- AQA, Edexcel
Last updated 29 Jun 2020
Socialism is based on the fundamental premise that human nature is a work-in-progress and that our behaviour is determined by the economic system. As with all previous societies, a capitalist society is based upon conflict between the social classes. Socialism however seeks to create a world based on co-operation with our fellow man.
In a practical sense, this argument is captured in the form of co-operative movement. The co-operative movement was born in Rochdale during the mid-nineteenth century. The Rochdale Pioneers believed that tradesman should work together to sell items of food that their customers might not otherwise afford. The co-operative movement is built upon shared ownership and seeks to make decisions in a democratic manner to serve the needs of its members. Over time, the co-operative group expanded by merging with several independent retail societies. In the modern era, the most significant illustration of the co-operative movement is the Co-Op Bank. Unlike the major high-street banks, the objective of the Co-Op is to meet the needs of its stakeholders rather than maximise profits.
Historically, the co-operative movement has a close relationship with the Labour Party. For instance, the Co-Op Bank has provided cheap loans to the Party. The co-operative movement also sends delegates to the Party conference and until recently was entitled to a set number of votes in the Electoral College. As such, the co-operative movement had some influence over the choice of leader and deputy leader. It is also worth noting that the Co-operative Party (which was formed to represent members of the movement at a parliamentary level) has a permanent electoral pact with the Labour Party. Moreover, some Labour MPs are also members of the Co-Operative Party.
The financial crash of 2008 was a significant milestone in the development of capitalism and one that casts light upon the co-operative ethos. For socialists, the financial crash exposed everything that’s wrong with capitalism. For instance, Barclays Bank was fined £1.5 billion for the fraudulent manipulation of the lending market, HSBC were involved with illicit money transfers and the Royal Bank of Scotland was fined for its role in manipulating the lending rate. Moreover, the reputation of those working in the financial services industry was damaged by the actions of rogue traders such as Jordan Belfort (who was the inspiration for the film ‘Wolf of Wall Street’) and Jerome Kerviel. Not only do the actions of those in ‘the City’ lend credence to the socialist critique of capitalism, they also make a persuasive case for the co-operative movement.