ultimately the performance of the company as a whole. Co-op Capitalism values processes not just outcomes.
The network has worth
Whereas Gucci Capitalism focuses on individuals - individual success, individual triumph - and does not explicitly value the network, Co-op Capitalism explicitly sees the worth in connections with one another. Connections often allow us to achieve things that we either could not achieve by ourselves, or could only achieve with great difficulty. Recognising that connections have both an economic and a social value means that enabling connectivity becomes of itself a social, political and economic goal.
Collaboration can trump competition
For Gucci Capitalists competition is the only modus operandi. But Co-op Capitalism recognises there are times that collaboration is better. Take the practices of giving staff commissions on sales, when sales people are rewarded solely for their own contribution rather then the success so the entire organisation or group, ideas and information tend to be hoarded.
Co-op Capitalism explicitly values collaboration, explicitly sees the value in sharing ideas, puling together in common cause and working with shared purpose. These four characteristics are just some of the defining traits of this alternative model of capitalism; a model which of course, is in its very early days, and which we are witnessing evolve in real time. These are not the only traits of course, but I hope they give a sense at least of how substantively this reformed version of capitalism may look like.
For any sceptics who might argue that collaboration will never be able to deliver sufficient returns, that Co-op Capitalism can never trump Gucci, let me lay out some facts.
In business the co-operative model clearly does work. Italian co-operatives are some of the most successful businesses in Europe. The Desjardin Group, the financial co-operative in Quebec, is that region's leading employer. In Switzerland, co-operatives are the largest private employer. In the UK, the co-operative sector has a turnover of €33.2 billion, with 12.8 million members.
The co-operative model of organisation has already huge impact on employment and economic success not only of course in the Global North but also in the South too. In Africa, one in every thirteen people is involved in a co-operative enterprise, providing vital support whether in terms of marketing for farmers or finance, through co-operative credit unions, for families. And importantly in a time of crisis co-operatives seem to be able to endure and survive for longer than other companies.
Of course there's the rise and increased success of collaborative, co-operative sharing models on the internet which should not be seen as something apart from other sectors, but perhaps as a window into new models of ownership and participation that might now work elsewhere.
Whether it's the iPhone and Facebook's encouragement of programmers to create applications for them, or the rise of social networking sites such as Facebook and LinkedIn, or the success of the open source movement with its poster boy stories — Linux and Apache, or the "open movement" more generally, encompassing "open design" where, in Helsinki, for example, there has been a revolution in the way old people's homes are being designed with the elderly being part of the design process or open creation such as Wikipedia which now delivers more accurate information than Encyclopaedia Britannica.
While the models that underpin business and accounting regulation worldwide tend to recognise and reward only the shareholder PLC, what we are seeing is the flourishing of diversity.
What we are seeing is collaboration as an increasingly exciting, dynamic, and successful model of enterprise. Co-op Capitalism is another way of saying "Yes we can". With the emphasis on the we - a system with the potential to be more inclusive, more equitable and more participatory than what guided the world in the recent past.
Are we definitely heading there? These are the earliest days of change and it is impossible to crystal ball gaze with certainty. Although the signs are there of a new era of capitalism in which co-operation, sharing and collective interest rule, the future is never certain. Especially at a time such as this.
This is a critical juncture, a dangerous one, because the stakes are so high and there's all to fight for.
My hope is that our leaders have sufficient vision, and we the public have sufficient ambition, to turn the wreckage of the economic crisis, that still surrounds us, into an opportunity that we will all gain from. An opportunity to join forces to push for a more supervised, equitable, economic system. One that tends to fair rules, social justice and sustainability and reconnects the economy with what is right and just and meaningful. An opportunity to pull together to co-create a better future, and really mean it when we say yes "we" can, and put the emphasis on the "we" when that is what we gain from.
An opportunity to widen ownership and share prosperity in a more inclusive way. To choose the open source version of capitalism, the multiplayer version in which one only wins when all parties work together in pursuit of a common good. To play our part not only in our collective economic recovery but also in our collective economic redesign. That we grab with both hands the opportunity to shop, not at Gucci . . . but at the Co-op.
• This article is an extract from Professor Noreena Hertz’s think piece for Co-operatives UK, which can be read below.