When you have got a global market, people do not think they can actually impact on the economic situation in which they find themselves. But they can impact on their local environment. There is this huge renaissance of community going on. -Pauline Green, President of the International Co-operative Alliance (ICA).
By Trond Overland
(March 2012) – Ours is a time of increasing collective concern and rapidly decreasing faith in the self-centred capitalist system. While the global market crisis continues on its hazardous journey towards brutal meltdown, the cooperative model emerges as the new, dignified way of doing business.
The incoming system: Cooperatives
The Outgoing system: Stock exchange-driven exploitation
The PROUT position
The Incoming System: Cooperatives
Globally, the cooperative structure is diverse and dispersed, has tens of thousands of member businesses, and employs 100 million people, which is 20 per cent more than the jobs generated by multinational companies. Across the world, cooperatives have 1 billion members, about three times the number of individual shareholders out there, reports The Age*. The 300 biggest cooperatives collectively generate revenue of $US1.6 trillion a year, equivalent to the world’s ninth largest economy, Spain.
“It’s the members who own the business. It’s they who take the strategic direction of the co-operative through their election to the boards. It’s a democratic process. And that is what distinguishes us,” Pauline Green of the Geneva-based ICA said to The Age.
”During the last four years in the financial crisis across the world, co-operative and mutual sector has come through largely unscathed. We have come through with an increased asset-base. We have increased deposits, whereas our high-street competitors have in many countries collapsed,” Green stated. “In the UK, the co-operative bank over the last two years has seen a 79 per cent increase in account switches from our corporate competitors.”
The United Nations has made 2012 the International Year of the Co-operative. It is the first time the UN has given this honor to a business model. UN Secretary-General Ban Ki-moon said: “Co-operatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”
The Outgoing System: Stock Exchange–driven Exploitation
Asked earlier this month what he thinks about the fact that the US unemployment rate is falling right now and companies in the Standard & Poor’s 500 are making more money than ever, David Stockman, the budget director of the Reagan administration, said*:
“That’s very short-term. Look at the data that really counts. The 131.7 million jobs in November was first achieved in February 2000. That number has gone nowhere for 12 years.
“Another measure is the rate of investment in new plant and equipment. There is no sustained net investment in our economy. The rate of growth since 2000 in money put into office buildings, factories, software and other equipment has been 0.8% — hardly measurable. We’re stalled, stuck.”
“Where it is now is totally artificial. It’s the result of massive purchases by not only the Fed but all of the other central banks of the world.
“What’s wrong with that is that it doesn’t come out of savings. It’s made-up money. It’s printing press money. When the Fed buys $5 billion worth of bonds this morning, which it’s doing periodically, it simply deposits $5 billion in the bank accounts of the eight dealers they buy the bonds from.
“The consequences are horrendous. If you could make the world rich by having all the central banks print unlimited money, then we have been making a mistake for the last several thousand years of human history.
“At some point confidence is lost, and people don’t want to own the (Treasury) paper. I mean why in the world, when the inflation rate has been 2.5% for the last 15 years, would you want to own a five-year note today at 80 basis points (0.8%)?
“If the central banks ever stop buying, or actually begin to reduce their totally bloated, abnormal, freakishly large balance sheets, all of these speculators are going to sell their bonds in a heartbeat. That’s what happened in Greece.
“Here’s the heart of the matter. The Fed is a patsy. It is a pathetic dependent of the big Wall Street banks, traders and hedge funds. Everything (it does) is designed to keep this rickety structure from unwinding.
“If you had a (former Fed Chairman) Paul Volcker running the Fed today — utterly fearless and independent and willing to scare the hell out of the market any day of the week — you wouldn’t have half, you wouldn’t have 95%, of the speculative positions today,” Stockman concludes
The PROUT Position
The concentration of great wealth beyond the influence of ordinary citizens is at the heart of the mounting difficulties that now make global capitalism look like the Nexus of Evil. As a first step towards establishing a real economy of real people, stock exchanges and their exploitative trading tools should be banned.
In a seminal discourse in 1984, PROUT founder P.R. Sarkar exhorted:
“Capitalists, in either their singular or collective forms, are the most pernicious economic exploiters today. All over the world they are continually exploiting local economies and draining their wealth. In nearly all cases the profits they accrue are spent outside the local area and remitted to outside stockholders and parent companies. An essential measure to control this economic exploitation is that the speculative markets in all countries of the world should be closed down immediately.”*
Closing down the leading institutions of an exploitative system is a first step. However, the subsequent constructive steps may seem even more important.
The world and its people need a decentralized consumption-oriented economy where profits are for developing the economy of everybody and not only of a few. It will be the job of lawmakers and the people to evolve further such a humanist system out of the present co-operative structure.
Money needs to be kept rolling, otherwise it loses its practical value. Right now, capitalists are holding back as they are not sure where they can get optimum returns. By their present unwillingness to invest they hurt the entire world and threaten to offset an unprecedented depression. But their greed does not allow them to act otherwise. They keep the whole world hostage to their defective mentality. Consequently, the days of capitalism as the dominating world system are numbered.
The future lies in cooperatives!
The Age (Australia) www.theage.com.au/opinion/politics/lets-stick-together-20120226-1twca.html
USA Today www.usatoday.com/money/economy/story/2012-03-03/david-stockman-says-economic-disaster-lurks/53339644/1
“Socio-economic Movements”, PROUT in a Nutshell Part 13, Ananda Marga Publications http://shop.anandamarga.org/books/hardcopy.html
Copyright PROUT Globe 2011