The Roots of Cooperative Capitalism Run Deep in Japan

2012•07•18 Brendan F.D. Barrett Royal Melbourne Institute of Technology, Kaori Brand United Nations University

Recently, one of the leading environmentalists from the United Kingdom, Jonathan Porritt, called for “cooperative capitalism”. He argued that today’s world is running on an operating system (software package) that is not delivering what we need and that has been “purpose built to make sustainability a totally unrealisable goal!”

The key components of this operating system are “minimally regulated free markets, driven by competition and increased productivity in order to maximise both economic growth and short-term profits”.

Porritt argues that the answer is not discarding this operating system or fine-tuning it. Rather we need “radical optimisation for a truly sustainable global economy”. Here on Our World 2.0, we describe this as a major upgrade of the operating system to version 2.0.

Porritt and his colleagues at the Forum for the Future and The Co-operative introduce the idea of “cooperative capitalism” as a way to reboot the sustainable economy. In 2011, The Co-operative established a website under the banner “Join the Revolution”, that seeks to inspire young people to change their world.

All of these activities form part of a global movement that has been given impetus with the United Nations designation of 2012 as the International Year of Co-operatives. The goal is to raise public awareness of the invaluable contributions of cooperative enterprises to poverty reduction, employment generation and social integration. Further, in 2012 the UN hopes to highlight the strengths of the cooperative business model as an alternative means of doing business and furthering socioeconomic development.

So what are cooperatives? They are business enterprises owned and controlled by the very members that they serve. This means that decisions made in cooperatives are usually made by balancing the pursuit of profit, and the needs and interests of members and their communities.

Learning from our history

Cooperatives have been around for centuries with some of the earliest found in Europe in the 1700s. Now, while cooperatives normally relate to some kind of business venture, a similar type of arrangement can be found in relation to land management and ownership, such as certain systems of community-based land use in different parts of the world like Mexico’s ejidos.

In Japan, as explained by Anne McDonald of the UNU Institute of Advanced Studies in the video brief that accompanies this article, there was a practice called iriai that dates back to the thirteenth century. This saw villagers exerting communal control over a forest. Using this approach, as documented in Conrad Totman’s 1998 book The Green Archipelago, the villagers would determine who within the village and from outside had what usage rights to which areas and under what conditions.

Photo: Ryo Murakami

According to Totman, “they obviously found communal management effective for excluding outside competitors, regulating allocation to insiders, and preventing abuses that might precipitate erosion, wildfire, or other damaging outcomes”. That sounds very much like sustainable development.

So curiously, upgrading to the new global operating system, as suggested by Porritt and others, should include learning from history and applying what has worked in the past over a prolonged period of time. Totman refers, for instance, to an agreement in 1448 where villagers in Omi province decided to regulate the cutting of trees without authorization.

The point to recognize with respect to these iriai (community controlled lands) was that the actual ownership was not shared, but was held by separate households. Essentially, these households agreed to a mutually beneficial management arrangement.

With Japan’s ‘iriai’ system, the actual land ownership was held by separate households, but these households agreed to a mutually beneficial management arrangement.

McDonald, points out that this may be the antecedent to the emergence of forest cooperatives. In the case of the Kaga Shinrin Kumiai (translated as the Kaga Forest Cooperative Association), we see in the video that due to the declining number of foresters, it made sense for those still operating to work together through the cooperative. In this way, they could pool their resources and expertise, but at the same time they were able to implement sustainable management practices and eventually gain certification from the Forest Stewardship Council.

The aim of this certification is to ensure that the products labelled uphold principles and criteria that “bring the highest social and environmental benefits”. These principles include legal compliance, clear tenure, use rights and responsibilities, respecting indigenous peoples’ rights, good community relations and respect for worker’s rights, minimizing environmental impacts and developing an effective management plan.

Photo: Ryo Murakami.

As Kouzuo Arikawa, President of the Kaga Forest Cooperative Association, points out there are now 6,600 members from 192 communities. If they had to rely only on the 30 association staff members it would have been impossible to effectively manage the forests or even dream of achieving certification. But by calling upon representatives from all 192 communities, it is possible for each to take charge of managing a specific area.

By working together as a cooperative and by being able to achieve FSC certification they have moved from a situation where, according to Arikawa, they were only driven by profits, to consider other important facts such as how to manage the forest in “coexistence with plants and animals”.

A new operating system based on tradition

As McDonald points out, Japan’s feudal traditions of community-based management are still a part of modern practice. At the same time, Arikawa argues that the younger generations have become disconnected from the mountains and the forests, and the forestry cooperative needs to step in to fill this gap and to manage the forest. But perhaps the Kaga Forest Cooperative Association could “join the revolution” and look to inspiring the young people of Ishikawa to try to change their world, as we find The Co-operative trying to do in the UK.

Photo: Ryo Murakami.

Other forest cooperatives may then follow the example. As of April 2011, there are 678 forest cooperatives in Japan. There are also 715 agricultural cooperatives and 1,001 fishing cooperatives. This represents a rich cooperative tradition and an amazing resource upon which to build during this International Year of Cooperatives.

It is not clear, however, that the cooperatives of Japan see their role in the same way that Porritt might. Perhaps they see themselves as upholding traditions, rather than as a means to “re-boot a sustainable economy”.

In responding to the pressing global issues facing us today, it is clear that we can either ‘strive together’ or we are will very likely ‘fall together’. The choice is pretty stark.

What we need in order to move towards a sustainable economy is greater emphasis on cooperation over competition. Moreover, Porritt argues that there is a “vast body of academic work which demonstrates that cooperation has been at least as important to the evolutionary success of humankind as competition — if not more so”. Yet somehow our approach to business became fixated upon the “survival of the fittest” competitive mode that underpins the current incarnation of capitalism, rather than the cooperative mode. He also argues that “Darwin himself wrote eloquently of the importance of cooperative behaviour among different species”.

Photo: Ryo Murakami.

Further, Porritt gets to the heart of the matter when he looks at the Latin roots of the word competition — competare — and explains that it does not “mean destroying everything and everyone that stands in your way. It means ‘to strive together’”.

In responding to the pressing global issues facing us today, it is clear that we can either ‘strive together’ or we are will very likely ‘fall together’. The choice is pretty stark. We have already argued in Our World 2.0 that business as usual is not the answer — a thought reflected by some of the world’s business leaders like Richard Branson, Chairman of Virgin.

So as we try to move beyond business as usual, we can and should look at cooperative models. Luckily, there are already 1.4 million cooperatives across the globe today. What this illustrates is that there already exist strong foundations for cooperative capitalism upon which we can build. These cooperatives show that it is possible to run businesses that are equally focused on being economically viable, environmentally sustainable and socially responsible.

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The Roots of Cooperative Capitalism Run Deep in Japan by Brendan Barrett is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.



Brendan F.D. Barrett

Royal Melbourne Institute of Technology

Brendan F.D. Barrett is a senior lecturer in Sustainability and Urban Planning at RMIT University. His professional career includes work in the private sector, academia and with international organizations. He uses the web and information technologies as a means to communicate, teach and undertake research on issues of environment and human security. Prior to joining RMIT he worked in the United Nations for close to 20 years with UNEP and the UN University (UNU). He is a visiting researcher at the UNU Institute for the Advanced Study of Sustainability in Tokyo, Japan, and a visiting associate professor at the University of Tokyo.

Join the Discussion

  • Kenji Watanabe

    People need to watch this clip! It’s not just descriptive and informative but also beautiful and indeed moving. Furthermore, the video and article show one of the sustainable (and I think thriving) model of common resource management. This media teaches us of the necessity to learn the lessons from traditions and histories and delivered them safely to future generations.

    Analytically speaking, I think that the FSC based forestry management would work in most of the advanced industrialized nations in which a diversity of businesses are contributing to the GDP and supporting many families living. However, at this point, absent the evidence otherwise, I must cast doubt on the applicability of the FSC based forestry management, however worth striving the goal is, to developing nations especially those that have one of their main industries relying on the slash and burn forestry practices. Can the FSC-forestry prove itself an alternative to the current S/B practice to support a majority of people living in the nation?

    Also in the clip, the public official was concern with the fact that more and more young people are losing interests in the mountains. I want to take issue with this point by contending that many young people are not losing interests in the mountains but they are losing opportunities to go to the mountains. People will never lose interests in beautiful nature, I believe. They just do not have adequate opportunities to touch the nature. Arranging tourism with local and city travel agents would be one way to revive “young people’s interests in the mountain”. And such opportunities are much needed and appreciated for young people being suffocated from urban air pollution in the cities. Such an opportunity could be always an eye-opener. Thanks.

    • BrendanBarrett

      Hi Kenji, thanks for your comment. I think the official concerned was talking about young people working in the mountains, rather than visiting. I agree with you that young people will always visit the mountains for tourism. However, not so many want to work there. This is a problem that applies also to agriculture in general in Japan and to the fishing industry. I think the average age of farmers, fishers and foresters in Japan is in the late 60s. It gets worse with each passing year. So we have to find a way to attract the young back to these primary industries.

      • Kenji Watanabe

        You are right, Brendan. I apologize for my misunderstanding. Yes, I hope the 10 year long term contract would work out.

        However, now I would like to express my opinion as to the employment issue of youngsters in the mountain. Roughly speaking, job creation requires economic competitiveness and generations of wealth based on the market principle. Forestry management based on the cooperation principle would not be as economically competitive as jobs in the cities that are always based on efficiency and intensity of the wealth.

        Thus, I believe that the general economic principle would apply to the forestry management and the forestry management and its sideline businesses could create more jobs and employment for young people if the management generate more wealth and create demands for more workforce.

        The challenges here would be to come up with business models applicable to forestry managements, which is sustainable and economically competitive such as eco-tourism and popular and unique souvenir products. These ideas could be come up with and implemented based on either cooperation or competitions, otherwise the willingness to break the status quo.

        • BrendanBarrett

          Good points Kenji and you may well be right. However, I think that forestry can be profitable even in the cooperative mode. It may be less profitable than other professions, especially those in cities. At the same time, we see that the goal of cooperative ventures is not only profitability, but also social and environmental concerns. They also tend to invest funds back into the venture or resources. This contrasts with what we have seen recently in the financial sector, for instance, where the businesses are disconnected from the resource base and from social and environmental goals of society. Instead it is just profit maximization and huge bonuses.

          We need more than this for our young people. We need other options for them to choose from. In addition, our forestry, farming and fishing sectors need young people to return to them so that we can enhance local food security and revive local communities in rural areas. That being said perhaps we will see, as some point out, young people combining foresty with another profession.

          Finally, we have to also think about the currently unemployed and whether we can create new opportunities for them, perhaps also through cooperative ventures. Just a few thoughts.

  • AlanZulch

    This is very interesting and, the way Anne portrays it, hopeful for Japan’s forestry future, and satoyama in general.

    It is also good to understand iriai and its historical success, and to reflect how it might serve as inspiration for new approaches to revitalizing the commons in the United States and other Western countries.
    Many thanks for this article and film!

    • BrendanBarrett

      Thanks for your comment Alan. What I like about this story, as portrayed in the video, is the way that a particular problem can be solved by people working cooperatively and in collaboration. In this way, they have been able to continue to harvest the forest, make money and promote environmental conservation. It shows capitalism as a positive force, if it focuses more on cooperation rather than always on competition. Not all issues can be tackled in this way, but perhaps there is great relevance to resource related challenges and commons management as you rightly point out.