Thursday, May 1, 2008

Social Democracy, Social Credit and the Cooperative Commonwealth

Several years ago someone commented on the checkered state of the cooperative movement overall. The commentator asked why do cooperative movements often lose steam? Why do the greater part of cooperatives behave in much the same way as other firms in terms of management and in terms of the links they develop, or don't develop, in their communities?

What we are reminded of here is that the history of the quest for a cooperative commonwealth is a story of missed opportunities and roads not taken. I've concluded that the essense of the challenge activists for economic democracy face is that we can never negotiate a cooperative commonwealth based on orthodox economic terms.

So what does this have to do with Social Democracy in the 21st. century? Plenty. Historically the Social Democratic Party here in America was committed to an actual demonstration of a non-statist cooperative commonwealth, many within the party going so far as to plan an actual colonization effort of an American state to do so.

It's in our genes....shining city on a hill and all that.

The prairie populists of Canada and USAmerica once had a unique opportunity for a breakthrough past the restraints of the orthodox economics of the early twentieth century. It was a time when new denominations of socialist thought arose alongside that of guild socialism. Social democratic Fabianism, which would be an early adopter of Keynesian policy prescriptions, came to dominate socialist thought and shape the limits of a socialist agenda. It also displaced guild socialism and its historic project of building the decentralized and non-statist social economy that the greater part of the American people wanted. Fabianism more-or-less adopted the conventional wisdom of orthodox economics and through this route social democratic parties the world over have been drawn into the corporatist agenda.

Populists and socialists in USAmerica and Canada squandered their opportunity to build the cooperative commonwealth in North America when the larger part of the movement gave way to a Fabian form of social democracy. This split the populist movements on North America's prairie country. In Canada in particular the populist movement would eventually find itself split between the CCF, the Progressive Conservatives and Social Credit. Today Social Credit is often dismissed as the ideology of right-wing monetary cranks. But lately Social Credit has been undergoing a revival among many on the European Left, particularly within the UK Green Party, which has a "sustainable economics working group" with a sizable congregation of devotees of Social Credit. Thanks to Richard Cook, formerly of the Carter Whitehouse, Social Credit principles are once again getting a hearing in these United States.

According to Frances Hutchinson, a British Green Party activist and academic, Social Credit has its origins in guild socialism. According to Hutchinson Social Credit was "formed within the broad alternative school of thought which opposed the growing domination of finance over the economies of the developed and underdeveloped worlds. It was equally opposed to economic and military warfare, to wasteful production, the degradation of farming to a commercial activity and to environmental degradation."

What precisely is Social Credit? According to Hutchinson, it is a means " approach the creation of alternative structures of production and distribution in order to meet local needs free from the restraints of distant financial institutions." According to advocates of Social Credit, the way in which central banks and financial institutions interact with productive firms creates a shortage of purchasing power. Social Creditors believe the structural problems creating this shortage of purchasing power can be overcome with a new means and new criteria for the creation of money that will allow a sufficient pool of purchasing power to liquidate the costs of production.

Perhaps it is time for the cause of Economic Democracy to recover its two wings. It may be that the cooperative movement has suffered most from the constraints of orthodox economics, and that the cooperative commonwealth is in need of a full pair of wings in order to fly. Perhaps the remarriage of Social Credit and the cooperative cause is just the kind of breakthrough that can allow cooperatives and cooperative communities to develop on their own terms.

By Alan Advans

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