Friday 6. December 2019
#158 - March 2013

 

The Commission fails to mention cooperatives

 

160,000 cooperatives in Europe employ 5.4 million Europeans. The “Entrepreneurship 2020 Action Plan” seems to have been sidelined.


In January, the European Commission issued its Communication on the “Entrepreneurship 2020 Action Plan”, subtitled “Reigniting the entrepreneurial spirit in Europe”. This is an extremely interesting document which sets out the need (though it sometimes looks more like an appeal) for raising the numbers of entrepreneurs to allow the EU to get back to growth and re-establish a good level of employment while it is challenged by the thriving economies in other regions of the world. More and more decision-makers in the worlds of politics and finance, both traditional and emerging, are turning towards this dimension of “doing business”, which is expanding via “business angels” and “crowd funding”.

 

The most innovative of the three pillars of action proposed by the Commission is probably that of education and training for entrepreneurs, thanks to which they may acquire “essential skills and attitudes including creativity, initiative, tenacity, teamwork, understanding of risk and a sense of responsibility.”

On the other hand, readers of this document end up feeling deeply disappointed at the lack of any reference to associative enterprises such as cooperative societies. Basically, this document appears to bypass entrepreneurial pluralism.

 

An incomprehensible omission in the Commission’s document

It is true that the Communication includes several references to social enterprises and social entrepreneurship, in particular on the basis of the recent “Social Business Initiative ”, but it only makes passing reference to cooperatives, and even then only in connection with the sectors involved in personal services and with professional integration for the disadvantaged. These sectors are significant and innovative, but they only represent part of the cooperative experience. Furthermore, the social business initiative was inspired by models far removed from experiences developed in Europe. The absence of references to the cooperative model is above all surprising and incomprehensible when in section 3.4 the document is discussing the transfer of businesses. The European Economic and Social Committee recently issued an opinion on “Cooperatives and restructuring” CCMI/093; the European Parliament approved a report on the recommendations to the Commission on information and consultation of workers, anticipation and management of restructuring (2012/2061(INI)) in which reference was made several times to this form of entrepreneurship, such as: “ cooperatives manage restructuring in a socially responsible manner and their specific cooperative governance model, based on joint ownership, democratic participation and members’ control, as well as the ability of cooperatives to rely on their own financial resources and support networks, explain why cooperatives are more flexible and innovative in managing restructuring over time, as well as in creating new business.”

 

A recognised model for global authorities

This omission is even more surprising since it is known that 2012, the year that has just passed, was proclaimed “The International Year of Cooperatives” by virtue of a resolution adopted in 2009 by the United Nations General Assembly. On the planetary scale, cooperatives represent an impressive economic phenomenon. Around 1 billion people are members of a cooperative; on a global scale almost 100 million people work in cooperatives. In 2011 the 300 largest cooperatives in the world produced a volume of economic activity equal to 1,600 billion dollars, equivalent to the tenth largest global economy. The figures for Europe are 123 million cooperative members – around 160,000 cooperatives employing 5.4 million Europeans. The fact that the United Nations chose 2012 to launch the “International Year of Cooperatives” is not by happenchance – the decision was made at the end of 2009 at the beginning of the difficult and persistent financial crisis, leading to the economic crisis we are still facing. The particular context, together with the economic crisis, give us a specific key to understanding the reasons for the UN choice: the current difficulties call into question the system of economic development that is based on the logic of maximising profits; they also highlight the urgent need for balanced solutions which can  reconcile economy with society.

 

The UN initiative recognised the cooperative model as a factor of economic and social development, especially for poverty reduction, job creation and social integration. Through this the UN has encouraged governments to set out policies and legislation that will contribute to the formation, growth and stability of cooperatives. Luckily, there is growing awareness that the multiplicity of business types is a valuable asset and a guarantee of stability and economic democracy. For example, the FAO, the UN Food and Agriculture Organization, wanted to mark the International Year by re-establishing its Cooperative Unit, which had been closed down for budgetary reasons several years previously.

The ILO, the International Labour Organisation, has right from the beginning had an internal department for cooperatives: it works closely together with the International Cooperative Alliance (ICA), the global body representing cooperatives, and is also a member of theCommittee for the Promotion and Advancement of Cooperatives (COPAC), a network that brings together other institutions including in particular research and training institutes.

 

The European Commission, on the other hand, appears to be heading in the opposite direction. The DG Enterprise unit dealing with cooperatives during the International Year of Cooperatives lost out in significance and visibility even to the point where the denomination “cooperative” was dropped in the name of the unit. This approach does not seem to take into account either the history or the added economic, social and societal added value of cooperative businesses and the collective projects they support.

 

Cooperatives and social education by the Church

A cooperative is a form of business enterprise that offers a positive common ground between cultures and traditions that are ideologically different, among which Christianity with its social action plays a leading role. Among the Catholic Church’s social Encyclicals, the Magisterium has paid special attention in its declarations to this specific form of business as the best way of humanising the economy.

Following the tradition begun by the Encyclical Rerum novarum, cooperative enterprises are referred to, more or less explicitly, in the following social documents: no. 33-34 of the Encyclical Quadragesimo anno by Pius XI; the radio message of 1 September 1944 by Pius XII; no. 72, 76-77 of the Encyclical Mater et magistra by John XXIII (1961); no. 71 the Pastoral Constitution Gaudium et spes from the Second Vatican Council (1965); no. 14 of the Encyclical Laborem exercens by John Paul II (1981); no. 43 of the Encyclical Centesimus annus by John Paul II (1991).

Looking at the most recent texts, the reference to cooperatives in the Compendium of the Social Doctrine of the Church, in the section headed “Business and its goals” is worth mentioning.

Regarding the last Encyclical, Caritas in veritate, there are three clear references: the first (no. 38) “Alongside profit-oriented private enterprise and the various types of public enterprise, there must be room for commercial entities based on mutualist principles and pursuing social ends to take root and express themselves”. This reminder of the multiplicity of the forms of business and the hybridisation of the logical principles on the basis of which businesses operate seems to me to be one of the most innovative passages of the Encyclical.

The second concerns cooperation in the area of credit (no. 65): “If love is wise, it can find ways of working in accordance with provident and just expediency, as is illustrated in a significant way by much of the experience of credit unions.”

The third relates to cooperative consumption (no. 66): “In the retail industry, particularly at times like the present when purchasing power has diminished and people must live more frugally, it is necessary to explore other paths: for example, forms of cooperative purchasing like the consumer cooperatives that have been in operation since the nineteenth century, partly through the initiative of Catholics.”

It is not an exaggeration to say, as certain researchers do, that there is a “doctrinal coincidence” between the principles of the Church’s Social Doctrine and those of cooperatives.

 

Enzo Pezzini

Director of the Brussels office of the Confederation of Italian Cooperatives

 

 

Translated from the original text in French

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