Evolution or Devolution: Toyohiko Kagawa’s Attempt to Create a Stable Cooperatives-based World Federation in an Apoplectic Era

Toyohiko Kagawa: 1888-1960

Stig Lindberg 11/18/2012 3rd Annual ABMC, Ramada Inn, Osaka

Why Economic Cooperatives & Why Kagawa? 2012: United Nations’ Year of the Economic • “It is almost cliché´ toCooperative say that those who do not know history are bound to repeat it. That usually is applied to the history of errors. Yet those who know the history of great ideas, the figures who thought them and moved them from theory to reality, do not mind and may even seek to repeat history.” • “…the rich are getting richer and the poor are getting poorer…our environment is being mined with increasingly calamitous results. If democratic countries are to preserve their political democracy in the face of multinational business, they need to build their economic democracy.” • “In remembering Toyohiko Kagawa, we in the cooperative movement are reminded that the actions of an individual may have a profound influence on the world. Cooperative economy is a promising idea. The effective communication of that idea makes all the difference.” (A Discussion Course on Cooperatives. East End Food Co-op. Pittsburgh, 2007. pp. 11, 12, 21)

“Civilization needs a new operating system” (Paul Hawken)

• Rash of capitalism is broken & 3rd Way books & orgs. – The Enigma of Capital and the Crises of Capitalism (David Harvey) – Beyond the Global Capitalist Crisis: The World Economy in Transition (Berch Berberoglu) – Global Capitalist Crisis and the Second Great Depression: Egalitarian Systemic Models for Change (Armando Navarro) – Global Capitalism: Its Fall and Rise in the Twentieth Century (Jeffry A. Frieden ) – America the Possible (Gus Speth) – Patient Capital (Acumen Fund): a third way that seeks to bridge the gap between the efficiency and scale of market- based approaches and the social impact of pure philanthropy. Kagawa’s New Operating System:

• Trade unionism

• Guild Cooperativism/Collectivism/Democracy

• Industrial democracy

• Brotherhood Economics/Christian Socialism

• “Dynamic Socialized Personalism” • 「動的人格的社会化主義」

“Dynamic Socialized Personalism”

To create a more just & equitable society focused on individual dignity – Structure: • Producers’ cooperatives: 1. Emphasize personal dignity & creativity 2. Increase productivity through this empowerment 3. Increase efficiencies for the betterment of society • Consumers’ cooperatives: 1. Eliminate middleman 2. Help ensure fair price for producers 3. Regulate consumption with the aim of making consumption an art. Eliminate waste & conspicuous consumption Kagawa’s Political Economy: “dynamic subjective personhood-based society- building” True Industrial Democracy is premised upon a collective social consciousness, overcomes exploitation, returns profits, regulates concentration of wealth, creates a commonwealth based on one-person, one- vote, and preserves the integrity of unions to accomplish jobs too large for individuals*, abolishes the management-labor class tension, eliminates unemployment, restores trust & credit and guarantees a minimum living standard. (13:151) Quandary: if the goal is to create a society conducive to personal fulfillment… • Trade Unionism (the form) is a necessary social context for the ultimate goal of liberating the human personality and for self-realization. CONTEXT • A certain degree of personal liberation and self-realization (the substance) is a prerequisite for the cooperative system to succeed, to avoid ossification and to being condemned to just another “perfunctory system.” SUBTEXT Solution: 1905: Kagawa first learns about economic cooperatives by Japanese lecturer (idea) 1916: Kagawa witnesses the textile workers’ strike/ demonstration in Manhattan (idea in action) 1919/20: Kagawa establishes 1st cooperatives 1925 visit to Askov folk higher school, Denmark: “… Kagawa thought he discovered the primary reason for the remarkable success of the Danish Cooperative Movement…advanced education during the off-season…strong craft-orientation… particularly attracted by the program’s successful rationalization of Lutheran pietism into a workingman’s ethic which preserved the intrinsic worth and dignity of manual labor.”(The New Jerusalem: 181)=>Japan Farm Village Evangelical Association, est. 1927 Consumer Cooperative Storefront Solution: Modus Operandi • The Socio-economic Component: – Establish schools to educate the masses in the ideas of Christian Socialism, which includes cooperative economics – Establish a full array of cooperatives 1. Insurance/health 2. Production 3. Marketing: purchasing & selling 4. Credit 5. Education & unemployment 6. Utilities 7. Consumer Solution: Modus Operandi, cont’d. • The Political Component: – Organization of self-governing enterprises – Proletariat takeover of existing parliamentary institutions: • Social Congress: – protect interests of the consumers & nonproletarians (artists, scholars, homemakers, etc.) (New Jerusalem: 227) – Settle legislative, judicial, administrative problems – Charged with promotion of national culture, morality & aesthetics – Power over provisional police force • Industrial Congress : – Oversee conversion from capitalism to state cooperativism, including property communalization – Budgetary control – Supervise annual redistribution of all state surplus – Levy taxes GOVERNMENT OF A CO-OPERATIVE STATE

SOVEREIGN SUPREME COURT

JUDICIAL CABINET ADMINISTRATIVE

LEGISLATIVE

Social Congress Industrial Congress

Cooperative Labor Union Federation Federation

1. Insurance cooperative Various labor TO INITIATE LEGISLATION 2. Producers’ " unions including 3. Marketing " farmers’ and TO INITIATE LEGISLATION ON ON 4. Credit " fishermen’s •Taxes •Religion, thought, 5. Mutual Aid " organizations •Relation to National education 6. Utilities " Enterprises 7. Consumers’ " •Ethics, art, customs •Changing private property •Diplomacy system to cooperative system •Social Problems •Related economic measures: •Military and Police Affairs budgetary control •National Enterprises •State surplus redistribution •National Budget

Union Organization • Unions for each trade would be integrated at the regional and national level into guilds, following the functional conceptualization of the British Guild Socialist, G.D. H. Cole (New Jerusalem:224) • Factories would become pleasant places to work where the laborer would find restored opportunities to create and invent freely in a humanized environment… (loc. Cit.) a la Google, Apple, Oracle, etc. Characteristics of the Guild Government & Society • No political party • All property, with few exceptions, state-owned • Surplus wealth redistributed periodically & equally on basis of need, not merit (productivity): supreme goal= just distribution rather than maximum production • No state seizure of private property, but over time the wealthy would be persuaded to donate their holdings to the state • No wages, but full remuneration (by unspecified means) • State subservient to the individual: no “organic state” • No production of luxury goods (New Jerusalem: 228-232) The Mature Guild Society • “Under the carefully rationalized controls instituted by the Cooperative Diet, overproduction would be completely eliminated and periodic unemployment and cyclical panics

would vanish forever.” (New Jerusalem: 229) • “With all accidents, sicknesses (etc.) covered by the national insurance program, with the right to inherit property or wealth abolished, with no luxury items available to arouse the desire for possession, for what really would one save? Freed from the psychopathology of greed and the kinds of anxieties typical of capitalism, man would be absolutely liberated to cultivate his spiritual and aesthetic growth and search for personal salvation.” (New Jerusalem: 229) I Have A Dream “…continuing to write of the coming age of brotherhood and love, a peaceful and nonviolent world founded upon international cooperative institutions. Thus, he looked far beyond the short range goal of Japan, the powerful nation state, to the day when national boundary lines would dissolve, racial and creedal differences would disappear, and all men would respect one another equally as brothers.” (New Jerusalem: 230) Kagawa Invited to Teach Cooperative Economics in U.S. • President Roosevelt invites Kagawa to the U.S. in 1936 to foster the cooperative movement – Dilemma: • Crippled capitalism triggers worldwide depression • Communism & fascism spread as solutions; Pres. Roosevelt pressed to find a solution viable for democratic America and looks to Kagawa as the leader of Japan’s thriving cooperative movement – Kagawa embarks on a whirlwind lecture circuit in the U.S., culminating in his hallmark lecture at Rochester Divinity School, which led to the book Brotherhood Economics Kagawa’s Teaching on Cooperatives in the U.S. • Q: Does the co-operative idea destroy personal initiative? • A: We don’t want to destroy personal initiative. It is too sacred. What we need is the socialization of profit and doing away with the exploitation motive. (Kagawa in Lincoln’s Land: 109) Kagawa Resumes Cooperative Movement after WWII with World Federation in Mind

• Ist Asian Council of International Cooperative Alliance held in Hiroshima. Kagawa presides • 3rd conference held in Malaysia in 1958; Kagawa on directorial board • Student Movement in U.S. leads to roughly have the states’ legislatures adopting the World Federation manifest • A similar ratio of prefectures and Diet members in Japan sign on Kagawa en route to Asian Council of International Cooperative Alliance, Malaysia, 1958 Kagawa’s Definition of Economics • Economics=study of human wants & human labor • Wants & labor=>tied to human psychology & subjective phenomena • Human economics is nothing other than humanity itself • Surplus theory, banking theory, monetary theory and finance theory are all appendices to human economics • Economics, like any other humanistic study, must be geared toward human liberation/ fulfillment Essence of Subjective Economics • Subjective Economics=Living Economics – Incorporate human value, religious value, creative/artistic value & economic value – Purpose is to restore the laborer’s human character/vivacity from the bonds of impersonal capitalism (2) – Economics is not principally about commercial systems & protocol but is at its core an indispensible component of human psycho- spiritual development=“value-added metaphysics” • Not descriptive (based on a static picture of human nature) but normative/prescriptive (based on what promotes comprehensive human development) (3) Kagawa’s holistic view of the cooperative “It is undoubtedly true that people made co-operatives. But it is also true that co- operatives made people.”

(A Discussion Course on Cooperatives, p. 24) Influences on Kagawa’s thinking • John Ruskin • Leo Tolstoy • Karl Marx • Pyotr Alexeyevich Kropotkin • Friedrich Wilhem Raiffeisen • Rochdale Society of Equitable Pioneers • George D.H. Cole • Romain Rolland • Walter Rauschenbusch • Borden Parker Bowne Kagawa’s Economist Credentials • Not a trained economist in the traditional sense: competent in identifying root of capitalism’s deficiencies but not in scientifically analyzing it. (Mikio Sumiya) • Pioneer of Empirical Socio-Economics in Japan – Study of Indigent Psychology (1914) ; data eventually induces Japanese gov’t. to implement slum eradication program • Economic Historian/Philosopher (in vein of Marx/Engels) – The Principle of Subjective Economics (1920) – The Economic Foundation of World Peace (1932) – Brotherhood Economics (1936) Kagawa’s Economist Credentials • Kagawa came from a family of entrepreneurs and witnessed the vagaries of capitalism first hand • Kagawa himself experimented in venture capitalism (canteen, toothbrush factory): investor/manager • Kagawa closely observed the labor market from within for over ten years, eventually establishing factory, farming, fishing and other trade unions • Kagawa established purchasing, producer, consumer, marketing, insurance, health care cooperatives Kagawa’s Assessment of Capitalism Capitalism-based economics has lost all credibility and the value of money has plummeted. In place of the bedrock of monetary value, human psychology and social conditions have determined value. In this way, subjective valuation has dramatically increased, and a clear imperative to reassess value has resulted. (5) (context of post-war inflation) Interview with Kagawa re: Int’l. Economics

• “If we could get rid of the free trade idea and the protective trade idea, and have the idea of international co-operative trade, we would be able to ignore the competing motive, (sic) and exploitation…Then there would be no difficulty whatsoever about overpopulation, about the need of raw materials, and about the need of national laws. We would not need to be afraid of the commercial policies of our neighbor, nor of

the transportation policies.”1 Conclusion Kagawa’s demonstrative success with economic cooperatives and his later involvement in the World Federation Movement reflect both the pervasiveness of discontent in the prevailing socio-economic systems of his day and worldwide efforts to provide an alternative paradigm. Proposition • Revaluate the value of human capital by establishing a comprehensive compensation of 20:1 • Barring that…stricter enforcement by State Attorneys General on corporate compliance to existing gov’t. regulations and enactment of more stringent financial and environmental regulations. An aphoristic summation of Kagawa’s philosophy If much of the world’s middle and lower classes lives beyond its means, much of the upper class lives beyond its worth. CAPITAL Foreign Exchange PURPOSE ORDER Credit SELECTION Commo- GROWTH Stock Loans Draft Insur- dity Exch- Exch- ance Exchang CHANGE ange ange e LABOR LIFE

Warehouse Pawnshop

Storage Private Loan WarehouseMONEY Bank Credit Union

Insurance Friendly Society THE DEVELOPMENT OF ECONOMIC ACTIVITY

CONSCIOUS ECONOMICS ATTENTION ASSOCIATION MEMORY JUDGEMENT SPECULATION Advertising Statutes Records Courts Stock Exchange

Learning Knowledge Beauty Goodness Holiness Schools Science Fine Arts Ethical Culture Churches

7. Consumers 7. purpose SENSE ECONOMICS Taste Smell Sight Hearing 6. Public Utility 6. Order Touch Sex Sport or Law 5. Mutual Aid 5. Selection Creative Preservative 4. Credit 4. Growth PHYSICAL ECONOMICS 3. Change Restorative Shelter Food Clothes 3. Marketing 2. Labor 2. Producers 1. Life 1. Insurance Heading

Regulation blahblhablhablhaljalks Regulation Regulation Autonomy No subjugation Regulation Self-employment Regulation No unemployment Regulation Self-determination Regulation No disruptions Regulation Freedom No distrust Regulation Regulation

Planning Sense of Social Social Insurance Solidarity Regulation Social Security

Political Democracy

Economic Democracy Social Democracy Essence of Subjective Economics

• Desire to live & will to work/create=two most fundamental components of economics (4) • Subjective Economics=Normative Economics which retains subjectivity and which is based on the two fundamental values of life & creation Theoretical attributes of Economics

• Economics comprises the ground of history • Economics must be understood in evolutional terms (ever changing & advancing in accord with the teleological evolution of life itself) • The study of economics only becomes viable in the context of the human quest for subjectivity and exercise of free will (松野尾：８０） Kagawa’s Definition of Economics

• ‘Economics’=the study of human capabilities employed for the sake of humanity. (13:149) • Natural resources exist exclusively for the purpose of stimulating the advancement of human capabilities. (13:149) Developmental Economics

• As machine technology advances, menial, manual labor decreases but heavy (skilled?) labor increases, as can be seen in the case of America. (13:151) Economics gone astray

• While Kagawa acknowledges the validity of certain applications of the scientific method to economics, he emphasizes that the discipline was established primarily by ethicists (Smith, Malthus, Mills, etc.) Kagawa’s vision of labor unions

An institution for comprehensive development of subjective personhood reminiscent of medieval monasteries/

Metaphysical guilds Artistic/Creative component component

Scientific Labor component component

Competition vs. Cooperation • Kagawa’s study of physical sciences, particularly biological sciences, persuaded him that cooperation is at least as important as competition (cf. Pyotr Kropotkin, theory of mutual help) R. Schilden, p. 100 Problem of Scarcity Addressing Poverty: Methodology • Philanthropy is insufficient (it only preserves the status quo); a radical empowerment of labor unions is the only solution (Seishin Undo to Shakai Undo, 1919, p. 484) • “…It is not sufficient to hold out a helping hand to our fellowmen in a time of crisis. It is more in keeping with the dignity of human personality that they should be given the chance to make their own contribution and to move under their own power.” (A Discussion Course on Cooperatives, p. 45) Footnotes

1. Kagawa, Toyohiko. Kagawa in Lincoln’s Land. New York, National Kagawa Coordinating Committee, 1936. 2. Mikiyo Sumiya, 1995. 3. Kagawa Toyohiko Zenshu, Vol. 9:180 4. Matunoo, Hiroshi, Kagawa Toyohiko’s View of Economy and his Conception of Cooperative Soceity, Research Center for Regional Community Innovation, Ehime Univ., March, 2008. 5. Ibid., p. 78 6. Zenshu, Vol. 9:181 Yes Magazine w/David Korten: http://www.yesmagazine.org/blogs/david-korten/economics-and-our-human-nature • The successful function of mature democracies, caring communities, and living economies requires caring, mature, and responsible citizens who care not only for their own well-being, but as well for that of their neighbor. Given the experience of human history, many will ask with good reason whether this might be contrary to human nature. • We humans are complex beings with many possibilities. Empire has demonstrated our capacity for extremes of individualistic greed, hubris, deceit, ruthless competition, and material excess. Yet most people daily demonstrate our human capacity for caring, sharing, peacemaking, and service…Contrary to what morally challenged market fundamentalists would have us believe, both are within our means Working Bibliography • Kagawa, Toyohiko. The Principle of Subjective Economics. Tokyo: 1920. • Kagawa, Toyohiko. The Essence of Industrial Cooperatives and the Path to Full Development. Tokyo: 1940. • Kagawa, Toyohiko. The Essence of Personality- based Socialism. Tokyo: Seiryu Publishing, 1949.

• Kagawa, Toyohiko. The Economic Foundation of World Peace. Tokyo: Japan Times, 1932. • Kagawa, Toyohiko. Brotherhood Economics. London: Student Christian Movement Press, 1937. Related Sources • New Economics Foundation • http://www.neweconomics.org/

• American Sustainable Business Council • http://asbcouncil.org/

• Demos: Ideas & Action to Promote the Common Good • http://www.demos.org/publication/beyond-gdp-new-measures-new-economy

• European SPES (Spirituality in Economics & Society) • http://www.eurospes.be/

• Grassroots Economic Organizing • http://www.geo.coop/

• U.S. Federation of Worker Cooperatives • http://usworker.coop/front

• Japan Workers’ Cooperative Union • http://english.roukyou.gr.jp/index.html Related Sources • Committee for the Advancement and Promotion of Cooperatives • http://www.copac.coop/

• Positive Money • http://www.positivemoney.org.uk/

• Currency Solutions for a Wiser World • http://www.lietaer.com/

• Creative Commons • http://creativecommons.org/

• Binary Economics • http://binaryeconomics.net/binary-economics

• School of Commoning • http://www.schoolofcommoning.com/