Can workers’cooperatives be a component of a better world?

Friends of Le Monde diplomatique

After one and a half century of history, the concept of cooperation seems to have a very meagre balance sheet; in Britain, the Co-operative Group (CWS) is declining and in financial trouble. Outside Britain, many successful cooperative companies have become big financial groups, with very little reference to the principle of cooperation. Should we conclude that there is no future for the cooperative movement?

What is a cooperative vs. a traditional company? In a traditional company, owners of the company are suppliers of capital equity; they bring money to the company, in exchange for which, instead of a reimbursement of capital plus interest (as with a loan or a bond), they receive the right to manage the company in their way, in order for them to extract profits and dividends from it. Their right is proportional to the money they invested in the company. At the opposite end of the spectrum, a cooperative is based on democratic principles: in a cooperative company, each member (cooperator) has equal right in managing the company, whatever his or her investment is (one person, one vote).

The second question, then, is this: who are the cooperators? Historically the first trend has been to consider that consumers should be the cooperators. In this context, Robert Owen and the Rochdale pioneers founded the Co-op (which later became the CWS).

A few years later, another type of cooperative appears: the worker’s cooperative. In this form of cooperative, workers are the owner of the company. The French socialist Jean Jaurès promoted the worker’s cooperative at the end of the 19th century (Verrerie Ouvrière d’Albi). Although it is true that a worker is also a consumer, and that from this standpoint it is progressive to set up a user’s cooperative for specific needs (credit, housing, services...) instead of a traditional capitalist company, it also appears that as they grow, these companies increasingly tend to act as ordinary companies; users behave like ordinary shareholders, and workers do not have their say. History shows that the biggest success in this type of company (the best example being the French bank Crédit Agricole) are those which are the least compliant with the initial goals of the cooperative movement.

Ultimately, what drove him to put his job on the line was the failure of the banks and US Treasury to change course when confronted with the crises - failures and suffering perpetrated by their four-step monetarist mambo. Every time their free market solutions failed, the IMF simply demanded more free market policies.

“It’s a little like the Middle Ages,” the insider told me, “When the patient died they would say, ‘well, he stopped the bloodletting too soon, he still had a little blood in him.’”

I took away from my talks with the professor that the solution to world poverty and crisis is simple: remove the bloodsuckers.


A version of this was first published as “The IMF’s Four Steps to Damnation” in The Observer (London) in April and another version in The Big Issue - that’s the magazine that the homeless flog on platforms in the London Underground. Big Issue offered equal space to the IMF, whose “deputy chief media officer” wrote:

“... I find it impossible to respond given the depth and breadth of hearsay and misinformation in [Palast’s] report.”

Of course it was difficult for the Deputy Chief to respond. The information (and documents) came from the unhappy lot inside his agency and the World Bank.

At you can read more about globalization - and view Palast’s reports for BBC Television’s Newsnight, including his broadcast interview with Joe Stiglitz (Meirion Jones, Producer).