From COPs to coops?

We are all aware of the extreme weather wreaking havoc both internationally and here in the UK: storms, wildfires, floods and drought.

Over the last few years, in particular, we have become acutely conscious of how little time we have left to resolve the climate crisis. It is four years since we were told that we had twelve years to save the planet. For those of us who didn’t excel at maths at school, that’s just eight years to go.

As well as these well-rehearsed climate concerns, it is important to understand how this crisis connects to the broader economic crises we’re facing. We are currently in the midst of an energy crisis where both prices and insecurity are rising.

Crises

Relatedly, we are enduring a cost-of-living crisis as inflation hits generational highs with wages falling in real terms. Bringing these crises together is not simply a rhetorical flourish. We must understand that they have the same root causes in our capitalist economy dominated by profit.

This is an economy where returns for shareholders are the priority and all other considerations –social or ecological – are secondary. Recent decades have seen an expansion of markets into every area of our social and economic lives to further this dynamic.

More and more of our basic needs are commodified and provided by competitive profit-seeking companies. This has been a strategy of consolidating and spreading that profit-based economic system – with disastrous consequences.

These features of our economy have meant we are failing to transition from fossil fuel energy to renewables. Fossil fuels have remained hugely profitable even as their extraction undermines the ecological basis for the civilisation on which they rely.

Where there has been some introduction of green energy, its operation by the private sector has depressed wages, worsened conditions and undermined collective bargaining. Wherever we see even the beginnings of an energy transition, it is decisively not just.

Markets

Our fragmented energy system – as just one example – has been put in the hands of private profiteers. This has driven up prices as profits are extracted at every stage by a variety of parasitic companies.

Those generating energy sell it at inflated international market rates. Transmission is a privatised monopoly and the most profitable sector in the whole UK economy.

The supply companies that we deal with day-to-day put a public brand on this broken system and skim their own profits off the top as they pass on the costs of shareholder dividends reaped throughout the system.

This systematic erosion of state capacity means the UK is increasingly vulnerable to major crises. As well as failing on energy transition, we are left vulnerable to the more and more frequent and severe extreme weather like flooding or drought.

When the COVID-19 pandemic hit, the UK was unable to mobilise a response anything close to the scale of the likes of China which has maintained much greater state capacity.

Transformation

So, we face a series of interconnected crises that threaten not just the long-term viability of capitalism but also of the modernity on which any socialist or cooperative post-capitalism would rest.

I have argued over recent years that we need a transformative response to this. It must be characterised by the mobilisation of every resource at the state’s disposal to achieve the dual aims of rapid energy transition and rebalancing power in our economy.

What does this look like in practice? Whether we call it a Green New Deal or something else, it firstly means mass investment in new industries and technologies like clean energy and home insulation. Crucially, this requires the fiscal capacities of the state as the private sector refuses to invest itself and communities have become so impoverished.

Secondly, it means massive regulation to wind down polluting industries and put the breaks on ecologically harmful activities like fossil fuel extraction and advertising.

This requires the disciplining powers that only the state has to exert control over rogue elements of our economy. Social movements may sometimes perform this function on their own, but too often their power is dwarfed by that of capital.

Thirdly, it also means expanding public ownership across key sectors of the economy most vital to transition. This is the basis of stripping the profit-motive out of our economy and putting people and planet before the narrow interests of shareholders. Again, the state is a necessary instrument for mediating this transfer of economic power from capital to the people.

Profit

By taking profit out of strategically important sectors, we can end the dominance of the market and introduce the possibility of central planning and democratic control to instigate the rapid and fair transition for workers and communities.

Of course, the energy sector should be a primary subject here given its obvious centrality to decarbonisation. But we should also be looking to transform power and ownership relations in other key sectors: food, manufacturing, transport, water, housing and finance.

So, what is the role of cooperatives in all this? My provocation to those who are committed to cooperation is that, while we may have some legitimate organisational preference for cooperatives in terms of how we run our own lives or economies, we should not understand them as occupying any special strategic role in response to the climate and energy crises.

When we think about those key strategic sectors like energy, transport, water and finance it is clear that there is very little cooperatives can do to lead the decarbonisation effort.

In the market system, cooperatives tend to operate with limited resources and are therefore unable to compete with private companies with economies of scale and the ability to take on large debts.

Struggling

This means that cooperatives struggle to scale from within a market, particularly at the pace needed when we think about how fast we must roll out renewable energies.

Significantly, cooperatives competing with private actors also struggle to guarantee workers’ rights. In a market, any firm has an incentive to depress wages and work harder and longer.

We’ve all heard stories of worker-cooperatives treating themselves even worse than their parasitic private-sector competitors, just to pay the bills.

In natural monopolies like the water industry, there is an even clearer imperative for those utilities to be run by the state. Efforts to introduce a cooperative sector within these industries are really efforts to maintain the existence of markets and competition where they need not exist.

In these areas, it is important for the cooperative movement to actively restrain from advocating for a larger sector as it functions to undermine central planning and democratic control.

Expanding cooperatives

Are there any areas of the economy where we can imagine a more interesting and useful role for cooperatives? Of course. There is clearly a role for cooperative housing for those who have a preference to organise their lives in that way.

However, we should be clear that it is not possible to scale housing coops as a response to the housing crisis or to accelerate home insulation without a national scheme.

In food, it makes sense to support cooperatives growing some food and certainly in service and distribution. This could be one of the cooperative sectors strongest areas of growth, but we should recognise the need for significant state intervention to transform our grossly unequal and ecologically damaging food system.

In manufacturing, while there are some products of national strategic importance that it makes sense to keep under national or regional state control, we can certainly imagine a strong role for cooperative management of production of more specialist or artisan products.

In all of these cases, cooperatives face the same pitfalls of market competition if the sector is not expanded in the context of public ownership.

Transition

How do we overcome these limitations, then? What role can cooperatives play in the movement for a rapid and fair climate transition?

We can and should make a positive case for an expanded cooperative sector but it must be in the context of non-market economies with public ownership as the anchor.

Otherwise, cooperatives either function to uphold markets or are doomed to fail to compete.

We should limit our support for cooperatives to the provision of everyday goods and services and support their expansion as part of a national strategy. This would look like drawing on the fiscal capacities of the state to campaign for governments to provide funding for their seeding and expansion.

In this context, they could be used to crowd out private competitors but only as long as they’re properly resourced and adhere to strict employment rules around pay and working-time.

Justice

What, then, should a cooperative movement for climate justice look like? Firstly, it should recognise the strategic limitations of its organisational form of preference.

Cooperatives may be desirable for some, but they do not provide the answers to the crises we face. It is useful to advocate for the principles of a democratic economy and cooperation within national and municipal public ownership. This will be particularly important to avoid the pitfalls of historic models of state ownership.

Secondly, the cooperative movement must embrace its existential dependence on national and municipal forms of public ownership. Contrary to those who pit cooperatives against public ownership, co-operators should argue for these economic transformations as a necessary precondition to the expansion of the cooperative sector.

That means opposing the malign influence of the Cooperative Party in the Labour Party and the cooperative movement more widely, including its consistent promotion of anti-socialist candidates and policies.

It also means sequencing the cooperative movements demands. To achieve the end-goal of a viable and desirable cooperative economy, members of the movement must first join with socialist climate organisers in building power for public ownership and a worker-led economic transformation.

This Author

Chris Saltmarsh is a co-founder of Labour for a Green New Deal and author of Burnt: Fighting for Climate Justice. This article has been adapted from a speech given by Chris Saltmarsh at Ways Forward 2022 on Thursday, 20 October 2022 in Manchester.