PANHELLENIC UNION OF SOCIAL ECONOMY PARTNERSHIP “DISTINCTION OF SOCIAL COOPERATIVES”

PANHELLENIC UNION OF SOCIAL ECONOMY PARTNERSHIP

“DISTINCTION OF SOCIAL COOPERATIVES”

The question

The key question of the conference is "whether all cooperatives should be considered to be institutions of the social economy and belong  to the same associations". The answer can not be unambiguous because all cooperatives have different goals. Some serve the interests of a particular group of producers or professionals exclusively for  their members, while other interests of the wider community.

There are profit-making cooperatives aiming  to maximize the profit of their members and others aiming at lowering the prices of goods for the benefit of consumers and users. In addition, some forms of cooperatives are virtually represented as cooperatives, while in fact they act as private companies.

In the first case, we have cooperatives operating in terms of market (co-operatives of private owners) and in the latter, cooperatives where part of society attempts in a shared space (land, factory, internet etc.) with the main purpose is securing revenues to members , its employees and cheap services to the community.

The second category develops with more social features, especially after the great recession. In Europe and Greece, we have many forms of cooperative entrepreneurship, hence separate legislation. This is why in our country the relevant policies are shared in many ministries (Labor, Environment, Rural Development, Health, Infrastructure, etc.). While efforts have been made, there seems to be real consolidation difficulties both in the institutional framework and in the policies.

The view that "cooperatives must all operate on the basis of the 7 cooperative principles" does not mean that their social character is ensured, as there are differences in their economic nature. For example, an energy partnership involving the entire local community is not the same as a cooperative of a group of 7-10 partners that manufactures eg soap. A health service co-operative  involving disabled people differs from a small-scale cooperative of accountants or lawyers.

Traditionally cooperatives were a way of survival for small and medium-sized businesses, pooling money available to buy raw materials and products with discounts, and reducing their operating costs by preserving common economies of scale. But in their development, many of them became regular shareholder private  companies and were cut off from their original destination. Of course, every form of entrepreneurship is acceptable and can contribute to the sustainable prosperity of society, but it does not have the same social impact or the same social benefit.

The difference

It is therefore necessary to distinguish between private / commercial forms of cooperatives and social cooperatives.

It is also necessary to distinguish between NGOs operating as private companies with hundreds and thousands of employs  on the one hand and civil society organizations that are characterized by volunteering and the social capital they make up.

Unfortunately, in our country, rural and urban commercial co-operatives collapsed and denied co-operation because they functioned as private organizations, and many big NGOs defrauded volunteering, resulting in general deprecation. Here, a substantial study of the phenomenon is needed to encourage new investment in space. A new law does not solve this problem.

Collaboration

"Today, more than a billion people are members of cooperatives,  one in seven inhabitants of the Earth. More than 100 million people are employed by cooperatives, or 20% more than workers in multinational corporations. The three hundred largest cooperatives have an equal number of members with the tenth country in a population in the world. In United States and Germany one in four is a cooperative member. In Canada, four out of ten inhabitants are members of cooperatives. In India and China, four million people belong to cooperatives. In Japan, one in three families is a cooperative member, and in France thirty-two million people are involved in cooperatives. In the United States there are 29,000 cooperatives, with one hundred and twenty million members, and they have 73,000 business locations across the country “J. Rifkin”.

There are two main reasons for the increase in co-operation, especially after the 2008 crisis.
1. the gradual shrinking and withdrawal of the welfare state;
When the state began to withdraw, private charity tried to fill the gap by funding non-profit initiatives, but the funds available to the communities were scarce in comparison to government revenue. Trapped among an increased social burden but with reduced revenue to meet the critical needs of the community, non-profit organizations began to look for new business models that could match their primary mission and provide a complementary source revenues for the operation and expansion of their services.
The prospect of an exemplary model that can reduce the marginal cost close to zero, makes private enterprise less effective because its survival depends on maximizing profit. Cooperatives are therefore the only business model that will be able to function in a society of virtually zero marginal cost.
Thousands of electricity and green energy cooperatives are emerging in communities around the world, laying the foundations for a shared energy sharing through regional and national distribution channels. In European Union, more people invest in cooperatives than in the stock market.
2. The rising technological unemployment.
The second reason that forces societies to go in this direction for "TECHNOLOGICAL UNEMPLOYMENT" that is plagued over Greece and Europe and the world, and it continually shrinks the tax base of wage earners and small and medium-sized enterprises by limiting state and municipal revenues. This is a major overthrow of the economic perception and practice that is taking place globally, and the doctrine of its tax-paid labor that has flourished for a century.
This was not always the case in the economy. The 1920 tax state held between 10% and 15% of GDP in Europe and America. Today, while the average is approaching 50%, it can not cope with unemployment and adequately cover the needs of the welfare state. In Europe, governments and municipalities have perceived new trends in the economy, and for this reason we see increasing energy cooperatives, cooperative banks and social enterprises with the involvement of Local Government.
Social and labor cooperatives emerged as a new hybrid in the post-industrial era of rising technological unemployment and the need to fill the gap left behind by the shrinking social state. The key is to invest in social enterprises that are not profit-oriented but offer new jobs, in other cases supplementary income and other reduced social service costs.

The alternative way

The alternative way of enhancing social services in municipalities is as follows:
• development of social economy for new jobs and new services,
• reducing the cost of services offered,
• activation of inactive material resources,
• saving funds due to reduced bureaucratic costs and services that can be digitized to make it accessible to citizens via internet, at no cost.
With this approach, we see a growing demand for social, energy and consumer cooperatives to reduce transaction costs (quintessence of the social economy) and supplementary incomes for households.
We could characterize these cooperatives as “post-capitalist”, in which whole communities that form social capital are activated.

The answer to the question

The question therefore, "Why don’t  all cooperatives belong to the social economy of whatever form" is answered by the participation of consumers and users in social business.
Law 4430/16 has correctly instituted discrimination based on participation and social impact and rightly limits the recruitment of non-partners to social enterprises, otherwise it would be like recognizing as a social enterprise any cooperative that operates privately and economically.
In addition, the agricultural cooperatives enjoy special privileges from the Ministry of Rural Development and obviously it is not fair to claim the privileges of the social and labor cooperatives of Law 4430/16. Adopting a positive law certainly does not offset the political planning deficit and the lack of resources to strengthen social cooperatives.
Therefore, what matters for Greece is to rebuild the credibility of cooperatives with the creation of new social capital and to have investment policies in this direction and synergies with the Local Government which  need the services of the social cooperatives.
PESKO has taken similar initiatives in this direction to the proposal for SOCIAL PARTNERS in the framework of "Local Social Partnerships" aiming at exploiting the inactive resources in buildings and farms, which can not be used by expanding paid employment with more municipal employees,  but through social cooperatives. The central objective of the project "Synergies of Social Cooperatives with Local Government and Civil Society" is the creation of jobs based on social entrepreneurship, which can be developed with synergies of Employee Cooperatives with Local Government and private entrepreneurship.

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