I’ve always hated that cooperatives were considered as a kind of curiosity, like an epiphenomenon that suddenly appears during desperate times. Right now, I’m delighted to say that those times are over. Faced with recurrent crisis, constantly increasing inequalities and the inability to make adequate forecasts, economists are scurrying to revise their theories. In fact, over the last ten years, the Nobel Prize for economics was awarded, very often, to projects designed to better determine how a business actually operates, such as through experimental economics, which is often based on game theory.
Recently, I had an opportunity to attend a session in which results from recent research were presented, and more specifically those from an experimental economics branch called ‘behavioural economics.’ This refers to studying the psychological aspect of decision-making either in a laboratory setting or in the field. Several experiments are then translated into equations, regressions and statistical charts to better understand the various motivations that drive people to act in a certain way rather than another. You might be thinking that is far from economics? Yet it isn’t.
If the so-called laws of economics don’t work, it’s because business overlooked the human factor. These laws, based on the premise that human beings act solely in their own interests and that the search for profit leads to business efficiency, simply don’t hold water. In real life, human behaviour upsets this staid perspective. Numerous behavioural economics experiments have clearly shown that human beings are only seldom selfish. In fact, they have a clear preference for cooperation, particularly when considering a long term outlook. The importance of trust, values and organisational structures influence people’s behaviours in business as well as in their private lives.
At the end of this fascinating session, the resulting conclusion was that, until now, business had been misunderstood and now required a new model. This new model would allow for better predictions. A model …. to which would be added a social component. Well, what do you know? That’s when the cooperative model was introduced. In cooperatives, researchers have found a source of inspiration. From their perspective, the cooperative model is astounding : while capitalist businesses are destabilized by economic crisis, the cooperative movement seems, for all intents and purposes, to continue its development. An explanation is therefore sought. And one hypothesis is issued: the success of cooperatives is probably related to its social component. Among other factors, we should also consider the efficiency of a business via its social component.
The instructor then showed a slide. Simple, but so meaningful. Different businesses, in a long continuum, could now grab onto a line. On the one side, there is the capitalist business with its clear mission of making profits, but where the social component becomes a means to achieve its purpose (isn’t this exactly what we are seeing now, with the business world’s sudden interest in social accountability?). And on the other side, there is the cooperative whose mission is obviously social – since it aims to meet the needs of its members – but requires capital to make it happen. And between the two: A multitude of possibilities. Naturally it depends on the type of business and on the context, but businesses and cooperatives can move along the line to adapt to current conditions.
Finally, there is a confirmed place for cooperatives. They are no longer strange curiosities. They are no longer miracles for the poor. They are now very germane to today’s reality and perfectly integrated in the market economy and this is a testament to their relevance. As for us, the people from the cooperative world, we finally have the scientific tools to support our cooperative education efforts.