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Though many suffer, the crash of 2008 was not as system threatening as in 1929.

The financial turmoil of the past five years reminds many of the crash of 1929, which led into the Great Depression of the 1930s.  That depression threw millions out of work and forced millions more off their farms, both in Europe and in the United States.  It also bankrupted thousands in the business classes of Europe and the United States and dispossessed thousands from the remaining European aristocracy.  That crash resulted in a moderate rise in support for radical political movements plus a near total demoralization of the establishment forces.  Nobody could stomach defending capitalism in debate, it was a ghastly word.  Capitalism was defended of course, by the sword, and under the guise of other issues.

The aftermath of the crash of 2008 appears quite different.  The “Great Recession” has thrown millions out of work just like the Great Depression did, but the rigidity of generations of farming or working at a particular craft had already (all but) disappeared. Furthermore, though there is a lot of talk about ‘entitlement mentality’ from conservatives, they are clearly overstating. In 1929,  people lost occupations they felt entitled to out of an inheritance over generations. Today unemployment and instability/flux in careers is considered normal, at least by the majority of the population.  More often,  people don’t feel they are “entitled” to a job, and certainly not to a particular one.  Correspondingly, the sense of moral outrage on losing one’s job and home is also less.

But there is a bigger difference from the 1930s than this. While there is no doubt that many business and professional people all over the world lost a lot of money over the last few years, they have largely been protected—bailed out—from the kind of catastrophes that so many endured, or failed to endure back in the 1930s.  Today,  the top “one-percenters” and people among roughly the next ten percent of  the income distribution feel sufficiently secure to remain morally and politically invested in the current regimes.  So while there has been plenty of worry, there has been no mass panic and no mass demoralization in business and financial circles.  The ruling parties are a little embarrassed, opposition is greater than normal, there is a lot of protest, the situation provides little significant support for alternatives.

This has given rise to a series of disappointments for the left.  In Greece, anti-austerity socialists lost to establishment parties in an election considered as significant in Europe as the failed Wisconsin recall effort was in the United States.  In Egypt, the military has reestablished effective control and the left has to decide whether to celebrate or mourn the election victory of a “president” from an Islamic party.  The upcoming elections in Mexico will yield similar results.  While there is a great deal of discontent, there is little support for a militant alternative to the current order, and the current order continues to enjoy significant minority support.  In the upper and middle classes, in fact, it still enjoys majority support.

What about the left? Let us consider two distinct grouping– the militant left and the left counterculture.

The militant left has suffered defeat after defeat for forty years, with the partial but notable exception of a number of countries in South and Central America and perhaps Thailand.  This cannot be explained solely by bitter memories of Soviet “Communism.”  The main reason is that socialism appeals most to property-less but somewhat educated and at least semi-secure employees—the working class as it has typically been imagined.  That said, this group has never been a majority in any country and is currently a shrinking proportion in most.  In developed countries, many working people are also small property owners and may even participate in a pension fund: they are at least somewhat invested in capitalism.  More important by far, however, is that in many developing countries and increasingly in developed countries, a large proportion of people are casual laborers or petty entrepreneurs—small business without the glamour.  In countries like India or Mexico, it is considered a great privilege to be officially hired for a job.  It means an employer is willing to make a long-term commitment.  The majority of poor people have no official job at all.  This explains why, with all the migrants seeking jobs in the US, Mexico has never had an official unemployment rate of over 5%.  Most people are not officially in the labor force and so are not counted, but you can bet that they are working harder and suffering more than their officially employed and unionized counterparts.

Ironically, therefore, socialism has often come to appear as a movement of the partially privileged, both in the developed and in the developing world.  Unions and union struggles, social security, pensions, working conditions—all these are important issues for people who see themselves as employees for most of their lives.  For those, however, who see themselves as “self-employed” in petty business, petty crime or casual labor, these are all issues affecting only people more secure and privileged than they.  Unions and socialists are more likely to inspire resentment than sympathy.  Only the most militant type of communism involving mass redistribution of property and privilege is likely to appeal to this growing underclass, whose life style already includes the kind of violence and fear such communism threatens.  In short, traditional socialism has never had enough of a constituency, and year by year is losing more.

There is another part of the left that is largely untouched by the defeat of the militant left.  This is the counterculture left.  Here the strategy is not to “fight capitalism” so much as to “opt out.”  This is the left of alternative communities and alternative lifestyles, and it prefers moral critique and personal character development to political campaign and military combat.  Unlike the militant left, this counterculture left actually stands to grow under depression conditions.  As more and more people are separated from rewarding roles in the capitalist mainstream economy, they become available for/open to alternatives.  On the periphery of the plenty created by capitalism, these alternative lifestyles provide structure and meaning to people until perhaps a new boom brings them back into the mainstream.

There used to be a bumper-sticker that said something like ‘if you think capitalism is working, ask someone who isn’t.’  That reflects a major misunderstanding.  Capitalism works as much by excluding as by including people, and as many an executive of the last thirty years will tell you, there’s profit to be made in firing people–more than any other way.

 Arnaldo T. Soltermann is Development Laboratory Director, for the Chemistry Department, Rio Cuarto National University. Republic Argentina. He is also President of Initia Workers Cooperative of Argentina. Professor Soltermann is currently on a short visit to the Chemistry Department at UIUC to engage in research (from May to September).

“Cooperatives are a reminder to the international community that it is possible to pursue both economic viability   and social responsibility.” United Nations Secretary-General Ban Ki-moon.

The General Assembly of the United Nations declared 2012 as the International Year of Cooperatives to raise awareness about their importance, promote expansion of the model, and to establish proper cooperatives’ creation and development policies. US co-operators made history on May 4th of 2012 when 150 of their leaders from across the country attended a national briefing at the White House. It was the first-time such a wide ranging number of co-op leaders had attended an event of its kind.

Cooperatives are autonomous associations of persons united voluntarily to meet shared economic, social and cultural needs and aspirations through a jointly and democratically controlled enterprise. Each cooperative is a company, as it is an organized entity that operates in the market, however, the aforementioned features differentiate cooperatives from other types of organizations and companies controlled by capital or the government. Furthermore, organizing principles include: self-help, democracy, equality, equity and solidarity — have proved to reduce poverty, create jobs and promote social integration.

Cooperatives employ over 100 million people worldwide and the 300 most important cooperatives generated over 1.1 billion dollars during 2008. The cooperative agricultural movement emerged in Argentina by late nineteenth century, as a result of the association between European immigrants arriving to the country to work and produce food to export to Europe, in need for an increasing amount of food as a consequence of the industrial revolution. Some of them still exist today and are more than hundred years old. In Argentina today, there are more than 9.3 million coop members distributed across14,000 associations. In recognition of their significant role, The Argentina National Agricultural Technology Institute, noted that, “cooperatives linked to the agricultural sector will play a leading role in the technological change in Argentina.”

Evolution of the Argentine Cooperative System
During the last few years a new generation of Argentine cooperatives has begun to emerge. According to specialists, cooperatives “traditionally played a key role in primary production to benefit the producer, but a new generation of cooperatives are also progressing to transform the primary product and bring it closer to the market.” Aside from adding value to the product, these “new generation” associations draw upon a modern outline of capitalization of profits with an effective return of 50 percent at the end of the annual cycle. In addition, they generate indirect economic and social benefits such as comprehensive territorial development on site that helps increase the demand for labor employment, education, and infrastructure of towns and cities within the country and improve the quality of life of residents. The increasing number of producers and cooperatives adding value to their products, translates into increases in regional resources. This can help prevent generational flight to big cities and favor local development in an environmental sustainability and social equity scenario.

The Inter-Cooperative Agricultural Confederation indicates that there are over 500,000 people depending directly on the agricultural cooperative system; expanding from small communities, where they operate directly, to the shelves of supermarkets and seaports. In turn they account for over 1.7 million dollars per year; exports exceed 0.7 billion dollars and contribute to six percent of the gross domestic product. Agricultural cooperatives not only play an important role in the production and distribution of food but also enforce the food security of nations.

A Case in Point: Initia
Waste from oil industries presents a number of problems in Argentina including storage and potential pollution. Its productive use could enhance the existing oil industry, solving at the same time the environmental problem.  In 1999 at the Chemistry Department of Universidad Nacional de Rio Cuarto (UNRC), Argentina established the Development Laboratory to explore a variety of scientific, commercial, and social issues. This interdisciplinary research group began its work by analyzing the technical and economic possibilities of establishing an oleo chemical development centre-an oil-waste repurposing system, in the southern province of Cordoba. The group identified advanced production technologies to handle this waste that also result in production of added value products (Vitamin E, fatty acids, liquid soap, etc.) using as feedstock oilseed industry waste. The industrial processes were supported by original, well-proved scientific and technological development combined with a respective business plan and a patent application.

The liquid soaps that are produced in the waste-repurposing process could provide a cheap source of cleaners for purchase by public sector organizations focused on the health of vulnerable populations. In fact, negotiations with government agencies regarding this use have begun. Another residual of the processing, tocopherol acetate (Vitamin E) can be useful in several industries. The business plan included plants which would have a strong  production capacity, and would be easily replicable with relatively low initial investment.

In 2011, ten individuals including myself and some other members of the Development lab decided to launch Initia, an autonomous, technology-based worker cooperative. We  decided upon an organizational form based on principles of Cooperative Capital. We bring together our different skills and abilities to carry out shared objectives. We expect that our  connections with the university and the community will allow for significant impact on the local economy and on the local university culture (that is sometimes reluctant to participate in specific production processes). Our journey from research to market has given us new ways of thinking about interconnections and possibilities across multiple arenas.