Venice conference: the ideals and realities of cooperatives

As they work to improve their performance, cooperative organizations are facing two major needs: a clarification of their definition, and evaluation criteria that are compatible with their characteristics and diverse nature. Such was the consensus of the speakers, panellists, and attendees of the European Research Institute on Cooperative and Social Enterprises (Euricse) conference held on March 15 and 16 in Venice, Italy. In addition to the drafting of an appeal to the European Union governments, the conference was also a forum to discuss issues relating to the status of cooperatives and the importance of social capital. Some highlights of the conference’s sessions are summarized below. Issues relating to the status of cooperatives Former Italian Prime Minister Romano Prodi spoke about the issues cooperatives are currently facing in the process of creating a new regulatory framework for financial institutions, one of which is that they must either decide to maintain an active role in this process or risk being marginalized. He also called on political leaders to have the courage to buck the trend of turning to short-term solutions to solve long-term problems. Mr. Prodi also spoke about diversity and how it should be taken into account in recognizing cooperatives, even calling it is necessary in the ongoing globalization of the economy. Henry Hansmann (Yale Law School) outlined the tensions at play in the development of a regulatory framework for cooperatives: on one hand, strict laws to protect owner/employers, and on the other hand, flexible laws to meet the needs of new businesses. According to Hans Münkner (Marburg University), cooperatives require autonomy, independence, and the right to form associations in order to thrive. Another issue facing the development of cooperatives, explained Vera Zamagni (University of Bologna), is that some people believe a true cooperative can only exist on a small scale. The cooperative movement needs to challenge this reductive view in order to ensure its future success. Avner Ben-Ner (University of Minnesota) and Matthew Ellmann (Institute for Economic Analysis, Barcelona) spoke about the false economic premises that form the basis for evaluating cooperatives. In terms of development, employee recruitment practices must meet the standards, values, and environments that set cooperatives apart. The importance of “social capital” There was a consensus among the conference participants that in the current economic climate, the participation of cooperatives in community cohesion is one of their greatest strengths. Len Wardle, President of Co-operative Group in UK, concisely summed up the values of social capital with the phrase “human need, not human greed.” Luigi Marino, President of the Italian Cooperative Alliance, spoke about the ability of cooperatives to promote productivity socially, saying this is the area to focus on in order to maintain the public’s trust. For Partha Dasgupta (University of Cambridge), the challenge facing today’s industrial society is to separate income from jobs and bring civil society back into the economic system. He went on to say that the current financial crisis didn’t happen accidentally: its origins are historical. And in developing social capital, “the relationship of trust and the relationship of responsibility are fundamental, ” concluded Mr. Dasgupta.