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Capitalism – can we move from greed to need?

10 Feb 2012

Social Business Australia’s Melina Morrison on the International Year of the Co-Op.

For some of us, the concept of a co-operative brings back memories of the university bar or shop. A farmers market on a weekend or a small winery may also spring to mind.

But co-ops are a booming business. In Australia last year, co-operative businesses generated some $15 billion in turnover and across the globe the top 300 co-ops turned over $1.6 trillion, equivalent to the economy of Canada.

It’s a little known fact but banks and listed companies are actually legally required to maximise benefits for shareholders — a legal obligation to think of the bottom line only.

Coops are another model altogether. You may not realise it but some of the largest companies in Australia and internationally are based on the co-op model – companies like Rabobank, Sunkist, KPMG and Associated Press. The difference is, all these companies are set up to serve a purpose beyond simply making a profit by adopting so-called Co-Op Capitalism.

So how do co-ops gauge success? And as the global economy faces stresses what role could co-ops play in stabilising economies?

Answering those questions is Melina Morrison from Social Business Australia.

“We are the businesses that deliver services and products through a socially responsible business structure,” says Morrison.

“ In 2012, co-operatives, credit unions, mutuals and member owned businesses will be putting the building blocks in place to grow the sector.”

Now, a growing global movement towards cooperatives may offer an appealing alternative.

Listen to Dame Pauline Green talking about the scale and scope of co-operative businesses on The Drum.

Co-ops are making growth happen by making 2012 the “UN International Year of Co-operatives” which will bring co-operatives across the globe together to campaign for a ‘better’ business model.

The drive for profits has never been clearer than with recent actions by the big four banks to increase interest rates independently of the Reserve Bank board’s decision to keep the cash rate on hold. ANZ and Westpac also announced job cuts and taking jobs offshore to cut costs while slashing jobs and increasing home loan rates.

But if your bank happens to be a customer owned financial institution, the experience is vastly different.

Bankmecu, a co-operative bank, did not put up its rates. Find out about their business model here.

These financial institutions run their business on a co-operative model, putting profit back into the business to protect employees and to serve their customers.