Story Six

　In Episode 5, we outlined the origins of cooperatives, which can serve as the foundation of a mutually supportive society, focusing primarily on those in Japan. While Japanese cooperatives have legal backing, established under laws such as the Agricultural Cooperative Law, the Consumer Cooperative Law, and the Fisheries Cooperative Law enacted in the late 1940s, with the exception of JA (agricultural cooperatives) and consumer cooperatives, which can be considered excellent enterprises in terms of scale and employment security, fisheries cooperatives, business cooperatives, and credit cooperatives seem to have a stronger industry association character than corporate structure. Let's reconsider cooperatives as enterprises, as follows. However, it appears that enterprise cooperatives under Japan's Small and Medium-Sized Enterprise Cooperative Law have problems because they do not consider their members as independent entities.

"Adam Smith, the 'father of economics,' who defended the desires of capitalists, also left behind passages in 'The Wealth of Nations' expressing concern about the social monopolies that successful large corporations could achieve. They were quick to recognize the boundless desire of capitalist corporations to exercise monopolies as the sole operator in the market. Cooperatives are enterprises in which many economically disadvantaged individuals join hands and work together to cultivate market economic power and overcome the fatal flaws of capitalist monopolies. Because they rely on self-responsibility and do not expect subsidies from welfare systems or charities, the self-esteem of those who work together is enhanced." (Quoted from book [6-1], page 15).

　But beyond ideals, can cooperative enterprises actually compete with global capitalist corporations? The current global situation is as follows: while fundamentally composed of vulnerable groups, they seem to be quite powerful. Of course, these are successful examples that demonstrate the potential of cooperative enterprises, and it is important to note that there are also examples that are struggling and failing to create jobs.

"The economy of Emilia-Romagna, one of Europe's wealthiest regions, is driven by cooperatives? Even professional football team FC Barcelona and American company Sunkist are cooperatives? It may seem unbelievable to us, but it's not strange at all. Many cooperatives play a significant role in national economies and exert considerable economic power. Their activity is particularly prominent in retail, finance, and agriculture. Not only in Switzerland, but also in Italy, Germany, France, and the UK, leading cooperative retailers are at the forefront of their respective industries. (omitted) Greenery, the largest fruit and vegetable wholesaler in Europe, Danish Crown, which controls 90 percent of Denmark's pig farming industry, and Granarolo, Italy's largest dairy producer—the common thread among these brands is that they are cooperatives formed through the joint investment of horticultural farmers, pig farmers, or dairy farmers. Fonterra (a dairy company) and Zespri (a kiwi export company), which are leading agricultural businesses in New Zealand, a country often called a model for agricultural reform, are also cooperative enterprises in which domestic farmers hold 100 percent of the equity." (Quoted from book [6-1], pages 17-18).

　Let's look at some more detailed examples of cooperative enterprises in various countries. First, let's consider employment in consumer cooperatives and dairy cooperatives in Italy. (Although there are no dividends for investors, they earn enough to pay employees' salaries, etc.) Job creation by non-profit enterprises is an effective means, and in the United States, it actually ranks third in terms of employment, after retail and manufacturing, with wages being, on average, 30% higher than those paid in retail and 60% higher than those in construction.

"Regarding life in this city, he said: 'I think the concept of wealth here is different from ours. When we say a family is wealthy, we talk about how many houses they own and how much money they have in their bank accounts. But it's not like that here. They seem content as long as they have enough to eat to live on and adequate welfare facilities are in place. (omitted) Italy is famous for its designer goods, but it seems that not many people actually carry around such expensive bags. (omitted) Cooperatives account for 30 percent of the region's economic activity. In Bologna alone, more than 400 cooperatives are actively operating, accounting for 40 percent of the economy. Wages are twice the average wage for all of Italy, and the unemployment rate is only 3 percent.' " (Quoted from book [6-1], pages 37-38).

"He replied, 'In Granarolo, not a single person lost their job. Unemployment was virtually nonexistent in Italian cooperatives. This is because the most important spirit of cooperatives is to protect workplaces and protect people.' (omitted) Of course, cooperatives are also businesses, so the risk of bankruptcy is not entirely absent. However, in such cases, the problem of job insecurity is solved by employing unemployed people in other cooperatives. (omitted) Cooperative enterprises, like other businesses, conduct business and generate profits, but what they value most is their members and their workplaces." (Quoted from book [6-1], page 52).

　Next, we will introduce the initiatives of wind power cooperatives and meat processing cooperatives in Denmark, a Nordic country.

"Established in 1997, this cooperative owns 10 wind turbines offshore. 8,600 environmentally conscious Copenhagen citizens are owners of this Middlegron Wind Power Cooperative. Since citizens are investors, The profits generated here are not taken by the shareholders of a specific company, but are returned to the citizens of Copenhagen." (Quoted from book [6-1], page 74).

"The competitiveness of Danish Crown, which plays an institutional role in the Danish export economy, lies in its thorough management system. Carl Christian Møller said, 'International competition and cheap American produce undoubtedly threaten the European market. After all, Danish Crown products are more expensive than those from America and other countries. But the quality is not the same. We compete on the basis of high quality. Because we invest continuously in animal welfare, thorough hygiene management, and research and development, I think it will be difficult to beat Danish Crown. We are not a sandcastle, but a solidly built castle.' He then added, 'If Danish livestock farmers had not formed cooperatives, I think the farmers would have been wandering around in a chaotic and desolate competition.' " (Quoted from book [6-1], page 84).

　Isn't it fair to say that we are unknowingly being forced into 'disorderly and destructive competition'? Furthermore, Danish dairy cooperatives have spread not only throughout their own country but also across Europe, contributing to job creation while protecting the natural environment and ensuring food safety.

"Alura Foods, the world's eighth-largest dairy cooperative, is trusted throughout Europe. How did a cooperative created as a self-help measure for farmers, without government support, grow so large? It certainly wasn't achieved by a few people in a short period of time. It was achieved by over 8,000 farmers, like Ends Fiskel, who awakened to the importance of cooperation and actively participated in policy-making for the common good. These people didn't wait for someone to do something for them; they worked hard to create the system themselves." (Quoted from book [6-1], pages 88-89).

　In New Zealand in the Southern Hemisphere, through the development of technology and products through research, We are committed to environmentally conscious business practices.

"He stated simply and clearly that 'Fonterra's mission is to enhance the value of milk produced by dairy farmers.' He also proudly explained that 'cooperation among cooperatives and cooperation among dairy farmers as a whole have created the competitiveness of New Zealand's dairy industry today. The vast majority of dairy farmers have united under Fonterra, giving us strong marketing capabilities and brand power. We invest over $100 million annually in developing new products. There are more than 400 researchers working at Fonterra's research institute alone. (omitted) Fonterra consistently fulfills its responsibilities to society and the planet. We implement water quality protection and greenhouse gas reduction programs and conduct the world's first dairy carbon tracking research. Because Fonterra is a cooperative.' " (Quoted from book [6-1], page 100).

　Beyond the above examples, several cooperative banks, medical cooperatives, and farmers' cooperatives have succeeded in competing with large capitalist corporations in the global market. (Although it probably hasn't changed, at least as of 2014) In Japan, there are individual legal systems for agricultural cooperatives and consumer cooperatives, whereas countries around the world have uniformly enacted laws based on the cooperative principles of the 1995 statement by the International Co-operative Union (ICA). The explicit mention and practice of social and community benefit objectives, indivisible reserves to internally retain surplus funds as common assets, and a multi-member system that includes not only workers but also customers and supporters is considered to have been successful and should be emulated. However, it has been pointed out that the following three conditions are necessary for cooperative enterprises to reach a scale that can maintain a balance with capitalist joint-stock companies and the market. Meeting these conditions can be said to be a common challenge regardless of country or region.

"Firstly, schools must teach that economic activity has forms other than the profit-seeking approach based on the logic of survival of the fittest. For the past two centuries, the world has taught only two types of logic: the logic that the proliferation of capitalist markets is the solution to social pathologies, and the opposite logic that markets are the rule of the weak by the strong. This has left no room for cooperatives, a form of enterprise that operates in the spirit of reciprocity and solidarity. Secondly, consumers who are sensitive not only to the characteristics of the goods themselves but also to the production process of those goods—that is, consumers who take social responsibility—must emerge. Thirdly, complete political and institutional mechanisms must be in place. Social order must support diverse forms of enterprises, including cooperatives, so that they can stand on the same starting point as capitalist corporations in the market." (Quoted from book [6-1], page 207).

Further consideration is needed regarding what kind of social order should be formed and how it should be maintained. On the other hand, focusing on community-based mutual aid-based enterprise activities in Japan, the current situation does not seem very promising. Beyond the negative effects of modernization and militarism modeled after European powers, the rapid industrialization under the high economic growth of the Showa era created a vertical subcontracting structure, primarily in manufacturing, from large corporations to small and medium-sized enterprises (SMEs), and then to micro-enterprises. This made it difficult for the weaker parties to become independent and unite. None of the three conditions mentioned above were met. Furthermore, as will be discussed in Episode 10, there are also urban-rural issues, and efforts are continuing despite the struggles described below:

"Until now, we have measured economic effects by the apparent size of sales and investment. However, no matter how large a store's sales or investment is, what matters is how much of it remains within the local economy and generates new income. First, we need to examine how the wages received by each individual and the sales of stores flow within the region afterward." (Quoted from book [6-2], page 7).

A situation of external dependence, where money flows in from outside a region and immediately flows out again, is likened to the 'leaky bucket theory'. It's important to note that typical examples of profits being immediately siphoned off as usage fees include network businesses such as electricity, telecommunications, e-commerce, and logistics—social infrastructure capital that should ideally be shared resources—as discussed in Episode 2. Dependence forced by a few monopolies, while different in scale from the global inequality discussed in Episode 1, presents a similar common challenge: breaking free from it. On the other hand, regarding vegetables and bread, and supermarkets and convenience stores, here are some specific examples of how these are being siphoned off by global corporations and other external companies.

"What about the increasing number of bakeries in mountainous and rural areas across the country? (omitted) If we calculate the difference between a loaf of bread made outside the region for 100 yen and a loaf of bread made locally, including the ingredients, for 150 yen, by multiplying by the local income generation rate mentioned earlier, In fact, the income difference is far greater than the 50 yen price difference (58 yen). Buying only products from outside the region simply because they are cheaper can lead to a situation where the local economy is stripped bare." (Quoted from book [6-2], pages 52-53).

"Large national chain supermarkets and convenience stores have virtually no local sourcing, and naturally, they hardly stock any locally produced goods. As the result, the more you shop at these supermarkets and convenience stores, the more money flows out of the region. (omitted) On the other hand, at direct-from-the-farm markets, both the sourcing and production ratios within the region exceed 50%, greatly contributing to securing income within the region." (Quoted from book [6-2], pages 56-57).

　To put it extremely, buying only because something is cheap can help monopolize giant capitalist corporations and, as illustrated in the example in Episode 12, may create poverty and suffering around the world. While there may be some differences in every region, the same applies here. It seems that a system where large corporations siphon off profits is widespread, but what should be done and how?

"Understanding the regional structure and key figures, connecting these key persons, and creating new shared values for the region. (omitted) The shared values and assets that the region should cherish and nurture are discovered through a series of discoverative activities in which local people recognize the strengths of their region and contemplate a better future." (Quoted from book [6-2], page 91).

While the existence of key persons is important, it is undesirable for the circulation of money and other resources to be confined solely within the region; a proper balance must be struck between connections within and outside the region (the problem of overly strong internal structures will be discussed in Episode 11). Of course, the large, predatory holes in the bucket must be closed. In Episode 7, we will introduce various attempts towards a degrowth-oriented egalitarian society, utilizing new technologies in communication, power, and logistics not only in agriculture, livestock farming, and retail, but also in other industries. Furthermore, we will touch upon the importance of not only the circulation of money but also the exchange and movement of human resources, and the organizational culture and communication forms that make this possible.

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