The self-reinforcing nature of cooperation and ethical business

Business as usual is unsustainable. Capitalism has legitimised the externalisation of various ‘costs’ to such an extent that it has become normal for companies to exploit the natural world – and their customers at the same time.

Take the example of a large video conferencing company that enables people to chat and run webinars. At first glance the service sounds amazing – and it’s so convenient that most people sign up without a second thought, and even fewer actually read the terms and conditions.

But the servers which power the video conferencing service pump out huge amounts of heat, which contributes to global warming – yet the company in question does not pay for this pollution. They make huge profits but leave us with their mess.

If the company’s servers are not powered 100% by renewable energy, they create carbon dioxide too, which creates further global warming – for which the company in question does not pay.

To add insult to injury, the video conferencing company listens in on private calls, bans users from its platform for political or undefined reasons, sells on customer data to advertisers and further exploits its users in a multitude of other ways.

Conventional business is neither fair or ethical – it is vehemently exploitative by design.

Cooperatives, by comparison, may have the reputation for being a bit ‘hair shirt’ but are based on the values of self-help, self-responsibility, democracy, equality, equity, and solidarity. These values set cooperative business apart by incorporating ethics into business practice. They provide a guide for cooperative members to run businesses which incorporate the values of honesty, openness, social responsibility and caring for others.

The cooperative principles are guidelines by which cooperatives put their values into practice. Principle 6 is especially powerful in the context of ethical business. It states:

Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

Principle 6 signposts the path to a fair and ethical future. The theory being that, as more co-ops spend more money with other co-ops, which all share the same ethical values and principles, the cooperative sector will inevitably grow a self-reinforcing network of ethical business.

But, considering the cooperative movement has existed since at least 1844, it could be argued that it is not doing very well. This may be true – and there are numerous reasons why this is the case, not least of which is the way our Governments define “success” as growth in GDP without factoring in externalities – but it does not detract from the power of the idea.

Principle six provides a mechanism to grow a self-reinforcing network of ethical business., the ethical video conferencing service, powered by renewable energy and open source software, is a great example of a business which is putting principle 6 into action, reaping the benefits of mutuality and growing the cooperative commons economy at the same time. is run by a network of Operational Members from other co-ops, it procures hosting, software development and customer support from other co-ops and makes a dedicated effort to support commons building organisations in favour of conventional businesses.

People who subscribe to get their own online meeting rooms which they can use at any time when they subscribe via Open Collective, a platform which enables groups to quickly set up a collective, raise funds and manage them transparently without needing a bank account.

Most of’s business subscribers are other co-ops and the majority of individual subscribers are coop members or people that are keen to make ethical choices. In June 2021 Open Collective reciprocated’s use of their services and became a member of – highlighting the self-reinforcing effect of principle six and the growing preference for ethical alternatives.

Alanna Irving, Open Collective’s Chief Operating Officer, explains:

We switched to because it’s really important to live our values when it comes to supporting open source solutions. Why give money to proprietary for-profit companies when the cooperative commons offers great tooling like this?

The commercial benefits of cooperation

As more people and businesses wake up to the benefits, and switch their procurement to cooperative and ethical alternatives, the self-reinforcing mechanism of principle six can only become more powerful.

Whether the self-reinforcing mechanism holds the potential to change ‘business as usual’ is largely a question of whether the individuals who run ‘conventional’ businesses continue to leave their ethics at home and operate their companies as if ethical principles and values somehow don’t apply within the work setting.

Free-market theories imply that the consumer dictates, which places the onus on each and every one of us to stop supporting unethical, exploitative businesses and to switch to ethical alternatives instead.

In some cases taking the ethical choice can be easier said than done and convenience often wins out over ethics but, as in the example, it can be just as convenient to choose the ethical option and the satisfaction of doing so – and ‘sticking it to the man’ – is often more than enough to warrant any extra effort.

As preferences for values-aligned alternatives – and cooperation between ethical businesses – grow, operating with ethics will deliver clear commercial benefits and the self-reinforcing mechanism will act as a catalyst for more businesses to incorporate ethical values.

Proving these commercial benefits – and that the self-reinforcing nature of cooperation and ethical business is more than just a theory – by supporting values-driven businesses and encouraging others to switch their spending – is therefore a key goal for anyone and everyone with an interest in an ethical future.

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