Shaping global cooperatives

By Sri-Edi Swasono

The following article is based on a paper presented at the First International Cooperative Alliance (ICA) Asia-Pacific Cooperative Forum in Singapore on June 27, 2000. This is the first of two articles.

SINGAPORE: Since its birth, economics has been regarded as a moral science. Even before the publication of the legendary Wealth of Nations (1776), Adam Smith had published The Theory of Moral Sentiments (1759).

As a moral science, economics was conceived and developed not only to show concern about economic growth, but also about economic equality, employment and justice, particularly social- justice.

This is the reason why, since the early days of capitalism, the notion that people are economic animals (homo economicus) has spawned disagreements and scholarly disputes. In essence, people are also perceived as homo socius, even as homo religius (homo- imago-Dei).

Economics is divided into several doctrinal ideologies, the two most prominent are the hardest to reconcile: the one prioritizing the supremacy of the interests of the individual, known as individualism; and the other, emphasizing the supremacy of the collective interests of the people, referred to as collectivism. Basically, individualism has become the soul of capitalism (the right) while collectivism has given soul to socialism (the left).

Although the economic environment is dominated by the free- market mechanisms, the co-operative movement is closer to collectivism and socialism, which emphasizes the collective needs of the community while still respecting individual identities and initiatives.

Many consider that confronting capitalism and socialism in this era of economic globalization is an outdated issue, although defenders of each pole still defiantly maintain their convictions through philosophical discourses. However, it is my opinion that we should observe carefully the developments of each ideology in order for the co-operative movement to rightly position itself to participate in forming new directions and advance economic globalization to its final and just form.

Some are of the opinion that there is no winner or loser in the confrontation between socialism and capitalism. Socialism, however, can be considered the winner in this global battle since it has seeped into all aspects of human life. Even socialist ideas have been absorbed by capitalist industrial countries. Communism as a form of extreme socialism may have fatally failed, but moderate socialist ideas are alive and in capitalist countries.

Capitalism, on the other hand, can also be considered a winner, thanks to its practitioners' willingness to self-correct, their flexibility in facing change, and their willingness to accept socialism (Berten, 2000). But we should certainly be aware of the basic instinct of capitalism (Swasono, 2000) which greedily tends to form a "winner-take-all society," something similar to what Thurow (1980) calls a "zero-sum society."

Convergence between these two poles has long been observed by Western scholars, among them Aron (1967). For the past three decades we have been familiar with the expression: "someday the children and grandchildren of Kennedy will become socialists and the children and grandchildren of Brezhnev will become capitalists" (Ibid).

It's only natural that many are under the impression that capitalism is the big winner, since the current economic globalization movement is fueled by the free market, which is basically the market of the global capitalists. But another fact reported by The Economist, reminds us that left-centrist social-democratic parties hold the power in 13 of 15 Western European countries. Even the current administration of the United States is beginning to show nuances of social democracy.

From the convergence of capitalism and socialism, came "the third way," an idea to reconcile the "left-right" dichotomy. But if we recall what Giddens wrote, "the third way" is not meant as "the middle way," but rather, "the left-centrist way," which strongly demands "social justice" in the global market system.

Giddens is a respected intellectual, championed by Prime Minister Tony Blair. According to his ideas on the resurgence of social democracy, socialism isn't really dead, even though communism, socialism in its extreme, has indeed lost its roots and its future survival is doubtful.

Dr. Sri-Edi Swasono is former chairman of the Indonesian Cooperative Council.