Imagining a Cooperative Australia (Essay)

Australia is in the early twenty-first century a society of competition. We teach our children to compete in academic achievement, with their talents and even against each other with ‘likes’, and in their maturity they will compete with their degrees and compete for internships.

To secure a job they will be forced to compete on salaries and conditions, and when finally they do find work they will be expected to compete by working forty, fifty, sixty hours for little or no extra compensation. They will compete with themselves in performance reviews and against their workmates by being constantly contactable; meanwhile, their representatives in parliament will compete ever downward with corporate taxation and financial regulation, just as their employers compete ever upward with executive remuneration and shareholder spoils.

Faster, higher, stronger might as well be our motto in these Olympian times, but what of compete’s antonym, cooperate? Why not cooperate for jobs and wages, cooperate in production and consumption, cooperate with our workmates and in our communities? Why not cooperativise our businesses, firms, factories, industries, sectors and economies, so that by the end of this century we might not have to fight against each other just to get by, but instead work together to share in an Australian common wealth?

Marinaleda: A ‘Utopia toward Peace’

My first introduction to cooperativism, an idea which simply says that workers and consumers should own and run the means of producing and consuming their wealth, came some months ago when I travelled to the Spanish town of Marinaleda, a self-described ‘Utopia toward Peace’ where full employment and fair wages reign in a land where unemployment can reach thirty percent or more and where poverty wages are common.


This little town of two thousand people is led by Juan Manuel Sánchez Gordillo, the unionist and mayor who has led these people through decades of battles with private landowners – a war waged through occupations and hunger strikes, and counter-attacked on the movement’s legal and political flanks – trying to devolve the land to the people who work it; to ‘expropriate the expropriators’, in his and Marx’s words.

After long years of struggle they finally won the vast tract of land called El Humoso, now an agricultural co-operative run by and for the workers, paying them a dignified minimum of one thousand euros a month, and in recent years Gordillo has shot to fame for his involvement in the anti-austerity movement, becoming known as a modern day Robin Hood after he seized food from a supermarket to share it amongst the poorest families of the region. With fierce eyes and a wild, unkempt beard, Gordillo has a mystique which has sustained his leadership through long decades of struggle.

Marinaleda’s cooperativism is truly radical, radical in that it “grasps things by the root”, as Marx defined it. Their co-operative model is based upon the premise that the exclusivity of private property over limited resources necessarily involves the deprivation of another of what is as equally theirs. Such exclusivity is manifestly unethical, and in Marinaleda such exclusivity meant the impoverishment of those who produced the wealth.

Gordillo asks me: if we are constantly told of the sacrosanct right of private property, why is it that so few may exercise this right? Who protects the right to property of the countless families facing eviction in Spain, and what of the homeless? What of the right to own what you produce; to, literally, reap what you sow?

In Marinaleda Gordillo has tried to “build a different world in which the resources are put at the service of the people and not private interests”, but Marinaleda is Marinaleda, you might say; you cannot honestly think that the this experiment of some tiny Andalusian town is transferable to other towns, cities and entire economies? I put this to Gordillo, and his answer is unequivocal: “Of course you can.”

I want to believe Gordillo, I want to believe that Marinaleda – that living, undeniable example of the possibility of another world, of the fact of another world within this one – can be a model for those who desire a just society. So I go searching for other signs of hope.

Bathurst Wholefood Co-operative: The Real Fresh Food People

A world away from Marinaleda – away from its radical confrontation with capital and even further away from its sweltering heat – I find myself back home in the wintery Central West New South Wales town of Orange, but I need not look far to find that same desire to work together, to cooperate, as I found in Andalusia’s interior only a few weeks before. Paying a visit to the Bathurst Wholefood Co-operative I’m greeted by Cathie Hale; artist, community worker, and now co-op coordinator.


Chatting amongst barrels of lentils and oats, between bags of liquorice and spices, Cathie tells me that while this consumer co-op’s primary function is to return profits to its members through discounts, its purpose is “so much more than saving.” Through market days that connect consumer and producer, through a seventy-strong volunteer army, through community funding drives and social media campaigns, this little co-op aims to educate Bathurst on good food and good living. Guided by the motto ‘local food for local people’, the co-op challenges the supermarket duopoly not through price wars or by offering a dazzling range of plastic-wrapped imitation foods, but by providing the community with quality, organic, local produce.


And how have the locals responded? Judging by the success of the co-op’s recent ‘crowd credit’ funding drive which secured forty thousand dollars of liquidity in just three months, the locals love it. Cathie tells me that this ‘community investment scheme’ – which was perhaps the first of its kind in Australia – invited the 500-strong membership base and the entire community to purchase one hundred dollar ‘notes’ from the co-operative, notes which would be paid back at the rate of two percent per annum.

The message, she says, is that “our community really believes in us”, and their experience in this mass micro-credit scheme could be an example for other co-ops thinking about how to raise extra capital without resorting to the banks all the while raising community interest and involvement in the co-operative. And sales are booming too; over the past two years sales jumped thirty percent and then another fifteen percent last year, a boom which means the co-op is now considering other options for its shopfront.

But for Cathie, who doesn’t want to “line the pockets of some other person” it’s not about the money, maybe it’s not even about the food, “but the people… I wouldn’t be interested in anything else.” Perhaps this gets to the essence of small consumer-coops such as these; of all their benefits, perhaps the most important is that they act as a kind of stimulus for ideological transformation within their communities, and even a place of political education. When someone purchases at their local coop, they are making a choice, they are saying no to the corporate agents and structures which command so much of our lives and reaffirming the human, social basis of all economic activity.

The Cooperative Logic

If the Bathurst Wholefood Co-operative can do it, if Marinaleda has done it against all odds, then there should be no reason why countless other co-operatives can’t start up, survive and thrive. Because co-operatives are much more than feel-good experiments isolated from the realities of the modern economy; no, they can produce more efficiently than private ventures and they do make financial sense.

Instead of channelling profits into third parties – owners and shareholders – a co-operative reinvests into the firm’s capital, allowing it to boom in good times and get by in hard times. Conflict between management and labour is minimised or non-existent thanks to democratic representation and decision making, and if the worker-owners do decide that wages must be depressed or even that labour must be shed, then that will be a sacrifice which comes only after profits and production are redirected in a manner which might avoid such downsizing and one which only ever comes with parallel cuts to and caps on executive remuneration.  And should a worker lose his or her job, the firm may search for another position in an area which is not in decline. Co-ops, then, can and do compete.

“It’s so natural. You don’t have to read big books to think that the workers in a plant ought to get together and run it… That’s just natural, that’s like saying that people should vote for their own representatives in congress. Well okay those natural ideas are crushed, but there’s no reason they can’t be realised and implemented” – Noam Chomsky

Take another Spanish example, the Mondragon Corporation, whose story is perhaps not as stirring as Marinaleda’s militant means and ideology but just as inspiring in its success in the modern world. The Mondragon Corporation emerged in the 1950s from the industrial Basque Country in Spain’s north and has since expanded into the global economy, employing some 74,000 workers across the entirety of its operations and bringing home some $US20 billion in sales. Even through the worst days of Spain’s economic crisis, Mondragon managed to avoid labour shedding through consensual reductions in workers’ wages and executive remuneration. Not that the gap that separates worker pay from executive pay was ever large in Mondragon’s co-operatives; each workplace may vote on a executive-labour wage difference ratio, with the average ratio being 5:1, meaning that the executive board would earn no more than five times that of the least paid worker in the enterprise, a stunning achievement in a country where a CEO can expect to earn a staggering 127 times the salary of the average worker.

“The business is ours, but we’re workers as well. We don’t have a boss like in other companies, we’re all bosses, and we have to move the business forward.”

“A lot of the time in regular capitalist companies, if there’s some type of slow down, you’re out on the street. Some coops do better than others, but you still have a job. You can’t get thrown out onto the street.”

Mondragon proves that co-operative values are not just moral luxuries that enlightened firms can indulge in and jettison according to the economic climate, but that they actually boost growth during good times and safeguard the company’s very survival during hard times.

Murray Goulburn and the Cooperativist Challange

But as Marx said, though co-operative enterprises “represent within the old form the first sprouts of the new,” that is, that they give us the taste of what a post-capitalist future would look like, they also “naturally reproduce, and must naturally reproduce, everywhere in their organisation all the shortcomings of the prevailing system.” Because co-ops too must compete; compete against other producers, sellers and buyers on a market.

The pressures of survival mean that at some point a co-operative may be forced to decide between its cooperativist values and its competitive interests. No better example of this cooperativist conundrum exists in Australia today than the case of the Murray Goulburn dairy farmers co-operative, a farmer owned business whose executive board, tempted by the immense fortunes promised in a booming Chinese milk market, partially floated the co-operative on the stock exchange.

Once sold off to share-holders, those farmers only partially owned the means of milk production, and the resultant clash of interested between those of the farmers (who want high prices paid for their milk) and shareholders (who want high prices paid for their dividends) was spectacular. The third contradictory interest was that of the directorship, whose remuneration was linked to milk prices, thereby raising the incentive to maintain optimistically high prices. When the milk price was revealed to be far below what had been promised and paid to farmers, the Murray Goulburn executive forced an unprecedented and astonishing ‘clawback’ of that money already paid.

The end result has been financial devastation for thousands of families, betrayed by the executive management of a co-operative originally designed to protect farmers from such corporate malpractice, individual greed, and market volatility, a co-operative which was literally ‘sold out’ by its management.

Reviving Cooperatives

What then, can co-operatives do to avoid such an identity crisis as was suffered by the Murray Goulburn milk co-op? And what can society – our parties, governments and unions – do to spur growth of co-operatives far beyond its currently limited place in the economy?

For a start, co-operatives need a level playing field. Veteran legal consultant for the co-operatives and mutual sector Robyn Donnelly believes that co-operatives in Australia are struggling in an ambiguous legal environment which penalises co-operatives for expanding. She explains that co-ops, not being covered by the federal Corporations Act, have their legal grounding in state legislation, meaning they can be forced to pay extra registration fees every time they cross state boundaries while their corporate competitors would be entitled to automatic national recognition upon registration under the Corporations Act. And despite efforts to standardise state laws, Robyn tells me that still states are lagging in properly funding the registry and regulatory offices that give effect to these laws. Should the current standardisation process continue to advance haphazardly, why not aim for a national piece of legislation similar to that of the Corporations Act which would govern co-operatives across the economy?

Apart from the ambiguous legal environment within which co-operatives operate, there is the challenge of co-operative capitalisation. As the recent Senate Report into the sector commented, co-operatives, not having the option of issuing shares, need to develop innovative ways of raising external capital aside from that of ordinary debt. To spur the creation of new co-operatives, a national investment fund could be established to provide credit, guarantee existing loans, and distribute grants linked to socially beneficial programs – such as volunteer programs and apprenticeships – to new and expanding co-operatives. Superannuation funds, credit unions, trade unions and investors could be encouraged to contribute to such a fund, creating a community-wide source of credit and grants bringing together government, industry and finance.

For inspiration we might look to the Canadian Co-operative Investment Fund (CCIF), a new fund which has in the past year pooled some $25 million dollars from diverse sectors of the community, promising to inject Canada’s already booming co-operative industry – made up of 9,000 businesses employing some 187,000 people – with between $53 million and $164.5 million of capital (depending on how much initial capital can be raised).

Apart from such an investment fund, novel investment instruments similar to the earlier mentioned Bathurst Wholefood Co-operative’s ‘community investment notes’ could be included in legislation to give co-operatives a legally clear precedent for raising capital. There is so much potential for original capitalisation ideas to develop in this country, all that is necessary is for Australian policy makers take these ideas seriously and legislate for real instruments of co-operative capitalisation. Lacking that, the co-operative movement must take the initiative and begin seeking investment partners for a Canadian-style co-operative investment fund.

Perhaps even more essential than the issues of legality and capitalisation is the task of raising awareness of cooperativism in our society. In this, trade unions could play a significant role; simply by pushing for cooperativisation whenever a firm decides to leave its workers behind for cheaper labour abroad, trade unions could reignite the movement within the movement, so to speak, and push co-operative policy making to the top of the agenda in political circles. This kind of bold action was seen not long ago when a group of unionised McLaren Vale poultry workers decided to take over ownership of their factory when Ingham Chicken announced its closure. Hopes were high when Ingham showed good faith signs of a willingness to sell the factory to the workers, and hopes were doubled when the state government launched a feasibility study into backing the co-operative, but the poultry workers have since reported that Ingham reneged on its promise to sell, deciding instead to “completely strip the factory of its processing equipment, with much of it being crushed on site.”

But the attempted takeover shows that Australian communities need not fatalistically accept the continuing decline of manufacturing in this country, but instead that they can take matters into their own hands and aim to build living, successful examples of non-capitalistic production. As the workers said through their social media account, “without doubt in our minds we proved that a poultry processing industry could have been created and become successful.” Along the road to a more democratic economy setbacks will surely occur, but we should not fall into resignation and despair. The lesson from the poultry farmers’ unsuccessful attempt to cooperativise is that workers cannot expect unbridled enthusiasm from neither capital nor government, and that those reliable and institutional means of capitalisation mentioned earlier must be developed.

Beyond the vanguard role of the labour movement, our universities and high schools ought to include co-operative commerce in their studies of accounting, business, economics and law; just as the recent Senate report into the sector recommended. Thinking big, the co-operative movement should look forward to the day in which Australia has something similar to what Canada has long had, a Co-operatives Secretariat; a public office which acts as an interlocutor between government, co-ops and the community. Once having returned cooperativism to the forefront of the labour movement and wider society, co-operatives – whether from the ashes of abandoned industry, from the goodwill of executives, from scratch, or even through pre-emptory ‘expropriation of the expropriators’ à la Gordillo – would flourish in places as far removed from Marinaleda as could possibly be imagined.

The Socialist Objective: From State to Society

In the twentieth century the labour movement sought to socialise production, distribution and exchange through the enormous power of the state. But such nationalisation programs – while they did protect jobs, strategic interests and ensure access to services – did face problems of overproduction, stagnation and overreach. Queensland’s publicly owned butcheries come to mind as an example of the Australian left’s inability to think far outside the box of the state, and while the idea of state-owned butcheries today may seem absurd, the notion of a co-operative butchery would to many seem perfectly appropriate.

Solidarity: International Workers of the World Union Poster

So while in the twenty-first century the fight to maintain, extend and even re-take public ownership across the economy should remain high on the agenda, what must be remembered is that economic democratisation cannot only be top-down, but, as the term suggests, it must surge forth and transform our society from beneath.

Because what is clear is that not only are co-operatives good for production and investment, but they are good for worker and social welfare. All that is needed to ignite this cooperativist turn is the leadership shown by the likes of Juan Manuel Sánchez Gordillo, the commitment displayed by the people of Marinaleda, the enthusiasm found in the Bathurst Wholefood Co-operative, the wisdom gained from the mistakes made in the Murray Goulburn milkers’ co-operative, the insight taken from the international pioneers of cooperative policy-making, and the lessons learnt from set-backs like those suffered by the South Australian poultry workers. Another world is possible, as Gordillo told me, but we will have to fight for it.


What did you think of this essay? You can let me know in the comments section below. Do you think ‘cooperativisation’ could be a way to move away from capitalism?

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