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The People’s Business

The People’s Business. The Italian Co-operative Movement from an Historical Perspective. by Tito Menzani Adjunct Professor of Economic History Department of Economics University of Bologna. Global Social Economy Forum Seoul, 5-7 November 2013. My goal.

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The People’s Business

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  1. The People’s Business The Italian Co-operative Movement fromanHistoricalPerspective by Tito Menzani Adjunct Professor ofEconomicHistory DepartmentofEconomics Universityof Bologna Global Social Economy Forum Seoul, 5-7 November 2013

  2. Mygoal • Explain the historicalrootsof the Italiancooperative model, withparticularreferenceto Emilia-Romagna • Highligth 5 elements: • Bottom up process • Roleofumbrellaorganizations • The promotion ofmergers • The creationofnetworks • The legalenvironment

  3. The history in brief 1854-1899: originsofcooperatives 1900-1914: take-off ofcooperatives 1915-1944 interwar period (fascism) 1945-1950: re-birth ofcooperation 1951-1972: economic boom of Italy 1973-2013: economic boom ofcooperatives Bologna and Emilia-Romagna Tobetterexplain the model in brief, wemust focus on the period 1945-2013

  4. Bottom up process • Twoperiodsof“cooperative boom” • 1945 –1950 (agriculture, retailing, building industry, credit) • 1970 ca– 2000 ca (service sector, social services) • Whydid people choseto create cooperativesinsteadofconventionalenterprises? • Economicreasons(“togetherwe can”) • Ethicalattitude • Roleofpasteducation (socialist, catholic, democratic) • Roleof some “agents” (politicalparties, tradeunions, umbrellaorganizations) • Institutionalfeature: the Constitutionof 1948

  5. Roleofumbrellaorganizations • Legacoopis the oldestand largestItalianumbrellaorganizationaboutcooperatives • Whyitwas (and itis) so important? • Ithas a democraticstructuretoexercise a leadership (it’s notan holding!) • Functionsto drive and to coordinate: • A wide a rangeofservices • Lobbying • Educationofcivil society • Aboveall: mergers and networks

  6. The promotion ofmergers • Emilia-Romagna cooperative modelisfeaturedbybig sizeofcoops. • Twomainreasons: • Capitalaccumulation: realised profit income was reinvested in capital assets • Progressive mergersamongcoopsof the samesectorand in the sameterritory • Twoconsiderations: • Umbrellaorganizationfightedthe peculiarresistances • Big sizeisreallyimportant in manytypesofmarkets

  7. The creationofnetworks • Wesay cooperative “movement” becauseof a lotoflinks (inter-cooperation) • Mainnetworks: • Consortium (horizontal) • Consortium (vertical) • Financial networks • Otherslessused or lessimportant • Networks are fundamentalforflexibilityof the system

  8. The legalenvironment • Italianlegislationcontributedtomake the cooperatives “bigger and stronger” (in termsofmembers/employees and net worth) • BaseviLaw (1947) • No demutualization (a cooperatives can’t betransformed in a conventionalenterprise) • Limited remuneration of the capital (to promote accumulation) • Mini reform (1971) • Some fiscal subsidies • Pandolfi law (1977) • The indivisible reserves were excluded from the taxable income • Visentini-bisLaw (1983) • Coops can establish or be shareholders of conventional enterprises (hybridization) • Law No. 59 of 1992 • Introduced the shares of cooperative participation and the figure of the investor member • It’s importantbecausecooperatives don’t attract capital (no stock market for the members’ quotas)

  9. Conclusions • The cooperative modelisanaddedvaluein Emilia-Romagna and in Italy • Neither a profit-orientedenterprisenor a state-ownedfirm: thepeople’s business • Business and ethic in the sameorganization • Self-help and solidarity • Intergenerationality

  10. We do not inherit the earth from our ancestors; we borrow it from our children Thankyou 감사 tito.menzani@gmail.com

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