Monday, 30 January 2012

Time for a Moratorium on the Use of “John Lewis Model”!

It is getting to the point that every time I hear a Tory or Liberal (or for that matter a New Labour) politician use the term “John Lewis Model” I want to scream! Never in the history of political discourse has a term been so misused by so many, so often!

Yet even I as a student and teacher of co-operation and co-operative business forms I have no idea what this all encompassing “John Lewis Model” as used by politicians’ is.

It is clearly from the way this phrase is used that the user is banking on the hearer having some vague well meaning niceness come to mind. A sort of warm organic Duchy Original waitrosian ambrosia from our one of our own farms.

Of course we are all familiar with the technique from our child hood readings of that political classic Alice Through the Looking Glass.
“When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.”'
“The question is”' said Alice, “whether you can make words mean so many different things.”

“The question is,”' said Humpty Dumpty, “which is to be master — that's all.”
Well this week its Nick Clegg’s turn to be master. He wants the “John Lewis Model” to “do something” about corporate governance in the UK and at the same time improve labour productivity.

How interesting. And how does he intend this to work. Apparently by allowing workers to ask for shares. Now that too sounds familiar but I am not sure that Nick has read the right book this time as this is more Oliver Twist than Alice Through the Looking Glass. “Please Sir, Can I have some more?”
You would be amazed at how many problems the “John Lewis Model” can solve. A Google search gave me 135,000 references in 25 seconds.
It is going to solve all our problems in funding the public sector, empower people, giving people control of community centre, libraries, swimming pools, schools, etc etc. Once the “John Lewis Model” takes hold it will be like the second coming. All the bosses will be kind and all the workers will be grateful.
All will be well in the world there will be no capitalists and the purpose of all economic organisation will be to make workers happy. Oh happy days!

But wait a moment have all these politicians really understood what dear old John Spedan Lewis actually did? He did not give workers a smattering of shares, or having sacked them offered them the chance to compete from a position on the pavement. Talk of the “John Lewis Model” in the NHS is particularly pernicious as if the NHS are going to give their staff a hospital and all the equipment that goes with it!

No John Spedan Lewis actually gave them the whole company - all of it - every shop, office and warehouse.

The whole business is owned in Trust for the workers and they have a complex but nonetheless a real form of democratic control over the business.

Is this really what Tory and Liberal politicians are advocating – interestingly New Labour types only began advocating “John Lewis models” and eulogising co-operation generally either just as they are about to leave or just after having left office like a form of radical chic.

Are they really advocating giving the entire NHS to the people who work in it under a form of workers control with the sole purpose of running it to make those self same workers happy?

And are they advocating buying all the shares in BP then giving them to the workers setting up an international workers BP parliament and encouraging the workers to run the oil giant solely to make them happy?

It is worth remembering that John Spedan Lewis set up the Partnership in 1929 not from a fit of philanthropy but from a fit of anti-communism. He gave the firm to the workers because ultimately he was frightened, as he saw it, of something far worse.
That fear of something worse is exactly what drives the Tories and Liberals today they throw sand in our eyes with talk of the blessed “John Lewis Model” because they have no interest in giving workers their due and they merely want to put workers off taking that which already belongs to them.

In the public sector they are trying to sell to workers what they already own and in the private offer a few crumbs from the top table. We saw with the sale of Northern Rock to Virgin Money that the government have no interest whatsoever in co-operatives, or mutual’s, worker or otherwise.

The fact is if we want workers control and more co-operative ownership we will have to do it for ourselves. Of course John Lewis and other workers co-ops are a good thing so are other co-operative forms and workers would be acting in their own interests by joining and forming co-ops, investing and shopping with them, for everything from food, to telecoms, to energy and anything else they feel they need and goodness me Britain needs a bigger co-operative sector. But there are no short cuts; this kind of philanthropic giveaway is the exception not the rule no one is going to give workers anything.

So the next time you hear a coalition politician going on about the “John Lewis model” remember in their hands this model has less life in it than one of the dummies in the windows of John Lewis’s Oxford Street store!

Tuesday, 17 January 2012

Consumer Co-op's in Japan

Towards Contemporary Co-operative Studies: Perspectives from Japan’s Consumer Co-ops. Edited and Published in 2010, by The Consumer Co-operative Institute of Japan. 15, Rokubancho, Chiyoda-ku, Tokyo, 102-0085 Japan.
ISBN: 978-4-915307-00-3.

A Review by Nick Matthews

The Japanese consumer co-operative sector deserve great credit for establishing the Consumer Co-operative Institute (CCIJ) and then for allowing it such a wide ranging brief to look at the future of consumer co-operation in Japan. In an excellent piece of work the CCIJ has conducted, “comprehensive multidisciplinary studies on consumer life, consumer co-ops and civil society by involving both researchers and practitioners.” Something the UK Society for Co-operative Studies aims at and has been set a benchmark by this study.

The sector is an important actor in the Japanese economy with nearly 40% of Japanese households belonging to a consumer co-op generating a turnover of around Three Trillion Yen (at the time of writing there where 76 Yen to the US$).

The latter half of the nineteen nineties saw the stunning growth of the sector in Japan stagnate the growing realisation that they faced a new set of problems and challenges was the stimulus for the development of Consumer Co-op Studies.

There was also a deep realisation that the changes in Japanese society are not unique - so I am delighted that this work has been published in English – and that a new kind of research was needed “transcending the framework of the existing body of research, to deal not only with the organisation and management of the consumer co-ops, but also the various external conditions influencing them.”

This research covers four main areas, firstly the organisation and management of consumer co-op’s, secondly and perhaps more innovatively, an analysis of “changes in consumers lives in relation to consumer co-ops”, thirdly to understand the role of changes life style and in society generally that are driven by globalisation and the information society and fourthly, and the most far reaching, to “draw up a vision for a new communal society in the 21st century.”

They argue that, “consumer lives will be stabilised and the basis of democratic participation will be secured, when consumers voluntarily set up strong community organisations for the improvement of life and welfare.”

The book tackles these issues in three parts, in the first part Japanese Consumer Co-ops Today and Tomorrow, there are some fascinating insights into Japanese consumer co-operation. Japan was an early adopter of the “Rochdale model” with the first co-op shops opening in Tokyo and Osaka in 1879. In the early day’s three different types of co-ops developed, ones attached to companies for their employees, worker-orientated co-ops associated with the radical labour movement and citizens co-ops organised by the middle classes. However the Second World War almost completely destroyed these societies leading to a fresh start in the 1940’s.

Whilst the leadership came from the pre-war movement the post-war consumer co-op movement was based on necessity as the economy was in a state of near collapse. Co-ops in the form of buying groups mushroomed but as the economy stabilised and began to grow this movement, lacking effective management and organisation, was unsustainable. In the 1950’s growing trade unions took on supporting “workers welfare businesses” to supplement their main role of collective bargaining. Local Trade Councils began to set up co-op shops again this was relatively short lived as they faced stiff competition from the new supermarket formats introduced by existing retailers.

The transformation in the movement came with the development of “Citizen Co-ops” these where partly a reaction against the industrialisation of foodstuffs from Japanese housewives. Indeed this is probably the most distinctive feature of Japanese Consumer Co-ops – the active participation of women members.

The key unit of organisation was the Han group, traditionally they where small groups of women in a neighbourhood who came together to channel their opinions into the co-op. A third of the total co-op members belonged to Han groups although the average group size was only four members. The second key feature was home delivery – something that has gone in, out and back into fashion here in the west.

Akira Kurimoto, points out that “Joint buying is a unique system of home delivery to Han groups, in which members place joint weekly orders to co-op delivery staff who then deliver the food and groceries the following week.” Akira is Director and Chief Researcher of the Consumer Co-op Institute and also Executive Director of the Robert Owen Association.

The big issue for Han customers was primarily food safety many Japanese consumers where concerned about food safety and demanded produce free of additives, pesticides and any form of adulteration. This particularly appealed to those living in the new suburbs which often lacked the range of shops consumers wanted.

Members demands where quickly communicated and acted on by managers thereby strengthening customer loyal. By law all customers had to be members so a strong pattern of member involvement from the Han groups to district committees, consumer panels’ up to annual meetings and boards developed.

Also being restricted in their trading areas and restrictions on advertising to the general public forced them to be very close to their members and the communities they served. By the way it is clear from this book that the Japanese know a great deal more about European consumer co-op’s than we do about Japanese ones and seeing ourselves through Japanese eyes is not always flattering.

As a Director of a UK retail co-operative society I was particularly interested in Akira Kurimoto’s chapter on Consumer Co-ops Retail business operations. Like everywhere the retail co-ops are facing intense competition and there has been a downturn in the amount members have been buying from stores driving a consequent downturn in floor space and this trend seems set to continue. However to compensate they have established a dominant position in home delivery indeed individual home delivery seems to be replacing the Han groups.

It is only in the last decade that more intensive forms of federal buying and product development functions have developed and it is hoped this will improve the sectors competitiveness improving quality, product safety and prices.

Considering the debates we have in the UK in developing a consistent national co-operative brand another fascinating chapter is by Deborah Steinhoff who whilst based in the US received her PhD in Agricultural Economics from Hokkaido University and worked for many years for Coop Sapporo and who writes about the development of COOP brand merchandise.

The cornerstone of the COOP brand in Japan was and is the Japanese consumers’ anxiety about food safety and the ‘credibility’ of agricultural products after WWII.
Historically that anxiety was expressed through the Han groups – today the movement is harnessing internet technology to engage members in product development.

The way this anxiety was addressed is through a system known as Sanchoku. This is a sophisticated provenance system providing fresh foodstuffs directly from the producers based on three principles, traceability, standardisation and a direct line of communication between consumers and producers. As the distance between producers and consumers with the growth of more complex larger scale buying arrangements this system has come under some strain.

Despite this consumers still join primarily to buy COOP brand products. Indeed in surveys members say that they value security, safety and transparency as the key issues. These are followed by the fact that members support the concern the movement expresses for the less fortunate in society perhaps surprisingly price was of lesser importance.

The growth of co-op’s has gone along with educating members about food, as issues around food production, health, nutrition, and the environment have also gone into the development of the brand.

The second part of the book looks at the way consumer co-operation has diversified into two other areas, into what are called University Co-ops and Medical Co-ops. There are lessons again to be learned from how Japan has diversified into these areas for us in Europe. The University Co-ops are established on University campuses to supply, cafeterias, bookstores and other services to staff and students. There is perhaps more we can learn from the medial co-ops as the Japanese health care sector has some similarities to our own and the co-op sector offers a particular service.

They seek to challenge the ‘problems associated with asymmetric information’ and as such they are empowering consumers of heath care through “learning and participation and taking on the challenge to create networks for heath promotion and medical and social care in communities.”

The last part of the book looks at consumer co-operation in the wider Japanese economy and society, including the changing institutional framework of co-ops, their role in the Japanese food system, their role in civil society and the way they could play a role in ‘reconstructing the livelihood security system’.

This latter chapter by Professor Mari Osawa, of the Institute of Social Science of the Univesity of Tokyo, looks at unpicking the welfare state to look at welfare government and governance and how co-operative forms could drive participation in community management. These are particularly challenging ideas that deserve a much wider sounding than is possible in this review.

Overall this is a terrific publication which both articulates the issues and challenges facing the Japanese consumer co-operative movement and also offers some powerful insights that co-operators everywhere could learn from.

2012 A Special Year for Co-op's

Everyone in the co-op movement was chuffed when the United Nations designated 2012 as the International Year of Co-operatives. Co-operation has been an international movement for a long time with the founding of the International Co-operative Alliance (ICA) in 1895.
Co-op’s where a key ingredient in the formation of the International Labour Organisation in 1919. The ILO, formed as part of the Treaty of Versailles that ended World War I reflected the belief that peace could only be accomplished if based on social justice.
The first Director General of the ILO was French Co-operator Albert Thomas (ex- executive committee of the ICA) and the Co-op Branch of the ILO was established in 1920.
The 1920 Governing documents of the ILO say that “The Peace Treaty foresees that the ILO should not only be concerned with the conditions of work but also with the conditions of workers. By and large, it is under the organisational form of co-operatives that this concern is best addressed for the largest part of the population. The Co-operative Section will not limit itself to the questions of distribution, but will also research into the question of housing, leisure time of workers and transportation of the workforce etc.”
Sadly before this could be fulfilled the world was plunged into depression and world war. Following which international politics was blighted by the cold war. Unlike the International Trade Union Movement the ICA was not split by the cold war. Whilst this degree of unity was laudable the consequence was the organisation was to be largely ignored by the western dominated UN and it was unable to be firm about co-op’s being independent of the state until it ended.
It is only in modern times then that the ILO and UN have rediscovered the importance of Co-ops to social justice and the global economy. It may be hard to believe but the contemporary global Co-op sector secures the livelihoods of three billion people. There are a billion owner members of co-ops and they directly employ over 100 million workers.
To put this in perspective that is twenty percent more than all the transnational corporations added together. There are also three times as many member owners of co-operatives as there are shareholders in capitalist businesses, as there are only 328 million people who own company shares.
I celebrated the launch of the international year at Birmingham Film Co-op one of many new co-op’s that have sprung up to fill the gap in the market for the distribution of radical films.
The film was The Take. It follows thirty unemployed car-parts workers in Buenos Aires during Argentina’s economic collapse of 2001. They march into their idle factory, roll out sleeping bags and refuse to leave. All they want is to re-start the silent machines, armed only with an abiding faith in shop-floor democracy they face off the bosses, bankers and a system that sees their factory as scrap. What shines through the film, directed by Canadian journalist Avi Lewis and writer Naomi Klein, is the simple drama of the workers struggle for dignity. Importantly this is not just another tale of heroic failure.
Over a decade after the campaign - ‘Resist, Occupy, Produce’ - the Argentine recovered factories movement began there are still 300 factories that have survived as workers co-ops. But co-op’s are not just acts of desperation by workers or small social clubs for radical film goers.
The top 300 co-op enterprises worldwide have a turnover of US$ 1.6 trillion. This - a bigger economy than Spain - is a significant sector in any language and if anything despite being the home of modern co-operation the UK has a lot of lost ground to make up. In Europe, three countries have over half of their population in co-operative membership – Ireland is top with 70%, then Finland at 60% and Austria at 59%. Other countries with the high proportions of people in co-operative ownership are India with 242million and China with 160million. Even the land of free enterprise the USA has a higher proportion than the UK with 120million co-op members.
It was good to see former Labour MEP Pauline Green, now President of the ICA speaking to the UN General Assembly to launch the year in New York where she called for countries globally to provide co-operatives with a “level playing field”.
She said the unique legal and financial framework of co-operatives should be fully recognized in public policy and regulation saying “Co-operatives are asking for their model of business to be given equal promotion with the shareholder model. The diversity and robustness of the co-operative business model is based on principles and values. This is why co-operatives were resilient during the global financial crisis, employing over 100 million people worldwide and enabling the development and welfare of societies in the most competitive economies.”
The strap line for the UN year is, Co-operative Enterprises build a better world. Whilst I am sure that is true, given the state of the UK economy, the crying need is for more co-operation here!