Building a social enterprise economy

Mark Drakeford finds grounds for optimism in the spread of co-operative ideas in today’s Wales

In building Wales as a co-operative nation we have three major reasons for optimism. First is that in the National Assembly over the last decade social policies have developed around a set of ideas which have clear and direct links to cooperative principles:

  • Good government regards individuals as citizens rather than consumers.
  • The relationship between providers and users of services should be rooted in trust, reciprocity and mutualism.
  • The key object of Welsh Government policy should be equality of outcome, not just of equality of opportunity.

A second reason for optimism is the fertility of the ideas which are to be found in Wales which provide an intellectual bank from which practical policy ideas can be drawn. A good example is the Collective Entrepreneur, a paper published earlier this year by Kevin Morgan and Adam Price. It is a plum pudding of a publication, into which it is possible to stick a finger in at any page and pull out an idea which sends you away better informed and a good deal more cheerful about the future. Here are just a few examples which the paper puts forward:

  • A social square mile for Wales, with a social stock exchange.
  • Social impact bonds.
  • Worker cooperatives in social care.
  • Creation of a development bank for Wales, drawing on the experience of Solidarity Funds in Quebec, and on the finance held by the eight major public sector pension funds in Wales.
  • A Welsh Housing Bond.
  • A shift from shareholders to stakeholders, not just in water, but in other natural monopolies where public goods are provided – transport, renewable energy, broadband infrastructure and so on.
  • A Welsh savings super-mutual.

It is unlikely that every one of these ideas can be translated from the page and into practice. However, what they demonstrate is that we have in Wales a great renaissance of ideas for cooperative ways of taking back ground in the public interest which, over the past thirty years, has been lost to private profit.

Thirdly, there is the political commitment of the present Welsh Government to putting those ideas into action, and to making them a reality. Of course, a commitment to basic cooperative principles is one which stretches beyond just one Party. It was clearly evident in the programme of the last One Wales administration, and it is very obviously there in the Labour Manifesto for this year’s Assembly elections. If you want to see it in action, then look at the record of the exchanges on the floor of the Assembly of Wednesday last week where Cooperative Party sponsored Assembly Member, Vaughan Gething raised the issue of cooperative approaches to housing with Cooperative Party member and Minister, Huw Lewis. In the difficult times which lie ahead, Wales is able to draw on a set of principles, practices and political commitments which, together, underpin the prospects of our becoming a truly co-operative nation.

I believe we stand on the cusp of a period when people will turn their backs on shareholder solutions, in favour of models based on the decentralised, distributed principles which underpin cooperation. The cooperative sector in Wales should learn lessons from Spain and Italy about overcoming fragmentation and building up a critical mass of cooperative and mutual ways of doing business.

We should also have the confidence to use the capacity for innovation which the sector possesses: to be less anxious about imitating what goes on elsewhere, and to use the opportunity which devolution, on the one hand, and cooperation on the other, provide to create new policy solutions for the future.

Anyone involved in the practical business of politics or delivering services knows that perspiration runs ahead of inspiration, most of the time. But we will never achieve the sort of cooperative nation we seek, unless we bang the drum for our beliefs in:

  • Working to place collective benefit above personal gain.
  • Designing services to be controlled by the people they serve and who work in them.
  • Knowing that we all do  better when we cooperate together to maximise our strengths, rather than compete to exploit each other’s weaknesses.

These are the beliefs which continue to inspire those across the world today who seek to improve the lot of ordinary working people and their families. They remain the beliefs which animate us here in Wales and which give us an opportunity to make ourselves, truly, a cooperative nation.

Mark Drakeford is Labour AM for Cardiff West. This article is based on the keynote presentation he delivered at the IWA and Co-operative Society conference in Cardiff last weekend, Wales a Co-operative Nation.

5 thoughts on “Building a social enterprise economy

  1. Apologies in advance for being a pedant but to be clear. The publication ‘The Collective Entreprenuer’ was actually jointly commissioned and published by Nick Bennett, the Chief Executive of Community Housing Cymru and Ian Courtney, the Regional Director, Wales, of the Charity Bank. .

    As the representative body of one of Wales’ leading mutual movements and the development bank for the Third Sector the two organisations felt it timely to stake out the contribution the social economy might make to the shape of civic life and the Welsh economy.

  2. It’s an inspiring vision. There is a waiting trap though. Wales is more than a co-operative nation, it is a cliquish nation. Producers getting together often turn into a conspiracy against the public, as Adam Smith said. Look at Valleys political culture where “who you know” is all important. Mark Drakeford is perhaps too decent or too naive a man to see where his idealism could lead. If we are not to have competition we need an enquiring press and a critical public and a very free flow of information or co-operation will degenerate into a conspiracy of insiders acting in their own interests. As far as I can see none of those three conditions exist. Notice how the Co-op lost its utterly dominant position in retailing in Wales. That was because it provided a worse service than commercial organisations. The fragmented membership failed to exercise the kind of discipline on management that shareholders did and the enterprise pleased itself until it failed. If there had not been a competitive market it would still be pleasing itself and service would be poor for “ordinary working families”. That is not to say co-operation cannot be successful but it has its own weaknesses and these must be confronted in a hard-headed way.

  3. Mark – I agree with almost all of that, apart from the bit where you advocate the importance of equality of outcome over the equality of opportunity – that doesn’t bear scrutiny does it? Everybody goes to Oxbridge, or nobody does? Everybody gets to star in a Hollywood film, or nobody does? That is the only way you can achieve equality of outcome.

    However the rest is well argued, as one would expect from an old Maridunian, and great food for thought.

    The financial crisis in this country was largely brought about by the de-mutualised building societies, and for me, that, above all else was Thatcher’s big blind travesty. For someone who publicly espoused Victorian values of prudence and business values, she actually encouraged and enabled the exact opposite – unbridled greed and unbalanced, un-collateralised borrowing on a personal and corporate level. Time to get back to the sort of cooperation that civilised us all those millennia ago.

  4. Inspiring visions can take us to new landscapes, and Mark already makes the point that not everything can be translated from the page to reality in the way envisioned, but reaching for those goals can bring us huge gains. The more worrying point is the deep misunderstanding that continues to prevail around the notion of ‘equality of outcome’ – this idea does not preclude different solutions for different people. In fact, the idea must embrace those varying solutions as core, in order that outcomes become achievable, nothwithstanding the differences in choices that people will make. It is not a case of everyone does the same thing, in the same way, but equality of outcome depends on creating enabling conditions, insofar as they are possible, so that each one can live the life of their choosing – of course there are all sorts of parameters to that, legal, moral and otherwise practical. But the question is: ‘can I aspire to/do this like anyone else?’ or are there systemic or structural barriers to me even having the possibility of doing whatever it is? Where those barriers exist, setting about removing them goes a long way to creating equal outcomes to which we must aspire – for too long being satisfied with equal opportunity policies which were meaningless in practice or were manipulated to unequal outcomes. Working to promote better outcomes for everyone in selfless ways, maximising our strengths and stopping the expolitation of some people’s ‘weaknesses’ is the right direction of travel, although one additon I would make is that it is not just about people designing services and their delivery but being involved in the decision-making processes to scope those services in the first place – that is, for me, where the drum-banging can be translated into world-class, cost-beneficial truly co-operative approaches and real partnership is the only working game in town.

  5. In response to a Banker, being a pedant, I think you have misinterpreted what is written. It should read that the paper was published this year and by (ie authored by) Morgan and Price.

    There are a number of important ideas in this which need to be taken up in Wales to fully understand their potential for the economy.

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