As Nick Clegg calls for a "John Lewis economy", ResPublica Fellow Ed Mayo looks at co-operative ownership around the world
Do you get long emails from occasional people with an outpouring of views? On Facebook, it might be about a relationship or a cause. The ones I get are rather more dry, often about business and economics.
Shann Turnbull, who is one of the great advocates of economic democracy, recently sent me his text which is a different take on markets and capitalism. "Many people think that capitalism is defined by the existence of markets. But markets exist in primitive, feudal, fascist and socialist societies. Capitalism is better described and identified by the existence of private negotiable property rights." He goes on to say "Ironically, the biggest problem with capitalism is its ability to eliminate, frustrate and/or distort markets."
If Shann is right, then who owns things and on what terms becomes the core to how systems work. There is a growing sense that, given the acute inequalities that markets are now generating, getting the economy restarted (the Treasury focus not unreasonably at present) is only half the story. If you restart the same economy, you get the same problems, as night follows day. A second central economic policy issue is therefore how to widen the distribution of ownership and prosperity. It is what I call an agenda of creating mass ownership.
After some initial work I did comparing the numbers of people who own business in the UK, I have completed
research which I think it is the first statistical analysis to compare co-operative and conventional business ownership worldwide.
All the proper qualifications you would expect for this kind of analysis apply, but the findings are fascinating.
There are three times as many member owners of co-operatives as individual shareholders worldwide. There are 328 million people who own shares, compared to 1 billion who are member owners of co-operative enterprises.
Only 7% of the world population lives in countries that do not have stock markets. The country with the widest shareholder ownership across its population is Japan (31%). In Japan, this has doubled over the past two decades, whereas in the UK, individual share ownership, compared to other institutional investors, has halved.
In the fast-growing BRIC countries (Brazil, Russia, India and China), there are four times as many co-operative members as direct shareholders. 15% of their population are co-operative members, compared to only 3.8% who are shareholders.
Some of the other conclusions that emerge from the data are:
1. There are three countries with over half the population in co-operative membership and are all in Europe. These are Ireland (70%), Finland (60%) and Austria (59%).
2. The countries with the most significant numbers of people in co-operative membership, however, are predominantly in Asia and the Americas. These are India (242 million), China (160 million) and the USA (120 million).
3. One in five people across the Americas, North and South, are a member of a co-operative. In Africa, one in thirteen people is a member of a co-operative and there are six times as many co-operative owners as there are shareholders.
Of course, as evidenced in global entrepreneurship surveys, there is also a very significant dispersed ownership worldwide across a variety of non-listed enterprises, family firms and micro-enterprises. The numbers in money terms may sound small even so, in comparison to the trillions turned over daily by hedge funds on the back of the future value of listed companies. But the numbers of people with a stake in diverse models of business ownership (and economics always has to remind itself that the fundamental unit of concern is people not money) is astonishing.
Such diversity is a strength. As Jacquelyn S. Yates, who reviewed national frameworks
for social ownership many years ago commented “there appears to be no limit to the inventiveness of humans in constructing formal institutional arrangements for collective ownership. Nor do they hesitate to adopt confusing terminology, calling the same idea by different names, or different structures by the same name.”
Mass ownership. It is a different way of looking at how to go.