The Evolution of Manpower Cooperatives
and Other Contingent Workers
V.A. Teodosio, Ph.D, The University of Sydney
Professor, UP SOLAIR

Dr. Virginia Teodosio, faculty of the University of Sydney, former CDA Administrator, former Chairperson of the UP Employees Housing Cooperative and currently Professor at the UP-Solair shares her insights on processes that took place in the development of manpower cooperatives.  

Interesting to note is her contention of changing workplace concerns and the issue of lack of jobs and security of tenure brought about by the turn of the millennium.  The globalizing environment gave rise to a number of issues including triangular employment relationships, and how workers are able to come up with innovative approaches of forming “new organizations and institutions” to address their condition. 

Dr. Teodosio cited Founder Leo Parma and his effort in forming Asiapro Cooperative and its innovative attempt as a “new industry player” that has addressed the issues of contingent workers.

Introduction

With capital relocated on a global scale and markets and production internationalized in many sectors, industrial restructuring combined with the introduction of information technology have transformed job requirements and changed work relations.  To date, the most recent comprehensive study on the origins and global evolution of industrial relations was conducted by Bruce Kaufman (2004).  According to the latter, industrial relations as the study of employer and employee relations have remained steadfast on the need to balance the competing interests of capital for efficiency and competitiveness and that of labor, on fairness and decent work.  However, given the environment of declining collective representation as represented by the labor movement’s narrowing sphere of influence and the move towards more insecure, contractual work and increasing unemployment, it is critical for the discipline of industrial relations to prove its theoretical competitive advance for workplace governance in tune with the new economy.  Kaufman’s major point is for industrial relations to provide compelling interpretations of theory and methods to demonstrate its continuing relevance or for the discipline to address social problems to solve with which it has a comparative proficiency.  In this changed workplace context, the research also made mention of the fact that the Philippines is home to the only free standing School of Labour and Industrial Relations (SOLAIR) in Asia, located at the University of the Philippines (Kaufman, 2004:490).  While the search for collective voice from below through institutions and practices regarding labor problems was talked up in both SOLAIR and practitioner circles, the evidence on the ground was harder to find.

No less than former Labor Secretary Patricia Sto. Tomas called for a new definition of work that acknowledges the existence and contributions of Overseas Filipino Workers (OFWs), unpaid family workers and of an increasing temporary nature of employment with no clear employer-employee relations (PDI, 2006:A10). She called for the need to recognize that these types of labor exist in re-conceptualizing on “work that is desirable” if only to seriously advance the welfare of people engaged in such employment.  The case of the Asiapro Cooperative as a new actor in industrial relations has started to address the important social issue of triangular relationships where jobs are subcontracted by companies that are not the workers; principal employers.  The Cooperative has helped mediate conflict and tensions at the workplace that resulted in improved productivity and in the building of prosperity for its members and their communities.  The Philippines is the only Poor Man left in East Asia with unemployment its gravest defect and most serious labor problem.  Asiapro Cooperative has created 18,000 jobs (Leo Parma, 2006:1).
The Rise of Temporary Employment

With globalization, there are radical changes in the way production, consumption and other aspects of social relations are being organized with information communication technologies blurring the distinctness between economy, politics and culture.  The challenge in the Philippines is to create the right climate for people to have jobs, an improved standard of living to meet the basic needs such as better education, housing and access to health care.  In the absence of real changes in peoples’ lives, zero sum mentalities will prevail and thus undermine the nation-state from within the deep cleavages and tensions.

The Philippine labor market is characterized by persistent under-utilization of labor resources (Felipe and Lanzona: 2005:3).  The lack of productive foreign investments and a population growth rate of 2.36 percent have blocked the capacity of industries to absorb new entrants to the labor market.  Alongside the consequent scenario of unemployment is the higher incidence of underemployment.  The Bureau of Labor and Employment Statistics came out with an article on “The Underemployment Phenomenon” describing the high incidence of underemployment as a more serious problem that unemployment since underemployment rate is usually higher or twice the unemployment rate (BLES, 2006:1).  The report observed that while unemployment is usually a problem among the youth (with an average rate of 17 percent), underemployment cuts across age groups and affects more less educated workers and heads of families.

The turn of the millennium has ushered in job insecurities as a more permanent concern to workers in contemporary workplaces than it was to a majority of their counterparts a generation ago.  Precarious employment, where jobs are secure only for the length of the contract, is organized around the increasing tendency of outsourcing in the private sector and the move towards contracting out of public services.  The outlook raised the urgent issue of permanent job insecurity in the context of a coalescence of transnational corporate mergers and acquisition activities.  The worldwide phenomenon of a growing proportion of the workforce experiencing paid employment as an intermittent, rather than a regular activity pose major challenges for governments, policy makers and development practitioners.

Triangular Employment Relationships

The new labor market is shaped by a growing global competition, spurred by the rise of cheap manufacturers in China, India and Eastern Europe and the price cutting effect of both the Internet and great retailers like Wal-mart (Newsweek, 2004:40).  These compel Western nations to exercise great restraint on prices and labor costs.  Traditional workers are still losing their jobs at record rates.  General Electric has a 70-70-70 plan that describes the extent of these shifts.  It plans to outsource 70 percent of its head count, push 70 percent of that offshore and locate 70 percent of its workforce in India.  The mergers result in further cutting of jobs.  China’s growing influence stretches much deeper than its exports of cheap goods.  It is revolutionizing the relative prices of labor, capital, goods and assets in a way that has never happened so quickly before.  China combines a vast supply of labor in an economy unusually open to the rest of the world in terms of trade and foreign direct investment.  There has been much impact on the world economy in relative prices and incomes.  Lakshmi Mittal, Indian-born, is the owner of the world’s biggest producer of steel offered $US 22.6 billion take over bid for Arcelor, Europe’s biggest steel company and described as an attempt by new India to take on old Europe.  Location is less important than cost efficiency and higher mobile innovators and entrepreneurs.  Steel prices have doubled in the past four years.  Outsourcing (the contracting out of business functions previously performed in-house) has heightened concerns among the workers about job security.  More particularly, the increasing trend of offshoring (the contracting out to foreign as opposed to domestic affiliates) has prompted many to suggest that the phenomenon is leading to a reallocation of jobs from developed to developing economies.  In the longer term, in most economies, productivity and employment growth go hand in hand.  A policy strategy for increasing productivity and employment over the long run should therefore entail a dual strategy or investing in dynamically growing sectors of the economy while also building capacity in sectors where the majority of labor is employed.

The service sector is important for a policy focus because it represents and overwhelming majority of output and labor in most developed economies.  Additionally, in the developing economies the growth of services is also expanding in terms of output, employment and in some cases productivity.  Thus, both employment and productivity gains can be achieved in this rapidly expanding sector, warranting further investigation into the impact of the service sector expansion to the total economy.

Temporary help is a rapidly growing industry.  The basic traditional role of temporary work agencies has been as the name suggests to supply workers to clients who require temporary help, whether to replace employee who is sick or on a maternity leave, or to perform a task that is needed for a short duration.  The workers (temps) work for the same user for only a few days, weeks, or sometimes months and move to another placement.  In the last two decades, temporary work agencies have begun offering a number of additional services.  This can be seen as a direct response to the new needs of business.  In particular, heightened global competition puts pressure on firms to look continuously for new ways to cut costs, flexible specialization and just in time industries have increased the need for numerical flexibility that is flexibility with regard to the number of workers at any given time; and new ideas supporting the focus on core competencies have prompted massive outsourcing.  In some countries the temporary help industry now offers it all; agencies are taking over many burdens of being an employer.  They can also let go of some of the headache associated with dealing with employees, e.g. hiring, firing, payroll, unemployment insurance and workers compensation payment.  The flexibility of businesses is crucial in the age of the new economy.

The first category of change noted above is often associated with the growth of poor work, inferior, insecure contingent jobs and interrupted, discontinuous employment.  It is associated with a shift of employment towards the service sector, and in some countries with increased female participation in the workforce.  The second category of change tends to be linked to the growth of the so-called new economy, the wired world.  This kind of contingent employment reflects cyclical socio-economic trends and/ or specific labor market pressures or rather represents a move from contract to network.

Despite the talk of the death of Fordism, mass production still accounts for a substantial part of industrial employment around the world, and there are still large bureaucratic physical organizations.  Nonetheless, there is an emerging fluidity in organizational, sectoral and occupational boundaries.  Labor markets are inherently imperfect and incapable of self-regulation.  Flexibilization of the labor markets has resulted in the greater power of capital and increased societal stress to find new ways of wealth generation.

The relationship between the agency, the client and the worker is the most common form of what is know as the triangular employment relationships.  The basic problem that arises in such relationships is who should be considered the legal employer of the worker in question.  It has been argued that the temporary employment relationship is being developed and an alternative to standard employment relationship.  Temporary work relations however and in particular employment through temporary work agencies come in different forms and shapes that cannot be grouped together.

During the past two decades, many industries changed their manufacturing structure as a strategic response to the globalization of markets and consequential increase in competition.  For many companies, the key to successful restructuring has been to focus on core competencies or strategically important activities and to withdraw form noncore functions.  This approach led to the mushrooming of outsourcing options.  Outsourcing has become the crucial part of supply chain.

It is only in countries of East Asia and Southeast Asia that real success in poverty reduction has been achieved.  The experience of countries that succeeded in reducing poverty significantly indicates the importance of sustained high growth in achieving this result.  However, studies on poverty also mention that high growth alone is not adequate.  The pattern and sources of growth as well as the manner in which its benefits are distributed are extremely important for achieving the goal of poverty reduction.  And in that regard, the importance of employment in linking growth with poverty reduction is often pointed out.  Cooperatives are self-reliant organizations that have sought to make possible diverse solutions to address basic material needs of the poor such as credit, livelihood and jobs.  They are not state-initiated organizations as some have described them and are largely dependent on their membership for their resources.  Members pay their shares, patronage their cooperatives’ products and services, undertake tasks that may be assigned to them and participate in decision making activities such as the general assemblies.  They have set up mechanisms for dialogue, encouraged equity and devolution of authority as well as developed skills to manage complex societies.

Characteristic of a globalizing economy is towards a diminishing core of well paid, tenured staff and an expanding informal workforce.  With the widening gap between the rich and poor, cooperatives appreciate the fact that very basic human drives require equally basic material solutions.

The Cooperatives in a Global Age

Cooperatives can be located on a continuum within the social, national, regional and global levels.  They are inextricable connected to forces shaping domestic social and economic conditions.  Their network is represented in large measure by its peak organization, the Switzerland based International Cooperative Alliance (ICA).  The ICA (1995:3) has referred to a cooperative as:

An autonomous association of persons united voluntarily to meet their common economic social and cultural need and aspirations through a jointly owned and democratically controlled enterprise.

It also adopted seven principles that define the identity of cooperatives: open and voluntary membership, democratic control, limited interest on shares, return of surplus to members, cooperative education, cooperation among cooperatives and concern for the community.  The various types of cooperatives include agricultural, consumers, workers, financial cooperatives and service.  Cooperatives are difficult organizations to develop and manage.  So many of them failed but a large number prospered and are now a powerful force for social transformation.

The cooperative movement has an enormously long history and to date, the ICA has 230 member organizations from 92 countries covering all sectors of the economy (ICA, 2007).  The scale of cooperative activities is impressive with 800 million members worldwide making it the world’s larges non-government organization.  At the turn of the millennium, the ICA has been asked by the United Nation’s Anti-Hunger Programme to help develop the capacity of small scale farmers in food supply processing and marketing with the use of the cooperative model in addressing poverty and food security.  In September 2000 the UN Millennium Summit world leaders agreed to solve problems of poverty hunger, disease, illiteracy, environmental degradation and discrimination against women in cooperation with the Food and Agriculture Organization, the International Federation of Agricultural Producers, the World Council of Credit Unions as well as with the ICA.  In 2004, the largest 300 cooperatives posted US$ one trillion in revenue.

As a social enterprise, the centrality of productive activity in a cooperative is a constant.  It is an enterprise characterized by the dualism of cooperation and competition wherein it must ensure that its operations are informed by certain values and ethical considerations and at the same time must operate on a surplus.  To flourish most successfully, a cooperative must apply systems of innovation, create its own knowledge base, exploits its business opportunities and learns to use its networks of interconnected institutions with related interests.  As the scale and rapidity of change has affected cooperatives and the conditions in which they operate, the members’ interest remain the heart of the issue in long term perspective and commitment.  For citizens to be interested in equality and justice, fair and egalitarian institutions and practices must obtain.  The growth of the cooperative movement has been gradual but the main result is its ability to shore up its own vitality and inexorable influence on the principles of cooperation and concern for the community.

Historical experience shows that the problem of social exclusion is best addressed as more universal countervailing systems of expanding equality are put in place.  Under the present circumstances, the huge wealth concentrated in a few hands require structures and ideologies capable of reasonably maintaining popular expectations of social change.  What makes cooperatives different from non-cooperative organizations, is its being a historical phenomenon encompassing at least two hundred years and generating basic conditions of autonomy and solidarity feeding back consistently on the need to cooperate on a world scale.  Trade unionism is the only other institution with that universal character.  The first trade unions were organized in England around the time of the Industrial Revolution.  While unionism is on the decline, cooperatives are gaining more adherents.  The steady dismantling of legal protection for workers and the failure to organize the unorganized resulted in trade unions being severely weakened by the era of neo-liberalism.  Depending on the time and place, the values and norms of community responsibility and accountability are expressed concretely in the cooperative movement.  After a long struggle of self-reliance, it has proven to be efficient and effective with a substantive legitimacy that generally comes from below.  The movement has put at its disposal indispensable resources in terms of income, livelihood, jobs, education, knowledge and information and the capacity for dialogue and a public discourse taking shape including those by authorities and political leaders.

The long period of growth of cooperatives in all industrialized countries, as elsewhere, owes much to Robert Owen’s (1771-1858) activism against the inherent social and economic inequalities as a result of England’s Industrial Revolution (Birchall, 2003:5).  The development of factory production and its concomitant concentration of capital and land led swiftly to a large number of people who were relegated to lower paying and peripheral jobs.  The dehumanizing effects of industrial capitalism called for competition to be replaced by cooperation wherein workers by their own accumulation of collective capital should be able to organize for their own interest.  Cooperation, not competition, is a necessary extension of human capacity according to Owen, who is generally regarded as the founder of modern cooperative movement.  Workers are better off when they cooperate on the basis of equity and economic justice inspired by villages of cooperation through which these interests can find realization.  Owen worked for factory reforms and established a model factory himself based on cooperative principles.  In additions, some retail cooperative stores proved successful for a brief period in the 1830s.  Owen’s ideals resonated but given crushing poverty, worker s themselves failed to find the resources required to concretize the communities of cooperation.  It was only in 1844 when a group of weavers in Rochdale launched a cooperative society that brought prosperity to its members.  The Rochdale Pioneers Society was set up by skilled workers to compensate for their marginalization and impoverishment because of the unregulated market forces of the period.  The forerunner in response to the social distortions of industrialization, the Rochdale cooperative became the model of consumer cooperation by the end of the t19th throughout the world.

During the first half of the 20th century in Europe and North America, despite the diversity of geography, cooperatives were able to maintain self-determination and their productive energy unfolded with hardly any support from the state.  An enabling legal environment was set in place but the cooperators remained disengaged from overarching political authority.  The international convergence on the broadly shared values meant the rise, among others, of consumers cooperatives in England, the producer cooperatives in France, rural banks in Germany, diary cooperatives in Sweden and New Zealand, and the national association of producer and worker cooperatives in Italy (Fairbairn, 2003:3-4).  In Australia, rural producer cooperatives embarked on a large scale communal production and distribution.  Through mutual cooperation, there was heightened economic security for the farmers through quality products and services.

In the second half of the 20th century, there was dramatic increase in the demand for social cohesion through cooperatives by various post colonial states in Africa and Asia (Birchall, 2003:10).  Cooperative-based reforms included formal recognition, bilateral aid programs and versions of community outreach and self sufficiency at various levels of state support and government policies.  In particular, the occupying powers in West Germany and Japan drew upon equity oriented reforms through consumer cooperatives.  The cooperative model became the centerpiece of social reforms and by the end of the 1960s, the post colonial states created departments of cooperatives with imported European models characterizing the German credit banks, the Danish agricultural cooperatives and the British consumer cooperatives.  The large scale program of cooperative development brought with it the opportunity and challenge of increased exposure to modern-based economies of the West. The unprecedented level of support for cooperatives gave way to great expectations.

However, the historical high and the marching to the beats of the cooperative movement were largely in the shadow of the formal, state regulation policies.  In such a setting, primary cooperatives were increasingly organized not in the context of a sustained relationship and expectation of reciprocity and needs of members but as implementors of identified programs of the government.  The cooperatives became channels of state sponsored financial credits and political favours eroding the very purpose of their formation.  What this amounted to, in practice, was the proliferation of rural cooperatives ostensibly engaged in farm credit, farm supplies or storage and marketing of agriculture produce with continued failures.  It cannot be stressed enough that without members’ participation, even the most effective, well targeted development programs will not by themselves solve the problem of rural development.  However, none of this should be taken to imply that there were no notable successes.  A new wave of export markets strengthened agricultural cooperatives such as the coffee cooperatives in Africa, the dairy cooperatives in India and beef production in Argentina and Brazil.

In 1971, the United Nations (UN) outlined a strategy in support of cooperatives by establishing the Committee for the Promotion and Advancement of the Cooperatives (COPAC).  The starting point called for a broadly based participation in the growth process through a partnership with representatives of the cooperative movement together with farmers organizations and the United Nations and its agencies.  During all stages of strategy implementation, members were asked to give special attention to policy dialogues, technical cooperation information and concrete collaborative activities.  In 1976, the UN through COPAC undertook an evaluation study on the impact of UNDP projects on the conditions of the poor.  While the study confirmed the contribution of cooperatives to rural productivity, a lot was still needed to be done on members’ education and organization.  Reference was made for people to actually exercise control over the cooperative to put its resources to serve their interests first.  Moreover, there was an acknowledgement that cooperatives in the long run can solve the problems of development.  Then years later, in 1981, the UN reaffirmed the role of cooperatives in the socio-economic development of developing countries and worked for comprehensive report in promoting the cooperative movement.  By the late 1980s, the ICA reported that there were at least 500 million members of the movement.  In Europe, for example, its long history of cooperatives has resulted in 45,000 agricultural cooperatives making more than half the value of total farm production, health insurance to some 21  million families and the consumer movement with market shares ranging from 10 percent in Britain, 20 percent in Sweden and 30 percent in Denmark.  The agricultural cooperative enterprises in fuel, feeds and fertilizer represented 26 percent of the US market and in Canada, 44 percent.  Farmer centered enterprises have come to dominate mainstream discourse once again.

In December 1992, the General Assembly proclaimed the first Saturday of July as the International Day of Cooperatives (Resolution 47/90).  The date was chosen to coincide with the already existing International Cooperative Alliance celebrated since 1927.  In 1995, another positive step was made with the World Summit for Social Development declaration to use the cooperative model of self help, sustainability and inclusion in the eradication of poverty.  The UN’s Social Perspective and Development Branch has characterized cooperatives based on the values of self help, self responsibility, democracy, equality and solidarity.  In 1996, another resolution was adopted with the growing confirmation that cooperatives have mobilized a far greater range of social energy and capacity and urged the various states to collaborate with national and international cooperative organizations (Resolution 51/58).  Since 1997, specific issues that were raised during the celebration of the International Day of Cooperatives included the movement’s contribution to the world food security, globalization and the economy, concern for the community, opportunities for all, microfinance and on confronting climate change.  In a decade, in June 2002, the promotion of cooperatives in the 90th Session of the International Labour Conference was adopted and took the position that the states should promote the movement in transforming the informal economy into legally protected work and integrated into economic life.

The mainstream of the cooperative movement has historically promoted agricultural cooperatives by helping raise productivity and a common commitment to credit unions, loan and savings cooperative and cooperative banks.  Credit unions posted 30 percent of membership among Americans.  The extent of growth is evident by their assets of 400 billion dollars and by another measure, their representing the 10 percent of consumer deposits and 15 percent of consumer loans.  Job opportunities are created through workers cooperatives with far ranging changes in how to organize work, where they locate the work to be done and whom they hire to do the work whether unskilled, skilled or semi-skilled.  There are also service cooperatives which provide specialized services such as housing and health care and consumer cooperatives mostly in urban areas.  While consumer cooperatives  seek to deliver desired goods or services to members at good prices, embodied in worker cooperatives is the increased work effort to generate access to better paying jobs and continued employment for their members.  Start-up capital is usually provided by members as they join the organization and work preparedness is assured through members’ contributions over a period of time.

The cooperative movement has been most responsive to changing global circumstances and has extended its influence worldwide.  It is central to social change because of its methods for effective collective action.  A number of cooperatives has gained a reputation as a world class operation.

The Associated Press (AP) is a cooperative which is owned by US daily newspaper members.  On any given day, half of the world’s population sees news from the AP.  It serves 1,700 newspapers and 5,000 radio and television outlets in the United States and subscribers internationally.

Emilia Romagna in Italy is a cooperative federation on food retail with 8,000 primary coops as members and is managed by 155 regional centers with 6 million members.  Some 60 percent of wine production comes from cooperatives also in Italy.  The Cooperative Atlantic in Canada is a regional cooperative wholesaler with 142 reetail outlets and 650,000 members.

Fontera Cooperative in New Zealand represents 96 percent of all dairy farmers.  It has evolved to become the 6th largest in dairy international trade.

IFFCO is the world’s largest fertilizer cooperative based in India.

In Argentina, there are 170 workers cooperatives with 10,000 members who have reorganized a number of enterprises by taking ownership and collectively assuming management of the business and the associated risks of failure.

In 2005, the Rabobank Group in the Netherlands is ranked 28 out of the world’s top 50 banks.  The Rabobank Group’s range of financial services for food and agribusiness is grounded on cooperative principles and was founded in 1898 by small farmers who with little access to capital decided to help one another.

In Japan, over the past 50 years, the National Federation of University of Cooperative Association has grown to 227 member cooperatives.  It is the largest federation of university cooperative student federation in the world with 1.4 million members across campuses in Japan.  The federation serves students and faculty members in universities and colleges through bookstores, convenience stores, cafeterias and other services.  Meanwhile, consurmer cooperatives in Japan has a turn over of UF$ 24 billion in 2004 and has a membership of 16 million.

In the United States, there is the National Business Cooperative Association with 47,000 cooperatives serving 100 million or 37 percent of the population.  In the Philippines and the rest of Asia, cooperatives continue to be relevant in strengthening development (Teodosio, 2007).  Most of the Asian cooperatives are under the guidance of the Department of Agriculture while those in the Philippines, the Department of Finance and the Cooperative Development Authority.  Agricultural cooperatives are very strong in China, India, Nepal, Thailand and South Korea while in the Philippines, it is the credit cooperatives.

In Singapore, the National Trade Union Income (NTUC) was established with an initial capital of US$ 1.2 million in 1970 for affordable insurance.  After 36 years, NTUC Income has 1.8 million members and assets at US$ 16 billion.  It has the highest rating among all domestic insurers in Asia.  As Singapore’s only insurance cooperative, it contributes about one percent of its surplus to support education, healthy lifestyle, charity and trade unions.  NTUC was recognized as Singapore’s Call Canter of the Year Gold Award in 2005.

Unquestionably, the reigning model for ushering in considerable diversity on the ground practice is the Mondragon group of industrial cooperatives, located in the Basque region of Spain.  The Mondragon Cooperative Corporation (MCC) is the largest business organization in
the Basque country and 7th largest in Spain with total assets of US$13.4 billion.  As of end of 2006, the MCC workforce totaled 83,601 people of which 44 percent were based in the Basque country., 37 percent in the rest of Spain and 19 percent in the international field.  The MCC has 38 industrial plants overseas.  In the 1980s, the MCC shifted its attention to restructuring its industrial production in the context of a global economy and in the 1990s set up the University of Mondragon to meet the requirements of the local economy.  The first cooperative was established in 1956 and the majority of cooperatives are industrial cooperatives, followed by agricultural, fishing, catering, retail and educational.  The MCC’s funds are administered by its own bank, the Caja Laboral Popular.  Export sales have increased 45 times, a manifestation of the growing competitiveness and market acceptance of Mondragon’s industrial products in the global overseas market.  There are many reasons behind the success of Mondragon.  These can be divided into external factors, the leadership qualities of Father Jose Maria Arizmendi, cooperative legislation, support structures, the role of the state and the ability of cooperative enterprises to manage and adapt to change.

If the goal is to capture and explain epochal trends of globalization and democracies reshaping people’s lives, rediscovering the cooperatives or discovering them for the first time is a necessary element to advance equity led sustainable growth strategy.

Democracy and the Community

At the end of the 1800s Pope Pius XI called for a Third Way between socialism and capitalism raising the concept of the social market economy characterized by values of real opportunity, civic responsibility and community.  The approach called for growth, entrepreneurship, enterprise and wealth creation in the context of greater justice as it sees the state playing a major role in bringing this about.  What this means is that people are capable of making choices and may be trusted to ascertain and pursue their genuine interests.  Measures must therefore be taken to enable individuals and social groups to affirm themselves and to be recognized for what they are or wish to be.  There has to be equal opportunity of access to resources and a fair distribution of benefits and full respect of human rights.  A crucial function of Third Way thinking is to overemphasize the cumulative disadvantages of greater risks and uncertainty that globalization brings to people’s lives.  A major tool is for policy making to provide the social capital and for the state to make resources available to overcome the mounting constraints to achieve prosperity in the global age.

The implications of the Third Way conditions are also to be found on the substantive freedoms as argued by Amartya Sen on the need for enhancing capability strategies characterized by the freedoms of people to acquire sufficient food, avid disease, access education, obtain employment and participate in community (Sen, 1999).  From what emerged from Sen’s body of work, development is best seen as a process of expanding the substantive freedoms that people enjoy.  Substantive freedoms are constituent components of development but they are also instruments of development.  Closely related to this concept is capability and certain aspects receive particular attention such as having good health, being literate or educated, having a community life and being free to speak.  The windfall gains offer the expansion of the capabilities of persons to lead the kinds of lives they appreciate most.

It is worth looking again at the four key elements of the Third way: a belief in the value of the community, a commitment to equality of opportunity, an emphasis on responsibility and a belief in accountability.  The idea according to Stuart White (1998) suggests real opportunity, civic responsibility and community.  Alongside with this is Anthony Gidden’s (1994) observation that society’s higher moral nature is grounded on a community of fellows with reciprocal obligations towards each other.  To bring this to bear on public life means a direction towards a more caring and compassionate society and not of ruthless competition.  At the community level, balancing the interests of business, state authorities, and the environment require partnerships that influence the growth of local economies.  The pressures facing local economies today make it increasingly difficult for any one institution to centralize public services.  Only when partners often referred to as stakeholders agree to develop and implement a common strategy, is it likely that change will be sustainable.  The Third Way’s opportunity structure is necessarily a collective project consisting of coordinated efforts and must be facilitated by some institution that is seen by diverse community interests to be legitimate.  The processes of issue identification and priority setting should establish key values that all stakeholders can agree to as fundamental to their notion of sustainability.  The approach is to be based on building consensus on matters of mutual interest at the level of stronger centralized structures and the mechanisms for vigorous grassroots participation.  Historic transitions and transformation the product of a combination of diverse forces acting in mutually reinforcing ways.   The expansion and decentralization of the local leadership should strengthen the decision making powers of small and rural communities.  Democracy is realized to the extent that people can exercise control not over the decision making itself but over the decision makers who act in their place.

It is necessary to recognize the rise of new identities and in constructing an agenda which links the interest of the relatively secure but also the precarious and the unemployed. Organizational capacity is surely essential to develop programs which offer hope of real employment opportunity.  However, the problem with most of the literature on labor and globalization is that it tends to treat labor as passive victims of the new trends in the world order.  Capital is seen as an active mobile forward looking player in the globalization game while labor is seen as passive and basically reactive.  Labor in formal and informal sectors are not just victims but can also resist, organize and could seek to change the conditions of work.  Whatever the strategy, new issues challenge past structures built on traditional battle lines and under the constant pressure of a highly competitive economic reality, the existing patterns will be open to change.  Some of adjustments may represent values of democracy and equality while other innovations may be more destructive of those values.  In all, democracy and equality while other innovations may be more destructive of those values.  In all, democracy and constitutional government have still to compete with authoritarian forms in the struggle for legitimacy.

But democracy does not stand still.  Where democratic institutions have taken root they have often deepened and the dynamic interplay of democratic processes is continually renewed and transformed.  Globalization has prompted new identities and new interests within local political processes and it transformed and in many ways reinvigorated the multiple identities and fluid processes of the current era.  The strategy is for all actors to respond to the demands of responsibility at all levels of the specific character of a country’s economic structure and its distinctive pattern of representation.  What matters for democracy is the existence of social formations whose way of life gives them a consistent interest and capacity to support democratization both in general and at particular historical conjunctures.  The central issue for democratic consolidation is to monitor the ill effects of global market integration and the balance of power between institutions.  In other words, the challenging distributional issues through growth alone have to take into consideration ownership structures to deal effectively with unemployment and poverty.  Advocacy means an alignment of policy processes to a wider range of voices and stakeholders.  Much of this activity is a form of empowerment involving multi-scaled strategies and networks in agenda setting in relation to the underlying forms of privilege and domination.

Cooperatives played the central and positive role in advancing universal models of change to mobilize people for an articulation of collective projects and consolidating the pressure from below.  They are schools of empowerment that have created the right conditions to trust people to do their best for the organization.  This means that people are valued, their opinions sought and their views taken into account.  It means trusting people.  The value systems of cooperatives, built up and earned over a long period of time, have developed into a culture and a way of life.  What is probably remarkable in terms of the story of cooperatives is that despite the many obstacles to organizing such organizations, across the world, they have really endowed the global civil society and its remarkable developmental capacity.  The essence of cooperatives is not to seek a return on invested capital but to get goods and services at reduced cost.  What this amounts to then is that any surplus is returned to the members in proportion to their participation in the business of the cooperative.  As an organization a cooperative is an evolutionary phenomenon; it is constantly in a process of adjustment with its immediate environment, it expands or shrinks according to the operating conditions within which it is placed and tries to survive and grow as best as is possible.  But as members gain more confidence and leadership develops more competence the primary cooperative may expand, diversify and offer a whole range of services, needed by members.  Cooperatives are institutions of democracy promoting distinct realms of community life.

The Nature of Social Transformation

Grassroots collective action through people’s organizations is one of the most important and yet least recognized dimensions of Philippine development.  Overlooking its record of achievement reflects a more general failure to interrelate concepts of the institutional and economic development.  Contemporary forms of collective action refer to large scale far reaching changes in patterns of social organization and behaviour over an extended period of time.  Relocating participation within cooperatives situates it in a broader range of socio-political practices, or expressions of agency through which people extend their status and rights are members of particular communities, thereby increasing their control over socio-economic resources.  Doing this requires developing new capabilities entering new arenas.  Cooperatives have begun to think about how to develop bigger economic capabilities, to go beyond small livelihood projects.  There is a lot of experimentation with developing trading and institutional credit capabilities.  By working towards larger economic projects, and working within local governments, cooperatives hope to accumulate enough power to make a difference in local areas.  The intention here is to locate a radical home for the participatory project that secures autonomy, room for innovation and links to a transformative project to develop the notion on citizenship.  It offers a means of covering the convergence between participatory development and participatory governance.  It seeks to situate participation with a broader political, social and historical perspective that draws attention to the politics of inclusion and exclusion that shape popular agency beyond particular interventions.

A real transformation must therefore encompass more than social and the political change, it must be a cultural one.  This cannot mean the same thing everywhere but at the same time, much can be learned from the traditions and experiences of others.  In this way the diversity decentralization and multiplicity of struggles should be seen as more than the unfortunate necessary result of diverse economic and political structures rather they are potentially positive factors in the development of transformational theory through the practical struggles of our time.  Do cooperatives offer viable alternatives?  To what extent do they serve as an alternative to both political parties and interest groups for the representation of collective interests, rights and identities?  I propose to tackle it by addressing three different albeit interrelated issues.  First, the issue of participation.  Do cooperatives allow ordinary people to participate in the socio-economic process?  Second, the issue of visibility:  Do they allow ordinary people to make it their interests and identities visible in the public domain?  Third, the issue of effectiveness.  Do the Cooperatives allow ordinary people to be effective in reaching their objectives?

In 2012, the world will celebrate the International Year of Cooperatives.