Nobel Prize-winning economist Joseph Stiglitz compares the global economic system to a frog in a pot of slowly boiling water. The water is not hot enough to prompt the frog to escape—until it’s too late.
But cooperatives represent a model that can turn down the heat, he says.
“There are alternatives to the current system,” Stiglitz told a gathering of world co-op leaders. “One of the striking aspects of cooperatives that have been studied extensively is that they represent a better way of responding to the risks that our society presents.”
That’s important because Stiglitz, named by Time magazine as one of the 100 most influential people in the world, believes economic, social and political inequalities will inhibit worldwide economic growth for the next 20 years.
After all, he said in citing an Oxfam report, the 62 richest people in the world hold the same amount of wealth as the poorest one-half of the world’s population.
“There is clearly growing inequality and growing volatility,” he said. “These are problems that the private sector won’t solve, partly because the private sector created many of these problems.”
Canadian official Jean-Yves Duclos and consultant Mark Kramer joined Stiglitz at a forum on inequality and the global economy at an Oct. 11 session of the International Summit on Cooperatives. The three-day meeting attracted about 3,000 people to the Québec City Convention Centre.
Nobel laureate Joseph Stiglitz sees the cooperative model as one way to deal with economic malaise. (Photo By: Steven Johnson)
They were united in their beliefs that co-ops can provide a voice for citizens who feel ignored. That could be an antidote to the anti-system outrage associated with the vote in Great Britain to abandon the European Union and other nationalistic movements, they suggested.
“The ability to participate in the process is good in itself and that’s what cooperatives make possible,” said Duclos, Canadian social development minister, an economist and a member of the Canadian Parliament.
“When people feel excluded in social and economic terms, they also often feel excluded in political terms and that can lead to very short-term as well as long-term adversarial outcomes,” he added.
Kramer said he doubts that cooperatives ever will totally replace the traditional corporation structure of most Western markets.
“But I think the DNA, the lessons, the understanding that is embedded in the cooperative model does and can move into the mindsets of corporate leaders,” said Kramer, founder and managing director of FSG (formerly Foundation Strategy Group).
“I think it’s not so much that everyone becomes a cooperative but that the cooperative model begins to infiltrate and influence the thinking,” he said.
Stiglitz said he holds out special hope for cooperatives in developing nations struggling to find an appropriate social and economic mix.
“They say, ‘We tried socialism; it didn’t work. We tried… the market model; it didn’t work. What are we supposed to do now?’ ” Stiglitz said. “I think it’s really important to say there are some other models out there.”