Corporate-think co-opting co-ops?

October 3, 2006

Co-op Week, which runs Oct. 15-21, provides us with an opportunity to reflect on the role of co-operatives in our communities. Many Nova Scotians are proud of the co-op tradition. The growth of co-ops is closely associated with the Antigonish Movement in the 1930s and ‘40s which promoted co-ops as a path to social change and community development.

Co-ops pool community resources and democratically pursue shared objectives. In the face of globalization and an economy increasingly dominated by big business, many look to co-ops as a way to make our society more democratic, broaden the distribution of wealth and put more of the economy in the hands of Nova Scotians. At their best, co-ops combine social and economic benefits.

But more recently co-operatives have not been faring well in the region. According to data from the Co-operatives Secretariat, the number of co-operatives (not including credit unions) has stagnated and membership in Nova Scotia-based co-operatives has dropped from 61,000 in 1995 to 37,000 in 2003 – a 39 per cent decline. Co-op membership has also decreased in all of the other Atlantic provinces.

Co-ops in Nova Scotia have had limited success in benefiting from the growing economy. Overall, the volume of business conducted by non-financial co-operatives between 1995 and 2003 has declined in real terms (adjusted for inflation) by about three per cent. The proportion of the province’s economic activity produced by co-ops has declined from 3.2 per cent of GDP in 1995 to 2.5 per cent in 2003.

The declines should be a big concern. The data indicate that less of the provincial economy is democratically controlled and that co-ops are having a hard time attracting new blood, especially young people. Presumably, there are a variety of explanations for the decline, but the clout and popular support co-ops had historically in the province has faded.

The deck has always been stacked against co-ops in the capitalist economy. They grew out of a desire to address the injustices of capitalist industrialization. They were structured to broaden the distribution of the fruits of economic activity to workers, their families and communities.

The capitalist economy has very different objectives. Governments and investors have organized the economy to nurture, subsidize and reward the maximization and accumulation of profits in private hands. Investors and corporations have had the clout to set the rules of the game, such as taxation laws, that place co-ops at a disadvantage and relegate co-ops to being marginal players. Where supportive government policies have been in place, co-operatives have been very successful such as in the Basque region of Spain, northern Italy and New Zealand.

Faced with an increasingly corporate-driven economy, many co-operators have taken to emulating private business and shedding their social agenda. Co-ops are increasingly promoted as simply another model through which to organize a business, rather than as institutions for change and community development.

While many Canadians are looking for socially just and environmentally sustainable alternatives to corporate globalization, the co-op sector appears to have been stepping back from such an agenda. In many cases, co-ops and credit unions have become virtually indistinguishable from the businesses and banks they are competing with. For many co-operatives, the co-op principle of "concern for community" has been reduced to making donations to charities rather than promoting social justice in their activities and engaging in advocacy work.

If the co-op sector is considered a movement, it’s fair to ask, "What is it advocating?"

It’s hard to tell. For the Nova Scotia Co-operative Council, which aspires to "form a strong co-operative movement in Nova Scotia," the focus appears to be on promoting the interests of co-ops and offering services for those "wishing to consider the co-operative model for their business ideas and opportunities." These are hardly activities that are going to mobilize Nova Scotians to join or at least support a co-op movement. How is the co-op movement different from, say, the chamber of commerce? How is the co-op sector advocating for policies that address community problems, such as high levels of poverty?

Part of the problem is that co-operators often assume that co-ops are an inherently positive force in society. The reality is that the co-op structure, while democratic, is not inherently more socially just or community oriented. Some co-ops have more of a strict bottom-line focus. For example, a producer co--op in the agricultural sector could be focused on the maximization of the profitability of the members’ farming operations, with no more or less concern for the workers, environment and consumers than a private corporation. The orientation of a co-op is mostly shaped by the members, for example workers and/or consumers, and by the values and objectives they share.

Co-ops could play a crucial role in developing sustainable communities. But they are going to need greater public support and participation and government policies that prioritize sustainable social and economic development, which is certainly not the case now. For co-ops to become more vibrant and to increase their clout in shaping progressive public policy, they must move away from the corporate agenda and strengthen their connections with the environmental, labour and social justice movements.

John Jacobs is director of the Nova Scotia office of the Canadian Centre for Policy Alternatives (, an independent public policy research institute. This column has appeared in the Chronicle Herald.