Story Five

　In Episode 1 and Episode 2, we outlined the current serious inequality problem and its main cause: the pursuit of greedy economic growth. In Episode 3, we touched upon the fact that capitalist competitive societies are historically relatively recent, and that humankind, including wild animals, was based on mutual assistance from ancient times until relatively recently. Putting these points together, you can understand why 'cooperatives' have been attracting attention in recent years. Perhaps we need to reconsider the global significance of cooperatives, which is recognized by the United Nations.

"Neoliberalism, which has swept the world, is showing signs of stalling. The main reason is the widening gap between a few high-income earners who enjoy the benefits of the global economy and low-income earners who do not. (omitted) In this situation, the United Nations Educational, Scientific and Cultural Organization (UNESCO) registered 'cooperatives' as an Intangible Cultural Heritage in November 2016. Cooperatives are organizations that can build communities through common interests and values, from job creation and support for the elderly to urban revitalization and renewable energy projects. The cooperative was highly praised for its innovative solutions to various social problems. Originally, cooperatives were established to protect people's livelihoods through mutual assistance and connection. While there are various cooperatives in Japan and around the world, unlike profit-making companies, they all operate businesses for the benefit of their members and communities using money contributed by their members, aiming to fulfill the wishes of their members. In short, it is an organization of the members, by the members, and for the members. This is the core of a cooperative." (Quoted from book [5-1], pages v-vi).

　Furthermore, in Episode 4, we explained that in Japan, a system of mutual assistance called 'Kou' took root among the people, and in the late Edo period, the Houtoku movement, which also had cooperative aspects, spread. It was an organization of farmers, by farmers, and for farmers. Moreover, even before the Rochdale Equitable Pioneers Society, established in 1844 and known as the world's first consumer cooperative, cooperatives existed in practice, as follows:

"After the Tenmei-Tenpo Great Famine, many farmers in rural areas of the Kanto region lost their land and fell into ruin. (omitted) In this situation, Yugaku Ohara(1797-1858) formed the 'Ancestral Share Association,' considered the world's first agricultural cooperative, in Hasebe Village (Asahi City, Chiba Prefecture), aiming to protect ancestral farmland through the cooperative power of farmers and prevent mutual ruin. Specifically, each farmer acquired cultivated land (seven se) equivalent to five ryo from the farmland inherited from their ancestors. This system involved investing and accumulating the profits generated indefinitely. Furthermore, in the event of bankruptcy, half of the accumulated funds were given to the individual, allowing them to inherit the family name, thus preventing the farmers from fleeing. (omitted) In addition, Yugaku rationally exchanged and consolidated farmland from each household, provided agricultural instruction, and engaged in activities such as joint bulk purchasing (similar to today's consumer cooperatives) and village education, striving to create an equal society and foster human development. The goods purchased jointly included not only agricultural necessities such as farming tools, fertilizers, and seeds, but also daily necessities such as clogs, teacups, hand towels, combs, and mirrors, as well as medicine." (Quoted from book [5-2], pages 23-24).

　However, after the Meiji Restoration, it is presumed that there was a growing trend to emulate European powers (not only in legal frameworks, but in all aspects) as Japan's long-standing way of thinking and excellent systems were considered outdated. Aside from ideological discussions, we can now discuss comparisons with contemporary times, but at the time, literature from both sides was limited and difficult to obtain. Furthermore, given that not only were there no reflections on colonial rule or world wars, but the issue of drastic climate change was not yet apparent, it's possible that the advanced nature of Japanese thinking and practices was particularly difficult to understand.

"The Edo period ended, and Japan's isolationist policy was lifted. The Meiji government rushed to modernize, promoting agriculture (agricultural promotion), which was the main industry at the time, under the slogans of 'enriching the country and strengthening the military' and 'promoting industry.'" (Quoted from book [5-1], page 29).

　Amidst this, after the return of the delegation led by Tomomi Iwakura, who served as a financial ambassador (including Yajiro Shinagawa and Tosuke Hirata), which investigated cooperatives in Germany at the time, the Credit Union Act was rejected by the Imperial Diet in 1891. However, credit unions were successively established in Shizuoka Prefecture, starting with the first Kakegawa Credit Union in Japan in 1892, and by 1898, they had spread throughout Japan, including Yamagata, Tochigi, Kumamoto, Okayama, Kyoto, Tokyo, Osaka, and Hiroshima prefectures. The Industrial Cooperative Law of 1900 gave credit unions a legal basis, leading to today's credit unions and labor banks, and their origins can be traced back to Sontoku's Houtoku Five Virtues. From here, It is also clear that they aimed for a circular economy.

"The Five Virtues refer to the Confucian virtues of 'benevolence,' 'righteousness,' 'propriety,' 'wisdom,' and 'trustworthiness,' which are things that should be observed in daily life. Sontoku said that saving small amounts of money through frugality and hard work and lending it to those in need is 'benevolence,' repaying it is 'righteousness,' adding interest is 'propriety,' devising ways to repay it is 'wisdom,' and being bound together by these relationships is 'trustworthiness.' This lending and borrowing based on 'trustworthiness' is also related to the 'credit' that forms the foundation of modern credit unions and credit associations. While popular finance such as mutual aid associations has existed since ancient times, the Five Virtues Association can be said to be original in that it emphasized morality." (Quoted from book [5-1], page 15).

"Afterward, some Houtoku-sha converted into credit unions, but many did not choose a complete conversion to credit unions in accordance with the wishes of bureaucrats. The Enshu-koku Houtoku-sha, the predecessor of the Dai-Nippon Houtoku-sha, which founded the Kakegawa Credit Union, also chose to remain on its original path." (Quoted from book [5-1], page 29).

　Then, a wave of militarism swept in, with the aim of catching up with and surpassing the European powers to avoid colonial rule, and Japanese society seems to have gone astray.

"In post-Meiji Restoration Japan, inflation caused by the issuance of large amounts of inconvertible paper money to finance the Satsuma Rebellion, the subsequent Matsukata deflationary policy, and the subsequent Sino-Japanese War dealt a major blow to the lives of the people, and wealth became concentrated in the hands of a few who had accumulated capital. Many farmers fell into poverty, gave up their land, and became tenant farmers. A social situation similar to that of Britain after the Industrial Revolution emerged. Therefore, the Meiji government tried to suppress the social unrest caused by the poverty of farmers and maintain and improve the rural economy, In 1900 (Meiji 33), Japan enacted its first Cooperative Law (Industrial Cooperative Law), anticipating the concept of cooperatives. (omitted) Meiji-era socialism, unlike the socialism that emerged after the Russian Revolution of 1917 (Taisho 6), was actually synonymous with cooperatives. When some of these socialists began to oppose the Russo-Japanese War, the Meiji government launched a hardline crackdown, claiming that anti-war discourse would extinguish patriotism and lead to criticism of the Imperial family." (Quoted from book [5-2], pages 29-30).

　In the 1920s, known as Taisho Democracy, the labor movement led by Sakae Osugi and others was also suppressed. Meanwhile, during the Taisho and Showa eras, a third possibility—neither capitalism nor socialism (a problem that persists today)—was already found in cooperatives.

"When discussing not only mutual aid businesses but also the Japanese cooperative and labor union movements, one indispensable figure is Toyohiko Kagawa (1888-1960). (omitted) Kagawa envisioned a society free from poverty and fear, aiming to curb the harmful effects of capitalism by spreading cooperatives to all aspects of human life. He sought a third way—neither liberalism nor a controlled economy—a 'cooperative society' based on mutual assistance." (Quoted from book [5-1], pages 103-107).

"Toyohiko Kagawa, the father of Japanese cooperatives, summarized the essential spirit of cooperatives in his 'Seven Principles of Cooperative-Centered Thought' (1954). These are: 'Shared Profit, Personal Economy, Capital Cooperation, Non-Exploitation, Power Decentralization, Non-Partisanship, and Education-Centered.' Profits generated are shared among everyone; there is no speculation or greed. The initial capital was shared by everyone, no one skimmed off the top, decisions were made close to the ground, power was not concentrated, the principle of one person, one vote was upheld, and a spirit of independence that did not pander to the government or political parties of the time was emphasized. The importance of repeatedly conveying and learning these principles was stressed." (Quoted from book [5-2], page 116).

　Let's also touch upon the cooperatives of the time in Europe and East Asia. As the monetary economy spread, even basic necessities that had previously been self-sufficient became necessary to purchase. The soaring prices of these goods were covered by loans from moneylenders, but repayment was impossible, and farmland was seized.

"The roots of European cooperatives are in Britain, but rural credit unions were born in southwestern Germany in the mid-19th century. (omitted) The social conditions at the time were that rural areas were severely impoverished after the Industrial Revolution. It was in this context that they were established with the aim of 'the independence and recovery of the rural economy.' This trend spread from Europe to North America and other parts of the world. By the end of the 19th century, it had reached Japan and evolved into industrial cooperatives. (omitted) In order to overcome the difficult situation, there was a growing awareness among residents to help each other (cooperate) and establish financial institutions for rural residents as an alternative to banks and moneylenders. (omitted) In Germany, the initial combination of credit and economic activities of rural credit unions gradually separated in Europe. Meanwhile, in Japan, combined cooperatives were established en masse based on the Industrial Cooperative Law. In East Asia, although there were some twists and turns, credit and economic activities are currently developing in a combined manner." (Quoted from book [5-1], pages 148-159).

　While there may be some differences in the specific approaches of each country, the fundamental idea of cooperatives supports 'degrowth', as mentioned in Episode 2, and can be directly linked to people's happiness. Let's reaffirm this below.

"Neoliberal thinking is incompatible with the ideals of cooperatives. It is in stark contrast to the ideas that cooperatives have cherished for a long time since the lodgetail principle: respecting each individual, recognizing each other, and emphasizing participation and involvement; not inciting competition, but acknowledging diversity, valuing shared thoughts and desires even if there are differences in position or opinion, and realizing them through cooperative businesses and activities. While premised on equal opportunity, it is not just about encouraging individual effort, but about solving problems that cannot be done alone through the power of cooperation, while considering equality of results, even if it takes some time. Furthermore, a characteristic of cooperative business is that it seeks synergistic profits by operating multiple businesses, not just a single specialized profit. It is different from what is generally considered business." (Quoted from book [5-1], page 218).

　The above outlines the historical background of the social structure up to now. In Episode 6, we will look to the near future and introduce a third possibility—a social solidarity economy centered on cooperatives—as an alternative to the capitalist economy, which is the root of inequality, and the corrupt socialist economy.

Series: Learning about cutting-edge science and human history to prevent social division