The Past Speaks

I read everything Professor Joseph Heath writes, whether it’s a blog post from In Due Course or one of his books. He’s one of the most consistently clear-headed philosophers working today, especially when it comes to political economy. His recent Substack post, “Are cooperatives more virtuous than investor-owned firms?“, is another example of his signature style: lucid, skeptical, and refreshingly empirical. In it, Heath challenges the romanticism often attached to cooperative firms, arguing that they are neither inherently more virtuous (i.e. more socially beneficial) than investor-owned enterprises. (I suppose we should define organizational virtue here as an organization that seeks to increase the utility the human race/sentient beings as whole, not just the people who control the organization). I agree with Heath’s central claim, and it aligns with the argument made by Henry Hansmann in The Ownership of Enterprise, which shows that the choice of ownership form is best understood as a response to transaction costs and governance challenges.

Heath’s post also makes a comparative political claim that deserves closer scrutiny. Here’s where the empirical researcher in me gets pedantic. He writes: “In Canada, co-operatives have always played a much more important role in left-wing politics than they have in the UK.” This is a striking assertion, and one that I think isn’t quite right. While Canada certainly has a rich tradition of cooperative enterprise, especially in agriculture and finance and in Heath’s native Province of Saskatchewan, the UK’s Labour Party has had a formal electoral alliance with the Co-operative Party for about a century. This relationship is not merely symbolic. As of the 2024 general election, 41 sitting Labour MPs are also officially designated as Labour and Co-operative MPs. These MPs advocate for cooperative principles within the broader Labour agenda, and the alliance reflects a deep institutional connection between cooperative ownership and British left politics.

The historical relationship between the Co-operative movement and Britain’s Labour Party dates back nearly a century, back to the time when Canada’s CCF, and it predecessors, closely followed intellectual trends in the UK. The cooperative movement and the UK Labour Party formalized their alliance in the 1920s, jointly endorsing candidates who represent both Labour’s social democratic values and the Co-operative movement’s commitment to shared ownership and democratic control. Today, the partnership remains robust, with dozens of MPs carrying the joint designation, although I can’t think of any recent Labour policies in tax or anything else that favour the cooperative form over the investor-owned firms.

By contrast, the link between cooperative ownership and left politics in the United States seems to be far weaker, except perhaps in a few states settled by Scandinavians. While there are many successful cooperatives in the US, particularly in agriculture and rural finance, these organisations often have stakeholder bases that would almost certainly lean Republican. Some of the largest agricultural co-ops in the Midwest, for example, are deeply embedded in conservative communities. The cooperative form in the US has not been consistently championed by the Democratic Party, nor has it been institutionally integrated into, say, the DNC’s machinery, in the way it has in the UK or Scandinavia. In countries like Sweden and Norway, cooperative ownership is tightly woven into the fabric of social democracy, supported by both policy and party infrastructure.

This variation raises an important question: why is the linkage between cooperative ownership and left politics stronger in some countries than others? We probably need scholars to develop a causal model that explains this divergence. Such a model would need to account for historical party structures, electoral systems, the role of civil society, regional economic patterns, and perhaps even cultural attitudes toward ownership and governance. Heath’s skepticism about cooperative moralism is well-founded, but his comparative politics could use a bit more empirical grounding. A few years ago a great book on the history of the UK’s Cooperative group was published by some of my friends. It could provide empirical detail to stimulate the thinking of philosophers.