The Workers' Paradise A Discussion of Workers Cooperatives and Building the New Economy

October 12, 2009

#7 Democracy

By nature of writing on worker co-operatives, I have touched on the subject of democracy countless times. It is the foundation of co-operation. It is part of the definition, the values and the principles. If we could only use one word to describe co-operation, it would be democracy (which is I think that Michael Moore almost had it right when presented the choice between capitalism and democracy). Of course, the word “democracy” can be co-opted. Nobel Laureate Milton Friedman often claimed that capitalism, in its pure form without government intervention, was the purest form of democracy as people could “vote” on every transaction and the power of their vote was equal to their significance to the economy. For that reason alone, co-operators need to understand and defend democracy as a definition, a value and a principle.

The founding pioneers of Rochdale included a large number of Charterists. They were fighting for Universal Suffrage—the vote. They saw co-operation as a backdoor method of achieving property for working people. Once they owned a share of stock, they could argue for the right to vote as an owner of property. They truly believed in the concept of “one man, one vote” and that if everyone had a vote, they would create a shining city on a hill and usher in an era of peace and prosperity.

It didn’t quite work out that way, though. It underestimated the power structure and its ability to manipulate, obfuscate, and control the process. Here is a sad and cynical take on democracy from Ghana:

The movie does make a point: democracy is expensive. The lack of democracy is even more expensive. I often hear members complain of the cost of democracy–it tight economic times, it can be seen as an unnecessary expense–a competitive disadvantage even. That is false logic, however. Democracy pays for itself by creating a loyal and dedicated workforce that has a vested interest in the success of the company. The money spent on committee time, member forum, and meetings easily gets made up by the ability of the co-operative to survive tough economic times without layoffs or even financial losses.  Of course, this film focuses on the electoral democracy, rather than participatory democracy. Electoral democracy is only one aspect of a truly democratic process. I get into this argument quite often in Madison, which is a town dominated by pols. People often see democracy as the right of the people to vote an idea (or person) up or down. I see democracy as the process of creating the idea. It may be that being in Madison causes people to have a negative view of democracy and not see the real democracy that takes place when they can attend a forum and denounce the cost of the forum!

In our co-operatives, we need to be mindful of the democratic functions. For worker co-operatives, this means flattening hierarchy whenever possible. We need to move away from the “Big Man” theory of history and governance and consider, instead, that leaders get created by the movement that created them. If you have a leader who is manipulative and counter-productive, it is likely that the people who elected them gravitate to that type of leadership. The problem is one of culture, not votes.

The question, then, becomes “How do we create a participatory democratic culture?” The answer isn’t that simple. Part of it involves the culture of the organization, the culture of the industry, the region of the of the world, and generation of the workers. It really gets incredibly complicated which is likely the reason for focusing on voting. Voting is simple. Everyone can understand it. Complex ideas distill into simple yes and no questions. Business can move at the speed of business not at the speed of everyone’s comfort level.

This video offers a great perspective:

It is up to us, the members of worker co-operatives to define democracy within our generation, accept that the next generation will want something different, and create an evolutionary culture that honors knowledge, history and change.

As the shibboleth of the co-operative movement, democracy needs advocates and we must accept the role of stewards. We need to develop democratic cultures and processes that honor the individual and the community. Sometimes this will mean supporting the decision our co-operative makes even if we know it is doomed to failure—helping it to succeed against that fear—and being present, without admonition,  to find new solutions if it does. Ultimately, it is about educating our membership and creating a sense of openness that allows members to really control their co-operative free of silent or hidden cliques. For those of us who have been in the movement for a while, we need to remember how it was when we were the new kids with the great ideas that nobody wanted to hear. Democracy means, in part, to have the courage to change the culture and accept the voices of others even if we disagree.

I accidentally wrote on the values out of sequence. Democracy should have been posted prior to equality. The authors of the Identity statement certainly chose the order of the values carefully. Equity follows Equality for a specific reason. Likewise, democracy follows the more individual values of self-help and self-responsibility. As equity is a check on equality, democracy is a check on the individual. This, again, shows the inter-relatedness of the values (and the principles).

Next Week: Solidarity—the last, but not least, of the six values.


  1. Hey John,

    Nice post. Where does the debate begin about cooperatives, and cooperative federations, that have proportionally democratic structures?
    For instance, I own 8 hardware stores, so I get 8 votes in the ACE marketing coop, even though I’m one solitary boss-man. The same issue often comes up in agriculture cooperatives. I’ve heard a lot of complaints about Ocean Spray being dominated by one or two major farm owners, making it more a tyranny of the few…rather than the tyranny of the majority we often see in coops 😉

    Sometimes proportional voting makes a lot of sense, but sometimes it seems to be a proxy for the most capitalist-like structure possible under a certain state law. It would be interesting to reach some general consensus in the movement about what the boundaries of reasonable proportionality really are in a coop – state legal limitations aside.

    Have you come across this topic when talking about cooperatives publicly? Any suggestions of how we should address this potential value contradiction within the movement?

    In cooperation,

    Comment by Tom — October 12, 2009 @ 3:54 pm

  2. Tom,

    Great comment! I have to admit that I am fairly ignorant about the federations and even the marketing coops. I would think that the proper way to deal with size is through the more commercial aspect of volume discounts. The example that you gave with Ace would mean that the owner of the eight stores should really only get one vote at the AGM, but the coop should have policies that respect volume purchasing by members (and the dividends would reflect that). In that way, the owner still gets a benefit from keeping eight stores in the co-op, but it also doesn’t eclipse the single store owner’s voice. This is a contentious issue however. One aspect of the demise of North Farm Co-operative (a co-operative warehouse based in Madison, WI) was the defection of Willy St. Co-op. As I understand it, Willy St. demanded a better price citing the fact that they alone made up 10% or more of the co-op’s revenue. NFC balked because they didn’t have a consumer volume discount and “all members are equal”. Here the lack of balance between equality and equity created an undemocratic situation and demand.

    At the USFWC, we weight votes based on the type of organization, but the large co-ops (by revenue and membership): Rainbow, Alvarado Bakery and Union Cab all get the same three votes that the small co-ops get. This will be a bigger issue as we discuss reforming the dues calculator.

    Comment by John McNamara — October 12, 2009 @ 4:34 pm

  3. Readers, this is a quick comment to clarify the above. Folks from Willy St. Coop called to clarify reasons from pulling away from North Farm Co-operative. A different view to my suggestion (which was based on what I heard at the time from some Willy St. people), comes from current co-op people. I won’t get into the long description (but certainly invite Willy St. Representatives to post here). Basically, North Farm had an agreement with its members not to short anyone’s order. Due to a cooperative management group, Willy St. came to learn that their orders were being shorted–often in favor of another co-op in which North Farm had an ownership interest (as did Willy St). This created a breach in the agreement and Willy St found itself needing to work with a different supplier. There wasn’t a demand for a greater volume discount.

    My apologies if I further mangled the explanation. The point is how democracy works in our co-ops especially when their are competing market forces and vested interests at work. Clearly, Willy St. was acting in the best interest of its members as a member of another co-op. North Farm was a secondary tier co-op (a co-op of co-ops) that then had another co-op made up of itself and one of its member co-ops. How complicated is that dynamic? Maybe the larger lesson is how the values and ethics interact and why we need more than business degrees to manage our co-operatives.

    Comment by John McNamara — November 4, 2009 @ 2:09 pm

  4. Here is another post about democracy from the consumer co-operative perspective at Consumer Grocer

    Comment by John McNamara — November 11, 2009 @ 4:47 pm

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