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

June 2, 2014

The Cooperative Decade

Filed under: Movement — Tags: , , , , , , — John McNamara @ 1:05 pm

Over the last couple weeks, cooperators across North America have been meeting and discussing the state of cooperatives and the future. I’ve been fortunate to have been involved in a number of those discussions. Despite the geographical, sectorial, and ideological diversity, a couple of common themes ran through all of the discussions. As I start to filter through the presentations and key notes, I will share with you what I heard and how I heard it.

Visibility

Time and again, we discussed in Canada and the United States that we need to build our “movement”. We need to be a bigger part of the economy. The oft-quoted number of “1 billion members” by the International Cooperative Community sounds great, but ignores the multiple memberships that people hold (for example, I am a member of four credit unions, a worker cooperative, two consumers cooperatives, a developer’s cooperative, and the US Federation of Worker Cooperatives. I was recently a member of a healthcare cooperative. I represent 10 of those 1 billion people).

More importantly, we allow our message to be usurped by others. Cooperatives are the original sharing economy. Today, investor-owned tech companies operating on purely neo-liberal principles have managed to co-opt that idea to make profit by using other people’s capital and labor. We need to reclaim what a “sharing economy” really looks like. It shouldn’t be a person sharing their labor and capital to a tech firm so that the tech firm can take a 20-30% share of the revenue. It should be an organization where all the members share their capital and labor and equally share the surplus value that they create.

The cooperatives that do exist, need to be more visible. They need to make noise. They need to let their local, state and federal elected officials know who they are and tell their sotry. This has to be a part of the expression of the 7th Principle of “Concern for Community”. They also need to engage the “cooperation among cooperatives” in a meaningful way by helping to grow the Federation through membership and promoting sustaining memberships among their members, diverting funds towards the Worker Ownership Fund, and providing resources to the Federation to assist getting the message out.

Impact

Enhancing our visibility must involve measuring our impact on the community. We need to be able to show how a worker owned business does more than provide a decent wage. It builds resilience within the community by developing leadership, educating people, and creating added value for all the stakeholders, not just the members. This may mean developing skills in members that allow them to successfully serve of community boards and committes, it may mean working to create strong and vibrant neighborhoods, and it may mean building local and regional alliances as needed to create sustainable economies built around social justice.

Growth

It was pointed out that worker cooperatives, even at a high estimate, represent about 0.03% of the businesses in the United States. To get traction, we need more worker cooperatives. We need to stop seeing growth as a problem. Rather our cooperatives need to address the demand for our goods and services. We should be happy that consumers like the goods and services produced by worker cooperatives. This doesn’t mean a wild expansion of individual coops to the point that the community is lost and democracy reduced to electoral politics. As we scale up our businesses to meet the demand of consumers, we must also scale up our governance models to meed the demand of the cooperative principles and our members right to a truly participatory democratic workplace. A nine-member board that works for a hundred members may not be enough for a three hundred member coop, let alone a thousand member coop.

More than Money

We must commit to being about social justice and creating a world based on our values, ethics and principles. If we are only about creating jobs with decent pay and benefit, then our success will be illusory and subject to the whims of a marketplace in which our businesses will eventually succumb to the downward pressure on wages and benefits that is built into the investor-based market economy. As the Rev. Martin Luther King jr. is often quoted as saying, “we must be the change that we want to see.” Arizmendiaretta also saw the role of the cooperative as a means of assisting people to their full realization as a human beings (perhaps-riffing off of the movie Little Big Man–that is the real term that we should use instead of worker-owners or members).

These four themes were present and actively discussed and debated at all three conferences that I attended (in three different cities and two countries) between May 22 and June 1). We clearly acquired a lot of energy from the Year of the Cooperative in 2012, and that energy is pumping through our organinzations. We need to harness it. The ICA has called for creating the Cooperative Decade. This must happen or we will watch this energy siphon off to who knows where. For it to happen, we need to begin using it now, today, in our coopertives, our cooperative organizations, our local networks and community organizations and with our policy makers at all levels.

I hope you join me as I start writing up my notes form the conferences. I have always wanted this site to be a discussion, not just my musings and rants. You are welcome to submit your own posts (just let me know and I will give you access). We need a national discussion that is outside of the annual conferences or only among a small group of people.

9 Comments »

  1. I think you’re right that cooperatives need to be a lot more visible in the economy but is that really possible with current growth methods? So far as I can tell, most cooperatives focus on the standard business model of internal growth but largeness carries its own pressures. The larger the organization gets, the more it has to adopt “efficient” modes of business and the more it looks like a traditional corporation. Once that happens, is there any point proclaiming that you’re a cooperative? Or does it become a convenient label slapped onto business as ususal?

    Comment by Ito Eta — June 26, 2014 @ 6:19 pm

  2. I agree that we need to figure out new ways of growing. One of the distressing themes at the Chicago conference that I heard during the meeting, in workshops and even from leadership was that worker coop have to fold into other movements to grow. We kept getting compared to ESOPs and other organizations that are essentially designed to make capitalism more palatable. At one point, worker coops were described as just one of many efforts to improve communities. I would argue that worker coops are the economic solution and that given that most of the failure of our communities (environmental, social, political and economic) derives from a “winner take all” economic model based on profit and the amount of individual wealth, that the worker coop model is not just one solution, but a major part of the puzzle. If we don’t see that, then our movement really won’t be a movement at all.

    Comment by John McNamara — June 30, 2014 @ 12:30 pm

  3. “…fold into other movements to grow”? That’s horrifying coming from *within* the movement.

    Worker cooperatives are absolutely part of the economic solution. I’d also argue that they provide major solutions to the social, political, and environmental problems. Namely, in its ability to remove economic stratification as a distorting factor in democracies.

    I guess the problem here is related to a comment I made in another post: “What exactly are we doing with this ‘cooperative movement’?” From what I can see, the movement lacks moral/ideological force, which means it’s hardly a movement at all. It becomes a sort of hopeful wandering that will perhaps stumble upon something useful.

    We need something more…

    Comment by Ito Eta — June 30, 2014 @ 1:25 pm

  4. Hi John, Ito shared this post with me and I figured I would weigh in. I think that part of the solution to the lack of “moral force”, as Ito put it, is to focus more on the people in the cooperative. As I’ve heard cooperatives talked about, admittedly not as often as one would hope, the focus is all on the cooperative as a faceless business that swoops in and saves the community. But no one ever really talks about how, or why, that’s just sort of glossed over and slapped with the happy little “coops are cool!” sticker. In my opinion the biggest reason a cooperative has such positive effects on a community is that it changes the way people think about each other. No other business model has the same psychological paradigm. People work as equals and share benefits equally. When we think of how this would ripple out in social interactions both inside and out of the workplace, the implications are vast. The biggest factor to me being the respect instilled in both oneself and others when you each are entrusted with the job you have rather than having some person looking down on you constantly to make sure you can dot your I’s and cross your t’s. It just doesn’t really get mentioned. If you want a movement, not a shuffle, bring people’s attention to how a cooperative matters to them as individuals. Yes the community is the overarching goal, but this society is too individualistic for that to matter much to the common person. Know your audience . Play to their interests first, then direct them towards yours.

    Comment by Adrienne Grishaw — June 30, 2014 @ 2:23 pm

  5. I agree–people are missing the paradigm shift and that is part of why it is so easy to confuse “worker ownership” with ESOP and the like. In the book “the Citizen’s Share”, they even make the tent large enough to include Google and Microsoft as “worker owned”. It isn’t just about ownership, but also control. We can’t simply impose Taylorist management strategies and beat our competitors and call it day. Worker Control through Ownership means not just removing the exploitation of labor (which refers to the taking of the surplus value created by labor) but also the alienation of labor. In a true Worker Control Through Ownership enterprise, the workers do not “sell” their labor, they maintain ownership and control of their labor and through consultation and consent with co-workers create the surplus value which is shared in proportion to its creation. Unfortunately, even people who truly believe in worker ownership (and even worker control) still exist in an institutionalist mindset that can’t see that a our “movement” requires more than just a “one member one vote” at the AGM, it also requires a fundamental change in the way that worker owned and controlled organizations manage their assets, liabilities and the labor supplied by its members. It is that quality that makes your comment about ” the respect instilled in both oneself and others when you each are entrusted with the job you have rather than having some person looking down on you constantly to make sure you can dot your I’s and cross your t’s” resonate with me. We are not just asking people to come and get a better job, we are asking them to be a true human being interacting with others. This can, in fact, work on a very large scale as I have just learned (see http://cecosesola.org/)

    Comment by John McNamara — June 30, 2014 @ 4:18 pm

  6. I’d love to read your link but not being fluent in Spanish (if that is the correct language), I can’t really. That said, it’s interesting that you note large scale as questions of scale have always been forefront in my mind. One of the usual objections to workplace democracy is that it isn’t feasible for an organization the size of Microsoft to truly be run democratically. It’s not efficient. But why should we even allow single organizations to get so big in the first place? That, however, is a bit of an aside.

    I agree with the comments about dignity, and I think that’s really a point that needs to be emphasized. It’s not “labor”, it’s “people” and people are not merely “factors of production”. The things we create with our hands and our minds are not just to produce things for sale but to produce that which expresses who we are.

    That said, I have a question. John, you mentioned that “it also requires a fundamental change in the way that worker owned and controlled organizations manage their assets, liabilities and the labor supplied by its members”.

    What did you mean here?

    Comment by Ito Eta — June 30, 2014 @ 6:07 pm

  7. Here is the history in English: http://cecosesola.org/index.php/other-languages/our-history/a-short-summary

    Comment by John McNamara — July 2, 2014 @ 5:16 pm

  8. I think that true worker ownership requires a complete shift in how we do business and this includes how we manage financial accounting. Almost all “benefits” received by workers will be classified as “expenses” which affect the balance sheet. What if the cost of labor (including benefits and insurance) were calculated as owners’ equity–or at least the portion of which exceeds the industry standard? This would dramatically change the “profitability” of worker cooperatives and that affects the ability to get loans and the such. In terms of assets and liabilities, we need to see these things as tools to maximize owner equity (in terms of the above change in that concept), not as ends in and of themselves. Too often, being trapped in a capitalist mindset, members bring a simple attitude of minimizing liability to the detriment of the organization or eschewing assets because of something that they learned in a business class back in college without considering that those ideas are deisgned to maximize monetary wealth for the largest stockholders, not a different kind of wealth for the workers.

    Comment by John McNamara — July 7, 2014 @ 12:47 pm

  9. Hey John,

    I’ve been pondering over your last comment to see if I could find a solution and I’m having a hard time coming up with one because the brick wall I keep running into is how to “financialize” an intangible. What you are fundamentally suggesting is that cooperatives, being different from traditional corporations, are looking to extract a very different set of benefits from their organization and the financial accounting should reflect that. A brilliant concept but I have found that it runs into trouble with how to turn it into numbers that can go on the balance sheet. For instance, I *very* much value my leisure time and the primary benefit I may see from working at a particular worker cooperative may be the opportunity to earn enough to live on while only having to work 20 hours a week. That’s great but how do I express that preference in money so as to put as a section of equity on the balance sheet. I don’t know of a way, but I did hit upon two ideas while ruminating:

    1) One of the largest (if not THE largest) ongoing expenses of a company is labor. By determining that member labor is considered is to be paid out of equity based on last year’s profits, it can shift a major focus on the balance sheet. It also makes it clear that, as cooperators, member-owners are fully committed to the fortunes of the firm like any entrepreneur of a traditional corporation.

    2) While I understand that benefits are often included with employment, I don’t necessarily think they should be for cooperatives. Sure, the worker cooperative may contract with a particular consumer cooperative for health insurance or unemployment insurance in order to get a fair group rate but this isn’t something that should be on the worker co-op’s balance sheet.

    That said, I will continue to give this thought to see if I can find an answer I haven’t considered. Do you have any insights here?

    Comment by Ito — July 17, 2014 @ 7:48 am

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