Issue 13, Vol 8: 18 July 2011 *In this issue:*
- Building Cooperatives, Building a People's Economy<http://www.ycl.org.za/main.php?ID=40ae4b410095899#one> Building Cooperatives, Building a People's Economy The cooperatives movement in our country remains relatively underdeveloped with significant potential for transforming the economy and facilitating job creation, poverty alleviation and social integration. Many countries have promoted the formation and growth of cooperatives as a means to address societal ills such as unemployment. Cooperatives worldwide have created more than 800 million jobs. They create jobs because members are allowed to pool resources, ideas and capital for collective growth and prosperity. Cooperatives therefore have a distinct employment creating potential that differs from other forms of enterprise. Cooperatives can provide decent work opportunities because they allow members to determine for themselves under which conditions they wish to work. This is of course the extreme opposite of the exploitation of one by another as experienced under capitalist orientated forms of enterprise. Thus cooperatives provide a viable option for decent job creation and the realization of a living wage. Such is the importance of co-operatives in addressing the challenges of poverty alleviation, job creation and social integration that 2012 has been declared as the International Year of Co-operatives. The cooperatives movement in South Africa has a staggered, divided and unequal history of racist development. Prior to 1994 we saw the growth and development of whites-only agricultural cooperatives. Apartheid legislation such as the Land Acts of 1913 and 1936 as well as the Cooperatives Act of 1981 and preceding acts of the Apartheid government facilitated an enabling environment for whites-only cooperatives, especially in the agricultural sector. The post - Apartheid government has since tried to redress the legacy of unequal cooperatives development through the promulgation of key pieces of legislation such as the Cooperatives Act 14 of 2005. However, this has not translated into meaningful and sustainable development in practice. What we have seen is a large number of cooperatives existing only on paper but unable to deliver on the objectives of poverty alleviation, job creation and sustainable livelihoods. Of course it is difficult to promote a more ethical, democratic and socially responsive form of enterprise in a capitalist society based on greed, individualism and exploitation. This however cannot and should stop the advance of the cooperatives movement as it inherently subscribes to a more humane form of enterprise, one that is based on socialist principles and values. The power of human agency and our strong tradition of building mass - based civil society movements are critical ingredients for success. They must however be fully utilized as complementary requisites for intensifying cooperatives development in our country. *Defining Cooperatives: Identity, Principles and Values* The International Cooperative Alliance (ICA) is one of the largest NGOs in the world with permanent observer status in the International Labour Organization. This is a clear indication of the significant power and size of the cooperatives movement internationally. The ICA defines a cooperative as "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations, through a jointly owned and democratically controlled enterprise." Cooperatives are enterprises that operate under values of democracy, equality, equity, solidarity and social responsibility. It is a form of enterprise that cares about its members and their communities. Members in a cooperative work together, invest together, negotiate together, innovate together and grow together. Individualism does not feature in cooperative enterprise. Cooperatives demonstrate on a daily basis the principle of concern for people whether it be by addressing environmental issues or strengthening the capacities of communities to meet economic, social or cultural needs. Societies are increasingly confronted with rampant unemployment, environmental degradation, the need to focus on socio - economic realities quite often at the expense of human values. Cooperatives provide a human face to development. As such, they contribute to addressing many of society's most pressing issues by putting in practice the principles of voluntary and open membership, democratic decision - making, member economic participation, cooperative autonomy, education and training, cooperation and concern for community. Any surplus is shared according to the participation of members in the cooperative. In a cooperative, assets are indivisible. When you leave as a member you leave with your initial share contribution. Assets are jointly owned and not linked to member share contributions. Fundamentally, cooperatives instill a very different set of political and economic principles and values in the mindset of the member. Principles and Values not based on greed, individualism, inequality or survival of the fittest. They are in fact based on a complementary set of socialist principles and values of equality, democracy, member or worker solidarity and collective ownership and control. *The International Experience* How proud the Kenyans must be to know that 31% of their national savings is in the hands of cooperatives, owned and controlled by the people themselves. Today the Kenyan economy is driven by cooperatives and tourism. It is said that 85% of diary products in Kenya are produced by cooperatives such as the Kenyan Cooperative Creameries Ltd. Some academics even argue that if cooperatives in Kenya had to pull their monies out tomorrow, the entire financial economy of Kenya would collapse. Here's a country that even has a Ministry for Co-operatives. That's how seriously they consider cooperatives. That's how important and powerful cooperatives are in a country that is considered to be the powerhouse of East Africa. Bear in mind they have just as many challenges as we do but at least they are transforming their economy into one they can truly call their own. I'm reminded of the Mann Deshi Mahila Co-op Bank in India. It was established in 1997 by a group of 700 women in the predominantly rural province of Maharashtra, India. The aim of the co-op bank was to empower rural women by providing them with a means to save and obtain loan finance to improve their lives and ultimately their villages. So the women needed small loans as well as a place to save small amounts of money that big banks could not or would not provide. Each woman saved for 120 rupees (approximately R27) and got an equal share of 120 rupees in the co-op bank. These were women who were not even earning 80 rupees (approximately R18) a day. Today this co-op bank has more then 125 000 women who are equal members and have an equal share in the ownership of the bank. Is this not ownership and control by the proletariat? One characteristic most striking about this co-op bank was the expression of co-operative values in the very design of their products. Products are designed to meet needs, not for maximizing profit. Perhaps someone may need a loan for medicines, maybe for grain containers maybe even for food, all of which was perfectly catered for by this particular co-op bank. *Making Cooperatives work for a Peoples' Economy* Coming back to our own context, one could argue that our bourgeoisie banks are more concerned about charging interest and making a profit then providing for peoples basic needs. I remember the case of a poor health worker who was a member of Nehawu and needed a loan for R4 500. She went to one of our banks who agreed to grant her the loan provided that she repay it over a period of two years with interest. She of course agreed due to her circumstances which almost all workers face on a daily to monthly basis - being unable to provide basic necessities like food and clothing for her children on a meager wage. What the bank conveniently failed to explain to her was the terms and conditions of the loan agreement which just so happened to be bourgeoisie robbery at its best. Taking advantage of her situation the bank charged her a mindboggling 50% interest, which they would never have charged a more affluent client. This left her with almost R9 000 to pay after the two year term was over. Of course she never bothered to ask or even question the loan agreement because she needed the money for basic necessities. The matter was taken up as it was not even legal to charge such interest rates. The question is how many more have been exploited for profit without recourse. Well I suppose we can expect such crimes from a bloodsucking bourgeoisie banking industry under the lure of profit maximization in a capitalist world. Capitalism - the exploitation of one by another. The aim of any society should be to organize production in such a way that people are happy and comfortable. Cooperatives provide a vehicle for achieving this aim. Compare the Mann Deshi Mahila Co-op bank or the Kenyan Co-op banks to any of our big four banks and you will see the difference in values, aims and objectives. No doubt which of those lead to the transformation of the financial sector and the building of a more humane society, a Socialist society. And this is only the financial sector we talking about. To facilitate the development of cooperatives especially amongst young people requires first and foremost the political will by government. In this respect, significant progress has been made in stimulating the cooperatives movement at the legislative and policy level. The promulgation of new cooperatives legislation in 2005 has seen a significant rise in the registration and activation of a great number of cooperatives. On the ground a lot has been learnt through understanding the role of communities and their specific needs. The Mtubatuba Poultry Cooperative project facilitated by the NYDA has churned out ground breaking knowledge and information about poultry cooperatives in particular and cooperatives in general. Price determination and facilitating economies of scale seem to be critical in ensuring sustainability of agricultural cooperatives in particular which of course is the largest and fastest growing sector in cooperative enterprise. Too often young people are not aware of the cooperative model of enterprise. They do not learn about cooperatives in school as cooperatives often do not figure in the school curriculum. The country does not have institutions that can readily accommodate the training needs of cooperatives. Most academic institutions do not have a Department of Cooperatives that provides training interventions for cooperatives. The University of Zululand and the Institute for Cooperatives at the University of Fort Hare are the two institutions of higher learning that stand out with an academic department devoted to cooperatives development. We must advocate for a change in the basic and higher education landscape to incorporate curriculum on cooperatives to create more awareness and knowledge on this alternative form of enterprise. By so doing we will be able to generate more interest and research on how best to utilize this form of enterprise for job creation, poverty alleviation and social integration. *Building Cooperatives for Socialism in our Lifetime and Communism in the Future* Communism comes from the Latin word *Communis* for "common". According to Lenin, "communist society is a society in which all things - the land, the factories - are owned in common and the people work in common." To own in a cooperative is to own in common, to work in a cooperative is to work in common. We must as communists see cooperatives "as an instrument to resist private capitalism and develop a new economic system - that is, to prepare the conditions for Socialism." In a speech given by Mao at the Conference of Cooperatives in 1944, he argues that "cooperatives must help in the development of our economic life, our social life, our education……using the initiatives of the masses of the people to supplement the activities of the government." Thus cooperatives can never be seen as purely business entities designed to make profits. They first and foremost have a developmental character subscribing to more humane principles and values as opposed to the winner take all, survival of the fittest mentality underpinning capitalist entrepreneurship. Mao was convinced that cooperatives can break down the traditional system of individual economy. He argued that, "This scattered, individual form of production is the economic foundation of feudal rule and keeps the peasants in perpetual poverty. The only way to change it is gradual collectivization, and the only way to bring about collectivization, according to Lenin, is through cooperatives….."(Mao, 1944) It is quite clear that revolutionaries such as Mao saw a necessary role for establishing and sustaining cooperatives as a means of destroying the capitalist foundations of production; as a means of freeing the peasants and the working class from the exploitative nature of the individual private-property economy; as a means of enabling the peasants and the working class to use their labour power, tools and machinery more effectively; as a means of permitting economies of scale; as a means of stimulating worker enthusiasm; as a means of developing the social, political and educational aspects of life; as a means of crushing the capitalist system of economy, as a means towards Socialism first and then towards a classless society, a Communist society! *Yershen Pillay* *YCLSA National Chairperson* -- Venceremos -- You are subscribed. 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