Marxism and Cooperatives

(Comments on Dr. Virginia Teodosio’s Cooperatives and Marxism in the Philippines, 2006)

We probably can highlight the emerging importance and counterhegemonic potential of the “cooperative movement” by also comparing its efforts and achievements with other actors in the market and within the larger sphere of civil society, and by pointing out its weaknesses as well. The following comments on ‘marxism, hegemony and the cooperatives of Filipinos’ is an attempt towards that; in the process, the comments make some bold assertions, not to refute the propositions of the paper but to call attention to a few possible data that may have been overlooked.

Co-ops are the most widespread form of popular organization in civil society – with over 60,000 registered with CDA, although only about half are operational and an even lesser number actually viable. Yet, this alone indicates how the masses are trying to respond to their own socio-economic conditions. Co-ops are based on the concept of self-reliance, that is, ‘people helping themselves’ by building their own capital as distinguished from ‘people helping other people’ as in the case of NGOs.

The latter category would include microfinance NGOs, which cater to the financing needs of the entrepreneurial poor but are not owned and controlled by the users of the financial service. Micro-finance NGOs are seen as competition by some co-op leaders, unaware of the particular segment that the micro-financing institutions seek to serve. Contrary to some claims of some co-op leaders, microfinance NGOs do deliver (the Kauswagan Bank and TSPI, top microfinance institutions in the country, are good examples). It could very well be that microfinance organizations are in a better position to help the poor who are unable to put up an initial share capital to become a member of a co-op and become entitled to its financial services. Co-ops may be more democratic, yet participation in a co-op entails initial costs that a poor individual may not be able to afford. Co-ops would be just one of the players catering to the poorer segment of the population.

There are co-ops however, that also serve as conduits of micro-financing loans for the poor. Such an arrangement allows the poor to eventually become a regular shareholding member and co-owner of the co-op. It should be noted that such loan funds are ‘conduited’ (co-op as conduit of funds coming from somewhere else – a micro-financing institution for instance) for poor non-members and do not come from the co-op own equity funds since co-op lending rules provide for members’ equity as condition for extending loans. Co-ops may have been very good in serving its members, who have all the incentives to ensure that their co-ops are run well since they imparted money to it, but microfinance NGOs have been able to develop social and business technologies to serve the financial needs of the very poor, the Grameen being a celebrated though not the only example.

The paper explores “the relationship of Gramsci’s Marxism and a cooperative movement that deserve greater recognition and more careful analysis to reflect their significance in the lives of the Filipino people,” as an “emancipatory, social phenomena in contemporary Philippine society and as “representing a distinct alternative that exists within capitalism.”

Robert Putnam’s study (Making Democracy Work: Civic Traditions in Modern Italy) showed that the high degree of associationalism and civicness are highly correlated to high economic performance and high quality of regional governance in northern Italian regions compared to the southern regions. In the Philippines, it could be shown, and there are various cases and anecdotal evidences that tend to show, that where people are concerned about community problems and involved in resolving them (as co-ops, POs, or other forms), marked improvements can be observed in community welfare, and local governments tend to respond and perform better. Co-ops indicate a certain degree of civicness among those who participate in them, and we can say that Philippine civil society is all the more vibrant because of the existence of co-ops. It is therefore worth exploring “the significance and implications of…cooperatives in terms of civil society being a precondition to the democratic process.” (It should be interesting to adapt Putnam’s methodology in a study of Philippine co-ops and local government performance.)

As to the extent cooperatives “help create the conditions in the country for … counter-hegemony,” it might be helpful to see how co-ops actually see their role, and to examine the actual organizational and ideological origins of the different cooperative networks and traditions. The following are some illustrations:

The agri-based co-ops originate from martial law’s Samahang Nayon program under PD 175, and Marcos himself, in a marginal note to his diaries, wrote that the “cooperative movement is the hope of our people.” The development of cooperative was part of Marcos’ “developmentalist” state agenda (along the mould of South Korea and Taiwan). The same is true for the electric co-ops and the transport co-ops. The 1987 Constitution and the Cooperative Code (RA No. 6938) enacted under the Cory government clearly locate cooperatives as a component of a liberal market economy.

The savings and credit co-ops came about as non-state initiatives, by private organizations including the Catholic and Protestant clergies. These cooperatives came about as part of the social initiatives of reformist institutions and individuals. However, community-based savings and credit cooperatives have linkages with the NGO/PO movement.

The workers’ co-ops came about as a reaction to, not as a component or as a product of, militant trade unionism, and some workers-based co-ops were initiated with the purposive intent of thwarting unionism in the workplace.

Probably the cooperative tradition that was more or less ushered by the advocacy progressive movement is the agrarian reform cooperatives, which came about with the implementation of the (now endangered) Comprehensive Agrarian Reform Program (CARP) under the Comprehensive Agrarian Reform Law (CARL).

The NATCCO Network, one of the most high profile national co-op organizations, is also successful politically, being the only co-op network to get at least 2% of the vote in three successive party list Congressional elections (under the Coop NATCCO Party List). It may have aligned close to the somewhat center-left “social democrats” (in Code NGO), it may have joined EDSA 2 against Erap, and it may have taken progressive positions on agrarian reform, reproductive health and women’s rights, retribution for martial law human rights victims, local sectoral representation, etc. Yet it voted affirmative to the House Justice Committee report exculpating GMA of the impeachment complaints against her in connection with the 2004 elections (local affiliates of the Coop NATCCO Party reversed an earlier call by Coop NATCCO Congressman Gil Cua for GMA to resign).

Other co-ops networks are outright traditional (apolitical, which means political in favor of the status quo), conservative, and reactionary. Leaders of co-op unions and transport federations take pride before Malacañang for preventing the participation of co-op members in popular protests against oil price hikes, EVAT.

Hence there might be a need to clarify the proposition that co-ops have “not become simple appendage of the state apparatus” because “their ideological struggle is one that draws on political, cultural and social engagements.” If we define the state as “not just as the apparatus of government operating within the public sphere…but also as part of a network of the private sphere of civil society,” then one can also assert that co-ops are more intimately integrated into or within the Philippine state than other private organizations. This is more pronounced under the Marcos regime, when membership under one apex organization (the Cooperative Union of the Philippines) was mandatory. Today, co-ops remain as one of the transmission belt for government: co-ops are represented as one of the 12(?) sectors in the National Anti-Poverty Commission (NAPC), an inter-department body headed by the President. Some co-op leaders complain that co-ops are not given enough importance by government and that there are not enough policy forums between government and cooperatives. Executive Order 95 signed by President Ramos in 1993 calls for the creation of cooperative development councils at the regional, provincial, and municipal levels, yet as an unfunded mandate there is only half-hearted and grudging compliance by local governments.

That “the cooperative movement is a distinct and separate historic bloc with alternative meanings and practices” is a seductive assertion, yet we also should note that there are distinct and separate traditions within the “cooperative movement” itself, as given in the preceding illustrations. Unlike in other social movements (such as labor, environment, or women) the apparent polarities within the cooperative movement are not between a reactionary hegemony and a counter-hegemonic progressive alternative. Co-ops are concerned more about what business practices work and what does not, and like ordinary businesses are on the look out for emerging best practices. Still, it may well be that there is an underlying reactionary vs. progressive dynamic within the co-op sector, as within other Philippine social movements. There are some co-op leaders who take issue with the preoccupation of graduating or transforming savings and credit co-ops into more businesslike and more bank-like financial institutions, arguing that the strength of co-ops lies in serving its members at cost, and that the “competitive advantage” of co-ops over other service providers will be undermined by adopting the more ‘capitalistic’ standards such as income to capital ratio as prescribed in the emerging standards such as COOP PESOS, even though the standards were developed with the active participation of the co-ops themselves. These co-op leaders are not among those who use the line that “co-ops are for service, not for profit” to hide or justify their inefficiency, as they are leaders of some of the most successful co-ops in the country. But this still begs the question: which one is the progressive and the reactionary stance in the case of adapting the practices of co-ops to compete better in the financial market place? If co-ops do not become more business-like and more like banks, even the commercial banks would soon discover the technology of micro-financing and strengthen even more their position in the financial industry.

All these do not negate the preposition that co-ops constitute an alternative option, or may even be counter-hegemonic, to the particular brand of predatory oligarchic capitalism in the Philippines. Being anti-Philippine capitalism, however, does not always mean being anti-capitalist per se, as many co-op leaders tend to admire and emulate the practices of the successful cooperative movements in Germany (the Raiffeisen movement), in Canada (the Desjardins movement), and elsewhere, along with the liberal democratic political culture and market economy that brought about or attended those successes, including the institutional design of co-op regulation in those countries.

These examples also do not in any way negate the contributions of co-ops in bringing about more self-reliance, commitment to democratic values, and empowerment to those who became part of these co-op development projects, whether initiated by the government, by the church, or by NGOs. Empowerment, democracy, self-reliance are not exclusively projects of the counter-hegemonic Left (narrowly or broadly defined), and these are much a part of liberal and neo-liberal discourse and social vision as the socialist and progressive discourse. Cooperatives, in a way, can be seen as ‘counter-hegemony within the capitalist hegemony.’

The Canadian John Craig (Nature of Cooperation) noted that while American agricultural cooperatives see themselves as an alternative to capitalism, they do not want to be identified with those opposing capitalism (such as the communists), and are more comfortable being seen as subscribing to a ‘modified service-oriented capitalism.’ In the Philippines no cooperative network subscribe to a consistently progressive and democratic agenda. NATCCO is closest, but it can buck down too to particularistic local demands for development projects.

The rhetoric of some co-op movement personalities can be different (this is not to take issue with them for using rhetoric); some would say “our aim is a cooperative republic,” or that cooperatives are the “middle way between capitalism and communism” or that “cooperativism is legal communism” etc. (these are heard and overheard in speeches and conversations and I have not encountered any serious exposition of any of these putative political lines.

There could be several reasons why cooperatives as cooperatives would tend to be more conservative and cautious in their political positioning. As enterprises in which members money are invested, they have real economic and business interests to protect and therefore would tend to be more negotiating and compromising rather than confrontational and unyielding on matters of principles. Such issues of policy advocacy and confrontations are the areas where the cooperative unions are supposed to play a role. A co-op union leader once remarked that co-ops as businesses should not fight political battles because they can be sabotaged economically. Accordingly, policy and politics is the realm of co-op unions. Co-op unions are non-business organizations; they can be registered at national, regional, provincial, and city or municipal levels. The Cooperative Union of the Philippines (CUP) was the mandated apex organizations under PD 175. With the demise of the Marcos government, it was soon wracked by dissensions, with national federations such as NATCCO, PFCCO, and FFFCI disaffiliating from it in 1989. Today, most regional cooperative unions under CUP are dormant or ineffective. The two most active regional unions, Union of Metro Manila Cooperatives (UMMC) and the Cooperative Union of Southern Tagalog (CUST) have also disaffiliated from CUP more recently. Over the past three years, UMMC and CUST leaders have endeavoured to establish the Partidong Kooperatiba ng Pilipinas (Prokoop) as a national political party.

To date, there has not been an avowedly and comprehensively progressive co-op network or union or association similar to those that can be found within other social movements. There has not been also a comprehensive political program on cooperatives being articulated by the progressive and socialist movements and the left and center-left mass political parties. (Unlike, for example, in Germany: in 1995 an SPD member, speaking before a political conference of activist groups, mentioned that the party is based on the pillars of the trade union and the cooperative movements). Co-ops do present a unique and viable option to many social and economic issues facing Filipinos. The challenge is to see the great day of engagement and eventual marriage (not mere flirtations) between progressive politics and the cooperative movement.