In pursuit of the Polish cooperative republic

For young Poles, setting up cooperatives has become one of the responses to the economic crisis. For many, the principle of equal voting rights and sharing responsibilities and income has turned out to be an attractive alternative to taking a “junk” employment contract or functioning in the realm of harsh competition and constant pursuit of profit.

Photo: Facebook/Kooperatywa Dobrze

In the very centre of Warsaw a new store opened several weeks ago, run by the food cooperative Dobrze (Well). Here you can buy inexpensive yet excellent quality fruits and vegetables straight from farmers in association with the cooperative; you can also participate in various meetings and discussions. Members of the cooperative, who pay regular contributions and work at least a few hours a month for its benefit, have a right to purchase the products at producer prices, but the store also offers its goods to outsiders. Its opening has once again attracted media attention to the forgotten idea of cooperatives. In 2011, Poland was talking about the cooperative Rybka (Fish) in Katowice, where persons with disabilities and long-term unemployed opened a café serving local delicacies. Now and then the regional press deals with the topic, especially in reference to social enterprises characterised by young members and their ambitious goal of creating their own social and professional space. In Wrocław, for instance, the widely-known multi-brand cooperative PANATO includes mainly interior and industrial designers, craftsmen and other artists, and has become one of the flagships of the new generation of Polish cooperative activists. In times of crisis and an increasingly more difficult job market, joint action is sometimes the best way to survive – if only in the sense of cheaper shopping.

An old idea for new times

Cooperatives often provide employment for people with specific problems in the labour market (e.g. disabled persons), provide local communities with necessary services which are often unprofitable for commercial companies, allow consumers and small manufacturers to bypass intermediaries and prove to be more resistant to economic crises.

In pre-World War II Poland they played a major role in trade, agriculture, banking and even health care. Under the communists, who did not tolerate independent social and economic initiatives, such companies still existed but were in fact part of the centrally-managed state sector. As a result, after the restoration of the free market the word “cooperative” was negatively associated with the communist ideology and mostly stood for coercion, poor quality and inefficiency.

The post-1989 era was difficult for cooperatives – after all, the most highly prized values had become those of individualism, private property and profit maximisation. Many collapsed, while some evolved into regular companies (a big incentive to do so was the cooperative-adverse legislation, including a fiscal one). Others did not transform themselves into companies, but lost the idea of participatory management and caring for social purposes. This process was facilitated by passivity on the part of the members; for example, at the general meetings of housing cooperatives, which still manage a large number of residential buildings, only 1-2 per cent of those eligible to vote typically participate. The same can be said about social control over credit unions – one of the few cooperative industries that were created and developed after the fall of the previous regime.

Despite these problems, cooperatives have recently caught a second wind as they offer an interesting economic alternative for people who would otherwise have few chances for secure and permanent work, such as very young people and those approaching pensioner age. There are approximately nine thousand cooperatives in Poland with altogether some eight million members (mostly in housing and banking cooperatives). Despite some defects, they offer stable employment more often than private companies. In addition, their legal formula allows its members to introduce changes in its status or structure, according to the will of the majority. A good example here are the well-known dairy cooperatives (Mlekpol, Mlekovita) and producers of mineral water (Muszynianka, Piwniczanka), which have managed to combine a genuinely democratic structure with adjusting to the requirements of the market economy and attain great economic results. Their success proves that the modern cooperative business can thrive well in the Polish legal, economic and cultural realities.

Cooperation instead of corporation

In the last couple of years, a new phenomenon can be observed: cooperatives created from scratch by small groups of young people. They provide an escape from internships with no payment and temporary employment – or just from the prevailing corporate lifestyle, as was the case for the founders of the social cooperative Parostatek (Steamboat) from Cieszyn, which runs workshops on artistic and environmental education. For some young members, the choice of such a lifestyle is also a way to earn money without violating their own values; for example, the Warsaw social cooperative Margines (Margin) offers catering products prepared without the use of animal ingredients. The cooperatives also enable their members to realise their passions, as in case of the Rudy Goblin (Russet Goblin), a medieval-style inn created by lovers of fantasy film and literature. And of course, they are a good solution to problems of youth unemployment, one of the biggest worries during the latest economic crisis.

New entities based on cooperative principles are being set up not only by unemployed youth, but also by farmers. For them, a group operation provides access to cheaper fertilisers and seeds and gives them the possibility to invest in the marketing and processing of their food, as well as bypass intermediaries in selling their products. What’s more, almost every major Polish city now has at least one democratically managed informal initiative which, on the basis of solidary work by the members, regularly organises joint purchases of fruit and vegetables directly from producers. All related activities, such as the sharing of purchased goods and financial settlements, are realised on a voluntary basis, with observance of the principle of rotating functions. At the meetings each member has an equal right to vote. Consumer cooperatives are therefore not only “purchasing clubs”, but also a school of democracy, self-help and engaging in local affairs. They are also a way to build direct economic and social ties between urban consumers and rural food producers.

Cooperatives are also gradually entering new business sectors, as exemplified by the credit counsellor cooperative ANG, wholly owned by its more than 400 employees. In recent years many new social cooperatives have been formed, and the National Court Register (KRS) currently lists more than 1200 of them (although there are no data on how many of them are actually functioning). This category of cooperatives has been introduced into Polish law as a tool for bringing back to the labour market people at risk of marginalisation, such as those permanently unemployed or disabled and persons just released from prison. According to the law, at least half of the members of a social cooperative must be persons at risk of social exclusion. \

At the same time, however, the establishment of such social cooperatives has become quite a common choice for those young Poles who want to try their hand at business, but without hierarchical management and maximisation of profits. Cooperatives become for them not only a place of work, but also a group of people connected by their experience, goals and way of life.

There is no rose without thorns

The younger generations are not burdened with memories of the previous regime, and thus the idea of cooperatives is increasingly perceived without negative associations. So far the revival of the cooperative movement has taken place primarily in the form of setting up  consumer and social cooperatives. In the latter case, there is also something else at stake: programs for the financial support and training of people at risk of social exclusion who have decided to set up a democratically managed micro-enterprise. A healthy stream of money from the EU budget has allowed many groups of such persons to create stable jobs for themselves, but has also given rise to a new type of pseudo-cooperatives. Some social cooperatives are in fact family companies, registered as cooperatives in order to obtain grants while not pursuing any significant social goals.

There is also the problem of the emerging social cooperatives’ sustainability. Some of them cannot survive on the market and/or cannot cope with the resolution of conflicts within the group, and soon cease to exist. Public and non-governmental institutions which grant funding too often act rashly, supporting groups which do not have a good business idea or are not ready to conduct business in a way that would combine market and democratic values.

Therefore the animators of social entrepreneurship often say that social cooperatives are too demanding for most people affected by social problems. For that reason, the Polish Audit Union of Social Cooperatives (Ogólnopolski Związek Rewizyjny Spółdzielni Socjalnych) has suggested changes in legislation to allow cooperatives to be set up by a group wherein people at risk of exclusion are in the minority (a solution which has worked well in Italy, where the threshold is 30%).

Among other fundamental barriers to the development of an economically and socially effective cooperative sector are a shortage of professional cooperative personnel (managers, business consultants) and a widespread misunderstanding of the meaning and nature of cooperatives – by lawmakers, officials and local governments, but also by cooperative members themselves.

Hopes for the future

An important success of the cooperative movement, and a reason for optimism, is the governmental resolution (of August 2014) on the adoption of the National Programme for the Development of Social Economy. The programme is meant to support various forms of cooperation, as well as for instance cooperative education of children and youth. At the local level there are already many examples of support for cooperatives in the form of regular orders from the local government. Examples are the towns of Brzeziny, Byczyna, Czarnków, Klucze, Łomża and Wyszków, which use services offered by cooperatives.

Although currently the cooperative sector produces only 1 per cent of the Polish GDP, compared to a European average of 6 per cent, the cooperative movement has a chance to find an important place in the socio-economic life of the country. The movement succeeded in the much more difficult inter-war period, and today we are seeing growing interest in the movement’s historical roots. Although the road to the Polish Cooperative Republic – a term coined by the theorist and dreamer of associations, Edward Abramowski – still seems to be long, such enterprises can already offer an important complement to the private and public sectors.

Michał Sobczyk

Michał Sobczyk

is the editor of the magazine Nowy Obywatel, co-author of workshops, courses and publications on cooperatives, and a member of the Polish Audit Union of Social Cooperatives (Ogólnopolski Związek Rewizyjny Spółdzielni Socjalnych).