Emma Saunders and Nick Dowson chew over Nick Clegg's proposals for a 'John Lewis economy'.

2012 has been declared as the International Year of the Cooperative by the UN. But are cooperatives the way forward in the modern world?

A cooperative is a voluntary and democratic working structure in which participants share the benefits proportionately to their input. People often think of cooperatives as wishy-washy alternative businesses for hippies and other left-wing radicals. Well, let’s stop. Cooperatives are increasingly successful; in the UK, they have grown by 20% since the credit crunch, employ 235,000 people, and turn over more than £33 billion each year. Furthermore, they offer another take as to what a business should be or do for its community and workers.

Our government is increasingly resorting to mass-scale privatisation, by which democratic control over public resources (libraries, health, education) is challenged. Instead of devolving power and profits to workers, these are handed over to the private sector. Reversing this tendency offers an engaging alternative, and a sensible business model – even Nick Clegg, not known for his revolutionary instincts, suggested that radically increasing employee share ownership could boost growth.

Yet, we think this is only a condescending and unchallenging solution. It does not even live up to the John Lewis model, which Clegg used as an example. All John Lewis shares and value are held in a trust; a partnership council allows workers to influence decision-making and elect members to the executive board. All employees are partners in the business and profits are shared between all workers with each receiving a set percentage of their annual salary; in recent years this bonus went as high as 15%. This is not only good for workers, but also for the business, giving employees an incentive to take ownership of their work.

Clegg is offering employees the ‘possibility’ to buy a proportion of company shares, which is nothing but a sop. The mutuals suggested by Cameron and Clegg include organisations where workers only hold a minority of shares; this does not live up to the ideal of a co-op.

Government rhetoric about promoting mutuals is not borne out by their actions. Rather than re-mutualising Northern Rock's profitable parts, George Osborne flogged them off to Virgin Money at a knock-down price. And in September, Central Surrey Health, a Big Society award-winning worker-run healthcare cooperative, lost a £500m contract for community services to a company owned by Virgin Healthcare. Rather than promoting cooperatives, it seems that the naked lure of profit is the drive for this millionaire government.

As the wage system is preponderant, company profits for most employees are merely a figure on a balance sheet. The fruits of success do not trickle down to most employees, who have little input in decision-making processes and are little more than automatons in the company machine. Cooperatives on the contrary offer a democratic, sustainable and transparent way to work together. Workers have a say in how their business will go forward and how the profits should be shared. Greater involvement of workers fosters a better work ethic, providing motivation and a more egalitarian atmosphere in the workplace – and offers a much needed counterbalance to increasing inequality.

In Scotmid, for example, every member has the same input over the business plan. Scotmid is committed to being involved in the local community, offers support for charity projects, and was one of the first businesses in Scotland to espouse Fair trade. The alternative co-ops offer contrasts with the supermarkets, who are famous for siphoning money out of local communities for corporate profit, offering low wages and working conditions, and exploiting their suppliers whilst out-competing local businesses.

More and more, supermarkets shape our production system. They emphasise mass-scale production and distribution, threatening both small producers and our environment. Food miles, excessive packaging, destruction of small scale agriculture, and heavy use of pesticides and fertilisers, are just some of the many symptoms of this undemocratic, profit-driven system. Cooperatives, with greater member participation, offer another choice, which can benefit employees, producers and consumers alike.

To bring it even closer to home, Edinburgh University has had a cooperative society for the past five years. Though the group’s main activities are food-related, the co-op aims to spread awareness about cooperative practices. There is no hierarchy, but rather a bunch of students working for one another to provider cheaper and more ethical sources of goods. The Hearty Squirrel cooperative started as a small dry food cupboard in Guthrie Street, and through cooperation with Transition Edinburgh University and EUSA, now runs bi-weekly stalls on Mondays and Thursdays, selling organic whole foods and vegetables.

Last semester, the co-op had a turnover of more than £5,000; they are keen to spread the word this semester. Inspired by other university cooperatives in the UK such as St. Andrews, Bath and Leeds, the food co-op is looking for more members and involvement to remain a common project rather than merely a service. The International Year of the Cooperative is a challenge to us to question our beliefs about how businesses should be run, who by, and who for.