The new Labour government in the UK has committed to doubling the size of co-operative and mutual sector. This raises a series of questions that are relevant to all countries and the whole co-operative movement well beyond the UK writes Pro Colin Talbot.
How big is the co-op sector now?
The first and most obvious question is how big is the co-operative and mutual sector? The problem here is that most official statistics are designed to measure just two types of ownership – state owned and privately owned. Or the public sector and private sector.
Co-operatives and mutuals are member-owned, so most official (government) statistics put them in the privately owned sector – even though they are very different from share-holder owned businesses in ownership, governance, values and purpose. They are definitely not, or shouldn’t be, state-owned as they are independent.
One way of determining the size of any sector is by employment. Very roughly, for the UK, the ‘democratic sector’ (according to Co-operatives UK) is about 1.3 million workers, or by my calculation about 4% of all workers. By contrast the private sector (minus that 1.3m) is about 26 million, or roughly 76% of employment.
And the UK public sector is about 6 million currently, or about 18% of all workers. (These don’t add up to 100% due to rounding). This is remarkably close the to OECD average, which according to that organisation has “remained relatively stable over time”. In 2019 that average was 18.1% and although it rose slightly due to the Covid pandemic has settled back towards the 18% figure.
Related: Report on UK co-ops urges removal of barriers blocking sector growth
This UK figure for co-operative (or democratic) employment of 4% contrasts with estimates by the International Cooperative Alliance that globally approximately 280 million people work for co-operatives, or about 10% of the world’s workers.
As an aside this strongly suggests that despite being the undoubted home of the modern international co-operative movement, the UK lags the global growth of co-ops. Which might, in part, explain why the new government has committed to growing it.
How big should it be?
The question of how big the co-operative sector should be is a difficult one.
Of course, for the proponents of co-operatives in the early 19th century, the question didn’t really arise. The Christian and secular socialists and enlightened capitalists who promoted various experiments in utopian co-operation thought the whole of society should be ordered along co-operative lines.
Of 112 secular communes founded in the USA in the 19th century, the longest survived for 84 years, and on average they managed only 6.4 years. The 88 religious communes founded over the same period fared a little better – their average life-span was 25.3 years with the longest making it to 112.
Geoffrey Hodgson, who reports these figures in his 2019 book Is Socialism Feasible?, speculates that religious devotion can provide a more stable basis for the governance of small communities and this has been true for co-operative and non-co-operative organisations throughout human history.
These were, and in a few cases still are, small groups operating co-operative norms across several dimensions of human existence: housing; schooling; consuming; socialising and in most cases (but not all) working.
To the extent that co-operatives have become much larger – both as individual organisations and as a sector of society – they have become much more uni-dimensional. I may not be a member of a multi-dimensional utopian collective but I am currently a uni-dimensional member of more than half-a-dozen co-operatives covering banking, insurance, retail, education, publication, gardening and research.
These multiple individual co-operative memberships means that although there are over 1 billion members in the world’s 3 million co-operatives, many are, like me, members of multiple single purpose co-ops.
So, at the start of the 21st century, co-operatives represented about 10% of the global workforce and about 12% of the global population are members, often of multiple co-ops. How much larger could they, or should they, be? So far any attempts to make them society-wide have failed. So is there some balance between private, public and co-operative enterprise that could work better than what we have now?
Big government vs big business?
It might be useful to take a slight detour away from considering the balance between co-ops and the rest of society to consider the divide that, to the exclusion of co-operatives, dominated much of the 20th century – big government versus big business.
Some years ago Dr Carole Talbot and I looked at the pattern of the growth of big government over the long 20th century (1870s to early 21st century). The best figures we could find are in the graph attached. These are for what are now the G7 group of liberal capitalist democracies, although they had very different histories during this period.
The overall trend is quite clear. At the start of the 20th century these large countries spent the equivalent of about 10-20% of their GDP on public services. By the end of the century they were converging on between 35%-50% (now probably more like 35-45%). There was a very similar patten in public sector employment over this period, culminating in the 18% figure discussed above.
We called this the Goldilocks Zone – where government was neither too small to provide education, health and social protection for its population, nor too large to smother private enterprise.
Rebalancing society
A decade ago (2015) the well-known Canadian scholar of organisations and management, Henry Mintzberg, published a little book with above title.
He argued that many societies had at various times become out of balance. But not, as most political debate assumed, between private and public sectors, but also between both of these and what Mintzberg calls the plural sector.
The plural sector is all those entities that play an important role in society but are most often missed in economic analysis and public discourse. The largest group are clearly member-owned co-ops and mutuals. But it also includes lots of self-owned entities, like many universities as well as civic, community, sports, cultural and religious associations, trade unions, campaigns, etc.
If anyone doubts the importance of this plural, “co-ops plus”, sector they only have to look to what happened during the global Covid pandemic. Many plural sector entities were the ‘first responders’ in communities and neighbourhoods. Alongside public and private agencies they later played a vital role in containing, treating and vaccinating in many countries.
The leading international agency driving better recognition and development of what they call the “co-operative, social and solidarity economy” is the International Labour Organization (ILO) through various units and initiatives. Their definition is very close to Mintzberg’s “plural sector”.
So we may not be able to give a precise answer to the question of just how big the co-operative sector should be. At only 4% of the workforce in the UK, definitely bigger than it is now. At 10% of the global workforce, probable also bigger.
And there are many roles for co-operatives that could be further explored and expanded. Both in the production and distribution of marketable goods and services but also in provision of health, education and social services in partnership with governments?
In the UK, for example, expansion of worker and hybrid co-operatives in health, social care and education would seem to be an obvious option. And in the process evicting some of the more rapacious for-profit firms and private equity pirates invading these spaces.
For transparency I should add I am currently working with Henry Mintzberg and a small international group on ideas about expanding the plural sector, which for me very much includes co-operatives.
