Review of ‘Humanizing the Economy: Cooperatives in the Age of Capitalism’ by John Restakis

August 10, 2014

By Karen O’Sullivan

Bluestocking’s most recent book choice was ‘Humanizing the Economy: Co-operatives in the Age of Capital’ by John Restakis (2010, New Society Publishers).  The book is a grand tour of some of the world’s most successful cooperative initiatives; from preventative health care groups in Japan, to ceramics manufacturers in Italy, to sex worker collectives in India.humanizing the economy.png

The book presents an engaging history of the ‘cooperative movement’ followed by a kaleidoscope of case studies from around the globe.  According to Restakis, modern cooperatives first arose, and continue to operate, as a response to the abject failures of modern capitalism and globalisation.  From the inception of the industrial revolution onwards, cooperatives have tried to offer a more humane alternative to the dominant capitalist paradigm.  In 1844 in Rochdale, England, a group of 28 unemployed weavers decided to open one of the first modern cooperative shops with a founding capital of 28 pounds.  The subscription fee for members was 2 pence a week and the shop was managed democratically by the members.  Over 150 years later, the worldwide cooperative movement has, according to Restakis, over 800 million members in 85 countries.  The basic principle continues: an organisation run democratically by the members for the mutual benefit of the members.  In 2002 in Argentina, for example, following the collapse of the economy, 220 factory workers decided to take over and occupy the ceramic tiles factory abandoned by their former employer during the crisis.  They fought off police, re-engaged with the local community and suppliers, recommenced production and formally incorporated as a cooperative.  In the region of Emilia Romagna, Italy, a sophisticated cooperative productive system exists whereby many small firms cooperate in industrial clusters to manufacture finished ceramic products.

Restakis situates this global ‘cooperative movement’ within a theoretical argument about ‘economic democracy’.  According to Restakis, we operate under ‘the grand delusion’ that the free market can regulate itself and guarantee democracy.  The 2008 global financial crisis proves, however, that this is not the case.  Modern capitalist economies cannot regulate themselves, do not guarantee social cohesion and do not, he argues, guarantee a healthy democracy.  The economic realm has somehow become completely divorced from the social realm and democratic values.  While “[w]e exercise our democratic right to vote for public officials once every three or four years… we spend most of our waking hours in workplaces, which are still run like dictatorships, day in and day out.” (p.21).  If “democracy is good for politics,” he asks, “why is it not equally good for economics?”(p.21).  The cooperative, Restakis argues, is therefore a way of democratising or humanising the modern capitalist economy.  This is not a call for socialism, but rather a more humane version of free market economics, where social and democratic values are championed and embedded rather than divorced and excluded.

It is difficult to object to this as a vision.  However, the book offers very little critical analysis of cooperatives in practice and very little analysis of where the ‘movement’ is realistically headed in the long term.  Individual problems are generally glossed over, as is the ultimate direction of the seemingly ad hoc development of various cooperatives across the globe.  One of the main challenges, for example, facing successful cooperatives such as those in Emilia Romagna, Italy, is how to manage the interface with the global economy.  How can they continue to grow to become large scale while maintaining their local identity and local reciprocity?  And if growth is not necessarily the objective for these and other smaller scale cooperatives, then there at least needs to be some acknowledgment that the ‘humanising the economy’ project has significant limitations.

On another note, the book raises several larger, philosophical questions that go unanswered.  The current distrust of collective action and the demonisation of socialism, for example, is referred to but not addressed as another potential inhibitor for the expansion of cooperatives.  The book also begs the question as to why the cooperative impulse is not more pervasive in western liberal democracies such as Australia, the UK and the United States.  Why, in an era of privitisation and increasing budgetry cuts to social services such as health and education, does the impulse to cooperate as a collective not arise more often in these countries?

Despite these shortcomings, the book serves as a very accessible, timely and, at times, inspiring showcase of cooperative possibilities.  It should become a very useful handbook for anyone interested in imagining what it might be like to do things differently.



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