Excerpted from Robin Murray in Red Pepper (UK):

“What part can co-operatives play in a 21st-century model of an alternative economy? Could co-operatives become the dominant form of enterprise just as joint stock companies were in the industrial era? Can the state – itself part of the social economy – find a way of working with them in new collaborative ways? Can it indeed internalise not only co-operation’s values but its practices? Can we imagine a model of the co-operative economy that generates as much confidence as once did the various versions of Fordist socialism?

Let’s start with finance. Instead of a financial system dominated by a few centralised global banks that have subordinated production to their logic, can we imagine one with a thousand local banks, owned either by their members or municipalities? They would be a repository of local savings and lend them to small enterprises and households in need, whom they would know as intimately as the English country banks knew their neighbourhoods in the early 19th century.

For larger investments and technical support the banks would form their own regional and national bodies. And for the major strategic tasks, there would be a national public bank that would provide funds and advice to the local ones.

These were the dreams of 19th-century co-operators throughout Europe and North America. Today in Britain they would be seen as green utopianism. Yet in Germany they are part of everyday life. There are more than 1,100 independent co?operative banks, with 13,000 branches and 16 million members. In almost every neighbourhood in Germany you will find a co-operative bank, and usually on the other side of the street in co-operative competition will be one of the 15,600 branches of the 430 municipal savings banks or Sparkassen. That is more than 1,500 independent local banks with almost 30,000 branches.

Both the mutual and municipal banks have their own regional and national clearing and specialist banks. Together they dominate retail banking, with the commercial banks confined to less than a third of banking business. The public development bank, the KfW, commits more than €20 million each year to finance the switch away from nuclear energy and to meet its climate change targets. They need a highly granular banking network to reach the households and small enterprises who are key to the new energy model. That is provided by the co-operative and Sparkassen banks. These two social pillars of Germany’s ‘three pillar’ system have been a principal factor behind the economic success of the small and medium industrial enterprises of the German ‘Mittelstand’.

This model of co-operative banking was developed in the mountainous rural areas in the 1850s to support the local farmers, small traders and artisans ignored by commercial banks, and later in the eastern cities to fund urban artisans and traders. It spread all over Germany and to much of the continent, where it still plays a major part in the national banking systems. In Holland, for example, the second-largest bank (one of the top 30 in the world) is the Rabobank, a confederation of 141 local credit unions. Like the German co?operative banks, and the similarly inspired networks in Canada, they are geared to the welfare of their local economies.

What about industry? Can we imagine a co-operative region that holds its own in a globalised economy? It might equip its farmers and artisans with the most modern equipment, and help them to form co-operatives to sell their products all over the world. Each town could focus on a particular product so that it developed the necessary specialisms. It could have its own college where the skills of one generation are passed on to the next. The finance would come from local co-operative or public banks, the loans guaranteed by other artisans in the town, and all the invoices and accounting would be handled by a dense network of joint bookkeepers and accountants.

This is a description of the region of Emilia Romagna in Italy. Many of the light industries there and in neighbouring regions have not just held their own but become leaders in their sector in Europe. In the ceramics town of Imola the main co?operative is now the largest ceramic producer in Europe. Carpi is one of the major clothing areas in the EU – a town of 60,000 people with 4,000 artisan firms. The Emilian farmers not only supply the local co-operative supermarkets that dominate retailing in the province but they have established their own co-operative processing and branding. Parmesan cheese is made by a co-operative of 550 milk producers, Parma ham by a co-operative of pig keepers on the banks of the Po.

This pattern of production is not confined to the so called ‘third Italy’. There are similar industrial regions in Denmark, Germany and the Basque and Valencian regions of Spain.

Alternatives of this kind already exist in many of the core areas of today’s economy. In the face of industrialised food, Japanese consumers (almost all women) in collaboration with local farmers have created a remarkable food box scheme. Once a week they put in their orders, gather to assemble the produce into boxes and deliver them through a network of their own local micro groups (known as Han). The consumer co-ops now have 12 million members and have started associated co-ops for food processing, packaging, design, printing and catering, and are currently extending into childcare, health and elder care.

Or take renewable energy. Denmark produces a quarter of its energy from windpower. This is largely generated from turbines owned by more than 2,000 local wind co-operatives. The UK has many fewer, but those that there are can now distribute their energy through the recently-formed Midcounties Co-operative Energy, which attracted 20,000 members in its first year. There are similar thriving co-operative networks in fields such as education, health, social care and sport.”