Co-op's in Higher Education

Like co-operators everywhere I was saddened to hear of the death of Elinor Ostrom. Elinor, or Lin, as she was known was remarkable; the only woman to be awarded the Nobel Prize for economics. Her Prize was for her analyses of how individuals and communities can often manage common resources – ranging from activities as far apart as irrigation systems, fisheries and information systems – better than markets or the state.


Her most influential book was the 1990 work, Governing the Commons, in which she examined numerous local management systems overturning the conventional wisdom of resource management. This was the work that lead to her Nobel laureate and Time Magazine, earlier this year, to list her as one of the world’s top 100 most influential people.

I was thinking about her when I attended the Co-operative Education Trust Scotland (CETS) conference, Co-operation and Co-operatives in Higher Education, which bought together teachers, lecturers and students from across Scotland, in the Institute for the Formation of Character, the school founded by Robert Owen, at New Lanark.

Despite the work of great minds like Elinor’s neo-classical economics, has higher education in a death grip. It is like a religion, in the sense that its belief in markets is based purely on faith when all the evidence points in the opposite direction.

Like many abstract ideas they work very well in theory but not only do they not work in practice they simply do not exist. For neo-classical economists co-operatives are a result of market failure and the thing do when markets fail is to make the market work better with yet more liberalisation and deregulation.

The fact is that markets always fail because they are an abstract idea and take no account of the way people actually behave. The only way they can be made to work in the interests of people is by some degree of co-operation. But today co-operatives have almost completely disappeared from the economic text books.

When the subject of economics had its original name of political-economy co-operatives where well represented in the text books with co-operatives being presented in great detail with important contributions from Robert Owen, Proudhon, John Stuart Mill, Charles Gide and the Webb’s.

Come the rise of the neo-classical thinking however and all this disappeared.

The question we have to ask is why? Is it because co-operatives are less important? If anything co-operatives are more important now than a hundred years ago. In the European Union countries co-operative membership to total population is between 20 and 30 % and in North America it is even higher. By any measure the importance of co-ops globally has increased over the period with more members of co-ops than shareholders in private firms, 1.4 million co-ops international employ over 100 million people 20% more than all the transnational companies put together.

Is it therefore ideological? There is no doubt during this time economics has become even more abstract. That early analysis was of economic institutions today the worlds is bent to match the theory with the role of government reduced to getting out of the way creating perfect spaces for markets to operate in eliminating any need for co-operation.

This is why it is so important to get the study of co-operatives and co-operation back into Universities and Business Schools. The complete failure of the pure market model to reflect the needs of the real world means we have a new co-operative opportunity. But it will be stillborn if students and policy makers have no idea what co-operatives are, how they work and how they can be encouraged.

This ignorance also enables charlatans to fill the space with all sorts of outlandish business models called co-operatives or mutuals when no meaningful control in the enterprise is exorcised by the members in the form of customers, suppliers or workers.

It is for this reason it was great to be in Scotland and to see the excellent work that CETS are doing. They now have three levels of qualification approved by the Scottish Qualifications Authority. Beginning with Co-operative Enterprise the Democratic Alternative, history of the movement, practical activities and an international perspective, this is a huge step in the right direction.

It was also a delight to be at the launch of Democratic Enterprise a fantastic new educational resource. Developed jointly between CETS and the University of Aberdeen it is designed for undergraduate students and provides an open access, introductory-level analysis of democratic models of enterprise, ie co-operatives and employee-owned businesses. A supplement to any course or module that deals with these topics, it also stands alone as a template for academics who wish to incorporate material on democratic models of enterprise into their courses or modules.



This is a completely free resource so any teacher or lecturer can get hold of this material at: www.abdn.ac.uk/cets/resources/democratic-enterprise. So no excuse for university teachers to ignore the topic, Dairmuid McDonnell, who has worked on this for CETS deserves the plaudits but this is just a start of the education and educational tools we need to take co-operatives and co-operation out of their intellectual ghetto.