Social Economy and the Viability of Cooperatives(Feature Article: "Rethinking Systems Theory" 1999 Conference)

Abstract

The cooperative sector has acquired increasing attention from such points of view as the reconstructing of the concept of economic systems, especially the discussion on "social economy" based on "the principle of cooperation". The purpose of this paper is a consideration of the viability of cooperatives in market economies using the analysis on cooperatives' behavior in human capital investment. This study is one of the attempts to relate the economic analysis on cooperatives with the pluralistic theories of economic systems or with the principle of cooperation. The problems associated with investment in human capital are pointed out as what is difficult to be solved in the conventional forms of firm organization. We find out the effectiveness of cooperative forms of organization and of the principle of cooperation on these problems, and give some conditions for the effectiveness. Through our consideration we show an approach to the study of the relation of cooperatives' viability to the principle of cooperation.