The Workers' Paradise

December 28, 2009

The Worker Coop User Principles and The Mondragon Experience

Filed under: Identity Statement Series — Tags: , , — John McNamara @ 8:05 am

The US Department of Agriculture identifies the first three principles of the identity statement as the “user principles.’ In US parlance, this means that the users of a cooperative’s services benefit from the cooperative’s activities, the users of a cooperative own the cooperative and the users of cooperative control the activities of the cooperative.

However, in a worker co-operative, the users of the cooperative services generally do not own or control the cooperative. Should worker cooperatives have their own set of principles unique to the experience of worker ownership? The Mondragon Cooperative has developed a set of ten principles that it uses to guide its collective actions. The 10 Principles of Mondragon overlap to some extent with the Identity Statement:

Mondragon Coop Identity

1. Open Admission                                    Voluntary and Open Membership

2. Democratic Organization                    Member Democratic Control

3. Sovereignty of Labor

4. The Instrumental and Autonomy and Independence

Subordinate Nature of Capital

5. Participatory Management                   Member Economic Participation

6. Payment Solidarity

7. Intercooperation                                     Cooperation Among Cooperatives

8. Social Transformation                           Concern for Community

9. Universality

10. Education                                                Education, Training and Information

In considering this series, I initially saw the three principles of Sovereignty of Labor, Subordination of Capital and Payment Solidarity as the three that separated from the Identity Statement. However, it is clear that the Subordination of Capital directly relates to Autonomy and Independence. Yet, this principle also has a special nuance for worker cooperatives. Likewise, the role of Universality is a direct expression of the value of solidarity. It is not simply Concern for Community or Cooperation Among Cooperatives. It speaks directly to the need for worker cooperatives to support all movements that seek dignity for workers. This makes a substantial break from the principles and other cooperative sectors that may not support labor movements and may even be antagonistic to labor unions.

Over the next four weeks, I will detour from the Identity Statement of the ICA to consider the importance of the four Mondragon principles in order: Sovereignty of Labor, The Instrumental and Subordinate Nature of Capital, Payment Solidarity and Universality. For background information, I will be quoting heavily from The Mondragon Cooperative Experience by Jose Maria Ormaechea (January, 1993). Sr. Ormaechea is the “O” of ULGOR Cooperative, the first cooperative of the Mondragon Experience and the name was dervived from the initials of the five original members (it is known as FAGOR today). He was one of the first students of Don Jose Maria Arizmendiertta. He served as Managing Director of the Caja Laboral Popular (today, the Caja Popular) from 1960-1988. He also served at Director of Otalora, the management training facility and publisher of this book.

A Few Words About Mondragon

The principles of Mondragon are significant—in addition to acknowledging the history of the cooperative movement, they also expand upon the ideals of cooperation by addressing the role of labor. This was a very important issue for Arizmendiaretta. He believed in the sanctity of work and education. Through these two arenas, the human spirit could be elevated and all of society would benefit.

Mondragon was the pearl to come out of the fascist experiments of the 20th Century. Don Jose was in prison awaiting execution when the Pope decided that Franco had to quit killing priests. He was sent to the backwater industrial village of Mondragon instead of Bilbao to shut him up and ensure that his radical views would not gain traction. Mondragon succeeded in part because of some unique issues:

Communists in the South and the Anarchists of Barcelona had regrouped. Franco’s economic policies had failed even by his standards. It was easy for Franco’s people to see the Mondragon experiment as one of entrepreneurialism, not revolution.

Nevertheless, for the first two decades of Mondragon, the government was fascist and people had to be careful. They were harassed and had the deck stacked against them. The bank and social security systems were created because they were not allowed access to finances and health care otherwise. Add to that the role of the ETA and the Basque desire for independence (or at least to be left alone) and one sees a unique culture that produced Mondragon and has a lot to do with their decision making process.

The workers of Mondragon have “built the road as they traveled.” They haven’t always made the decisions that I would have made (sitting in my condo in Madison, WI instead of Basque Country), but those decisions were theirs to make.I have learned, however, that even when a decision is made, that may only be the beginning of the discussion. As with all of our co-operatives, sometimes decisions get made in order to survive to a day that a real fix can be made that will be more consistent with the principles.

I like that Mondragon refers to itself as an “experience.” I think that all of our worker co-operatives should adopt that attitude. We are an experience of our culture, society, place in history, and the good and bad tendencies of our collective memberships. The experience of cooperation offers us metamorphosis that will highlight our better natures. It is a process and a journey. We will occasionally stray from the correct path as a means of survival (or ignorance), but if our diversion will allow us the opportunity to correct ourselves in the future, we should be happy for another day.

That is my basic take on Mondragon. We have a lot to learn from them. They can learn some things from us too. However, we must always be cognizant of the principles that bind us. We must understand that we are only human and will make mistakes. We should embrace forgiveness and understanding of the human condition. There are as many ways to “co-operate” as there are personalities. We should be willing to honor our differences as much as our similarities, but always along the lines of the principles and values of the cooperative identity.

December 14, 2009

#15: Member Economic Participation

Filed under: Identity Statement Series — Tags: , — John McNamara @ 2:33 pm

The third of the so-called User Principles is the principle of Member Economic Participation. Think of this as the users of the co-operative financially support the co-operative. The identity statement states:

3rd Principle: Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.

This principle provides for the funding of the co-operative. Members should support their co-operative financially and provide the necessary capital to maintain and grow the organization. Capital, in a co-operative, has a vitally different role. As this definition of this principle suggests, capital exists to serve the needs of the co-operative (and the members). Unlike stockholders, however, capital does not get used to simply generate a profit, it gets used to enhance the benefits to the users of the co-operative, its membership.

The control of capital rests in the basis of democracy. People’s ability to participate in the co-operative comes from a minimal threshold of participation. In the United Kingdom, the share in The Co-operative is ₤1.00. At Union Cab, the cost of a share is $25.00. The main form of capital development in co-operatives comes through operations; however, members might also be expected to invest when necessary. For consumer co-operatives, the main way to address capital comes through setting prices at an appropriate level to meet capital demands. For worker co-operatives, wages and shift charges help meet the capital needs.

In a worker co-operative, the discussion over wages and benefits brings life to this principle. The ability to raise or lower pay and benefits allows the members of the co-operative to collectively decide how well to fund the co-operative. As with the consumer co-ops and prices, this allows the worker co-operative to engage in the market economy without a profit motive.

The lack of the profit motive, however, does not mean that the co-op isn’t driven to succeed in the marketplace. In a worker co-operative, the only way to increase wages and benefits is to increase market share. The role of profit (or surplus) relates more to capital replacement rather than creating rewards for stockholders. In many ways, this principle drives worker co-operatives. The “reward” for hard work is not a patronage refund, it is the good paying job (for the industry) with great working conditions (for the industry). However, the need for capital still exists and workers must manage it carefully.
Worker co-ops have to balance the operational and capital needs along with the very human needs of living wage, safe and humane workplaces, and a democratic environment. In this case, the concept of member economic participation means more that writing a check, it means that the members must accept responsibility to control their co-operatives capital. In a consumer co-op, it is relatively easy: hire managers with strong financial skills and let them manage. For worker co-operatives, we often have to teach our entire membership especially our board to understand finances. Most of us, in worker co-ops, majored in History and social studies, we avoided accounting and business classes like the plaque. This creates a unique challenge of educating our membership and creating a culture of fiscal intelligence.

That challenge creates a danger. Too often, because of ignorance, our worker co-operatives follow the industry standards in financial management and human resources. This is an error. The industry standards have been designed to maximize profit and treat the worker as an “asset” or a “resource”. As we learn about finance and how the money flows through our co-operative, we need to be cognizant that the purpose of having the money to flow isn’t to make more money, but to make our lives better.

Next Week: A diversion into Mondragon and the Worker Co-op User Principles

December 9, 2009

#14 Democratic Member Control

Filed under: Identity Statement Series — Tags: , , — John McNamara @ 9:09 am

After missing my Monday morning deadline due to a funeral, Mother Nature has given me the gift of a day away from the office (I really haven’t anyway to get to work) so I can at least catch up on the series.

The Identity Statement created the following definition for the Second Principle of Co-operatives:

Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.

This principle acts as the second of the “User Principles.” In this case, the users of the co-operative control the co-operative. In a worker co-operative, it is the workers who are using the co-operative in order to earn a fair living.

The Identity Statement Background Paper makes the following point about this principle: “Within co-operatives, ‘democracy’ includes considerations of rights; indeed, rights and responsibilities. but it also means more: it means fostering the spirit of democracy within co-operatives, a never-ending, difficult, valuable, even essential, task.”

In general, this principle leads to the membership empowering a board of directors to make decisions who then often empower a manager to make operational decisions. However, in many worker co-operatives, this principle comes to life with non-hierarchical structures in which all decisions (the big strategic and philosophical to the small operational) allow input and decision making by the collective. There is a basic concept that for a collective to truly operate as a collective it needs to stay under forty members. Obviously, the larger and more spread out the operation, the more likely it is need levels of hierarchy to manage effectively.

This principle brings up one of the more exciting differences between worker co-operatives and other sectors. Because the users/members are the workers, the function of democracy takes a significantly different role. Even in large co-operatives, the operational issues get debated by the membership. Management generally involves working with people to develop a consensus as opposed to barking orders. It also involves clearly defined roles for those times when someone does have to bark orders.

Mondragon has a famous saying that “there is no democracy on the shop floor.” I understand that concept, but disagree to a point. Obviously, every decision cannot involve a consensus of the majority. People have to be assigned roles with authority to act and have those decisions respected. However, there are ways to build in a sense of democracy into the operations. To me, that is one of the challenges of worker co-operatives. As stated earlier, we have a responsibility to foster the spirit of democracy throughout our actions. For those of us who have hierarchy in our co-operatives (especially those of us who have the title of “manager”), we need to find ways to manage that reflect the spirit of the principles. We cannot simply model our competitors and say that we have democracy because their is an annual meeting and board of directors.

Another key point in the discussion of democracy involves the middle sentence of the principle description: “Men and women serving as elected representatives are accountable to the membership.” The Background Paper makes the following concept: “This sentence reminds elected representatives that they hold their offices in trust for the immediate and long-term benefit of members. Co-operatives do not ‘belong’ to elected officials any more than they ‘belong’ to the employees who report to these officials.” In a worker co-operative, the sense of ownership is vital to its success. However, we must remember that we are a democratic organization and while we may be owners, our control is collective. To paraphrase Chief Seattle, “We belong to the co-operative, it does not belong to us.” As a result, it is our duty as leaders, directors and owners to take care of the co-operative for the generations of workers who will be looking to it for their healthy workplace.

Next Week: Member Economic Participation–the last of the user principles.

November 30, 2009

#13 Voluntary and Open Membership

Filed under: Identity Statement Series — Tags: , — John McNamara @ 12:06 pm

The principle of voluntary and open membership has always held problems for co-operatives. It is a very important part of co-operatives that keep them community based and relevant; however, it can also challenge founding members when late-comers express their rights (and their generational view). It can also challenge governments that want to have an alternative to capitalism, but only in a way that they can control.

Let’s start with the Identity Statement’s definition:

“Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.”

In this statement is the echo of the definition of a co-operative. More importantly, the language reaches back to the founding members of Rochdale who were universal suffragists and included women in the rights of membership. Notably, too, the membership is about the ability of the member to use the coop’s services and accept the responsibilities of membership. Nothing else really matters–even the political affiliation of the individual must be excluded.

This statement, however, should not be considered static. In a society which remains dominated by specific cultures, gender and class, co-operative must do more than simply ensure the policies and membership are neutral. Co-operatives should strive for communities that look like the larger community around them. They should develop program to encourage leadership development throughout the membership with special encouragement to those groups that normally don’t get promoted in society as a whole.

The Background Paper makes the following point: “Co-operatives should also reach out, either through their own activities, or through assisting in the development of new co-operatives, to all evident population groups and minorities able to benefit from co-operative enterprise. The basis for this involvement should not be charity; it should be the result of a careful, practical and innovative assessment of the possibilities for co-operative action. “

I don’t think that this statement should be seen as a call for “affirmative action” as much as it is for understanding the historical methods of exclusion that have been internalized by populations in the majority and the minority. This principle does call for us to understand the concept of oppression and take action to develop anti-oppression tactics in our co-operatives.

The Worker Co-operative Dilemma

For worker co-operatives, this principle might seem problematic. We limit the number of members for reasons of maintaining a living wage. Even though this is called one of the “user principles” by the US Department of Agriculture, it is only happenstance that the worker-members use the co-op’s services. In some cases, the workers might not be able to afford the co-op’s services.

The Background Paper refers to one point of the worker co-op problem in a discussion: “The phrase ‘open to all persons able to use their services. . . ‘ acknowledges that co-operatives are organised for specific purposes; in many instances, they can only effectively serve a certain kind of member or a limited number of members. For example fishing co-operatives essentially serve fishing people; housing co-operatives can house only so many members; worker co-operatives can employ only  a limited number of members. In other words, there may be understandable and acceptable reasons why a co-operative may impose a limit on membership.”

For worker co-operatives, members must also be able to do the tasks assigned. Cab drivers must be able to operate a vehicle in city traffic safely. Engineers need the education and training to design the machines. Grocery store workers need the skills of retail. Bike shop workers need to know how to repair bicycles.

Another dilemma involves the responsibilities of membership. Often, our co-ops grow faster than we can find bonafide co-op types to work for us. We then hire and membership people who really just want a good job. This seems a large contradiction of the principle. What if our members aren’t willing to accept the responsibilities of membership? The other method would be to allow workers to not join the co-operative and simply serve as hired guns until such a time as they chose to embrace the co-operative model.

The Closed Shop

I support a closed shop. I believe that all workers in a worker co-operative must be members of the worker co-operative. I liken it to the concept of a closed shop within the labor union movement. The workers all share in the benefits of a collective bargaining agreement, so they should all support the labor union that speaks for them in bargaining. If they have problems with the leadership of the labor union, they can engage the membership and run for stewards, officers, and even the bargaining team. However, they need to support the infrastructure from which they benefit. Likewise, members of a worker co-operative enjoy the benefits of co-operation and should bear the responsibility of membership to support that beneficial working environment.

I think that the CICOPA Declaration on Worker Co-operatives presents a workable compromise, but 50% is too low of a threshold. It allows worker co-operatives to create plantations and two-tier worker classes. I won’t even refer to co-ops under 50% ownership as a worker co-op. At that point, they are employer co-operatives and the workers should unionize to protect their interests. There are some that don’t agree. Often the argument runs along the lines of “workers not being intellectually ready for co-operation” or that the culture doesn’t support co-operation. These all tend to be the same arguments that supported anti-democratic governments throughout history. They were wrong then and they remain wrong today. Worker Co-operatives cannot, however benevolent, be economic imperialists.

The voluntary nature of this principle is the basis for the argument of an open shop. People shouldn’t be forced to join the co-operative if it is voluntary. One could point to this cogent argument of the Background Paper: “People cannot be made to co-operators. They must be given the opportunity to study and undestand the values for which co-operatives stand; they must be allowed to participate freely.” This sounds like a great argument for an open shop, but it isn’t. In fact, allowing this argument in a worker co-operative creates a method to use the ideal of “voluntary and open membership” to restrict workers’ rights. If we simply say “well, these workers don’t want to join!”, then we must also ask
“Why don’t they want to join?” What is creating the barrier? Is is a gender gap, a racial divide, a class division? Are the workers only there for the money and nothing else? Do we really want hired guns representing our co-operative?

Of course, the authors of the Background Paper focus on consumer, producer and housing co-operatives. I think that worker co-operatives have a unique situation. While their discussion concerns the role of governments in pushing people into joining co-operatives, it applies here as well: “In those instances co-operatives have a special responsibility to ensure that all members are fully invovled so that they will come to support their co-operatives on a voluntary basis.”

Worker Co-operatives have a special duty under the first principle. They must activate the other principles to an even larger degree that non-worker co-operatives. They must educate the workforce on the benefits of co-operation. They must work to develop their members as human beings. They must actively encourage participation among the workforce. Worker Co-operatives must be about worker liberation and human dignity.

Coming Up Next: Democratic Member Control

Sources:

MacPherson, Ian            (1996) Co-operative Principles, ICA Review 1995 (pdf)

For more extensive reading on the Statement on the Cooperative Identity, please visit the International Cooperative Information Centre through the UW Center for Cooperative’s website.

November 23, 2009

#12 The Principles of Co-operation

Filed under: Identity Statement Series,Uncategorized — Tags: , , , — John McNamara @ 12:44 pm

The Co-operative Difference, which creates the Co-operative Advantage, results from the creation of the Co-operative Principles.

The Principles have been with the Co-operative Movement since the success of Rochdale Society of Pioneers. Most of us know the story, after several attempts to create an ethical market enterprise; the organizers of Rochdale tried a different tactic. They created a set of rules that would govern the co-operative. Among these included the prohibition of credit to consumers and other tactics used by markets to control consumers and workers. Many of these principles and practices (such as food at meetings) have passed through the generations to our co-operatives today.

The Background Paper on the Identity Statement makes this point about the principles:

“Many people understand principles as iron-clad commandments that must be followed literally. In one sense, that is true in that principles should provide standards of measurement. In another sense, they should restrict, even prohibit, certain actions while encouraging others.”

“Principles, however, are more than commandments; they are also guidelines for judging behaviour and for making decisions. It is not enough to ask if a co-operative is following the letter of the principles, it is important to know if it is following their spirit, if the vision each principle affords, individually and collectively, is ingrained in the daily activities of the co-operative. From that perspective, principles area not a stale list to be reviewed periodically and ritualistically; they are empowering frameworks—energizing agents—though which co-operatives can grasp the future.”

In many of our co-ops, we ask if our choice of action is financially feasible. How many of our choices are socially feasible when compared to the principles? Everyday managers need to make key strategic decisions without the luxury of a consultant. The principles should guide their decisions along with the values and ethics of the Identity Statement. The teachings through the Masters of Management: Co-operative and Credit Union program focus on the merging established management practices with co-operative principles. When these two diverge, the goal of the MMCCU candidate will be to find a way to amend the practices to fit the principles. This is the key difference between programs such as MMCCU and other educational programs that utilize co-operatives as part of a large toolbox to reform capitalism (non-profits, ESOPs etc).

They also make us strong. They cause us to spend money on things that our competitors don’t. I think, however, that expense on the principles creates a competitive advantage not a disadvantage. Sometimes, when times get tough, co-operatives have to make decisions that may cause the principles to get “set aside”. In other co-ops, the lack of a clear co-operative identity may cause the principles to be co-opted as something else. In either case, the path to demutualization may be built by small decisions to ignore the principles.

The history of the principles is interesting. The Identity Statement, like the Rochdale Principles, is a living document. Since 1844, co-operative leaders from around the world have reviewed and amended them. The changes reflect the generation of co-operators that existed at the time as well as honoring the history of the co-operators that have gone before.

In 1844, Rochdale had a lenghty list of “laws” detailing every aspect of the co-operative. By 1860, the list of “Rochdale Practices”* had been whittled down to nine many of which sound quite familiar:

  • That capital should be of their own providing and bear a fixed rate of interest.
  • That only the purest provisions procurable should be supplied to members.
  • That full weight and measure should be given.
  • That market prices should be charged and no credit given nor asked.
  • That profits should be divided pro rata upon the amount of purchases made by each member.
  • That the principle of “one member one vote” should obtain in government and the equality of the sexes in membership.
  • That the management should be in the hands of the officers and committee elected periodically.
  • That a definite percentage of profits should be allotted to education.
  • That frequent statements and balance sheets should be presented to members.

As they have evolved, they have become integral to each other. In 1937, the seven principles were officially created as the Rochdale Principles:

  1. Open membership
  2. Democratic control
  3. Distribution of the surplus to the members in proportion to their transactions.
  4. Limited interest on capital
  5. Political and religious neutrality
  6. Cash trading
  7. Promotion of education

The seven principles that most of us know came into being in the late 1960′s and reflected the new ethos of that era. They continued to evolve to the Identity Statement of 1995. Today, there is a strong effort to add an 8th Principle called “Ecological Perspective”.

As the Background Paper continues:

“The principles that form the heart of co-operatives are not independent of each other. They are subtly linked; when one is ignored, all are diminished. Co-operatives should not be judged exclusively on the basis of any one principle; rather, they should be evaluated on how well they adhere to the principles as an entirety.”

Is it possible to have democratic participation without education, information? The first three principles “voluntary and open membership”,  “democratic member control” and “member economic participation” are collectively known as The User Principles by the US Department of Agriculture. They detail the internal dynamics of the co-op while the last four deal with the operation and external relationships

Over the next few weeks, I will consider the seven principles of the Identity Statement as well as three principles of Mondragon that I think should be part of the identity statement (or at least part of our identity as worker co-operatives).  Mondragon’s principles focus on the elevation of the worker over capital and social cohesion of the co-operative.

Here is a great video on the principles of co-operatives:

Next Week: 1st Principle: Voluntary and Open Membership

Source and Reading Recomendation:

*Fairbarin, Brett  The Meaning of Rochdale: The Rochdale Pioneers and the Co-operative Principles, Centre for the Study of Co-operation, University of Saskatchewan, Saskatoon.

November 16, 2009

#11 Caring for Others

Filed under: Human Relations,Identity Statement Series — Tags: , , — John McNamara @ 12:55 pm

This is the last of the ethical values and the last part of the identity statement that was added to the set of familiar “Rochdale Principles” in 1995. As such, it wraps up the concepts that have gone before. It acts as a bookend with the first value of self-help.

We can’t help others if we can’t help ourselves. We can’t be only about ourselves. In thinking about this entry, I couldn’t help but remember the scene from Hair in which a women confronts the father of her child who is otherwise a hip cat trying to change the world:

Cooperatives are a social movement, an economic movement, and an educational movement. As a result, caring for others takes us beyond the social responsibility so easily co-opted by caring capitalist and benevolent dictators. We have to be about caring for each other. This value of caring likely attracted the likes of Don José Arizmendiaretta and Moses Coady and other Christians in Italy and throughout the co-operative world. This sense of community service and support finds itself in the religious movements of  the Abrahamic religions. For more on this topic, check out Andrew McLeod’s book, Holy Coooperation!

For those of us in the secular world, caring for others is just as essential a value as it is for the religiously inclined. It is a human value, after all. The human species can survive on its own, but it flourishes as a community. As such, the need to cooperate is necessary to our survival.

Tom Webb presented the value of Caring for others in this manner:

“Caring implies not just charity but active concern about how to act and create structures so as to enable others to realize their potential and live full and satisfying lives.”

Worker Co-ops have a special mission under this value. We need to create structures in our co-operatives that develop us as human beings and even world citizens. We need to help our members break away from the bad habits of other workplaces that only value the labor of the worker. The “move them up or move them out” aspect of Human Resources (whose very name suggests that the human is simply another asset to be managed) must be replaced with Human Development.

Many workers (at least in the larger worker coops) come to co-operatives without a lot of knowledge about co-ops. They may be seeking a good job in the industry more than a commitment to co-op development. I’ve heard one co-op organizer describe them as post-traumatic stress syndrome victims. A lot of workers have learned the wrong lessons from other workplaces and they need to see that the workplace can be healthy for human  beings. Caring for others means that our policies and work places place the worker’s well being (physical and emotional) at the center of their purpose. This means creating strong resolution process that go beyond simply ending conflict, but transforming the individuals to make them stronger people.

Loyal and happy workers lead to loyal and happy customers. By creating a supportive and nurturing community inside our cooperatives, we create a strong and vibrant business model. Caring for others creates the basis for the co-operative difference in a worker co-operative. Creating strong relationships and human development among our work force allows us to develop life-long relationships with our customers.

Of course, not everyone is able or willing to participate in this sort of environment. It may be that the wrong lessons of how humans treat each other have become so ingrained that the individual can’t overcome them and prosper in a co-operative community. It may be that some people see the co-operative community as “easy to get over” and manipulate others for their personal ends. The value of caring should not imply that co-operators are emotional doormats. The value of caring for others should empower ourselves to step up and confront members who don’t act co-operatively. Mostly, these issues will be resolved through education and development programs. In some cases, however, the only way for the co-op to exhibit “caring for others” will result in asking unco-operative members to leave the community. We can’t pretend that co-operatives can fix everyone—especially in the United States where the co-operative option is such a minor part of the overall economy and workplaces. In this extreme case, caring for others means protecting for the larger community. Of course, even in this sad situation, the people involved should be treated with dignity and respect.

Caring for Others gives guidance to co-operatives on how to create thriving, human based businesses. This ethical value moves co-operatives beyond the concept of social responsibility. By expressing caring for others, co-operatives create a healthy workplace that helps people realize their full potential as human beings.

Next: We start on the familiar principles and will make a few detours along the way to learn about the Mondragon principles as well.

November 9, 2009

#10 Social Responsibility

Filed under: Governance,Human Relations,Identity Statement Series — Tags: , , — John McNamara @ 8:00 am

In my office, I have the Identity Statement posted where I can easily refer to it (along with Union Cab’s vision, mission and core values). I have a version that is based on the background paper, but includes other commentary.

This version describes the ethical value of Social Responsibility as follows:

“Social Responsibility—the interdependence of people and recognition of their dignity leads to a realization that individual and group action has profound effects on individuals, groups and their relationships.”

Clearly, this ethic ties into the values of solidarity, mutual self-help, and self-responsibility. It is, however, an ethic that has been co-opted by the corporations under the ideal of “corporate social responsibility” or CSR.

Of course, a lot of corporations do engage in a more humanized version of capitalism and that comes from a true belief that capitalism and an ethos of humanitarianism may be compatible. This group still pales in comparison to the clout and numbers of the neo-liberals and neo-cons; in fact, they are teaching those groups how to put a smiley face on their corporate actions. In some cases, they are also teaching the leaders of co-operatives without decent co-operative management theory the wrong ideas about management. In the corporate world, CSR is often about charity and marketing. Support a local little league team, clean up a highway, and sponsor the Komen Race for the Cure will offset the exploitation of developing countries environment and swear shop labor. Getting accreditation though SA8000 puts lipstick on the corporation that might also lobby the host governments to codify exploitation through ridiculous minimum wage laws ($2/day).

In the co-op world, social responsibility shouldn’t be about marketing. It should be about a genuine concern for the community and building a better world. This means to work to avoid or minimize the effects of exploitation. That includes exploitation of the earth and exploitation of labor. In the consumer co-ops, working with local producers and vendors, concentrating on fair trade (and fair production as fair trade is being co-opted). It means reducing waste, encouraging environmentalism, supporting worker rights.

In worker co-ops, social responsibility means the above as well, but it also means working to overcome the tendency to focus on the internal process of the co-operative. Worker co-operatives need to reach out to the stakeholders of their organization who aren’t members: consumers, suppliers, and the community as a whole. But how does the Worker Co-op Social Responsibility differentiate itself from CSR?

If WCSR means sponsoring benefits, cleaning up highways, and supporting little league teams, then worker co-ops aren’t really doing much different from their corporate counter-parts and failing to create the co-operative difference. Without a co-operative difference, the co-operative advantage fails.

How should we engage the public in our co-ops? For the retail outlets, consumer education offers a lot of value, but we need to go further. We need to be willing to be a voice in our community (especially around our specialty). We need to accept a role as community leaders because we are just that. By choosing the model of co-operator for our business (a model that says that workers don’t need bosses, but can manage their own affairs), we have chosen a model that promotes the worker as a community leader. Transportation co-ops should be active in promoting sustainable transportation systems even if it means promoting options other than what the co-op offers. Grocery Co-ops in promoting food security and sustainable living. Sex worker co-ops in promoting healthy choices affirming our humanity without the dogma of morality. All of us should be supporting the dignity of workers and the rights of workers to choose their representation (even if that means actively supporting and encouraging the unionization of the consumer and producer co-ops).

For the most part, most of the worker co-operatives that I have come into contact with do a good job on social responsibility. Although I have met some who don’t really support worker rights (they tend to be co-ops in a high-tech field or who see themselves as “entrepreneurs” rather than identifying as workers. Of course, a key part of WCSR is joining your federation of worker co-operatives. There really isn’t a good excuse not to do so. We need to start measuring it, however. The corporate world is measuring their success through SA8000, the WorldBlu Democratic Workplace, and other means.

The Co-operative, in the UK, has an extensive system of measuring their values. I am part of a research group through St. Mary’s University that is creating a similar tool for worker co-operatives. We want to create an index for worker co-ops that will create a score for them along the lines of the Identity Statement.

Ultimately, social responsibility is about more that patting ourselves on the back, but in accepting our role as community leaders, creating the change in our communities needed to develop a more sustainable and just society.

Next Week: Caring for Others

November 2, 2009

#9 Openness

Filed under: Identity Statement Series — Tags: , , — John McNamara @ 8:30 am

What does openness mean?

At one level, it is an ethic that relates directly to the first principle of co-operatives (voluntary and open membership).  At another, it suggests a way of being and communicating with each other. Perhaps deeper still, openness suggests transparency in all of our actions within the co-operative.

I think that all of these senses should be part of the co-operative meaning of openness. If members engage in hidden agendas they aren’t being very open. If members engage in hidden vested interests, they aren’t being very open. Finally, and this might be a very tender point, if people engage in hidden relationships (real or imagined), they aren’t being very open.

How far does this go? Is it an obligation of two workers who start a sexual relationship to make that open to their co-workers? Should that be anyone’s business? What about a less complicated friendship?

This isn’t just about individual rights to privacy. In a worker co-op, the relationships can get very complicated. If the friendship or relationship goes bad, it can create a social rift in the organization and reduce or even destroy the social cohesion necessary for an effective co-operative.

A lot of the conflicts around openness can be resolved through the creation of checks and balances on power, on limiting the ability of any one person to be the “decider” on another person’s advancement or discipline, and by creating a culture of equality and equity that would make hidden relationships meaningless. However, it is an issue that needs to be addressed.

I raise this point mainly because of an interesting article in a local business journal, In Business. In an essay, (I forget the author’s name, but will update when I get the chance), an experienced HR consultant suggests that companies should avoid creating any more “protected classes.” Madison, he mentions, has 20 protected characteristics (the standard Federal and State protections against discrimination as well as those unique to Madison such as status as a student, gender identity, criminal record, etc). He suggested that businesses have enough “protected” employees and don’t need to create more through conflict avoidance and favoritism. Creating an open work place means, in part, creating a system in which “what you know” and “how you do it” outweigh “who you drink with.”

Of course, openness isn’t just about personal relationships. It is also about communication between the leaders and the rank-and-file. If the members don’t know a proposal is coming up for a decision until it is too late, that isn’t a very open process and hurts the democratic nature of the co-operative. If the rumor mill is the main source of communication in the co-operative, that isn’t a very open process either.

We get told that we live in an open society, but the level of state secrets is high. We have 24 hour news that doesn’t seem to tell us anything that is really going on. Conspiracy theories get held with the same regard as the rest of the news while the actual activities of corporate America get ignored or lost in the hubbub over ACORN, the latest star scandal, or the weather while the people who have actually engaged in crimes against the nation and corporations who use their money to write the laws get ignored.

We have a lot of culture to work against in creating truly open environments in our co-ops. Part of the debate over privacy is likely because we have so little of it in the world outside our co-ops. Too many people seem to want to use information about ourselves in order to manipulate or attack us. How do we create an ethos of openness inside the co-operative without destroying people’s right to privacy and protect their privacy from those outside the co-operative?

Each co-op will be different, but clearly focusing on the job performance and creating clear rules on behavior will provide a foundation. Flattening that hierarchy so that no one person gets to make decisions about another person should provide a lot. We need to create good communication outlets that provide a safe means for people to discuss issues facing the co-op and present ideas (even if they aren’t popular). Mostly, as members, as individuals, we need to live this value. We need to be willing to stand up in the break room and tell someone that they shouldn’t be gossiping. We need to be willing to tell our friends that they are wrong. We need to defend another member’s right to express their opinion even when disagreeing with it.

As much as I’ve tried no to make this about personal relationships, that tends to be where a lot of worker co-ops hit the skids (and that shouldn’t be surprising as these of people based organizations), but one co-op shows just how powerful and economical openness can be.

Just Coffee decided that they weren’t going to worry about certification through TransFair anymore. The Fairtrade Coffee Roaster is a worker cooperative in Madison, WI.  Here is what they have to say about financial openness:

“A fair economy should be based on total transparency. Way too often when activists and consumers try to find out how companies deal with suppliers and customers, they are hit with tired rhetoric about “trade secrecy” and “sensitive information”.

“We at JC feel like any information about our books and contracts should be out there for our customers and allies to see. That is why you can find our contracts online and why we will eventually have our annual financials available on our site. If you have questions that are not available through our site, please e-mail or call us and we’ll do our best to get you the information that you are seeking.”

They eventually want to create a system on their website that will allow consumers to enter the bar code from their bag of coffee and find out the entire history of those beans (who grew them, how much the seed cost, how much they sold for (and to who), the cost of roasting, shipping, etc). When we toured their last summer, they mentioned how some see their action as a competitive disadvantage, but they see it as an advantage. Let Maxwell House meet our contract, they challenged. The farmers will still win.

So there we have it. Openness needs to be a critical part of our co-operative structure. It is an ethical value that influences our social cohesion, our democracy, and even our financial relationships. Openness requires a lot of trust within the organization. That should make it a perfect fit for a business model based on mutual self-help, self-responsibility, equality, equity, democracy, solidarity.

Next Week: Caring for Others

October 26, 2009

#8 Honesty-The Lonely Word

Filed under: Human Relations,Identity Statement Series — Tags: — John McNamara @ 11:11 am

The first time that I met Ian MacPherson, one of the key drafters of the Identity Statement, I mentioned how my co-operative, Union Cab, created our core values the same year that the Identity Statement came into existence. Even though we were completely ignorant of the larger movement, we chose many of the same values including that of openness and honesty.

Ian responded that I must be a trouble-maker. If you’ve met him, you know that he has a wicked sense of humor and I think that he uses it to test people that he meets. He went on to tell me that the group discussing the Identity Statement took an entire day (8-10 hours) on the concept of honesty in a co-operative. It dominated the discussion of the “ethical values of co-operatives” which include honesty, openness, social responsibility and caring for others.

Honesty is a lonely word. It creates a series of difficulties for us as humans since we are such social creatures. The concept of honesty and its confusion in society is the primary reason that the neo-liberal economic model fails. For Milton Friedman’s policies to work, every merchant and corporation must be entirely honest. Otherwise, the consumer cannot make a true choice. Capitalism, however, doesn’t encourage honesty. Quite the opposite. So it was, in the days of “pure capitalism” circa 1810 or so, that merchants mixed chalk in with the flour, rocks in with the coal and even today there are the jokes of the butcher with their thumb on the scale. This led to the Rochdale Pioneers championing honest weights and measurement and unadulterated food.

In worker coops, honesty is vital to the organization. We have to be frank with each other. This is true in our dealings with management of the co-operative and in dealings with each other as humans. This can be difficult, especially in co-ops that have traditional hierarchies in their management, however we need to be able to honestly appraise the business decisions and avoid cults-of-personality

The cults of personality in a worker co-op might be the biggest danger. We aspire to a democratic workplace, but can allow personalities to take over. We create “ladders of inference” about people and this precludes our judgement about their proposals and ideas. On the other hand, leaders may act dishonestly to manipulate people in order to maintain a position of authority. The latter situation, in my opinion, is the more dangerous and it can happen anywhere. Even flattened structures run the risk–maybe they are even more inclined to allow it to occur. The Tyranny of Structurelessness is an excellent essay from the ’70′s that explores how in the vacuum of structure, a secret structure takes hold and creates a power dynamic that may be difficult, if not impossible, to expose or challenge.

Of course, I don’t mean to suggest that it is a good practice to tell your manager that their idea is “stupid” even if you add the phrase “just sayin’” to it. We still need to be aware of people’s emotions. However, we should set up structures that encourage honesty at all levels of our organization–to me this means giving people freedom to speak their minds and reducing the ability of any one person to affect the livilihood of another.

It also means creating a strong code of ethics. Sometimes, this might meet resistance and I think it comes from people feeling affronted that they need a code of ethics. I think that we tend to have very high opinions of ourselves, as worker co-operators. As a result, the suggestion that we create a code, that we are honest about relationships that might affect our jobs or the jobs of people under our control, or that we codify in any way our values gets received as a suggestion that we aren’t being honest in the first place.

We have to keep in mind that not everyone comes to co-operation with the identity statement burned into their soul. Many are fleeing the failed economics of capitalism. They are in a state of post-traumatic stress from being a wage slave. Sadly, they may bring the negatives of the larger economic system with them. For example, some otherwise very honest people might not think twice about stealing (or “liberating” as I have heard it called) from the corporation (they get paid so little and the CEO spends millions on luxuries), but in a co-op that assymetrical tactic of labor-management class war can’t be condoned. We can’t assume that honesty is inherent in ourselves or the members. It needs to be supported by our structure.

In co-operation, there is an economic advantage to being honest. In worker co-operatives, it is imperative as a means of building trust and social cohesion among the membership. Worker co-operators depend upon each other as a community to meet our socio-economic needs. Without the trust of honest communication and dealings, that bond will breakdown and lead to the path of internecine strife and the failure of the co-operative.

Next Week: Openness

October 19, 2009

#7 Solidarity

Filed under: Governance,Identity Statement Series,Uncategorized — Tags: , , , — John McNamara @ 10:20 am

Solidarity, to me one of the most beautiful words in the English language, is not simply a cooperative value. It is a human value. To have a discussion about this value involves talking about so much more than the cooperative world, or of purchasing at the cooperative store. It involves talking about the key quality that creates societies and communities.

Of course, the first thing that must come to mind, upon hearing the word Solidarity, is the great labor anthem of the 19th Century that gave rise to the Industrial Workers of the World, the Congress of Industrial Organizations, and Solidarnosc. Solidarity is a key part of other movements, specifically, the labor movement. The polish workers of Gdansk chose Solidarity to name their union because it is the hallmark of the labor movement from the days of the Knights of Labor to the democratic resistance in fascist Europe to the battles of the anti-imperialist movements of Latin America, the Middle East, and Africa. It is about loyalty and the United Front.

Solidarity is a human value. It is what has allowed us to survive as a species. Sadly, upon achieving survival, we created economic systems that discourage solidarity and actively attack it through greed and avarice. A wonderful series called Ishmael and My Ishmael by Daniel Quinn discusses some of these concepts in human philosophical development. In her work, The Shock Doctrine, Naomi Klein discusses how the fascists of South America (led by the Chicago Boys and Nobel Laureates Milton Friedman and Henry Kissinger) specifically attacked solidarity as a means to break the resistance to their new economy. Solidarity is the anti-thesis of ne0-liberals. It runs absolutely counter to the anti-value of self-interest expressed by Adam Smith, Milton Friedman and, to a lesser extent, Jeffrey Sachs.

Solidarity is a major part of the human experience, so nailing down its meaning can be quite difficult.

One of my favorite songs from my youth, Solidarity by Black Uhuru, explores this value:

“Everybody wants the same thing don’t they,
Everybody wants a happy end
They wanna to see the game on Saturday,
They wanna be somebody’s friend.
Everybody wants to work for a living
Everybody wants their children warm
Everybody wants to be forgiven
They want shelter from the storm.
Look at me, I aint your enemy
We walk on common ground
We don’t need to fight each other
What we need, what we need
Solidarity.”

Solidarity is friendship within the community, within the society. A mentor of mine, Tom Webb, program manager for the Masters of Management: Co-operatives and Credit Unions, recently made this comment on the nature of friendship: “Friends are people who can be relied upon. They care about you and you care about them. Friends forgive each other when they ‘mess up’ or lapse into human folly. You know each other’s true worth. You know where they stand and as time progresses you even can imagine with some accuracy what they might say in the face of some event. It is with friends that some of the best things in life are done. If you are truly fortunate in life you get to work with friends.”

Solidarity is about something bigger than the needs of an individual. It is about experiencing the rites of friendship not only with the individuals that we determine to be our “friends” but also with our fellow travelers or in the case of the identity statement, the group of people who, along with us, voluntarily choose to associate to support our common culture, aspirations, and needs.

The Background Paper on the identity statement talks about solidarity as follows:

“The last operational value is “solidarity”. This value has a long and hallowed history within the international movement. within co-operatives, this value ensures that co-operative action is not just a disguised form of limited self-interest. A co-operative s more than an association of members; it is also a collectivity. Members have the responsibility to ensure that all members are treated as fairly as possible.; that the general interest is always kept in mind; that there is a consistent effort to deal fairly with employees (be they members or not), as well as with no-members associated with the co-operative.

Solidarity also means that the co-operative has a responsibility for the collective interest of its members. In particular, to some extent, it represents financial and social assets belonging to the group; assets that are the result of joint energies and participation. In that sense, the solidarity value draws attention to the fact that the co-operatives are more than just associations of individuals; they are affirmations of collective strength and mutual responsibility.

Further, “solidarity” means that co-operates and co-operatives stand together. They aspires to the creation of a united co-operative movement, locally, nationally, regionally and internationally. They co-operative in every practical way to provide members with the best quality goods and services at the lowest prices. They work together to present a common face to the public an too governments. they accept that there is a commonality among all co-operatives regardless of their diverse purposes and their difference contexts.

Finally, it d to be emphasized that the solidarity is the very cause and consequence of self-help and mutual help, two of the fundamental concepts at the heart of co-operative philosophy. It is this philosophy which distinguishes co-operatives from other forms of economic organization. In some countries, the concepts of self-help and mutual help have been ignored by governments, and co-operatives have been organized through government initiative, sponsorship and financial assistance; the unfortunate result is movements controlled and managed by governments. It is essential, therefore , the at  the solidarity of co-operators and co-operatives, based on self-help and mutual responsibility, be understood and respected, particularly in developing countries, but in industrially-developed countries as well. “

It is hard to add to the the background paper. Certainly, Solidarity does not mean turning a blind eye to the actions of friends or allies. It does mean keeping the discussion of those actions inside the cooperative community. For a worker co-op, Solidarity means that we honor each other (and express solidarity) by focusing our discussions and arguments in pursuit of the greater good for the co-operative. This means making our agendas and personal interests public to those in our co-ops. It means examining our own actions and positions to determine if we would still support it if we were an uninterested outsider. It means, to some extent, publicly supporting the co-operative–not complaining about our issues when elsewhere (coffee shops, taverns, and the like). It means accepting the decision of the group (blocking consensus only in extreme situations).

Ultimately, solidarity is the recognition that a community requires more than one person’s viewpoint to be heard and agreed upon. It requires more than one bloc or segment. It is a mosaic or a Mandela of people’s cultural, social, political and personal histories. When we join a co-operative, we are choosing a specific team. We are choosing to be part of something bigger than ourselves. With that membership and choice comes the responsibility of making ourselves subservient to the whole. This might run counter to some people’s ideas of individuality–that is fine. For them, the majority of the economic world has been built around the promotion of the individual and they should feel free to explore it. For those of us who believe that our economic world should express our humanity, solidarity is a value that shines bright and baths all of us in its glorious light.

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