Left Libertarian Alliance

Georg Haslam (Blog Co-Editor & GPEW Representative)

Competition is often framed as the dominant principle of economic relations: something both necessary and desirable. Competitive markets are frequently presented as a natural consequence of economic freedom and even as a powerful mechanism to enhance growth and productivity. Yet, the widespread rise in the cost of living raises an important question: does competition consistently provide these benefits? Many arguments for competition rest on the assumption that consumers are free to make meaningful choices in response to changing prices and conditions. This overlooks how economic necessity can constrain both the capacity to act and the ability to be free from external pressures for essential goods, be that housing, energy, or food.  Often consumers cannot simply withdraw from these markets when prices rise. Their choices may remain formally available but is materially constrained by necessity, limiting both their individual agency and their freedom from economic dependence. Enter cooperatism: a model based on democratic control, shared ownership, and mutual benefit.

I. An Economy Based on Mutual Benefit

Cooperatism seeks to distribute economic power amongst those who participate in and are affected by economic activity. The International Cooperative Alliance defines co-ops as “people-centred enterprises owned, controlled, and run by and for their members to realise their common economic, social, and cultural needs and aspirations.” Where competitive markets often concentrate authority in the hands of shareholders and those who own capital, cooperatives give direct and democratic control to ordinary people through shared ownership. This enables members to govern the organisations directly and distribute the surplus fairly. Cooperatism therefore extends beyond just individuals choosing to work together, and instead institutionalises democracy through cooperation, such that mutually beneficial choices are rewarded. The influence of members is not constrained through systems of consumer choice, as in current competitive markets, but rather individuals are given direct roles as decision makers. Cooperatism foregrounds a human capacity that competition sidelines: individuals can engage in rational collaborative decision making. In this sense, cooperatism is not just an alternative model of economics, but a broader social philosophy concerning how people relate to one another economically and socially.

Cooperatism began with Robert Owen’s New Lanark project, a cooperative experiment in 1800 involving the shared ownership of the New Lanark cotton mills in Scotland. Owen’s project aimed to prove that improved working conditions would produce better social outcomes without reducing economic productivity. Following this, the modern Cooperative Movement was accelerated by the Rochdale Pioneers, founded in 1844 and now widely regarded as the prototype for co-operative societies. The Pioneers, a group of workers in Rochdale, established the Rochdale Equitable Pioneers Society in response to the unaffordable prices of everyday goods. They created one of the first successful consumer co-operatives and laid the foundation for co-operative principles: those being democratic control, open membership, and equitable distribution of surplus. These foundations, later formalised as the Rochdale Principles, form the cornerstone of present-day cooperative practice. Their legacy stands as a testimony to the power of democratic ownership and people-centred economics. The vision of the Rochdale Pioneers challenges the dominance of competitive markets, demonstrating an alternative that places community, mutual aid, and human dignity over exploitative and purely profit-informed practices. The challenges that communities face today due to the high cost of living are not wholly dissimilar to the conditions of Rochdale in 1844, and as such the Pioneers provide a clear framework for how cooperatism can work.

II. The Cooperative Philosophy

The problems of competition are not limited to the consumption of everyday essentials. A deeper critique of competitive capitalism, developed from Owen’s theory of character formation, emphasises that competition plays an active role in structuring economic relations, often around dependency, antagonism, and the accumulation of resources and capital. Owen argues that human character is substantially shaped by social and material conditions. Competitive behaviour therefore need not emerge as an inevitable expression of the human condition, but from the placement of individuals within competitive systems. Behaviour commonly attributed to innate self-interest can instead be understood as a response to economic pressures. The resulting pursuit of individual advantage is therefore not evidence that individuals are incapable of rational cooperation, but rather evidence of how institutions and economic structures cultivate unequal and anti-democratic practices. Competitive institutions do not only accommodate self-interest. They actively rationalise and reinforce it; individuals are incentivised to pursue their personal interests at the expense of others, even where cooperation would provide a more mutually beneficial solution. As such, competition can disproportionately reward those with greater access to resources and economic power, enabling them to pursue their own advantage, thus widening wealth gaps and legitimising unequal practices. Cooperative structures incentivise alternative economic behaviours, where mutualism, democracy, and collaboration are rewarded instead of antagonism, dependency, and the maximisation of personal advantage. If economic institutions can make the pursuit of individual interests without regard for others rational, mutual benefit can be made rational instead.

Proudhon extends this critique of competitive capitalism by challenging the accumulation and distribution of economic power through the organisation of property relations in What is Property?, highlighting how the economic system plays a role in structuring interpersonal dynamics. He emphasises that the problem is not individual self-interest itself, but rather that property relations allow some people to derive power and income from others. The ownership of productive property allows the owner to control its resources, such that the worker is dependent on the owner for access to the means of production. Consequently, they have fewer economic alternatives than those who own productive property. This asymmetry allows the owner to obtain income from that dynamic as a return on ownership, often through profit or rent. The appropriation of this value from the worker’s labour therefore produces cycles of dependence, not only as workers lack control over the conditions of their labour, but also as workers remain dependent on the owners of property if they themselves do not control productive resources. Cooperatism challenges this directly by transferring property ownership and decision-making capacity to those who directly participate in production. Proudhon refers to worker cooperatives explicitly, emphasising the role of workers’ associations in organising collective labour, such that this organisation is not at odds with democratic principles. Workers’ associations challenge hierarchical master-and-servant structures that result in dependency relations by giving workers collective control over production. His theory of mutualism integrates cooperative elements into an alternative system, which is organised around reciprocity and equality rather than the concentration of wealth through ownership and the extraction of value. Also applicable here is Kropotkin’s Mutual Aid, which complements this critique by challenging the assumption that competition is the natural or most effective basis for social organisation. Cooperation and reciprocal assistance are equally significant to human development and survival, and the benefits of cooperation are not constrained to humans alone. Mutual aid demonstrates how individual interests can be advanced through collective organisation. Cooperation provides security and resources that isolated competition cannot. This offers an alternative to the competitive framework by replacing relations of economic dependence with reciprocal relations between substantially more autonomous producers. Thus, cooperatism does not reject the legitimacy of individual interest: instead, the individual and collective interests are reconciled through more equitable economic relations.

III. The Viability of Cooperatism: Why Cooperatives Work

The shortcomings of competitive and hierarchical economic relations are clear. Yet avoiding these limitations does not alone guarantee that collective governance can effectively coordinate individual interests. For cooperatism to be a credible alternative to the current commercial system, it must be a viable system of institutional organisation. A substantive objection to the efficacy of collective governance is the so-called “tragedy of the commons” theory. This theory suggests that an individual pursuing their own self-interest tends to overuse open-access resources, as the benefit is maximised for the individual whilst the environmental and long-term economic costs are distributed collectively. Imagine several fishing businesses all utilising the same area to source their stock. Each individual fisher is incentivised to catch as many fish as possible, as they receive economic benefits from additional catches, whilst the resulting reduction in fish is distributed between all fishers using the resource. Yet, collectively, this leads to overfishing, causing fish stock and future incomes to decline. Consequently, this reasoning has been used to argue that shared resources require either private ownership or centralised state administration. 

Alas, this argument fails to recognise the many examples of collective governance where the tragedy of the commons has been avoided. One such example is the Swiss village of Törbel, where access to grazing land, forests, and irrigation resources are collectively governed. Residents established rules that allow individual use to be coordinated with the long-term preservation of these resources, alongside collectively agreed enforcement mechanisms that ensure these rules are adhered to without requiring the state or private businesses to intervene. Extensive community participation in these enforcement mechanisms and adherence to these restrictions ensured that the collective resources remained available. Demonstrably, collective ownership, which cooperatism advocates for, does not inevitably lead to the overexploitation that the tragedy of the commons predicts. Instead, the success of collective governance relies on collectively established institutions that manage resources. When individuals participate in creating rules, monitoring the use of resources, and enforcing agreed restrictions, individual self-interests and collective interests are compatible. Crucially, cooperatism does not require individuals to abandon self-interest and act altruistically; rather, it restructures institutional incentives such that the pursuit of self-interest requires the interests of others to also be considered. This is the central premise of cooperatism: economic institutions can be designed to make mutually beneficial behaviour rational. Ultimately, its viability relies not on an assumption of inherently cooperative human nature, but on the capacity of democratic institutions to organise individual interests around collectively beneficial outcomes.

Evidently, cooperatism can therefore function effectively in small-scale communities. However, its credibility depends on whether it can operate within a modern commercial economy. The broader application of cooperative principles requires evidence that cooperative organisations can remain economically sustainable within the market system. Necessarily, cooperatism does not require the abolition of markets, but their democratisation. The long-standing success of cooperative organisations, including the UK Co-Operative Group and Spanish Mondragon, demonstrates that this is feasible. More than 1 billion people worldwide are members of cooperatives, and cooperative enterprises are growing, especially in developing countries. Democratic ownership is compatible with commercial activity and response to consumer demands. Thus, cooperatism does not suggest an individual must neglect their own interests in favour of a collective good. Cooperative arrangements produce outcomes that benefit the collective through incentivisation mechanisms. These shape an individual’s interests by redefining which outcome is rational. Shared ownership of cooperative enterprises and associations gives meaningful value to an individual’s labour and, whilst worker democracy may involve more deliberative decision-making instead of delegated executive decisions, the resulting personal stakes in the cooperative’s success garner productive and sustainable outcomes.

IV. Choosing Cooperation: Economics and Agency

The case for cooperatism rests on a more fundamental claim than merely the comparative efficacy of different economic systems: economic systems shape the circumstances in which individuals pursue their interests, condition which choices are rational, and therefore constrain which social relations are likely to emerge. Competition is often defended as an inevitable result of self-interest, yet the preceding analysis demonstrates that institutions play a much more active role in determining individual character. Why then should competition be defended? Cooperatism provides a distinct alternative, where democratisation prioritises mutual benefit, transforming the market system such that an individual pursuing their own interest rationally chooses a mutually-beneficial outcome. Cooperative enterprises challenge the assumption that economic freedom is adequately expressed through consumer choice whilst individuals remain excluded from decisions concerning ownership, production, and distribution. Competition is not therefore necessarily a response to economic freedom, and in itself can constrain meaningful choices for individuals and collectives. Greater economic and interpersonal freedom may instead emerge when economic relations are organised around cooperation, reciprocity, and democratic control. Consumer choice provides one form of economic agency. Democratic ownership provides another. The question is not whether people are selfish or cooperative by nature; it is what kind of economic institutions we should construct, knowing that the organisation of these institutions has the potential to shape characters, opportunities, and the economy as a whole.