Here's some important new research:
Cooperative enterprises can create social trust among workers, unlike any other type of enterprise...
The development of cooperative enterprises – and, more generally, of less hierarchical models of governance and of not purely profit maximizing forms of enterprises – may play a crucial role in the diffusion of trust and in the accumulation of social capital.
This matters not merely because trust and social capital are intrinsicially good, but also because trust helps raise long-term economic growth.
Three quick observations:
1. This highlights a fact sometimes forgotten by today's managerialist politicians but understood by classical thinkers such as Tocqueville - that institutions shape culture. And culture, in turn, affects economic growth.
2. Insofar as coops promote trust, they contain a positive externality - because the benefits of trust accrue to everyone and not just coop members. This suggests that relying merely upon private incentives to create coops could result in a suboptimally low supply of them.
3. The "coops create trust which promotes growth" view challenges a conventional approach to growth expressed today by Sam Brittan:
Let governmental authorities concentrate on securing conditions for as near as practicable full employment without inflation and removing distortions at the micro level. Then let the growth rate emerge as a byproduct of the activities of individual citizens.
This overlooks the possibility that hierarchical capitalism itself might be a barrier to growth.