The Necessity of Tension and Conflict

Maurice Glasman writes:

The Co-operative Bank came out of the financial crash with half a percent of the toxic debt that characterised its high street rivals, but within five years it has gone the way of much of the rest of the financial sector. It will be a while before it can say it is "good with money" again.

Not one of the mutuals privatised in the 80s and 90s now exists as an autonomous institution and that is because it is not only the state that centralises power.

Capital also centralises ownership. We see this in energy and communications, as well as finance. We are living in an age of the oligarchs and our rulers are not accountable.

The scandal leaves us with a decimated mutual sector at a time when both the market and the state have failed to preserve any sense of ethical practice in the financial sector. What went wrong here?

The Co-operative movement needs to take this opportunity to recognise why it has become such a marginal force in the economy and politics.

Lesson number one: it downplayed the necessity of tension and conflict in its practice and tradition. It embraced a flat system of egalitarian membership in which, unsurprisingly, elites get their way as they are not held to account by interests but by a placid membership going along with things.

I am a John Lewis heretic. It doesn't pay a living wage to all workers and its staff or partners are not organised in a way that can challenge a quite authoritarian pattern of management. I cannot find an example of when its leadership has been defeated by its membership.

The horrible phrase used by people like me is a "multi-stakeholder model" of governance in which those with an interest in the flourishing of the institution, like workers and users, are organised and sit on the board. They have the expertise and experience to hold unaccountable elites to account.

A third of the seats on the Co-op board should have gone to users and workers so the institution could not be captured by the self-interest of its managers, who pay themselves and develop strategy in their own interest.

This is a model that could be usefully adopted throughout our policy and economy: a third of seats for funders, a third for workers and a third for managers to negotiate a balance of interests.

It works well in Germany in public and private sectors. Such a "partnership" model could restore trust and integrity, as well as give incentives to participation and responsibility.

Lesson number two is that size is not the most important goal in the growth of a business. By absorbing the toxic waste land of the Britannia building society, the Co-op Bank took on far more debt than it could handle and it sank the ship.

What was the process of governance that, following the crash, could have made sense of such an act of recklessness? Once again there is a lack of virtue, of a balance of power, of reason itself in such a process.

Third, the co-operative movement needs to learn how to organise again, developing and training leaders who can participate in its corporate governance.

The tragedy of this story is that we have never been in greater need of the benefits that mutual responsibility bring. In the name of expansion and profit maximisation, that inheritance has been squandered. It leaves us institutionally and financially bankrupt.

I work with my mum's yellow hard-backed Co-operative savings book in front of me. When I look at the small sums she deposited when she was 14 and starting work, it brings me closer to her and to the hopes that she had for a better future.

She trusted the Co-op and she passed that on to me. I am angry with the Reverend Flowers for trashing my inheritance and angry with a movement that was not prepared to hold its rulers to account.

We need to rediscover tension and conflict in order to bring the Co-operative movement back to life.