Dear friends,
I am Ermanno Tortia, Professor of Economics at the University of Trento, Italy. I teach and I am an expert in the Economics of Cooperative and Social Enterprises. Here are my comments on the Discussion Draft n° 2 of the Revised Statement on the Cooperative Identity.
COMMENTS:
In my opinion, the founding values of cooperation should be very similar to those that already exist, but with a few changes. The existing values are mutual aid, personal responsibility, democracy, equality, equity, and solidarity. Of these, I would only remove “equality”, as “equality” is merely a stronger version of “equity”, which means that it is redundant, does not add much new meaning to the understanding of cooperative identity, and, moreover, has an ambiguous meaning. What does it mean to be equal? Does it mean that we should all be the same? This would not be a good outcome. Does “equality” mean that we should all have the same income or earn the same amount of money? This is not even an interesting outcome, and, in fact, it can also be dangerous, as classical socialism teaches us. Instead of “equality”, I would prefer to see “diversity and inclusion”. We are all different, and we can and should be different both in terms of our personal understanding of reality and in terms of economic decisions and outcomes (income and savings), but we should all be included in the same cooperative mission and cooperative values, such as democracy and solidarity, and in the same cultural and social context.
In fact, I would add some additional fundamental values of cooperation, especially “autonomy” and “freedom”, that is, freedom from oppression by both public (the state) and private (business) rulers. Among the basic cooperative values, I would also add “rootedness” (community).
I believe that we also need to work on the role of capital in cooperatives. I believe that it should be clearly established in the principles of cooperative identity that the aim of cooperation is not to prohibit economic gain, i.e. the positive net income of cooperatives, which would impoverish us all, as cooperatives would not have sufficient funds to invest and grow, and to satisfy the needs of their membership. The objective of cooperation should instead be to clarify that capital, both physical capital (the means of production) and intangible capital (e.g. licences, patents, digital capital) as well as financial capital, is not an end in itself, but only a means to an end, the ultimate end being the pursuit and fulfilment of the founding cooperative values. The problem is not to prohibit people from becoming wealthy, but to allow them to do so while respecting (the restrictions imposed by) and fulfilling basic cooperative values.
I would not even rule out the possibility of removing the requirement that part of the capital of cooperatives be held as collective capital (indivisible capital reserves). Collective capital should not be prohibited or ostracised, but neither should it be mandatory. Individual cooperatives and groups of cooperatives (e.g. Mondragón in Spain) should be free to choose whether or not to use collective capital, without limitations or impositions by national legislation or regulatory bodies. National legislation may encourage the use of collective capital through tax advantages (tax breaks), as in Italy, but not through impositions. A major effort must be made to create new financial instruments and develop existing ones, both at the organisational level (instruments held by cooperatives as corporate entities) and at the individual level (instruments held by individual members of cooperatives), to enable cooperatives to grow, be economically, financially, socially and environmentally sustainable, and be resilient in difficult economic conditions. The growth in the value of financial instruments held by cooperatives should not be seen as the result of speculation, but as the result of sound investments in economic resources and in the growth of the organisation, which would provide cooperatives with better instruments to fulfil their ethical and social missions, as well as their founding values.
Best regards,
Ermanno Tortia
Department of Economics and Management
University of Trento, Italy
Email: ermanno.tortia@unitn.it