This thread was forked from the Ways Forward 7 thread
Well yes social enterprise includes some coops and on the continent social enterprises are usually coops in law or practice. This is an old argument now. But it illustrates why sticking to ICA principles is crucial.
I have some thirty years experience in this field. no room to describe it all here. It is not only from my life in worker coops. Im interested in the practical application of laws and principles and not as much in academic classification or theory.
There is a distinction between US/UK style social entrepreneurships and cooperative or democratic social enterprise. This is much clearer in european circles than here in the US infected UK. There was a fear of social entrepreneurship capturing the minds of the European Commission in preference to cooperative social enterprise or coops (as happened with New Labour.) I was able to divert the thinking of the commission along with Italian comrades back onto the coop path (to the anger of the British government of the time). In those presentations I stressed the democratic governance dimension, and its lack in most definitions of social enterprise.
In many countries eg Germany, coop law is so restrictive that new starts often opt for another legal structure and call themselves social enterprises instead. Americans get even more confused. They have 47 variations on coop law. Its just easier to be a generic 'non profit'. But that means there is no control over the most important quality of coops/social enterprises, democratic control by their members, users and workers.
Social enterprise is a badly defined term if you look at it using the dimension of democratic control. Seemingly identical SocEnts eg HCT and ECT, can be effectively a consumer coop on one hand and chief exec and board dominated on the other. In European forums people agree. In the UK Soc Ent people dont want to know.
In the early days of Soc Ent in the UK it was democratic. John Pearce took the ideals of community business development plus the rigour of for profit business development and added democratic control by the beneficiaries, which was a radical departure from paternalistic charity and chaotic community businesses. (As a councillor I spent much of the late 80s closing down publicly funded community businesses that only benefited their leaders.)
And early Soc Ent conferences were full of enthusiastic activists eager to convert their local economies into democratic economies. It was an exciting New Cooperativism but it didnt last.
Without the rigour of ICA rules a definition of social enterprise was agreed with New Labour ministers from which democratic governance had been deleted. I protested at meetings with ministers and senior civil servants and realised they didnt care.
This enabled people like Liam Black to run furniture recycling projects pay himself a huge salary and play Mr. Social Enterprise UK because there was no democratic oversight. All over the UK voluntary sector managers who previously were paid local authority level wages turned their organisations into Soc Ents and the CIC legal form (a fraudsters charter in effect) enabled this, and paid themselves hugely inflated salaries. The activists disappeared from Soc Ent gatherings to be replaced by suited CEOs. My habitual presentation to Soc Ent conferences to 'sack your chief exec and do it yourself' was longer received with enthusiasm but sullen glares.
New Labour was at home with these people and threatened by radical cooperators. Patricia Hewitt, Peter Mandelson, Tony Blair, I met all of them. As Cameron later said, Social Enterprise was highly paid jobs for the children of New Labour.
This is why social enterprise is a dangerous diversion (and why employee ownership is as well). Without the rigour of ICA principles (all of them, not pick and choose those that suit) the players, parasites and predators have always and will always easily divert public and collective capital into their own pockets.
If an enterprise is not democratically controlled by its beneficiaries, no matter what it is, it is part of the world we must undermine and replace if we are to survive.
Democracy, the best we can get, is everything.
Thanks Bob. This really is a fascinating subject. Based upon experience, my knee-jerk reaction to any 'social enterprise' is suspicion as to the real motivation, as opposed to what it says in the mission statement. Much like so many charities, social enterprises can very often, regardless of how well intended they may be, only serve to perpetuate the problem they seek to address. Of course there is a huge danger of over simplifaction here, but nonetheless, everything I have read over the last few days has reinforced my conviction that the coop sector will only flourish by accentuating & promoting its uniqueness & will suffer by passively allowing that uniqueness to be diluted by accepting that it sits comfortably under the social enterprise umbrella.
a little over 15 years ago, when the UK government published it's first national strategy for social enterprise (and everyone started to get excited about this shiny new world), I was unsure where the overlaps/divergences might be with coops.
Rather than take a political, policy, legislative, legal structure, governance models approach, the one thing both seem to have in common is that they're both an incredibly diverse group with regards to all the above themes. However, my ideas was that they can be identified as a collective whole if we define them by their shared and defining values.
When you set them out side by side on this basis, with the sometimes exception of democratic control and accountability, there would seem to be more in common than difference?
Agreed, and something I always encourage (aka "The Manual") but I'd go further and say the Members themselves could write the plain language commentary. In doing so, they learn and understand their own Rules.
Which is what Radical Routes do with
it's rules RRFM14
Principled cooperation is distinct from social enterprise and commercialised charity, because it’s a praxis of collective self-help. It’s closest cousins are worker unions, mutuals and and interest-based associations. As an ideology, social enterprise hangs entirely on neoliberalism’s project of social atomisation/dumping and deepening the penetration of markets into basic aspects of life.
We are totally fed up with this bollocks, misinformation and downright lying,
The Memorandum and Articles of Association of Social Enterprise London show that Calverts Press (who you worked for Sion) and Computercraft (who Rory Ridley-Duff worked for) were subscribers at its incorporation along with members of Poptel, and Several Cooperative Development Agencies (including Hackney, Camden).
We (worker coops) created the most influential UK social enterprise agency to fuel and develop cooperative and common ownership social ventures. It spawned the Social Enterprise Coalition (which was registered by the Cooperative Union) and created the Social Enterprise Journal.
Neoliberalism has certainly influenced changes in approaches to social enterprise policy in government circles, but this came later (about 5 years later). Social enterprise (in the UK) was a challenge to neoliberalism, not inspired by it. These are the facts in the ground however much you want to rewrite history to distance cooperatives from the outcome.
Please be honest about this history and stop misleading people about the cooperative connection to the UK social enterprise movement. You might wish to disown our history, but we do not because of the direct line in that history that opposed government imposed (neoliberal) solutions and led directly to the FairShares movement gathering supporters in many counties. Multi-stakeholder solidarity cooperatives are not instruments of neo-liberalism.
Ouch! I'm not sure this comment fits with the 'safe space' concept... or that the naming specific people is quite appropriate without revealing who the individual writing as @fairshares is... ? Perhaps you might like to identify yourself?
I'm clearly less informed about the specific history of SE vs Co-op but agree with the sentiment that any self-proclaimed social enterprise can make itself look and sound like it's doing something cooperative / collaborative / sustainable / good for the planet whilst actually acting exactly like a hardcore neoliberal extractive corporation.
AFAIK there are no specific principles that a SE must subscribe to / can be judged against, wheres co-ops have very specific and long-standing principles, which makes them superior in terms of ethics, accountability and also as a vehicle for encouraging a more equitable world. SEs, on the other hand, I see as fairly useless in this respect. I'd also classify B Corps in the same, fairly useless, category.
Here's hoping the conversation can stick to productive debate going forward ;)
I own my involvement (and that of Calverts, and others in the coop movement) in helping legitimise ‘social enterprise’ in the late 90s, even if many of us, with hindsight, realise we fucked up massively. It seemed smart at the time, but not everyone was taken in even then. Neoliberalism had been in the ascendant for 15 years, and New Labour was a paid-up passenger on the bandwagon. We were acting from a place of weakness. I don’t blame coops for identifying as social enterprises when it suits them; also, of course, some community businesses identifying as social enterprises are more democratic, open, inclusive or independent than some coops. Some of my best friends call themselves social entrepreneurs. But social enterprise, as it manifested in the UK, mystified both the problem and the remedy, and if you’re not earning from that, you’re paying for it. That’s the truth. 😜
CAN rejects the notion that co-operatives are a type of social enterprise on two grounds:
1. The word “social” in social enterprise refers to a society outside of the organisation but in a co-operative the society is internal to the co-operative. Social enterprise is more akin to the charity sector than it is to the co-operative movement because its beneficiaries are non-members.
2. Any organisation can call itself a social enterprise but if it wants to substantiate that claim it must do some reporting on its social impact or, at least, its social output. If a co-op does not do social accounting and reporting it is no more a social enterprise than any other enterprise that doesn’t.
Therefore our Mission Statement refers to “assisting co-operatives and social enterprises” and not “assisting co-operatives and other social enterprises”.
We think that co-operatives and social enterprises are different types of social business.
Of course, a co-operative can be a social enterprise and that is what CAN is trying to be.
We want to develop social impact measurement from a co-operative perspective. Conventionally, the unit of measurement of social impact often relates to the individual. So, for example, a programme that delivers health benefits will measure the number of people whose health is improved by the social output of that programme and a training programme will measure the number of people successfully trained. But is “social” an appropriate word in this context? Societies may or may not be created or improved by these impacts, and even if they are, that is not what is measured. A count of the number of beneficiaries of a programme is not a measure of increased social cohesion or the resilience of communities. Thus, what is usually referred to as “social impact” is not really social impact, it is an aggregation of individual impacts.
The forces that bind people together and create societies are not so easily measured. The most important of these is the holistic principle that the whole is greater than the sum of its parts. This is the fundamental principle behind co-operatives. People do not form co-operatives just to get economies of scale. They do so because they know that by working together and pooling their resources they can achieve much more than they can by working alone. This is the basis not only of co-operatives but of all civilisation.
By focusing on individual (more easily measured) impacts, co-operatives (and social enterprises) risk becoming wedded to an understanding more akin to the charity sector than it is to the co-operative sector. Like a charity, a social enterprise sets out to improve the lives of individuals external to that organisation. Despite its name, the social enterprise movement does not explicitly seek to create or improve social cohesion. That is not to say that it does not have that effect, just that when it does, that is not what is measured.
Sometimes, what is recorded as positive social impact by charities and social enterprises actually reduces social cohesion and resilience when, for example, communities or individuals become dependent upon the continued provision of free or subsidised food or money.
Happy co-operative new year everyone.
CAN is certainly entitled to define for its own purposes its position on social enterprise. The issue - for this thread - is that CAN (according to my research with Mike Bull - published in 'Understanding Social Enterprise: Theory and Practice') is that CAN only formed in 1998. That is 18 years after Beechwood College in Leeds started teaching social enterprise courses, and 17 years after 'social enterprise' was first defined by cooperative movement members in the UK through the first edition of the Social Audit Toolkit.
Furthermore, the author of the toolkit (Freer Spreckley) went on to form a partnership with Cliff Southcombe (Social Enterprise Partnership). They ran a conference in 1994 to develop an operational definition of social enterprise for international work (still 4 years before the formation of CAN, and before the US discourse hit the UK).
So, while CAN can contribute to an expansion of the use of the social enterprise, it does not, and cannot, claim credibility as the body that defines the term for everyone involved the field. It is counter-productive form them to do so.
The FairShares Association works from the original definition operationalised in the Social Audit Toolkit, developed by the Social Enterprise Partnership, then Social Enterprise Europe and now Social Enterprise International. The FairShares Association (through the FairShares Model) has helped to maintain a fully cooperative and mutual (not charitable) definition of social enterprise alive.
CAN can reject (or limit) cooperatives within its own sphere of influence using its definition, but the FairShares Association values the enrichment of both members and beneficiaries through a single enterprise system comprising cooperatives and mutual societies.
Lastly, on your point 2), social impact reporting (however good it is) is not sufficient to claim credibility as a contributor to the social enterprise movement because social impact occurs whether it is reported or not. There are a sufficient number of studies of cooperative/mutual networks (particularly in Italy and Spain, but also by researchers in the ICA and UN) that provide evidence of the social impact of cooperative networks as an ecosystem.
The one I always use to rebutt your argument is David Erdal's PhD. He successfully argued (and was later supported Ash Amin's studies) that cooperative networks deliver consistent economic, health and welfare improvements across entire communities without the need for the formation of charities (or philanthropic organisations). On that basis, there is no credible rationale for excluding cooperative from the field of social enterprise because their joint action through the cooperative ecosystem creates the better quality of life that is the goal of the movement as a whole.
In summary, and I reiterate for those who did not read my earlier post, the most credible way to approach the study/definition of social enterprise (and to understand the cooperative contribution to it) is to accept that actors from the private, charitable and cooperative/mutual sectors have each (at different time and in different places) set out their views on what social enterprise is (in an attempt to capture the space).
The academic community - particularly the 450 members of the EMES International Research Research - accept all three of the above as legitimate parts of the field.
I urge other, including those in this thread, to roundly and robustly reject attempts by one 'wing' of the social enterprise movement to attempt hegemonic control over the definition that might usurp and undermine the work of others in the movement.
Rory - here. I've written to Mark Simmonds to explain why the comment came across as anonymous - the account being used in this group is firstname.lastname@example.org (the admin account of the association) and not my own account. I was originally invited as email@example.com but on changing the account email to firstname.lastname@example.org it is less clear who is posting.
Sion - thanks for that response. The double-edge of the initiative of co-operators from the late 1970s to late 1990s was to reopen the space for a wider discussion of cooperative action (through the medium of social enterprise), and on that level the space has opened up beautifully. At the same time, the ambiguities in the language opened that space up to many non-cooperative actors too, and after the Community Interest Consultation (under the New Labour banner) they became ascendant in the UK. Nevertheless (as I hope you will read shortly in the Social Enterprise Journal) the challenge to the neoliberal wing of the social enterprise world has carried on as an underground movement, and is now gathering momentum again gloablly.
I'll respond to the CAN post separately as that needs a separate response. If someone can invite email@example.com to this group, the posts will be personally attributable again.
Similarly, I've seen co-ops rely on secondary rules and ignore the governing document. The Secondary Rules are amended to reflect changing member needs/desires. In more than once case, on inspection, some secondary rules contradicted the governing document.
Thanks for clarifying that was you Rory - I think only Admin's can invite your other email address.. and I'm not an Admin here.
I'm certainly learning more co-op history here though ;)
Well, I had the pleasure of free funding from a multi-national bank to get a degree in "social enterprise" and it soon became clear to me that the term was basically ideological, tied to the neo-liberal project of remodelling charities and the community sector along the lines of existing business practice and encouraging a revival of the notion of the middle-class entrepreneur as hero, as put forward by Joseph Schumpeter. I do not believe that"fairshares" constitute a "Silent Revolution" any more than the concept of "A fair day's wage for a fair day's work" threatened the continued development of capitalism. But that's not to say that I reject multi-stakeholder co-operatives, indeed I am a member of one I set helped set up. But this is basically an accommodating survival strategy –as Sîon says – from a position of weakness in a world dominated by capital.
(P.S. I did actually write this before reading Rory's post above!)
The one I always use to rebutt your argument is David Erdal's PhD. He successfully argued (and was later supported Ash Amin's studies) that cooperative networks deliver consistent economic, health and welfare improvements across entire communities without the need for the formation of charities (or philanthropic organisations). On that basis, there is no credible rationale for excluding cooperative from the field of social enterprise because their joint action through the cooperagive ecosystem creates the better quality of life that is the goal of the movement as a whole.
I urge others, including those in this thread, to roundly and robustly reject attempts by one 'wing' of the social enterprise movement to attempt hegemonic control of its definition and usurp and undermine the work of others in the movement.
'All society rules assume an authority hierarchy'. Really Bob?
. If final decisions are one member one vote, where does the authority rest, how does it manifest?. What can be done at the outset of a new coop to guard against hierarchy?. Is it a constant battle?. Maybe it''s the main battle that defines society.
Not sure who supervised your degree but they have clearly steered you away from a large body of literature on social enterprise that explores its cooperative heritage and mutual roots. On FairShares, there are a large number of much more recent (and much stronger) publications than ‘Silent Revolution’ (which was written pre-PhD, 16 years ago). See the following pages:
That is also my experience Bob, but I see it as a problem in an organisation that seeks to evolve and be accountable to its members. I'm a great believer in self-organisation (do-ocracy) where groups of people come together, negotiate as they work and get on with the job - I saw it work many times in direct action camps and free festivals.
However, once the "Rules/Culture" have been negotiated, it's worth writing them down so:
* new people can refer to them
* they can quickly resolve disputes
* they can prevent the same conversation happening every year
* the Rules can adapt to change in a way that is agreed across the organisation and is known across the organisation.
It's also worth introducing new people to how stuff works - the internal governance. My experience as a new member at a large worker co-operative, many years ago now, was that I had to absorb how things worked by osmosis. I never really understood the governance properly (despite engaging with it) until I left; at which point I became quite a fan of the way it was organised. What was missing at the time was a link between how members thought it worked and how it actually worked.
There's an important balance to be struck between what we might call the cultural governance and the formal governance - the "Rules". I've been into many co-ops (not just worker co-ops) over the years where there is some form of block or crisis and I have often been able to help resolve that simply by pointing out that the Co-ops Rules have anticipated such a situation and "this is what your Rules say to do" - smiles all round and either "oh that makes sense" or "no that's not what we want to do" and so we work with the co-op and change the Rules. It has been my repeated experience that these crises arise in the vacuums where people aren't sure what should happen and fill that vacuum with "custom and practice" or their own guesses around "natural justice", or "what x told me".
Whatever the game you are playing, it's useful to have a rudimentary knowledge of the Rules. The Loomio platform we're using was created to facilitate large numbers of Occupy activists to come together and agree a written manifesto.
CAN (as in Co-operative Assistance Network Limited) was registered in 1989 as the first non-geographical co-operative development agency in the country. You may be confusing us with different organisation with a similar acronym (not that that makes any difference to any definitions). Our founder members were experienced co-operators, they knew what they were doing and what they were talking about, our current members even more so.
Societies Rules don't have to assume a heirachy. We have managed
to get rules passed the FCA that have no board and are managed by
general meeting, using consensus apart from the rare occasion when
you have to vote. RRFM14 does exactly that.
The view we have forced the FCA to have is that, the law specifies
that your rules must include provisions for the make up of the
board "if you have a board", but not that you must have a board.
I only know of a set of housing co-op society rules and worker
co-op company rules that are managed by general meeting, but we
could write a non-heirachical set of worker co-op society rules if
Hi @fairshares I think you have have confused CAN the worker co-op (I was once a member) formed in 1989 - and short for Cooperative Assistance Network - with CAN the social enterprise mob, managing lots of assets and funds, formed in 1998 :slight_smile:
Thank you both - you are right, I thought CAN stood for Community Action Network. Tell me more about the Cooperative Assistance Network. FairShares is not geographical either (we have around 170 on a Loomio group members from all over the globe now, and 1,400 on our mailing list - all built through word of mouth contact). Most activity, however is offline in specific enterprises creating infrastructure or local pilot projects and networks in the UK, Croatia (3 locations), Germany (2 locations) Hungary and Netherlands, with further (university-led) funding to link to sub-Saharan African universities. There are early adopters (actual enterprises) also in the USA, Canada, Ireland and Malta.
We’re consolidating contacts from different supporting organisations and now have a Hubspot database of around 5000 that will need several months to clean properly (with the goals of sharing it with members as a commons resource).
How can we work effectively together?
Thanks for that, Rory, however, I never done a PhD and I find your suggestion that I have been "steered away" from anything quite unwarranted. In my working life I have been involved in the co-operative movement since the seventies and am familiar with the debates which have been going on for decades, even before then.
Fabian - the comment was based of what you concluded from your degree programme, and was directly at your course, not you. Did your tutors use, or recommend, my textbook (it has been adopted by more than 50 universities worldwide)? It starts with an analysis of the Mondragon Cooperatives as an exemplar social enterprise, and has extensive discussions of employee ownership, cooperatives such as Loomio, as well as associations, social business, charitable trading and the FairShares Model. It is the most coop friendly textbook on social enterprise by far, and also the most widely adopted worldwide (about to go into its third edition). Your tutors recognition of coops (or not) as social enterprises would be indicated by the materials they directed you to use. What did they use as a core text, and where did you study social enterprise?
Some co-ops are social enterprises, some social enterprises are co-ops. I work with social enterprises as well as co-ops. This means that the social enterprise clients or training participants I work with get to hear about demoractic stakeholder controlled social enterprises, based on co-op principles which can make a difference to their choices about how to grow and develop. Some choose co-op. Most of the money thrown at social enterprises focuses on a narrative of heroic sole entrepreneur saving the world (and if you think that is bad you should see some of the bullshit that is spread about Societies by people who don't understand the legal form such as Young Foundation and UnLtd). If we don't counter that narrative we miss an opportunity. Some people were looking to set up a co-op in the first place but the well paid flashy social enterprise salespeople rushed them past the idea "nothing to see hear". I see the wider social enterprise world as a partially receptive audience to our ideas. IMO we should engage as much as we as individuals want to, but on no account should we water down how we define co-ops, which some are guilty of to appease the social enterprise world. (I once berated a representative of a CDA describing a small member CIC who rejected my suggestion to open up membership as being "like a co-op").
I am sorry, Rory, but I do not follow your line of reasoning. My degree programme was aimed at mature students with experience in the third sector, and one of the opening exercises was to look at how the accumulated experience of all the students was about 10 times that of the course leader. Unlike the top-down approach which I had previously experienced a long time ago in academia, we were encouraged to think for ourselves and develop our research skills. The posting I made arose as much from my awareness gained outside the course as from what we learnt during the course.
I am afraid I can't help feeing your repeated attempts to promote your own books and focus suspicion on a rival offering a parallel educational experience smacks to much of the heroic entrepreneur espoused by Schumpeter, mentioned above, so I hope you will excuse me if I refrain from further developing this strand of the thread
An interesting dialogue. I think on the history aspects what you say Rory is acceptable. I think the deeper point Bob and Sion stressed was on the failure of the typological consideration of social enterprise forms to consider the history and origins of collective mutual aid. This is what is missing today. Both this awareness of the cultural roots of resistance to laissez-faire economics (always the Tory agenda in one form or another) and how hegemonic market fundamentalist thinking is. This article by Ganz on why Social Enterprise is not Social Change talks to this fundamental issue.
Yes that nails it Pat. Our problem is power. That it is concentrated in the hands of minority elites, some of them capitalists, some politicians, some public servants and some social entrepreneurs (and some coop executives). They run everything for their benefit even when claiming/believing its for everyones.
If it isnt democratic, its our enemy. Hierarchy is the enemy. (Because it embeds elite power and privilege).
Democratic soc ents like HCT and GLL are coops, more or less. Non democratic soc ents are part of the problem. It really doesnt matter how they started out. Just look at the coop group!
Fabian - I’ll leave you to it. It is amusing to be stereotyped as a ‘heroic social entrepreneur’ type - never happened before and you can learn more about me from others if we are to reengage meaningfully. In my mind, I am a university professor being dragged (back) into the world of practice by practitioners who want to operationalise ideas patiently developed with them over the last 20 years.
On publications, professors have to profess - it is the essential part of the job description (just as a software developer has to develop software).
Sorry if you do not appreciate/like the way I am doing my job.
And there you have it - we have gone full circle. The very article (from the Stanford Innovation Review) doing the damage to our understanding of our own history is cited in support of Bob and Sion's argument. I posted a full book chapter rebuttal of that Ganz et al. rubbish earlier in the thread in the vain hope that it would counter their ahistorical, unsourced, poorly researched rant about social enterprise. I can see that this awful piece of work is being taken to heart by some UK co-operators as a valid argument (which it is not). The Cooperative College will publish my response to Ganz et al. in their Centenary Celebration book on co-operative education (not sure exactly when, but it will be this year).
I hope my frustration at the direction of the debate is now understandable - too many people in this group have internalised an argument from a truly awful piece of American research to support opposition to social enterprise.
So - when you say....
“I think the deeper point Bob and Sion stressed was on the failure of the typological consideration of social enterprise forms to consider the history and origins of collective mutual aid.”
Not in my work or the work of my colleagues in the EMES International Research Network (which is the world's largest in this field). The EMES Framework for Social Enterprise, and that published in Ridley-Duff and Bull (the leading textbook) both fully support recognition of co-operative and mutual enterprises in the field of social enterprise. I attach the rebuttal to Ganz el al’s work again in the hope it can reshape the course of this debate.
What I sense in all of this is a desire to end the debate, but the inescapable fact is that terminology will evolve within cultural context. For example just last year Larry Fink of BlackRock said 'society is demanding that companies, both public and private, serve a social purpose'. https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter In other words, we are moving into a time when to be simply profit-motivated will be bad for business. The net result will be that the term social enterprise will become increasingly devalued to the point of being pretty much meaningless as every company will seek to insist that they are one.
Simon, it might have a different effect. In a world where everyone wants to be a social enterprise (which is surely better than everyone wishing to be a private enterprise) the question will change from “are you a social enterprise” to “what type of social enterprise are you”? As that happens, it needs to be meaningful (and defensible) to argue that you are a cooperative social enterprise, and not a charitable one.
My best experiences, however, are in the interactions between cooperative, charitable and social businesses where they unite to work with the public sector or against the extractive private sector.
Your last sentence is very interesting Rory, as my experience is very different. I have met some decidedly iffy characters in both the charitable & social enterprise sector whose motivation & sincerity I would seriously question. I've never had that experience with anyone in the coop world. It is perhaps for this reason that I find myself uncomfortable with the social enterprise label, regardless of what the theorists may have decided. Has any academic research been done for example into the abuse within the sector & what I recently heard described as 'purpose washing'?
I too have met the iffy characters in the charitable / SE sectors, but I've also met some in the co-op sector. Actually, I have a sneaking suspicion I'm one of them. People just are flawed and have limited viewpoints, and our job is to ease them into contexts where they can be their best selves.
Simon, when you say "a time when to be simply profit-motivated will be bad for business" do you perhaps mean "...to be seen as simply profit-motivated"? Let's face it, with adequate information and resources, being profit motivated will by definition always be good for business. Rory, I don't think the ubiquity of 'social enterprise' would represent any change in intention - most people are already very keen to do good, and pursue it as best they can within the power structures around them. Given that, while I agree there is an opportunity to differentiate between different forms of SE, you'd surely have to accept that the term itself (which is what we started out discussing) will be debased by indiscriminate usage.
I think I may mean to be profit motivated full stop Alex. There is of course a compelling argument that capitalism is unsustainable, especially within the context of a debt based economy. Maybe by definition profit is unsustainable, maybe business. Let's face it, to be born is to be dropped into one giant never-ending game of Monopoly. Some are good at it, some not, whilst others depend upon the on-going game, academics for example, the entire public sector.
The minute the reward is monetary the problems begin, & we begin to divide into winners & losers, & people exhibit various levels of anti-social even sociopathic behaviour in order to 'get ahead'. Absolute losers are necessary to scare the shit out of those somewhere in the middle. A homeless person recently told me that he appreciated that that is his role within our society. There but for the grace of God.
It is for this reason that I am determined that my fledgeling workers coop will involve a flat 'enough' wage. I do not want to kill ambition, on the contrary. It is my conviction that if it is clearly understood that we all are paid the same, then the only way to improve our lifestyle & welfare is to think in terms of improving everyone's, by moving beyond artificial scarcity and competition by fusing cooperatives with the burgeoning commons movement. Maybe this makes me naive, but something has to give. I suspect a paradigm-shifting cultural change is our best hope, which is after all the essence of the sharing economy, as recently explained by Tom Llewellyn of Shareable when he visited Pat's Sustainable Economy Association in Oxford.
Historically those who have thought so have tried to build isolated communities, eco-villages and the like. Indigenous tribes pray to be left alone. Somehow we need to introduce their sharing mindset back into towns and cities. My personal conviction is that social enterprise is simply the last hoorah of late-stage capitalism, a desperate attempt to re-invent itself. I'm not sure if the folk at the Sustainable Economy Association in Oxford would agree, which may perhaps impede their work.
The following phrase sums this up for me:
"If you're not part of the solution, then you're part of the problem".
To me, the solution is nothing short of co-op ownership and governance.
So I just don't see value in thinking about social enterprise, which by all definitions I've seen, falls way short of the 'co-op' mark.
Hopefully, more businesses will become more socially and environmentally responsible, but thinking about that is simply a distraction to the ultimate goal of converting existing business to co-ops, and launching new co-ops, to make the present system obsolete.
Oli - the problem with that statement is that it is at odds with the most widely used/read theorectical perspectives on social enterprise (which fully integrates both cooperatives and mutuals). The two attachments illustrate this.
The Defourny and Nyssens (2017) figure is one of the most influential in the world as it has been used by 200 researchers in the ICSEM (International Comparative Social Enterprise Mapping) project to map social enterprise models in 55 countries so far. The Ridley-Duff, Wren and McCulloch (2018) figure is a foretaste of what will appear in the third edition of the field’s leading textbook (used on every continent in over 50 universities to teach social enterprise).
If leading researchers and educators integrate cooperatives and mutuals into their theory of social enterprise, it makes no sense to continue playing one off against the other (as if the question is whether to be a coop or a social enterprise). It does make sense to distinguish cooperative social enterprises from other types of/approaches to social enterprise.
Of course, I favour cooperative social enterprise over other approaches, but you will never find me arguing that cooperatives are not social enterprises (because it has been theorectically and empirically established by the global research community that they are).
Thanks for these Rory - it's thoughtful academic research like this that us coal-face practitioners have too little access to (open source academic publishing please - but that's another story). R-D, W & McC is a very useful clarification of the very divergent ways in which a superficially uncomplicated aim is pursued. I'm less convinced by D&N's triangle. They imply that the tension between the general interest and the mutual interest is comparable with the tension between both and the capital interest. In fact, the intention behind both is the same, with the mutual interest being calibrated as an efficient proxy for the general interest. Since it is simply impossible for the general population to participate in the direction of each and every general interest enterprise, why not invite those with the greatest stake in and knowledge of each enterprise to participate? The general interest can be pieced together from these broad, inclusive, but local interests (especially if they are multistakeholder co-ops...).
It also presumes uncritically that the general interest can be guaranteed over the long term without mutuality - without, I suspect, identifying any alternative mechanism. I don't think the capital interest would accept good intentions as a substitute for markets, rights, exit and voice; neither should the general interest.
This is getting too complicated and confusing. There is one clear difference in all these organisational forms, democracy or hierarchy. I'm not interested in what 'it' is called or how many academics have classified how many types of organisation. Groupthink is common. Politics is rarely considered. Just look at economics!!
If it isn't democratically owned and controlled by its beneficiaries, I'm against it.
Our societal problem is that 99% of our economy is run by a tiny elite largely for their benefit and at the cost of the majority.
And that goes for many/most large coops too as well as most soc ents and charities.
What we should be doing is trying to bring together organisations which are associations of people democratically owning and controlling enterprises to provide the goods and services they need. Regardless of what they are calling themselves.
And rejecting all those who are elite serving hierarchies no matter what they call themselves or whether Coops UK or Social Enterprise UK lets them be a member.
Now there's an interesting project. Classifying thousands of soc ents, charities and coops by democratic governance.
Democracy is not that black and white. Worker coops deny democracy to non-workers. Consumer members deny democracy to workers. Community coops have major contradictions in terms of the interests they accept/deny membership. The fullest expression of democracy is possible in multi-stakeholder (solidarity) coops, but on the basis of past posts I’m unconvinced that Bob supports them.
And then there is challenge of sociocracy which combines local democracy with limited forms of hierarchy between groups (which John McNamara's recent PhD found provided a much better basis for satisfying coop values and principles in a study of three worker coops - one collective, one hierarchical, and one sociocratic).
That’s the problem with over simplifications - they do not represent reality.
I prefer my theories of the field to be based on tangible realities not wooly oversimplifications of the complexities we have to confront and work with.
There is nothing as practical as a good theory (as someone once claimed) becauee then you can have confidence in the way you interact with the world.
Bob, my heart cheers you on, but my head says that is both too dogmatically prescriptive, and at the same time too vague and unfocused. I warm to your principles while being appalled at your PR.
I was not aware that this list began with a discussion of the Ganz critique. I joined the discussion mid stream. I will consider your own article viz. Ganz. But in the meantime I think what others are saying to you about the need to put economic democracy into action is the 'democracy spirit and solidarity structuring' that is missing. This is an issue for all social economy organisations. ILO 193 is all about how social change that is meaningful, empowering and transformative comes about when associations, co-ops and trade unions join forces and find common cause. As precarious work in Europe is now the new norm, the problem is that co-ops, trade unions and mutuals are not working out together how to move from marginal improvement responses to a new politics that makes history from the bottom up and also connects with local government progressives like Preston but also with new economy prospects here in Wales under the new Labour leader, Mark Drakeford. There is an opportunity to help unite forces through a solidarity economy alliance.
But as Oli stresses, this needs to be about Walking the Talk.
Wow, this is good stuff - hope I'm not too late to the party. Let's be honest, a bit of mild swearing and abuse in a discussion thread does add a little zest to an otherwise dry topic.
A few observations:
1. I notice a few folk using the term 'social enterprise' as though it has an uncontested meaning. By putting a vague positive qualifier on something that hints at the potential for making money, you have the perfect conditions for a phrase that becomes empty of all meaning and used for whatever purpose the speaker desires (yes, SEM is trying to change this; but let's be honest, takeup is still poor). So, is social enterprise a 'heroic sole entrepreneur saving the world', 'the neo-liberal project of remodelling charities and the community sector along the lines of existing business practice', or 'charitable and social businesses'? Yes to all.
2. For this reason, there is no point even using the term unless you immediately offer a working definition for the purpose of that discussion. So, if I wish to mention social enterprise, I follow it with "(by which I mean, a business whose governing document includes at least two of a) democratic accountability to beneficiaries, b) application of most profits to a social purpose specifically benefiting disadvantaged groups, c) objective measurement and reporting of social impacts)". For this reason, I rarely wish to mention social enterprise.
3. If we think that social enterprises are disadvantaged by this lack of clarity and are at risk of decision making contaminated by one or both of the profit motive and the ego motive, we will make no friends at all by banging on about it. If anything, we will reinforce a stereotype of co-operators as ideologues, bores and fogies.
4. There is a very large grey area in which we find social enterprises that are somewhat democratic, and co-operatives that are a bit half hearted about membership and participation. There is also a significant intersection where we find supposedly social co-operative trading businesses that in reality live up to few or none of those four words. In general, reality resists categories and entrepreneurs of all stripes have a natural bias toward (short term, tangible) reality.
5. So, the idea of the co-op principles as a rulebook or quality mark, let alone a claim to higher standards than mere social enterprise, is likely to fall on stony ground. What might gain traction is offering co-op principles as a toolkit, a set of problem solving heuristics, to all comers - those who think they are co-ops, those who think they are social enterprises, and those who have hitherto been unmoved by either label.
6. That still leaves the issue of our accountability as development workers: if we are here to serve a movement, is it a movement that includes social enterprises that aren't co-operative? I freely admit to fudging this issue, but in future it might be that implementation of the sixth co-op principle is in itself the best guide as to who we might find common purpose with.
Hurrah to Alex’s comment:
“What might gain traction is offering co-op principles as a toolkit, a set of problem solving heuristics, to all comers - those who think they are co-ops, those who think they are social enterprises, and those who have hitherto been unmoved by either label.”
I have to duck out the debate for a while - my mother has been diagnosed with terminal cancer and does not have long to live.
A really useful conversation from my point of view. I have a response, based on my personal practice, forming in my mind - watch this space.
I'm really sorry to hear about your mother Rory. Looking forward to seeing you in person at one of the many upcoming events and continuing the conversation.
So sorry to hear about your mother Rory - all our best.
Sad news about your mother Rory. Wish you well and take some of our energy to see you through the rough times.
CtrlShift 2019 which is a move towards a Social and Solidarity Economy Alliance across all the tribes (permaculture, peoples politics, coops and economic democracy, etc. etc.) is probably 8-10 May in Stoke this year.
Pat is correct about the incredible diversity of our civil society organisations. It's at the same time our strength and our weakness. (too many to degrade but also too many to coordinate)
Again, sorry to hear your news Rory. Just to add that I have been telling anyone who will listen (from 150 people to 1) for about 10 years now that the Co-op Principles are a roadmap to help you make your co-operative work successfully. I fully endorse the idea of them as a toolkit (see an example here http://www.cooperantics.coop/wp-content/blogs.dir/7/files/2012/06/Principles-Really-Do-Matter.pdf )
The Worker Cooperative Code of Governance is also the Coop Principles expanded into a practical checklist for governance and management.
A problem here in the UK is that an economic democracy alliance is impeded by tribes that are not Coming Together to secure the Common Good. Here Alex I love the way you describe so well the problems and the conundrum. I take Rory's point about the complexity from one angle about Democracy, but what passes unchallenged for Democracy is Statecraft. We need to make this distinction. I know Bob backs multi-stakeholder co-ops so what he says about hierarchy and power is in opposition to managerialism and forms of statecraft within the social economy. Associative democracy needs to be recovered and the Solidarity Economy movement advocates this. It does recognise a spectrum of social economy types and seeks to align these in a broader based movement of social and solidarity economy organisations pursuing a social and ecological economy for the Common Good. But in the UK we do not have a solidarity economy alliance. This is not the case in France, Luxembourg, Germany, Greece, Spain, Italy and Portugal. To seek to change this, I am a member of the new Solidarity Economy Association - a multi-stakeholder co-op - that is engaged in mapping in local regions the social and solidarity economy organisation locally with a view to getting them to engage with a Coming Together in order to build regional solidarity economy alliances - including co-ops, mutuals, other social enterprises, trade unions and local authorities where we can secure their involvement. The first mapping work is Oxford and now well underway but other cities and regions are interested in this strategy. A year ago in Manchester we held a meeting to explore solidarity co-ops but could not find a way forward. I think this new mapping approach will work. We have been inspired by Solidarity New York City that have done and set up the Co-operative Economy Alliance - NYC (or Scenic for short!)
I've enquired about membership of the SEA to no avail, although Kat is very helpful in maintaining dialogue. I understand that the mapping tools being used/developed are being made more widely available, and once that happens we'll be keen to pick them up and work with them. I've co-founded the Kirklees Solidarity Economy Network (https://ksen.org.uk) to cover our patch here in West Yorkshire, and we stand ready to cooperate and be a co-founder of a national solidarity economy alliance (I'll be happy to make it happen with you Pat if you are up for it). We are working constructively with our local authority, initially on a new model for social care, and soon more widely to create a cooperative development function to drive forward and complement the community wealth building approach that they appear to be adopting, in part at least.
Graham, Bob and Mark
This is music to my ears Graham. At present SEA is a worker co-op operated by a collective. I am the only multi-stakeholder member. An issue for us is how to design the membership offering to make it not just anybody can become and we get something that becomes meaningless by imposters joining. We are trying to work out how to take this forward experimentally. We think the local mapping work helps and this is happening now in Oxford. We will be looking for other locales to do this. We have involved Mark S to help the membership team that Kat is leading. I am also involved with this steering group. Solidarity New York City began with the mapping as a Worker Collective (they still are a collective) and then moved on to set the Co-operative Economy Alliance - NYC. I know the folk there as my mother grew up in Brooklyn and I have ties. So as they want to talk more to SEA, we can crack all this I think.
We should talk on Zoom Graham with Colm and Kat. Why don't you email Colm to suggest this?
Cheers Pat - finally got round to visiting https://www.solidarityeconomy.coop/ and am greatly impressed. Tricky to introduce this international idea to the UK context, and I wish you well. I do think there is a subtle challenge to social enterprises here - if you can't meet the very loose and openended principles used here (much less rigid than co-op principles), do you really have any right to the word 'social'?
Thanks Alex for this feedback. SEA is keen to engage with other activist networks in local towns and cities to pursue this methodology. If you google Solidarity New York City you will see the map on the home page and the videos of those 200 plus co-op, commons and social economy organisations across New York that joined in the mapping and tell their stories about their work for the Common Good through the videos. Since then Solidarity NYC has set up the Co-operative Economics Alliance to develop a co-op eco-system of support for building a solidarity economy. This work has engaged the Mayor to set up a $2.5 million New York City revolving loan fund for worker co-ops and got things moving to establish a development support system to assist economic democracy action and emergence. But Solidarity networks like this have popped up since in Boston, Philadelphia, Austin, Texas, Oakland/San Francisco and Jackson Mississippi. We at SEA are keen to engage with others on such an urban or rural journey here. Alex Bird and are involved with an emerging network here in Wales. Actually the success of Emilia Romagna to increase the co-op economy share of regional GDP to 38% since 1970 began in this way and attracted in the city council of Bologna and other towns to become democratic partners. Their mayors then were of the same mindset of Labour leader Matthew Brown at Preston today.
Could this be Ways forward here?
Worker Co-op Weekend starts on 10th May I believe, venue tbc
I am out of the country at the moment and only have limited access to Loomio, but I very much want to add a couple of issues which I think have not been taken up sufficeintly and which I think are essential to a sustianable and growing social and Solidarity Economy in the UK. I am trying to get these embedded in a Wessex Solidarity Economy Network, which Social Enterprise Link is trying to establish in Central Southern Engalnd.
First, participants and partners in the network, should include Trade Unions and Public Ownership organisations.
Second, Public, Cooperative (including Credit Unions) and Social capital and banking needs to be hugely increased and legislation changed to make the sector financially much stronger, democratising finance
Third, Ownership, Control and customer engagement all need consideration place in the strategic development of the sector.
Fourht, Regional government needs to be in place.
I hope to see these given a central place in local, regional and national Solidiarty development
We have a difference of approach. Some of us want to classify organisational forms and then find commonalities that can be used for promotion and action.
Some of us have specific principles and we assess organisations against them to decide if they are in our team or not. We seek to develop and amplify the use of the principles.
I am principle driven. When Rory says 'it isnt as simple as you say Bob' I agree. For me the principle of democracy (rule by the demos, the people) is paramount. Sociocracy (rule by the socios, the society) is maybe a better word to use but its been taken and causes confusion now. Democracy will have to suffice.
We have similar confusion over the term 'hierarchy'. In systems thinking a subsystem is subordinate to the system whole. It is lower in the hierarchy. When I use the word it is in the political sense. In a hierarchy the elite have power over the subordinate (whether agreed (functional authority) or imposed (status authority) or emergent (charisma authority)).
Other representative organisations use principles too. CECOP/CICOPA (euro/world worker coops) has clear principles around the modality of democratic control (its euroenglish). (Worker coops all over the world are assailed and undermined by anti-democratic hierarchical tendencies that have de-cooperativised many large coops, especially consumer owned coops, and turned them into manager benefitting corporates. Coops are especially vulnerable to the principal/agent trap and the emergence of oligarchy ).
Social coops in Italy are dual stakeholder, worker and user. CECOP says this is fine according to ICA principles so long as workers have at least 33% of voting power. The special relationship between workers and the coop is recognised. This relationship is both more engaged and more dependent that that of consumer/users and of investors or founders or any of the other stakeholder classes.
I have no objection to multi-stakeholder coops so long as they recognise the reality of these relationships. Too many multi-stakeholder structures seem to be dreamed up in the laboratory as a theoretical exercise. in practice they fall prey to behaviour by self-interested groups and individuals who game the rules to get what they want, usually the coop's capital. It is my experience that you cannot effectively design rules in advance to control all such tendencies for parasites and predators to find a way around the rules. (Look at what happened to the Coop Bank). Once a hierarchy takes over, the game is lost (e.g. the Coop Group and most retail coop societies).
In my experience, successful i.e. sustainable multi-stakeholder coops, too often come to rely on a strong leader to hold the factions in check. GLL (worker controlled but users, TUs, funders and politicians on the board) works because the CEO is a powerful and benign personality. Ditto HCT. There are examples of 'multi-stakeholder' coops which have been taken over by the CEO. What happens when the benign CEO leaves and is replaced by a normal CEO (plenty examples of demutualisation).
Alex is I think unique in the UK in designing a set of multi-stakeholder rules , seen them gamed in practice in the real world and assessed what went wrong and written it up. Where can people get that assessment Alex?
The Loomio UI fails again, leading to a double post from Bob (I've been there). Luckily the post is highly readable!
The tensions in a multi-stakeholder co-op demand that the cooperative principles are thoroughly applied. Member education is critically important. It is in other co-op models too, but especially in a multi-stakeholder scenario, poorly indoctrinated members leads to the rise in power of the CEO and subsequent management capture.
Radical Routes is also looking at becoming a multi-stakeholder
co-op and is in the process of writing it's own rules. The multi
stakeholder approach will be needed as their is a need for capital
and therefore investor members, but as all the other members are
co-ops there is a strong argument to reducing the power of capital
(obviously there is always a strong argument to do that) as having
an individual investor have the same voting power as a co-op
doesn't make sense.
Bob your overview is superb. Thanks indeed so much. Since the work we did on the Social Co-ops report in 2014 launched in Cardiff, two social co-op forums have set up. I am involved with both. The one in England has struggled with lack of resources but has had a committed group. In Wales we have had more luck on the resourcing front. So now the English Forum will be merging with the Welsh one. A key issue for me and for many in the group has been this governance problem for multi-stakeholder co-ops. As Bob indicates, in Italy they have not cracked this. The groups in Quebec also have had the same problem managing complexity and forging real democracy. I agree with all Grahams points about member education and forging and renewing co-op identity. I think a reincarnation of Solidarity Economy can change the dominant dog eat dog mentality of market fundamentalism. How to do this? Sociocracy is a good way forward but also here in Wales, Rick Wilson at Community Lives Consortium led work to convert his social enterprise into a multi-stakeholder co-op where disabled adults are the core membership. He has had success the hard way over four or more years using Elinor Ostrom's governing the commons thinking and design principles. Commons tend to involve multi-stakeholders so all this makes sense for areas like Community Land Trusts, social co-ops, ecological co-ops, etc at least to me. We have been talking in the Social Co-op forums about running an event somewhere this year on this topic. I think it would be really timely
My two cents.
Alex is I think unique in the UK in designing a set of multi-stakeholder rules , seen them gamed in practice in the real world and assessed what went wrong and written it up. Where can people get that assessment Alex?
Alex is I think unique in the UK in designing a set of multi-stakeholder rules , seen them gamed in practice in the real world and assessed what went wrong and written it up. Where can people get that assessment Alex?
I'd be really interested in reading that as well, I think the Somerset Rules are great and I guess there are more UK co-ops using them than are using the Co-ops UK or Fairshares multi-stakeholder rules (since they were FCA approved some years before the others), also having been involved with one that failed and one that is on going it would be interesting to see what issues there have been in common.
Just on the use of different Rules, I'd say that it's likely (and certainly my experience) that the CUK multi-stakeholder model is used more than others. My personal experience of the Somerset Rules is that they contain many provisions that are contingent on certain things happening. I'm thinking of councils to oversee common ownership and skewed voting across member classes. I'd be interested to know how these provisions are being used on the ground.
I have no experience of using the Fair Shares models.
skewed voting across member classes
skewed voting across member classes
This can be very complicated, Webarchitects has 50% vote reserved for workers, 25% for clients and partners and 25% for investors but thankfully we have never had to do the resulting maths at a members meeting (there has been consensus or overwhelming majority support for everything), as it would make adding up votes really hard…
I prefer the simpler way the New Internationalist implemented the Somerset Rules — one member one vote but non-user members (I assume in this context user members are workers) have a maximum of "25% of total voting strength" at members meetings and "75% of board members must be user members" — far simpler.
That's our model! But we hacked Co-op UK's rules to do it rather than Somerset.
And we only gave the non-user members 10% - 25% felt way too generous :slight_smile:
& you all wonder why there aren't more coops !!.
I've come late to this conversation as I've been away, so sorry to drag up old issues first.
Firstly, the issue about CAN that was a hot topic a week or so ago, was confused by many people not knowing there were two separate organisations. There's our own Co-operative Assistance Network, and then there's "their" Community Action Network. Formed with Millennium money (£millions) dug out by Alun Michael from Tony Blair, plus a bung from Coca Cola, and run by "social entrepreneur" Adele Blakebrough when her husband, Ian Hargreaves retired from editing the New Statesman and moved to Penarth close to Alun's home. It spent an enormous amount opening the CAN Mezzanine https://can-mezzanine.org.uk/our-products/office-desk-space-for-social-enterprises and running workshops in Gerald Scarfe's gallery in Pembroke. Some of the residual money went to form UnLtd. End result - not a lot of earth shattering change! Imagine what our CAN could have done if the £millions had gone to them.
Secondly, I agree very strongly with the idea that the ICA Principles, and democracy especially, are key to our identity, and anything less will not bring fundamental change, but I do feel the 7 Principles are no longer enough, and need adding to. See my article form 2015 - https://www.thenews.coop/94300/sector/time-to-extend-the-seven-co-operative-principles/
@marksimmonds I'm sure I clicked on a link on here the other day which took me to the repository of online governance playbooks/handbooks of other co-ops - I think you posted it but probably misremembering. Curated by Rich Decibels of Loomio fame. I can't find it now! Help! I was reading through on the train, loads of great stuff.