Contributors to this programme:
New Economics Foundation
Director of Cooperative Dissemination, Mondragon
Head of international operations, Mondragon
Professor Virginie Perotin
University of Leeds
Sales and Marketing Director, De Dietrich and Fagor Group
Head of Membership, The Co-Op Group
Co-Founder, People’s Supermarket
Peter Day's Webcomment:
About this programme by Peter Day
Industrial and business history is quite fascinating. Often (I think) more interesting than stately homes and ancient castles.
It is wonderful to stand on the world’s first iron bridge across the River Severn in Shropshire and marvel at the very beginnings of the industrial revolution, there beneath your feet.
It is remarkable to take the new London Overground (misnamed at this particular point) to travel across the Thames in London in the world’s first tunnel under a river … and to get out at the Brunel Museum in Rotherhithe which commemorates the father and son geniuses who devised this stupendous feat of engineering.
And there in the Brunel Museum you learn that the Thames needed a tunnel, not a bridge, in the early 19th century because another overhead structure would have interfered with the up to 3,000 ships and boats that went up and down the river nearly every day of the week.
A reminder of London’s position as the absolute centre of world trade in the 19th century, a forerunner of the City of London as a modern global financial centre, for better or for worse.
There’s quite another piece of history on show in a cobbled street in Rochdale in Lancashire. A lovingly preserved little shop in Toad Lane does not commemorate a technology breakthrough, but a social and economic one.
It is of course the place where in 1844, textile workers gathered to form the Rochdale Society of Equitable Pioneers. They were working people newly crowded into an urban environment. They were fed up of being exploited by merchants and sold adulterated flour and sugar.
They decided to set up their own cooperative shop, run for the benefit of the people who used it. A few simple Rochdale Principles animated the society: among them open membership and democratic control.
There had been earlier coops in Scotland, but Rochdale was the model that took off. Ten years after the first shop in Toad Lane, there were 1,000 cooperative stores across Britain, and hundreds of thousands of co-operators.
This alternative to capitalism produced a global response. There are now thousands of coops across the world, though the Cooperative (as the British one is now known) is the largest single consumer-owned cooperative organisation in the world.
But the movement cannot rest on its heritage. With its retail market share shrunken by cut-throat supermarket competition in recent decades, The Cooperative is now beefing up its ethical reputation in a drive to recruit millions more members in the next few years.
The Coop Bank is in the process of buying 630 Lloyds TSB branches in a move to give it a much larger presence on the high street.
This In Business also hears from some of the owners of the largest worker cooperative in the world, based at in the little industrial town of Mondragon in beautiful Basque Country in the north west of Spain.
The origins of Mondragon were a technical school started by a local priest.
in the town in 1943. He wanted to keep decent jobs in an isolated valley.
After the war, activist factory workers were sacked by their local employer. Inspired by the priest they set up a cooperative workshop making stoves in 1956.
From this has grown an industrial empire of 256 separate companies in 18 countries clustered under the Mondragon umbrella, including makers of foodstuffs, computers, household appliances, refrigerators, ovens, vehicle parts, the Olympic gold medal-winning Orbea bikes, an electric car.
There’s a big French and Spanish supermarket chain, a university and a local bank which is apparently rather healthier than most of the Spanish regional banks.
At the heart of the operation is a clever research centre looking for innovations for the Coops and working for outsider clients. Innovation helps keep the component companies at the sharp end of business development, counterbalancing the innate conservatism one might expect in worker-run operations.
Clever stuff, and it has given the area one of the highest standards of living in Spain … in spite of (or perhaps partly because of) the sometimes violent pressures for Basque independence.
Every year some 5,000 cooperative tourists come to Mondragon to see what the coop has to teach them about an alternative model to capitalist enterprise.
But not many go away and do carry it out. And it is illuminating to learn that when a Mondragon company takes over a foreign firm, the newly acquired business will most likely not itself adopt the cooperative model.
Even co-operators as famous as those from Mondragon find it difficult to persuade people who have not grown up with the idea to take over the running of their companies. Workers used to leadership (and the solidarity of trade unions representing their particular point of view to the management) find it difficult to switch to participation, it seems.
And for anyone brought up in the command and control environment of many businesses, the hours of meetings, listening to other people’s points of view, and a gradual coming to agreement, all are difficult skills to master.
Cooperation is a prominent other choice to what are a surprisingly small number of conventional ways of running a business or an organisation: private companies, public companies, state corporations, and worker participation.
Everywhere else in nature, diversity and the competition it brings is wonderfully productive. But in business, the numbers of different organisation models can seemingly be modelled on the fingers of one hand.
So at a time when Capitalism is looking a bit tarnished by the deep economic crisis we have been pitched into, maybe cooperation has something to teach conventional businesses.
Time for some new pioneers?
Insights into the business world with Peter Day - featuring content from his Radio 4 In Business…