Link to video: Why the world needs self-help enterprises?
What are bona-fide SHEs?
SHEs are not ‘commercial businesses’, and they are not ‘charities’, they are in fact ‘associations of equal persons’ seeking to alter their position within specific markets. These facts separate them from investor-owned companies, which are ‘associations of capital'. SHEs are enterprises that ought to support their members by developing their capacity to lead more prosperous and more fulfilling lives; this requires that they help their members to withstand the vagaries of the market and the misfortunes of life. SHEs empower their members to respond positively to changing conditions, helping them to build their resilience, equipping them to face future changes that will surely come, this contrasts with the approach of many commercial businesses that regularly make their profits by exploiting the weakness of their customers, workers, and suppliers.
Self-help enterprises – the benefits
The advantages of self-help enterprises include that the needs of their members fuel them, they operate entirely within the ‘real economy’ and have a geographical home (a commitment to a specific place). They can provide the opportunity for economic empowerment when business investors are moribund and are designed to deliver whatever outcomes their membership determines. Such issues can include getting a better deal, which can mean a more honest deal and a fairer deal for members which can be interpreted to mean better housing, better health, a better education, a decent job, or securing access to services when commercial businesses are not interested. In addition, SHEs can be:
- Engines for growth - When globally mobile capital has no home and gravitates to where profits are often easier to generate, whereas genuine SHEs are committed to their members in a specific location.
- An alternative model of enterprise - A model that works when others fail. Often investors are not seeking returns from investments in the real economy, which means investing in efficient and profitable enterprises. Instead, they are chasing super-profits generated by speculating upon the movement of share and commodities prices. Genuine SHEs are not-for-profit organizations and will not be involved in speculation. SHEs may in some situations be an alternative to state intervention.
- Ready to stay involved in markets when other players leave - Because SHEs do not need to wait for the economic climate to change they should seek to improve their members lives both in times of recession as well as in times of economic growth.
- Significant in maintaining international competitiveness - Countries having significant strong and effective SHEs as part of their economy can enjoy significant advantages within global markets because their underlying cost structure can be reduced and their capacity to make more productive use of scarce resources increased. Also, their focus upon stewardship as against short-term profit-taking, are all advantageous factors. The relative strength of SHEs in several Scandinavian countries and New Zealand has often allowed small economies to be more successful than those reliant upon multi-national corporations.
The importance of the self-help mindset
The first step toward understanding self-help enterprises is to acknowledge the significance of the ‘self-help mindset,' which drives them. SHEs are the product of the desire of people to improve their lives to secure a better future for themselves, their families, and communities. When people want to achieve big improvements in their lives, self-help and mutual action is often their only viable option. The kind of interventions that brings about ‘real’ improvements in the daily lives of people of modest means only starts when they determine to take greater control over their own lives. When people stop letting other people take all the most critical decisions about lives for them and decide to put an end to allowing other people to make their lives unfulfilling and miserable. Worldwide, there are countless self-help enterprises of many diverse types, working on behalf of their members; and play an important role within their respective national economies.
In enterprises where the self-help mindset does not exist, or its leaders have become complacent and content with the status quo, the enterprise will soon degenerate into an enterprise that does not truly serve its members, and that fails to achieve its purpose. If the people running a self-help enterprise are not committed to sustaining the self-help mindset within their enterprise and are failing to pursue a change agenda that benefits all members, then the enterprise will inevitably become nothing more than a ‘neo-commercial business,’ run for the benefit of a select few.