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COOPERATIVESAlternative economic structures and business enterprisesby Dieter DambiecThe basic reason for having cooperatives as a form of economicenterprisein an economy is to help people work together and move forward in acollective way. Cooperatives are considered to be the best form of economic enterprise because they are capable of seeking a balancedadjustment between collective spirit and individual rights. Dieter Dambiec summarizes PROUT's views on cooperatives.Cooperation means getting things done with collective effort. Thebenefitof cooperatives is that they combine the wealth and resources of manyindividuals and harness them in a united way. To help achieve this,however, cooperatives should be structured so that individual interestdoes not dominate collective interests. Individual dominance canadversely effect the welfare of different social groups and theenvironment.Essence of cooperativesCooperatives as a form of economic enterprise involve getting thingsdonebetween free human beings with:(i) equal rights;(ii) equal human prestige (and mutual respect for each other);(iii) equal locus standi (eg, legal standing) so that everyone's welfareis considered.This is called "coordinated cooperation" and is needed for equilibriumand equipoise in social life. A socio-economic system should be based oncoordinated cooperation not subordinated cooperation."Subordinated cooperation" involves people doing something individuallyor collectively, but at the same time keeping themselves under other peoples' supervision or control. This can degenerate the moral fabric of an enterprise and should be avoided when structuring cooperativebusinessenterprises.Avoid communesA collective economic enterprise that lacks coordinated cooperation asits primary mode of functioning is a commune or communist system. Itendsup being based on subordinated cooperation and the predominantrelationship is that of supervisor and supervised or master and servant.According to PROUT founder P.R. Sarkar, these relationships are ultravires to the psychological needs of the human mind and retardprogressivemovement.Such systems force production down, not increase it. This is becauseworkers do not feel oneness with their job, nor do they have freedom toexpress all their potentialities. Communes or collectives in communistcountries were not cooperatives. They were simply productiondistributionmechanisms under a regimented system of control.The major distinctions between communes and cooperatives are:
 
(i) Communes lack personal ownership; this is one reason for their failure. Without a sense of personal ownership people do not work hardorcare for property. Suppression of personal ownership sentiments resultsin sluggish production and psychic oppression. In cooperatives, tocompare, there is personal ownership, subject to social limitations onconcentration of wealth but also part of a mechanism to ensureprogressive increase in everyone's living standards.(ii) Communes lack a proper incentive system, which discouragesindividual initiative by talented people. The result is that people donot work hard.(iii) Organisational behaviour and outlook in communes tends to bematerialistic and the imposed leadership crude and unsophisticated.Avoid capitalismCooperative economic enterprises must also avoid becoming capitalist innature. A key feature of capitalism is the import of raw materials fromother countries or regions in order to manufacture finished products.Cooperatives must not encourage this form of economic imbalance. Aneconomy based on cooperatives must develop its own raw materials throughresearch so that cooperatives are not dependent on foreign raw materials.For example, apple orchards (raw materials), sericulture, appleprocessing, packaging, transportation and marketing should all beregarded as part of the farming industry of a region and function ascooperatives.However, in capitalism raw material producers like farmers, timber growers, fishing fleets, etc. have to sell their produce immediatelythrough large commodity exchanges or multinational companies in order topay off loans for irrigation, seeds, labour, equipment, etc. Becausecapitalist enterprises control markets for these raw materials,producersoften sell at lower prices than they could get under other arrangements.A good example of the squeeze on primary producers' income by capitalistenterprises can be seen in the steep decline in wool prices in Australiaover recent years. Commodity exchanges and multinational corporationsact as or dominate raw materials markets to the detriment of their suppliers.In a cooperative system, raw materials producers like farmers would notbe faced with the same financial pressures, and so not be forced to sellproduce immediately after harvesting at sub-market prices. By advancingmoney to individual farmers, cooperatives will allow farmers to better control the conditions of sale and thus enjoy more financial security.A properly conceived and structured cooperative should be capable of:(i) determining how much to sell;(ii) determining the most favourable time to sell in order to get thebest price;(iii) fixing the price of its own produce within certain price limits.In this way cooperatives will get the profit which is presently taken bymiddlemen and profiteers in the capitalist system.In a cooperative farmers sell their produce to the cooperative at a rate
 
fixed by the cooperative. When the market price is reasonable thecooperative sells the aggregate. The farmers then receive their percentage of the profit, which will be proportional to the amount of their land shareholding in the cooperative. At least this can be aninitial arrangement.Membership requirementsCooperative members have to be local people who, by virtue of their established residence, can make a commitment to the cooperative and theregion it services. Therefore the problems of a floating population andimmigrant labour which may disturb the economy by increasing theavailability of labor will not occur in a cooperative system. Therequirement of a worker's or shareholder's longer term commitment to thecooperative means there is no scope for floating labourers to becooperative members. Elimination of immigrant labour will also protectthe social life of the cooperative from possible adverse socialinfluences created by mobile populations.Anyone who wishes to be part of the socio-economic life of a region,however, can settle there and become a member of local cooperatives.UnemploymentSarkar further states that in the cooperative system unemployment willbesolved. This is because as production increases the need for more humanresources and for the construction and operation of more facilities willalso increase. Educated people can be properly employed as skilledworkers. There will also be a need for tractor drivers, labourers,cultivators, etc. who as cooperative members will naturally do thiswork.In times of economic downturn everyone's labour will be proportionatelyreduced so that no one suffers the stigma of being unemployed. In thisway economic downturns will always be short and temporary.Sarkar is confident that cooperatives will solve the unemploymentproblemand states that in the cooperative system there should be no compulsorydate for superannuation. People should be free to work as long as theylike providing their health permits. This is in contrast to somegovernment policies which encourage older people to retire in order tomake room for younger people. Following is a look at other aspects of Sarkar's cooperative concept.Workforce compositionAll groups in the cooperative workforce will benefit from thecooperative's profits. The members of a cooperative will be composed of:(i) shareholders - who receive salaries for their work plus a return ontheir shares;(ii) non-shareholders or labourers - who enjoy stable employment andfavourable wages.Non-shareholding labourers can be further categorized into those whoare:
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