Comparing Capitalistic and Cooperative Firms on the Ground of Humanistic Management

Historically, cooperatives came into being after capitalist enterprises and began to expand, in various modes and at different paces, in all the advanced economies. In a way, then, cooperatives can be seen as an unexpected fruit of industrial civilization that ripened during the “Belle époque”. Two main interpretations of this historical fact have been suggested. One explains the cooperative movement as the response to a specific “failure” of the capitalist form of enterprise, a sort of remedy or compensation for what businesses could not provide. The other considers the phenomenon as a more advanced form of enterprise in advanced societies. That is, the movement is seen as crowning the aspirations of those who consider labour as the opportunity for self-fulfilment and not just as a productive factor. This is the interpretation suggested by the great liberal thinker John Stuart Mill when he added the following passage to the third edition of Principles of Political Economy, published in 1852: “The form of association, however, which if mankind continues to improve, must be expected in the end, to predominate is not that which can exist between a capitalist as chief and work-people without a voice in the management, but the association of the labourers themselves on terms of equality, collectively owning the capital with which they carry on their operations and working under managers elected and removable by themselves” (p. 772).