SEAN CREIGHTON traces the historical association of mutual organisations and the labour movement, and questions what the ‘new mutualism’ can offer to radical politics in the future.
Scarborough’s Central Public Library is housed in the Oddfellows Hall opened in 1840. From 1857 it became the base for the Mechanics’ Institute and its library. The borough council took it over and opened the town’s first public library in 1930. (1) This is a reminder of the legacy of mutual association in the development of public services.
Can we learn anything from the history of mutuality? Our ability to do so is weak because of the failure of labour historians to study mutuals, apart from cooperatives and trade unions. The friendly society sector has also neglected its history, which is why the Friendly Society Research Group was founded in 1999. We need a lot more studies of all types of individual mutual organisations, of their interaction in the localities in which they were active, and of their activists, in order to identify common features and differences, dynamics, tensions, and contradictions.
What is mutuality? What are mutuals?
Mutuals are owned by their members for their common benefit not for the benefit of speculative investing shareholders. Mutuals have included:
- friendly benefit societies
- retail cooperatives
- housing cooperatives
- worker cooperatives
- building societies
- insurance societies
- loan societies and credit unions
- trade unions
- tenants’, residents’ and community associations.
There are also forms of non-investor shareholder organisations, including:
- unincorporated and incorporated voluntary and community organisations
- companies limited by guarantee
- housing associations.
Collectively these organisations are often referred to as the ‘third’ or ‘non-profit sector’, or the charitable, community and voluntary sectors. There is overlap between these sectors, and with the mutual sector, partly because of common legislation. Today there are 280 friendly societies with 4.5 million members and £11 billion in funds. There are an estimated 1.5 million community and voluntary organisations.
Some modern definitions
- A sense of common citizenship that leads people not to press too far their claims for personal liberty and to agree on a certain amount of basic equality of condition among citizens. (2)
- A “doctrine that individual and collective well-being is obtainable only by mutual dependence”. Liberty, equality and fraternity can only be achieved “if we develop a culture of mutual responsibility”. (3)
- “Stakeholder ownership by any of those who are beneficiaries other than a separate group of investors.” (4)
- “A mutual organisation is owned by its members, who also have a say – usually a vote – in the corporate governance of the organisation … The distinguishing feature of a mutual is that the member-owners are more than investors. They usually have another relationship with the mutual, either as consumers, producers or suppliers. The members create and own the organisation whether to consume its services or to come together as joint-producers.” (5)
Mutuality and radical politics in history
Mutual associations – that is organisations of working people coming together to provide collective self-help solutions to needs as diverse as shopping, employment, sickness, lack of credit, funeral expenses, education and leisure – go back hundreds of years. Perhaps the oldest surviving mutual association is the Aberdeen Shore Porters Society which has existed since the late 15th century. The Quakers and other non-conformist religious groups played an important role in developing associational cultures. Mutuality has been closely linked with radical politics in that there was a shared belief in defending working people and extending their rights as the majority against the ruling elites.
There has been a continuity of ideas about justice, freedom, equal rights, collective influence, and control and participation in changing radical agendas from the Peasants Revolt of 1381, to the campaigns for democracy and land ownership of the Levellers, Agitators and Diggers during the English Civil War and Revolution in the 1640s, to 18th century campaigns against corruption and for parliamentary reform, as well as in the radical and revolutionary aspirations of men like Thomas Paine, and the campaigns against the slave trade and slavery, and for the extension of the suffrage.
Governments have been uncomfortable with these developments, and have used a number of means to try and control free association. The Friendly Society Act of 1793 sought to control the activities of friendly societies, especially those concerned with the provision of financial help for unemployment, sickness and death. The Combination Acts of 1799 and 1800 sought to prevent free association and collective organisation especially for radical political and trade union purposes.
In response to the repressive legislation of the 1790s some organisations went underground, risking repression if caught. The successful campaign to repeal the Combination Acts in the 1820s, and the campaign from 1834 to 1836 to pardon the Tolpuddle Martyrs for breaking the law in the way they formed a trade union friendly society, were part of the continuing fight for free association. The 1830s saw benefit societies expressing concern about a legislative proposal to enable the government to raid their assets, the accumulated savings of working people, to help finance the £20m compensation to be paid to former slave owners in the West Indies. (6) In 1835 societies recognised that they needed to be vigilant and set up the Benefit Societies’ Protection Institution. (7)
Out of the ferment of radical ideas and campaigns from the 1790s, grew critiques of the exploitation of labour by capital, and a search for different strategies and tactics that could address the range of problems the working class was presented with by capitalism’s growth and exploitation. It is clear from the rules of many mutuals, including the Friends of Labour Investment Association, and in the opening editorial of the Labour & Unity newspaper, that there was a clear understanding at the time about the relationship between capital and labour, and their own function in protecting their members.
For example, the Preamble to the Rules of the Friends of Labour Investment Association stated: “Whereas, experience establishes the fact that working men generally are dependent on capitalists for the means of labour, and that, whenever those means are withdrawn, they are necessarily thrown upon their own resources, and thereby exposed to great privation and suffering.” (8)
Similarly, the editorial of Labour and Unity said: “Labour and Unity! Here are two things which, when firmly and permanently blended together, would form one of the most powerful levers ever wielded by an atlas to enable him to move a world. In the two words here recorded the whole fable of the bundle of sticks is illustrated; for what is Labour without Unity but a hungry out-cast, which Capital may at any time scatter and impoverish to its heart’s content. To teach those who live by their Labour how they may best unite to preserve it, and thus form a noble aristocracy of wealth producers – and not wealth consumers – in their own right, will ever be the object of the conductors of this journal.” (9)
There was a belief that through collective self-help associations, working people could alleviate the adverse effects of capitalism, end their social, economic and political exploitation and exclusion, improve their working conditions and pay, and improve their living conditions. The key words were ‘association’, ‘mutuality’ and ‘the cooperative commonwealth’. The growth of trade unions from the 1810s, cooperatives from the 1820s, friendly benefit society orders of the Oddfellows and Foresters from the 1830s, and friends of Labour loan societies from the 1850s, created a complex patchwork of mutual associations. (10)
Throughout this process, tensions between mutual associations and governments continued. In March 1870 a delegate conference of friendly societies held at the National Temperance League Hall, including the Foresters, Royal Liver, London Friendly Society, Independent Oddfellows, Victoria, Manchester Unity, Druids and others, expressed strong “opposition to government interference in the management of the societies, or in the control of funds.” (11) The principal friendly societies met in July to oppose a proposal for a Royal Commission on Friendly Societies. (12)
Even while attempting to keep their unions directly out of politics in the 1860s and 1870s, the trade union leaders were prominently active in a range of radical political associations, including the International Workingmen’s Association, whose secretary was Karl Marx, and the Reform League. And they associated through the Trades Union Congress from the end of the 1860s. (13)
While there was a strong case for keeping different types of organisation and activities separate for legal protection purposes, leading activists can be found working across organisations and movements. Examples include William Pare, the Owenite cooperator (see box).
William Pare, socialist cooperator (1 August 1805 – 8 June 1873)
William Pare was the corresponding secretary to the first Birmingham cooperative society. He was a member of the Birmingham Political Union, which campaigned for the major reform of the House of Commons enacted in the Reform Act of 1832, and which went on to support the People’s Charter from the late 1830s. Along with at least 11 of the other 17 members of the union’s committee he joined the committee that established the Owenite Birmingham Equitable Labour Exchange. He took a leading role in setting up the Birmingham Mechanics’ Institute.
Pare was a Birmingham City Councillor from 1836 to 1841. He became the first Registrar of Births and Marriages under the Act legalising civilian marriages. Because he “was an advocate” of Robert Owen’s views – ie. a socialist – Dr. Philpotts, the Bishop of Exeter, complained about him in the House of Lords, which led to Pare resigning his office.
Pare became governor of the Owenite community experiment at Queenswood serving from 1842-44 helping to fund it, and moving there with his family in 1844. He was later to become one of Robert Owen’s literary executors.
From 1865 he advocated the establishment of a national cooperative organisation. He became organising secretary of the committee charged in 1867 with organising a federation of cooperatives through “united action, promoted and controlled by a central representative congress”. This finally took place in May 1869. Pare was appointed honorary secretary for the congress. (14)
In 1868 he said that “if the old cooperators erred in sentiment, certainly the present ones err in the direction of materialism”. (15)
It is through what we now call ‘networking’ and ‘working together’, that strong local movements in support of radical political and social change could be built, whether via the work of Joseph Cowen in the north east in the 1850s, ’60s and ’70s, or John Burns in Battersea in the 1880s and ’90s. (16)
Marxian socialism, as organised through the Social Democratic Federation, grew out of the associational culture of the radical clubs of the 1880s. (17) The wish of the active working class movements to have parliamentary influence and representation, led to some developing closer working relations with the Liberals, including standing as Liberal Parliamentary candidates, while others argued the case for parliamentary representation independent of them. The outcome of the latter approach was the establishment of the Independent Labour Party in 1893, and of the Labour Representation Committee in 1900, which became the Labour Party in 1906.
Labour and mutuality
The historian, cooperator and adult educator, Stephen Yeo has suggested some useful concepts for analysing the change that the Labour Party has gone through from its seed bed in mutual associations. There have been three forms of socialism, he says: ‘associationism’, ‘statism’ and ‘collectivism’, by which he means rule by professional or managerial experts. And there have been three stages to Labour: ‘old, old Labour’, ‘old Labour’ and ‘new Labour’.
Old old Labour means “collective self-activity by large numbers of working people in large-scale associations mostly created during the 19th century. They offered more than one activity. They valued membership and democracy. Their forms of governance and management emphasise equal ownership. Old, old labour, at its strongest and popular best, preferred the practice of possibilities now, rather than their postponement until after something else had happened – an election victory, a revolution, the downfall of capitalism, or the next stage of history. Progress was something they made: not something someone else decreed.”
Old Labour, on the other hand, was the state-focused political party formed in 1900. Although retaining elements of old old Labour, as the century unfolded it gave less and less support to the self-activity of its old, old labour affiliates. (18)
These concepts enable us to analyse the development of radical, socialist, communist and social democratic approaches to politics as a process of competing ideas in which individuals, organisations and movements made choices, which gave predominance to one or other of the ”‘socialisms’ at different times, while also containing elements of the others, causing internal tensions and contradictions. Through that process old Labour developed its predominantly statist and collectivist approach out of its old, old Labour associationist roots. Elements of associationism continued to operate in its affiliated organisations and its branch and constituency parties from 1918 until the latter were undermined by the national membership schemes which have replaced branch collection.
In the complex battle with capitalism and the state, a range of strategies were employed: conflict, defence, and offence, identifying opportunities, working in the cracks in the system, and utilising divisions within the system. But strategic choices also created divisions across working class and radical movements. For example, the increasingly insurrectionary tactics used in the early part of the 19th century were abandoned in favour of reforming the system and, towards the end of his life, even Engels began to take the view that change could be achieved peacefully in Britain as near universal male suffrage created a major qualitative change in the political environment in which socialists worked.
The issue of alliances
The choices were many. They included support for Liberalism on the one hand, or developing Labour on the other; and choosing between sectarianism on the one hand, and working in alliances on the other. From 1884 the Social Democratic Federation fluctuated between the two positions, as did the Communist Party from the 1920s. There was even a choice of approaches for alliances. Labour was developed as a narrow alliance and was rejected by those that favoured a broader progressive alliance with the Liberals, preferably organised in such a way that enabled labour movement organisations to be in control. Keir Hardie adopted the former approach, John Burns the latter.
In Battersea, south west London, Burns built a progressive alliance dominated by labour movement organisations. It was built by the activists and organisations that were rooted in the local mutual association culture. Battersea was full of branches of the Oddfellows, the Foresters, the Druids, the Comical Fellows, Sons of Phoenix and the Rechabites, retail and industrial cooperatives, trade union branches, and working-mens’ clubs. Battersea workers had played leading roles in the formation of the Amalgamated Society of Carpenters & Joiners in 1860 and the Amalgamated Society of Railway Servants in the early 1870s. The Battersea & Wandsworth Cooperative, which started in 1854 and lasted until 1908, helped build the Cooperative Permanent Building Society, and the Cooperative Women’s Guild. (19)
Between 1888 and 1892, Burns was at the heart of creating the New Unionist radical and socialist demands for an eight hour day (or a 48 hour week, as people worked six days a week), fair wages, direct labour, and services provided by local authorities. The eight-hour day campaign initiated by Tom Mann in Battersea led to May Day being celebrated as a workers’ festival. (20) New Unionism saw an explosion in the formation of new mutual associations, especially among previously unorganised workers, particularly those in lower skilled jobs. It was also able to tap into its members’ support of the friendly societies during the dockers’ strike of 1889. (21-23)
As a result of his broadly based progressive political alliance, involving activists steeped in mutuality and association, Burns was elected as an independent socialist to the new London County Council at the end of 1888, and then in 1892 as MP. The alliance then took control of local government from 1894 until 1909, and again from 1912 to 1919. Battersea became the ‘Municipal Mecca’. It was in the forefront of the provision of education, leisure, sporting, housing and community health services, electricity supply, direct labour, the payment of fair wages, and work projects for the unemployed.
Albert Mansbridge also grew up within Battersea’s political mutual associational environment. He founded the Workers’ Educational Association in 1903, as a mutual association to help the development of workers’ education, because he saw this as key to strengthening democracy and participation. He brought together the cooperative movement, the university extension class movement, trade unions, and the settlements. (24)
Few other areas of the country saw the political breakthrough represented by the electoral victory of John Burns in 1892. This must explain, to some extent, why his progressive approach to radical and socialist political development did not win the day when the Labour Representation Committee was established in 1900. Though never joining the Liberal Party, Burns went on to accept a cabinet post in 1906. This was welcomed by some leading activists in the labour movement and attacked by others. He remained a member of the Liberal cabinets, until resigning in protest at the declaration of war in 1914, which introduced a wide range of measures that provided the building blocks for the welfare state, including old age pensions, national insurance, and employment exchanges. (25)
Nationalisation and mutuality
A further choice was made between, on the one hand, centralised planning – controlling public services and industries through public corporations and nationalisation, using capitalist management techniques – and, on the other, developing new forms of association and mutuality. In National Insurance, from 1911, the two approaches were linked, but the central control eroded the mutuality of the friendly societies and trade unions through which benefits were administered. (26)
Despite having been created from within the mutual association movements, Labour governments did little to help foster and support mutual organisation. When the Labour government was elected in 1945, 14 million people in the UK subscribed to friendly societies through a network of over 18,000 branches and societies. In introducing Beveridge’s National Insurance and National Assistance, and the National Health Service schemes, the role of these organisations was by-passed and diminished. Attlee’s government chose the top-down managerial nationalised industry model, without any element of workers’ control.
Features of mutual organisation
There are common features to mutual associations in the 19th and first half of the 20th centuries.
- They built organisational experience, skills and confidence, reinforced the sense of community, and enabled the sharing of ideas.
- They provided support at times for people with personal problems – financial and bereavement support. Large attendance at funerals gave public recognition, local leaders’ funerals would often be accompanied by organisations with their banners and with bands. Other members of the associations would be present along with the family. The simple display of the membership regalia on the coffin made a public statement.
- They provided social life, and there was a stress on ‘fellowship’. This took a number of forms, a drink before or after meetings held in public houses, dinners, benefit events to raise money for members or their widows, smoking and musical events, outings to the seaside and fetes. Songs played an important role. Social functions run for the membership helped to reinforce group identity. (27)
- They brought members together at large-scale annual events at Crystal Palace. (27) (28)
- They promoted learning among their members, through having a small library on their premises, running debates and having guest speakers.
- They reinforced group solidarity through public fund-raising events and other functions, enabling branches to help each other, and to raise money from non-members.
- They provided a ready made way in which newcomers to an area would be welcomed by transferring their membership to the local branches.
- They involved local activists in district and regional structures and at annual meetings, enabling them to exchange ideas with others from different areas. This must have allowed for new ideas and perspectives to be brought back into an area and that area’s ideas to be exported.
While organisations and movements were dogged by false-starts, dashed hopes, blind-alleys, defeats, lots of back-biting and personality clashes, there remained activists who continued to organise and fight for a better society, moving from one form of activity through mutual association to another. The collapse of any particular organisation may have been unfortunate, some people may have become disillusioned, but others found new ways to collectively work together. (29-33)
The ability of the British to form mutual associations around a shared interest or concern, controlled by their members, has been a hall-mark of the development of civil society over the last four centuries. Through mutual associations, working people developed their own forms of participatory and representative democracy, as well as winning formal representative democracy.
The decline of mutuality
There have been many factors in the decline of mass support for mutual associations in the second half of the 20th century.
- The growth of centralised unaccountable quangos, such as the nationalised electricity industry and the NHS.
- The slum clearance programme.
- The building of high-density, high rise flats, and edge-of-city estates.
- Government policy encouraging industry to move out of inner cities, and the collapse of large-scale industries aided by governments.
- The growth of local government as employer and housing manager, turned local politicians from leaders and innovators into managers, and for many they became one of the enemy.
- The growth of poverty and benefit dependency, and lack of adequate funding for the welfare state at local and national level.
All these things have not just eroded what is called ‘social capital’, but also ‘spiritual capital’, that is the nurturing of the full potential of individuals, and their confidence in their own value and potential to effect change. The type and range of mutual associations has changed since the second world war in response to changing circumstances, with the introduction of improved national insurance, the social security system and the NHS, and in response to new needs.
What seems to have disappeared is a real sense of being part of a shared culture. The concepts of the voluntary and community sectors are more about having a definition to distinguish their organisations from public service and commercial business organisations, and to distinguish locally-based organisations from the big charitable bodies.
Problems inherent in mutuality
Mutuality has not been without its own problems, tensions and contradictions.
- Exclusion. Fraternal inclusion also involved exclusion, particularly of women, who had to form their own friendly societies. The Foresters did not open up membership to women until 1893, and then only through female branches. (34) Trade unions developed around occupational gradings, usually leaving the unskilled outside, until the new Unionist wave triggered by women workers, the Match-Girls, opened up an explosion of unionisation among lower paid and unskilled workers and brought more unorganised skilled workers into existing unions. Many working men’s clubs and community associations in the 1950s and 1960s excluded people on race grounds. (35)
- Competition and friction. The diverse range of organisations often focused attention on the internal needs of each, with an element of competition and friction. This was often countered by joint community activity, but in the case of the two main railway unions resulted in decades of active organisational conflict. (36)
- Fragility of democratic control and accountability. These could be only kept real if local organisations remained small in numbers, but this often made for the financial unviability of branches or stand alone societies.
- Managerialism. As movements and organisations grew in size so a more professional management was recruited. There were also tensions and conflicts between rank and file and elected officers and managers. The adoption of management methods resulted in a reduction in the connections with members, whose identity with the core values was eroded, turning them into customers.
- Consumers versus workers. There was conflict between consumers and producers. The retail consumer movement was dominated by the view that any surplus should be shared through the dividend by the customer not the workers. Retail cooperatives were not good employers. They used their voting power to try and block the development of producer/worker cooperatives. (37)
- Fraud. No amount of rules and safeguards could prevent fraud of funds by elected treasurers.
- Member dissatisfaction. Dissatisfied members occasionally took their organisations to court, for example to obtain what they thought were their benefit or saving entitlements. In one famous case, Osborne, a railway worker steeped in the radical associationist tradition, took his railway union to court because he objected to his subscriptions being used to fund the Labour Representation Committee.
- Poor management. Good management could not be guaranteed. The Battersea & Wandsworth Cooperative Society failed in 1908 after 54 years because a membership split over the manager had sent it into a downward spiral. Mutuals were not always viable as businesses. The mutual grave yard is full of cooperatives and friendly societies which had very short lives.
- Retail competition. The retail cooperative movement took a great dent from the rise of the supermarkets after the war, and still seems unable to offer an attractive competitive alternative.
Mutuals began to lose direction after the statist, collectivist solutions of 1945 took hold. Many loosened the collective membership identity and did not continually celebrate their histories and contribution. As a result the movement to de-mutualise building and insurance societies, like Abbey National and Halifax, had a remarkable degree of success, as members opted for trading-in the accumulated assets of past generations. De-mutualisation sparked off a debate about whether mutual ways of running trading organisations had come to an end.
These are some of the downsides of the history of mutuality. They are issues that still bedevil the movement, and need to be addressed if their role is to be expanded. But for all their problems, a substantial structure of mutual associations has survived, and new ones are continually forming.
Making sense of new Labour
Many of us are still struggling to make sense of the new Labour project. Many Labour Party members and former members regard themselves as old Labour if only because new Labour rubbished their past activism. But many were not happy with old Labour either, moving in the 1970s to a critique of its statist and collectivist elements, and the failure of its locally and centrally-run services to meet people’s diverse needs in a holistic way, or to be involved in the growth of community action and welfare rights.
We need to make sense of the major changes in society and economy since 1976 when the Labour government began to cut back public services as part of the deal to prop up the pound agreed with the International Monetary Fund. Labour’s mini-monetarism helped pave the way for the major monetarist attack on public services, manufacturing industry and the concept of society under successive Tory governments, and for the attack on the tradition of associationism, as enshrined in the trade union movement.
The Tories were able to win a substantial section of public opinion for privatisation because of the perceived failure of centralised national and local public services and industries to deliver what the end user (or consumer, or citizen) needed. It was difficult to build a united defence because the labour movement was itself divided over the issue, many on the left having begun to develop a new anti-statist, anti-collectivist radical critique of their own.
The Thatcherite project destroyed the New Unionist agenda of the 1888-92 period. That agenda had never been completely realised. In particular the trade unions had never been able to ensure that local authority manual workers were decently paid. They were at the heart of the ‘winter of discontent’, which contributed to the defeat of Labour in 1979.
The Thatcherite reactionary revolution was helped by the collapse of Soviet communism, further evidence of the apparent inability of highly planned and centralised nationalised industries and services to deliver.
The labour movement’s morale took a severe bashing with the attack on trade unions with their declining memberships, the defeat of the miners, the splits in the Labour Party about what had gone wrong, and the choices that needed to be made to challenge Thatcherism. This was not helped by the debate started by the Communist historian Eric Hobsbawm in Is the Forward March of Labour Halted, and the championing of that thesis by the Communist Party’s journal Marxism Today, supported by a range of former 1950s New Left commentators.
Trotskyists felt vindicated by the collapse of the Soviet Union while Communists fractured into different groups. Rank and file members of the Labour Party were confused. Some sought to reassert democratic control only to find themselves outmanoeuvred. Others split off and joined the Social Democratic Party. Others began to construct a new labour politics, coming together in the Blair project and new Labour. Most party members went along with the flow in the hope that Labour could get back into power. Many have left since 1997, each departure triggered by some new policy announcement or direction that they could not stomach.
New Labour agendas
New Labour does appear to have some degree of a radical vision for the economic, social, environmental, civic, civil and democratic renewal of Britain. It links together seemingly separate policy agendas such as sustainable development, social inclusion, urban and rural regeneration, neighbourhood renewal, devolution, reform of local government, community strategies, social enterprise, life-long learning, basic skills, and ending child and fuel poverty. One of the central themes is putting communities at the heart of the decisions that affect their lives. Even if not all secretaries of state and ministers understand it, let alone agree with it or not, the most coherent advocate of it is David Blunkett. (38)
Blunkett has analysed the last 20 years, re-examined the positions he took during those times, and sets out a clear agenda for the future. In terms of ideas for changing local government, one can see the beginnings being fleshed out by an academic like Gary Stoker in 1988. (39) It is no coincidence that he is chair of the new Local Government Network, campaigning for the reforms at the heart of the government approach.
The government agendas are a challenge to itself and its public service agencies (the NHS, police, Learning & Skills Councils), local authorities, education bodies, businesses, and voluntary and community organisations. The regeneration, social inclusion and education agendas link closely with the government’s changes to the way local government works. Local authorities are being required to develop community strategies and encouraged to initiate Local Strategic Partnerships (LSPs).
Ideally the government wants these partnerships to be built from below. It recognise that this will not happen spontaneously, so it expects local authorities to consult with existing specialist partnerships to encourage them to evolve into LSPs, and then work to ensure that voluntary and community organisations are included. This process has been underway over the last year or so, and many difficulties have been experienced. Local authorities are also being encouraged to establish forms of neighbourhood management, which will need to involve voluntary and community sector organisations.
While you can argue about much of the detail, we seem to be on the threshold of a new period, in which the role of geographic and interest communities is being encouraged, resourced and given a more significant voice at local, regional and national levels. ‘Capacity building’, ‘community leadership’, ‘social and community enterprise’ and ‘social entrepreneurship’ are the buzz-words.
However, achieving this radical change is fraught with difficulties. Changing the way services are delivered, and the cultures of organisations, is difficult and takes time. New national frameworks, targets, tools and ways of passing down the resources have to be designed and new delivery mechanisms set up. People on the ground in public services, local authorities, businesses, and voluntary and community organisations, feel overwhelmed and overstretched. At the same time as passing down existing funds in new ways, increased funding has to be found to enable the accumulated damage of 25 years to be reversed.
Since it cannot do everything the government has to set priorities. The government gets distracted by shooting itself in the foot or by the media trying to trip it up. Unexpected events, such as foot and mouth, or last summer’s riots, can very quickly compound existing problems and make their solution much more difficult. Because it always has to keep an eye on opinion polls and forthcoming elections, lasting change, which takes 10 to 15 years, gets compromised by the need to deliver results in the sort-term. It panics, throws aside the general approach, and goes into crisis mode, as it has over refugees and asylum seekers, or street crime.
And because it knows that economic development and wealth generation is needed to provide the resources, to create the jobs, to invest in new infrastructure and build new environments, it seeks to win the support of a wide range of business interests, accepts international free trade and global capitalism, and supports propositions like freeing the labour market, which are in conflict with its long-term vision.
Labour has also inherited the legacy of the tensions and contradictions within the Thatcher project. She could not go all the way to unbridled free market economics and, in privatising major state industries like gas, water, electricity, and telecommunications, adopted a regulatory capitalist model. Arms-length regulators, who are wedded to market economics and ideally would like to see regulation wither away, underplay the social aspects of their role. They can neither guarantee a predictable shareholder profit, nor affordable and good quality service to customers. As a result several companies, like Kelda, formerly Yorkshire Water, have begun to look at the mutual model, and the government has picked up the idea in relation to Railtrack.
Mutuality and new Labour
What is one to make of new Labour’s interest in mutual association? In rejecting old Labour, new Labour seems to be trying to find a new accommodation with global capitalism, to encourage and support new forms of associationism, and still to retain some elements of statism and collectivism. This creates enormous tensions and contradictions.
Stephen Yeo points out that new Labour’s ‘third way’ puts greater emphasis on what is called social enterprise, the social economy, social investment, social finance, and social audit. (40) Since the general election it is becoming clear that the government does not see the social economy as a substitute for capitalist forms of enterprise. It sees it as running alongside and, in the case of Railtrack, possibly, providing an alternative model to, the failed privatised capitalist enterprise model.
A ‘new mutual’, common ownership model is seen by a wide range of other people as an answer to a range of problems created by the failure of private enterprise and public services. Like the government, many of its advocates do not see it is as a substitute for public or shareholder ownership, but an additional option. Mutual and social enterprise is thought to provide legal structures for public services that cannot be left to capitalist corporations, but within an overwhelmingly capitalist economy.
Mutuals are in danger of being reduced to just forms of social and community enterprise. Not all forms of social and community enterprise are mutuals. This is not to say that there is not a role for such non-mutual enterprises. Since the general election, the government has established the Social Enterprise Unit within the Department of Trade and Industry. The fact is that cooperatives and mutuals are being seen as institutions divorced from their radical roots. This a major challenge to developing new radical socialist politics.
- “It is important to be absolutely clear that the proposition here is not that we ditch either public ownership or shareholder ownership, in pursuit of some further, illusory all-purpose paradigm. Such an option does not exist. Modern economics and societies need public ownership where issues of public accountability and control are absolutely clear (the police and the armed forces, obviously, but there is room or debate about health and education). And we need shareholder-owned companies because they offer the most effective means of achieving the kind of fast-moving management and movement of capital essential to international competitiveness and economic growth. Most goods and services are best produced and delivered in this way.” (41)
- “The overall effect of pursuing new forms of common and community ownership would be to distance key services and infrastructures from excessively detailed involvement from government, which is not well equipped, at the local or national level, to involve itself in such detail.” (42)
- “Instead, government would still be a key player in all issues which involve public funds, but citizens would feel connected to organisations on which they depend for crucial services in a richer variety of ways. This would allow some to take a particular interest in, say, education, transport or health, enriching the democratic mix and working against the dangerous and growing sense that we, the people, are not responsible for the performance of core services because we have no way of influencing what happens to them. Unchecked, this trend promises to discredit politics as well as weakening the institutions upon which we depend.” (42)
- “The new mutual form of ownership is a radical new approach, but based on established principles and legislation. It is aimed at providing an alternative form of corporate model for the ownership of public services.”
- “Its ‘starting point .. is that public services are needed for the benefit of communities, and the individuals and organisations that make up communities.” (43)
- “They are incorporated under the Industrial and Provident Societies Act as societies conducting their business for the benefit of the community. They provide services to and are owned by the community. Their object is to deliver high quality services at the best price, and their ultimate aim is to service the community rather than generating profits for investors.” (44)
- “The new mutual approach “is an alternative which provides for greater participation by communities, or citizenship, and for local control of local services.” (45)
- Social Enterprise London (SEL) defines them as: “businesses that trade in the market in order to fulfil social aims. They bring people and communities together for economic development and social gain. They have three common characteristics:
- Enterprise orientated – they are directly involved in the production of goods and the provision of services to a market. They seek to be viable trading concerns, making a surplus from trading.
- Social aims – they have explicit social aims such as job creation, training and provision of local services. They have ethical values including a commitment to local capacity building. They are accountable to their members and the wider community for their social, environmental and economic impact.
- Social ownership – they are autonomous organisations with governance and ownership structures based on partnership by stakeholder groups (users or clients, local community groups, etc), or by trustees. Profits are distributed as profit sharing to stakeholders or used for the benefit of the community. Social enterprises are part of the growing ‘social economy’. Social enterprises stand out form the rest of the social economy as organisations that use trading activities to achieve their goals and financial self-sufficiency. They are businesses that combine the entrepreneurial skills of the private sector with a strong social mission that is characteristic of the social economy as a whole.” (46)
- Owned and controlled by the local community.
- Aims to serve the interests of that community rather than generate private gain.
- Any financial surplus it produces is used for community benefit, not distributed as private profit.
- Involved in commercial activity, producing goods or providing services for which they charge.
- Their key objectives include: the generation of jobs, skill enhancement, provision of necessary goods and services which the market is unable to provide, and the empowerment of individuals and communities to take control of their working lives. (47)
There are a wide range of questions that need to be asked and answered about the future for mutuals. Stephen Yeo and Johnston Birchall have posed a number.
Questions by Stephen Yeo:
- “Under the impact of threats of demutualisation, can large-scale mutuals and cooperatives find ways of living up to their principles as member-owned businesses, designing into their structures and practices the maximum flexible member participation? Or are they simply too big?”
- “Can mutuals find ways of distributing some of their value to members in order to avoid the temptation to demutualise, but without compromising member ownership? are the ways different in relation to different types of mutual: farmer coops, mutual insurance, building societies, consumer coops, and so on?”
- “How strong are the arguments in favour of legislation to stop demutualisation? What kind of legislation is being proposed, and what does it imply or relations between the mutuals, their members and state regulation? Are there any justifications for governments giving tax incentives to mutuals, or is a ‘level playing field’ between them and their competitors taken as axiomatic?”
- “What opportunities are there for the development of new forms of mutual, and for the conversion of investor-owned companies (in particular privatised utilities) into mutuals? Should they follow the example of the new football supporters’ trusts in the UK, and aim for group ownership within a conventional form … or perhaps aim for a complete buyout, as has been proposed for water companies?”
- “What are the blockages to the devolution of public services to mutuals? Are managers and elected councillors really committed to the kind of devolved management and participatory democracy that mutuality implies?”
- “In those countries where mutuals are used as part of a state-sponsored system to insure the population against basic risks, and to deliver services, how does the performance of such mutuals compare with that of public-sector providers such as the UK National Health Service? Are they closer to their patients? Are the systems of governance and accountability different and, if so, are they more, or less, effective?” (48)
Questions posed by Johnston Birchall:
- How can values and principles, and cooperative and mutual identities, be shared with everyone who has a stake in the enterprise?
- How can all members upskill themselves into knowledge of and conscious participation in the working of the enterprise?
- How can the same people fill different roles at different times (specialisation being a problem for longer-term, universal human development as well as an opportunity for the short-term development of some humans)?
- How can shared material ownership and shared ‘ownership’ of a more metaphorical kind (‘ownership’ of problems and opportunities, as in modern management-speak can overlap increasingly?
- How can Boards set goals, executives choose means, managers manage, electorates choose, members join erect in ways which, at their weakest, do not prevent cooperation and mutuality, and which, at their strongest, actively promote cooperation and mutuality?
- How can everyone’s stake be represented deliberately in the enterprise, by means of creative, social invention? (49)
It is possible that the most important issue that needs to be addressed is that discussed by Birchall and Richard Simmons – membership participation.
“Large-scale mutuals and coops may never become mass-participation organisations, but they can do far more than they are doing at present to promote member participation. They are facing a crisis of legitimacy, and have to demonstrate their right to exist in the mutual form. They have to show that they are in practice what they are in principle – member-owned and member-controlled organisations. They need to integrate into their business planning the needs and priorities of members. …. In order to succeed, the participation strategy has to be integrated into the wide business planning of the organisation, and not be seen as a separate activity. … The strategy has to include staff and member training that stimulates a wide sense of ownership of the strategy. Managers have to be ‘value-driven’, because it is their job also to identify and seek the needs of people who are not yet members. … Only by embracing an on-going, radical participation strategy that acknowledges their original nature as member-owned and member-controlled businesses can mutuals convince members and the wider public that they have the right to exist.” (50)
The role for the mutual and cooperative sector
The government documents on regeneration, neighbourhood renewal and social inclusion all focus on the contribution that can be made by the voluntary and community sectors, and by people in neighbourhoods and communities of interest. There is very little emphasis on the potential contribution of mutual associations in all their forms, or on the potential contribution of the cooperative movement and the friendly societies involved in insurance and health services.
Pauline Green, chief executive of the Cooperative Union, was arguing back in June 2000 that the government was realising that the cooperative and mutual sector could help “to deliver some of its most cherished goals” – the fight against social exclusion, creating jobs, activating local communities, resurrecting a sense of self-help and responsibility, innovating and regional development. (51)
The UK Cooperative Council and the Cooperative Party have been promoting the case for mutuals working with local authorities, by adding cooperation to the Best Value regime to challenge, compare, consult and compete. (52) The cooperative movement is playing its role within the Coalition for the Social Economy set up last year.
Mutuals and cooperatives have set up their own partnerships working at regional level, called the cooperative and mutual councils. These could provide a strong voice with the Regional Development Agencies and Regional Chambers, and enable partnerships to be built with both mutual and non-mutual voluntary and community organisations seeking to develop social businesses and community enterprises. The cooperative and mutual sector was built from below. CMCs could become important voices in Local Strategic Partnerships supporting the building of regeneration from below. Promoting their histories can contribute to building the confidence of ordinary people that what they do together is important and can have real influence.
The regeneration, neighbourhood renewal and social inclusion agendas, therefore, provide a wide range of potential opportunities for existing mutual associations. These opportunities include:
- Providing advice and support, and, where appropriate, investment in new mutuals, social enterprises and community businesses.
- Providing alternative business and management expertise that is not driven by the dictates of shareholders.
- Providing skills training linked to filling their own job vacancies, especially through working with specialist black and ethnic minority organisations.
- Involving people in local neighbourhoods through branch based organisations.
- Promoting each others’ activities and services.
- Participating in healthy living projects.
- Providing financial services through the Post Office’s 18,000 outlets.
- Supporting the development of basic bank accounts through the proposed Post Office Universal Bank.
Where now for radical politics?
The challenge for radical politics remains the same as it always has been, expressed in the modern words: social justice; social inclusion; anti-racism; equalities; community development; community engagement; human rights; environmental protection; sustainable development; internationalism; extending participatory democracy; and social enterprise.
Given that the Labour Party “has exceptionally deep and strong roots in the pre-Party, pre-statist social movements, and cooperative and mutual enterprises”, Stephen Yeo argues that “associationism offers a democratic, inclusive way forward”:
“Associationism is the way forward towards which ennuyed the third sector; the third way and ‘social’ as the ubiquitous adjective it has now become (social enterprise, the social economy, social investment, social finance, social audit, etc). Its most powerful vehicle will be cooperative and mutual enterprise.” (53)
Put another way it opens up opportunities for a new phase of radical politics. The scope for radical political activity around practical organisation of a new associationism, will involve reviving and strengthening existing mutual and cooperative organisations and developing new ones. There is considerable scope for this within local communities linked to the government agendas. Networking and alliance building will be crucial.
Yeo also argues that new Labour needs to learn from its pre-1900 roots, provided seven necessary conditions are met. These conditions are that new Labour continues:
- “to get over its initial impatience with the past”
- “to search for a new politics, with a small ‘p’ which promotes voluntary, associational activity” (54)
- “to distance itself, explicitly, from the statist dimensions of its own, twentieth-century, socialist and social-democratic inheritance, while also remaining open, … to earlier nineteenth-century, less statist components of liberalism and socialism”
- to become “more critical of technical and managerial solutions, delivered from above, to problems of anti-social exclusion. And that correspondingly, new Labour sets about enabling excluded people to include themselves in our own, genuinely social, voluntary, associational solutions to the problems of inequality in the distribution of resources and power”
- “its ambition for culture change as well as electoral victories, power in civil society as well as government office”
- “its interest in cooperative and mutual enterprises”
- “its commitment to lifelong learning, including its own capacity to learn from defeat as well as from victory”. (55)
Helping new Labour to meet this challenge provides opportunities for new radical politics both inside and outside the Labour Party. But it is not just new Labour that needs to learn from its pre-1900 roots; so does the mutual movement and the public.
The neglect of the historical power and legacy of mutual association contributes to a distorted picture of the way British society developed, keeping hidden from each new generation, the major contribution of ordinary people to the development of civil society, let alone the contributions of particular groups like women or ethnic and faith minorities.
This lack of popular understanding, coupled with widespread apathy and disillusion with the political process and politicians over the last 20 odd years, could be a fundamental stumbling block to achieving regeneration. There is a danger that ordinary people will react to the opportunities that are opening up with cynicism, that they are being conned, that government and local politicians do not really mean it.
It is important that people appreciate the tremendous contribution made by previous generations of ordinary citizens like themselves through mutual organisations. There is an enormous and growing appetite in Britain for history at family and local level. Large numbers visit heritage sites and exhibitions. So the ground is fertile. And the introduction of citizenship to secondary schools could provide another opportunity.
There is scope for re-defining local area histories through the inclusion of the role of mutual associations. If mutuals want to survive and prosper they need to become more publicly visible and to be unashamed in explaining their past historic contribution. Ways need to be found to integrate such public history work as part of the agenda of radical politics.
We continue to be faced with choices. The following questions seem to me to be important.
- Do we continue to demand renationalisation of privatised services and industries, or do we look for a wide range of forms of mutual or common ownership?
- Do we continue to defend the managerial way in which local authority and other public services are delivered or do we build new delivery mechanisms?
- Do we continue to politically campaign as if the working class was still largely skilled, semi- and unskilled blue colour workers in large scale enterprises, or do we find new ways to campaign relevant to the new style work forces?
- What are the opportunities for radical political activity, working in the cracks in the system, and utilising divisions within it?
- Can we be sure that mutualisation is not a form of privatisation that will end the universal features of public services?
- How can we roll back the democratic deficit in mutual organisations?
Answering these questions should help develop practical activity that will stimulate further development of mutual self-help organisations. The fact that there have been problems in the past should not deter action. The most important thing is to try and devise solutions which overcome the dangers of replicating past problems, which minimise the potential set of new problems that will arise, and will in their turn require new solutions. Keeping cooperative principles in the forefront of thinking may be helpful in this process.
Sean Creighton is a historian and researcher.
- voluntary and open membership
- democratic member control
- member economic participation
- education, training and information
- autonomy and independence
- concern for community
- cooperation among cooperatives.
The International Cooperative Alliance 1995 (56)
- Jack Binns. The History of Scarborough: From earliest times to the year 2000. Blackthorn Press. 2001. p. 234, 297, 354
- A. Halsey. Quoted in Johnston Birchall (ed). The New Mutualism in Public Policy. Routledge. 2001, p.3
- Peter Kellner. 1998, Quoted Birchall, op cit, p. 3
- Birchall, op cit, p.4
- Charles Leadbeater and Ian Christie, 1999
- Poorman’s Guardian 137. 18 January 1834. p.442
- Poorman’s Guardian 215, 8 July 1835, p. 602-3
- Friends of Labour Investment Association rules 1856 (printed 1858) in British Library
- Labour & Unity, Opening editorial. March 1868. Much neglected monthly ‘devoted to the interests of Insurance, Building, Friendly, Cooperative, Loan, Trade and Other Societies’.
- Sean Creighton. Friends of Labour Loan Societies. An Introductory Essay. Agenda Services. 1999
- Beehive, 5 March 1870
- Beehive, July 1870
- Details from Documents of the First International. Foreign Languages Printing House, Moscow/Lawrence & Wishart. Vol I, 1864-1866, Vol IV 1870-71, Vol V 1871-2
- W H Brown. Pathfinders. Brief Records of Seventy-Four Adventurers in clearing the way for free public opinion. Cooperative Union 1925. Reproduced with introduction by Stan Newens 1998. p. 12. Eric Hopkins. The Rise of the Manufacturing Town. Birmingham in the Industrial Revolution. Sutton. 1998. p. 189-190, 194, 196, 209. Holyoake, p.40-1, 50, 77 & 141. Philip N Backstrom. Christian Socialism and Cooperation in Victorian England. Croom Helm. 1974. p. 88-91
- Quoted Hopkins. op cit. p, 210.
- Nigel Todd. The Militant Democracy; Joseph Cowen and Victorian Radicalism. Bewick Press. 1991
- Stan Shipley. Club Life and Socialism in mid-Victorian London. Journeyman Press. 1983
- Stephen Yeo. The new mutualism and Labour’s Third Way. In Birchall, op cit, p. 231-4
- Sean Creighton. From Exclusion to Political Control. Radical and working-class organisation in Battersea 1830s -1918. Agenda Services. 1999
- Sean Creighton. The First May Day, History & Social Action. May 2001
- Evening News & Post, 7 August 1889. Cited in Terry McCarthy. The Great Dock Strike 1889. TGWU. 1998
- Ibid, 26 August 1889
- The Times, 6 September 1889. Cited in Mccarthy op. cit
- Sean Creighton. Battersea and the Formation of the Workers’ Educational Association. History & Social Action. May 2001. Sean Creighton. Settlements and the Formation of the Workers’ Educational Association. Talk at Toynbee Hall Settlement History Conference, September 2001. History & Social Action. October 2001
- Sean Creighton. Labour. The Problem of Alliances. The Experience of Battersea 1900-1929. Talk at Labour Heritage Labour in London Conference January 2002. History & Social Action, June 2002
- Point made by contributor to discussion at Friendly Societies Research Group Conference, November 2000
- Sean Creighton. The Ancient Order of Foresters in Battersea and Neighbouring Districts. Agenda Services. 1999
- Lawrence Magnanie. An event in the culture of Cooperation: National Cooperative Festivals at Crystal Palace. in Stephen Yeo (ed). New Views of Cooperation. Routledge 1988. p. 174-186
- Labour & Unity, July 1870
- Beehive, 21 May 1870
- Forester’s Monthly Journal, October 1871, March & May 1872; Chelsea News, 3 & 10 February & 20 April, 25 May 1872; South London Press, 2 March & 20 April 1872
- Foresters’ Monthly Journal, October 1872
- Beehive, 26 March 1879
- Roger Logan. Historian of Ancient Order of Foresters. Talk on Friendly Societies. Wandsworth Historical Society, April 2002
- Example Derby West Indian Community Association set up because of because of exclusion from existing CAs. Cited by George Mighty of DWICA in interview on Community Matters video 2001
- David Howell. Respectable Workmen.
- Backstrom. op cit.
- David Blunkett.
- Gary Stoker. The Politics of Local Government (1988)
- Yeo, op cit
- Ian Hargreaves in Ian Hargreaves, Cliff Mills, & Jonathan Michie. Ownership Matters. New mutual business models. Mutuo.co.uk. 2001, p.4 – referred hereafter as ‘Ownership Matters’
- Ibid, p.8
- Ibid, p.5
- Ibid, p. 7
- Chris Mills. In Ownership Matters, p. 10
- Social Enterprise London. Review 2000
- Department of Environment, Transport & The Regions. Community Enterprise. Good Practice Guide. May 1999
- Yeo, op cit, p. 240-1
- Johnston Birchall. Conclusion: The future of mutuality. In Birchall, opt cit.
- Johnston Birchall & Richard Simmons. Member participation in mutuals. A theoretical model, In Birchall, op cit, p. 247-8
- Communique. North West Cooperative and Mutual Council. Quarterly Newsletter. No. 3. June 2000
- Paul Gosling. ‘Mutualism – the solution for councils’. UK Cooperative Council and Cooperative Party, 2000
- Yeo, op cit. p. 227-8
- Ibid, p. 227
- Ibid, p. 227-9
- Quoted in Birchall, op cit, p. 103