A Market Without Capitalists

A market economy and capitalism are synonymous --- or at least joined at the hip. That's what most Americans grow up assuming. But it is not necessarily so. Capitalism -- control by those supplying the capital in order to return wealth to shareholders -- is only one way to drive a market.

Granted, it is hard to imagine another possibility for how an economy could work in the abstract. It helps to have a real-life example.

And now I do.

In May I spent five days in Emilia Romagna, a region of four million people in northern central Italy. There, over the last 150 years, a network of consumer, farmer and worker-driven cooperatives has come to generate 30 percent to 40 percent of the region's GDP. Two of every three people in Emilia Romagna are members of co-ops.

The region, whose hub city is Bologna, is home to 8,000 co-ops, producing everything from ceramics to fashion to specialty cheese. Their industriousness is woven into networks based on what cooperative leaders like to call "reciprocity." All co-ops return 3 percent of profits to a national fund for cooperative development, and the movement supports centers providing help in finance, marketing, research and technical expertise.

The presumption is that by aiding each other, all gain. And they have. Per person income is 50 percent higher in Emilia Romagna than the national average.

The roots of Emilia Romagna's co-op movement are deep -- and varied.

Here in the United States, many assume that Catholicism and socialism are irreconcilable. In Italy, it's different. Socialist theorist Antonio Gramsci's critiques of capitalism were a major influence on Italy's post-war Left. Although he was imprisoned by Mussolini in 1926 and died still under guard 11 years later at age 46, Gramsci's ideas took hold. Simultaneously, the Church came to appreciate the role of cooperatives in strengthening family and community -- as spelled out by Pope John XXIII's 1961 encyclical.

The shared values of the two traditions -- honoring labor, fairness and cooperation -- made them partners in standing up for co-op friendly public policies and in creating co-op support services.

Of the three main national cooperative alliances, the two largest in Emilia Romagna are the Left's Legacoop, with a million members, and Confcooperative, the Catholic alliance with more than a quarter of a million members.

During the 1920s, the fascists destroyed both the cooperative and the union movements. But after World War II, the movements regrouped to rebuild war-torn Italy. Farmer and worker cooperatives put people back to work. Retail cooperatives helped consumers and housing co-ops build new dwellings. Since 1945, the housing cooperatives affiliated with Legacoop alone have built 50,000 units in Emilia Romagna.

Curious about the differences that remain between the two historical strains, I questioned Davide Pieri, the energetic thirtysomething who heads the agricultural section of Confcooperative.

His response?

"Mainly the history and personalities at the top," he said, grinning as we headed out to see a co-op in action.

It is 7 a.m. when Davide picks up my partner Richard Rowe and me at our hotel in Bologna for a quick trip to a creamery on the outskirts of town that makes Parmigiano-Reggiano -- or Parmesan, to us. Almost 400 small cooperatives in Emilia Romagna make this specialty.

By 8 a.m. we're watching the morning ritual at the Nuova Martignana co-op: intensely focused workers stirring the fermenting milk mixtures in a dozen hot tub-sized copper vats. They are waiting for just the right consistency before using giant cheese cloths to gather the embryonic cheese into rounds.

Davide is distressed by WTO rules seeking to standardize and de-localize such place-based specialties. As we stand watching the cheesemakers testing the mixture, he seems to rebut that approach: "Look!" he exclaims. "These are artists they are tasting with their hands!"

In Bologna we also had the chance to sit down with the scholar of cooperation, professor Stefano Zamagni, whom Davide called "our prophet."

"Labor is an occasion for self-realization, not a mere factor of production," Zamagni, an economist, writes. Cooperation offers a way beyond the dehumanization of capitalism that fully uses the advantages of the market.

Ten years ago he launched a graduate program in civil economies and cooperation within the University of Bologna's economics department. So far it's graduated 250 students.

Another surprising feature of the culture is that, beginning in 1991, responsibility for social services in Emilia Romagna and other regions was transferred almost entirely to "social cooperatives." For those providing services such as job placement, 30 percent of the staff must come from the population served and, if possible, be members of the co-op. Certain tax benefits are provided to these "social co-ops."

The approach seemed another smart way to enhance human dignity, breaking down degrading divisions between the helper and the helped.

Because Davide exuded such passion for his work, I probed what had brought him to it. "Out of the university, I worked for a capitalist firm," he said. "But it wasn't for me. It was dog-eat-dog. So I tried working on my own, as a consultant. But after a year, I realized that wasn't for me either. So I took this job with the cooperatives.

"This is the interpretation of life that I enjoy," he said.

View a slideshow (pdf) of the author's visit to Italian co-ops.

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