The Workers' Paradise

March 1, 2010

#25: The Internationalist Nature of Co-operatives

Filed under: Identity Statement Series,Movement — Tags: , , , , — John McNamara @ 2:00 pm

Over the last 6 months,  I have been working my way through the Statement on the Co-operative Identity that the International Co-operative Alliance adopted at the 1995 meeting which also commemorated its first century of service. This statement solidified the Rochdale Principles as well as adding a list of values and ethics. In part, this was done to assure countries emerging into the world after decades of the Cold War, that co-operatives were not co-opted. That co-operatives that they experienced behind the Iron Curtain or as part of an attempt to shore up a rulers power in an emerging nation were not a true representative of the co-operative model. The Identity Statement also was a challenge to the western co-operatives as well. It was, and remains, a challenge to not rest of the laurels of the past, but to constantly struggle to improve our co-operatives and credit unions. The ICA created a true touchstone by which every co-operative and credit union in the world could be measured. That 1995 meeting may be the most significant moment in the movement’s 167 year history.

Dr. Ian MacPherson made these salient points in his background paper to the Identity Statement:

“It was a task much more difficult than the delegates of a hundred years ago knew. Overcoming the differences created by national perspectives and histories, coping with the ideological cleavages that swept the world in the Twentieth Century, recognising the biases each of us possesses, understanding empathetically the nature of co-operative experiences in non-European societies has not been easily accomplished. In the important book she prepared for Congress, Rita Rhodes has explained the deep tensions that made progress in creating a strong international Movement for most of the Twentieth Century difficult to achieve. It is a story worth pondering as we seek to understand how we can forge even stronger links among co-operative organisations spread around the world.”

In my days college days, we often challenged ourselves to “think globally, act locally”. We needed to recognize that the struggle of people is an international struggle but that we also aren’t saviors for those in other countries. To fix the world, we need to fix our local communities and share our story with the world. The Identity Statement embodies that ethos. As MacPherson notes, the co-operative movement exists as an international movement. The creation of the International Co-operative Alliance in 1895 was to help co-operatives world-wide and to share their stories. When workers in the Argentine factories succeed as running their own plants, they create a better environment for cab drivers in Madison, WI (and vice versa) by showing that workers can manage themselves. When Equal Exchange workers broke the Reagan Quarantine on Nicaragua with Café Nica. they helped farmer/workers the world over know that cold war politics could be defeated by workers and farmers uniting in a common cause.

The Identity Statement is our touchstone as a co-operative and credit union. It is an international document that makes our individual membership in our co-operatives and credit unions an international act of solidarity. Our membership in our organizations and our support for the ICA and the Identity Statement force us to “think globally”. By striving within our co-operatives to bring the Identity Statement to life, to “operationalize” the statement, we act locally. One of my projects over the last couple of years has been assisting in the development of something called the “Co-op Index.” It is a diagnostic tool to measure an individual worker co-operative against the Identity Statement (and the Mondragon principles). Ultimately, it will create a maturity index for worker co-operatives world-wide but in the short run, it will provide worker co-operatives with the information and tools that they need to become stronger co-operatives and create “best practices” for worker co-operatives in particular. It will be a means of improving our workplaces and the world at the same time.

The Identity Statement cannot just hang on the wall. We need to teach it in our co-operatives. We need to connect our actions to it. At my co-operative, we attach a “policy note” to each measure before the board that connects the proposed action to the co-operative’s vision, mission, core values and the Co-op Identity. It is a useful exercise that I think all co-operatives should adopt. The basic premise is that if we cannot explain why the proposal works from the vantage point of the Co-op Identity, then maybe it isn’t a proposal worth adopting.

On a final note, the Identity Statement is not a final document. It is, like the Rochdale Principles that it replaced, a living document. Each generation since 1843 has re-visited the co-operative identity and made adjustments appropriate to their time and place. In 1995, a strong movement existed (but eventually lost) to include a principle of co-operative management that would instruct co-operatives to manage in a different way and to create co-operative management schools. That effort didn’t fail, but continued and my imminent graduation as part of the 4th Cohort in St. Mary’s MMCCU program shows the power of that principle. It may be that the next incarnation of the statement will include management as stronger educational efforts on co-operative management have sprung up throughout the US and Canada to join existing programs at the UK’s Open University, Cooperative College and Spain’s Mondragon Univeristy. (These include the recent creation of an undergraduate degree at the University of Toronto, the CooperationWorks! Program, the Southern New Hampshire University program and the USFWC’s Peer Assistant Network).**   In addition to educating ourselves to manage from a co-operative framework, there is also a growing effort to expand the ‘concern for community” principle by adding a new principle specific to the protection of the environment.

The Identity Statement will celebrate its 15th anniversary this year. It has changed the dynamics of co-operation; it has given us an international touchstone that tells us that a co-operative in Sapporo, Buenos Aires, Winnipeg, Manchester, Madison, Bilbao, Bologna, Gdansk, Tel Aviv, Kiev, Dar es Salaam and Sydney all act under the same set of principles and values. The co-operative label is a label of trust, honor, and dignity for working men and women.

Next Week: This ends the series on the Identity Statement. I hope that people enjoyed it. I appreciated the comments on this site (and on Facebook where it mirrors). Feel free, as always, to use or redistibute my posts. I intend to keep the Monday entries going. The next series will be on a document that is just as important but little known: CICOPA’s World Declaration on Worker Co-operatives. Thanks for reading.

***Sadly, I have heard a rumor that there is some sectarian attacks on the Canadian programs coming from south of the border. The attack is jingoistic in nature (that the Canadian programs aren’t “american” and therefore not appropriate for US co-operatives. I haven’t had anybody say that to me directly (most likely because I would correct their opinion). It is a shame. Each program offers a means to manage our co-operatives according to the principles. I personally, would love to see the day when a co-operative undergraduate degree and the MMCCU are as ubiquitous in our universities and colleges as the business degree and MBA. We shouldn’t be fighting each other over our turfs, but co-operating to expand the educational opportunities for co-operative managers, directors and members. I chose MMCCU because it fit my life at this moment. In a different scenario, I might have elected for Mondragon, the UK, or SHNU. Had any of these programs been available to me when I was in college (1982), the path that my life took would be amazingly similar and different at the same time! It is my hope that in my lifetime learning of a young co-ed can earning their undergraduate degree in co-operative administration while working at a co-operative becomes a normal expectation and doesn’t require moving to specific part of the world.

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.

October 7, 2009

Capitalism: A Review

Filed under: Society — Tags: , , , , , , — John McNamara @ 8:12 pm

****DISCLAIMER****

In the spirit of openness, please consider the following as you read this post. My name appears in Capitalism: A Love Story’s credits under the heading “Special Thanks”. I provided significant information to DogEatDog Productions regarding worker co-operatives, Mondragon, and the St. Mary’s University program, Masters of Management: Co-operative and Credit Union. I also assisted the production company in coordinating interviews and filming of my co-operative, Union Cab of Madison, which ultimately did not make the theatrical release (although I hope that it will be included in the dvd release).I attended a special screening provided at no cost to the membership of Isthmus Engineering and Union Cab on October 1, 2009.

The following comments are my own and should be read in light of the above disclaimer.

*******

For a true “review” of capitalism, one should consult what remains the definitive work on the subject (regardless of your political views). That is the work Das Kapital by Karl Marx. In his expansive three volume treatise, one can find such poignant pearls as this comment from volume 1:

“Owners of capital will stimulate working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks which will have to be nationalized and State will have to take the road which will eventually lead to communism.”**

Capitalism: A Love Story provides the highest public profile for worker cooperatives in the United States that they have ever received. While it falls far short of the economic analysis of Marx, Moore correctly taps into the basic lack of fairness within the economic system and puts human faces on the statistical failure experienced during the last year.

The film is a great example of Michael Moore’s sense of humor and fair play. As with Sicko, Moore takes on the complexity of Capitalism and brings it down to earth with personal accounts of its effects, the disclosure that even the people who created derivatives can’t define them, and offers a real-life alternative to running a market economy based on the value democracy instead of greed.

One could probably write volumes on what Moore left out. As mentioned, Marx already has. However, in about 120 minutes, C:aLS tries to remove the social support that Capitalism receives from those that don’t benefit from it without making us feel too foolish for being suckers. Moore also correctly avoids the conspiracy theories of who runs the government by focusing on what Wall Street and our elected officials did in the light of day in front of the C-SPAN cameras.

For a large part, the movie preaches to the converted and for those of you who already identify as being “on the left” the movie is a fun, affirming event rather than the call for action with which it seems to end. For others, I am not sure that the film will resonate that much and may also be affirming to those who don’t really trust Moore or like his style. It was this latter group that seemed to be Moore’s primary focus and I think that may have hurt the overall ability of the film to get a coherent message out.

As with many reviewers, including The Economist, I was a bit shocked that Moore’s choice for economic advice was Wallace Shawn especially when I know that he spoke with people that had much more veritas in the area of economics, but the ones that I know about aren’t from the United States. Still, Moore has never shied away from foreign ideas and, one could argue, that Capitalism was an import for which our founding fathers saw as a threat to the republic. I think that the choice of Shawn suggests that the focus of the movie wasn’t to create a viable alternative as much details just how much capitalism sucks.

My biggest critique of C:aLS was the inclusion of the lengthy discussion about theology and WWJD. One that Moore continued on his blog the Sunday of the first weekend after the movie opened. This segment, to me, exposed a trait among the American Left that is almost as obnoxious as their unwillingness to understand market economics. The Republican Party may have risen to power on the basis of Gods, Gays, and Guns as Wisconsin lawmaker Mark Pocan has proclaimed; however, those social issues have absolutely nothing to do with capitalism. Too often, however, the Left assumes that religious people are reactionary because they elect republicans. However, the republicans have never run on deregulating the economy, closing plants and shipping jobs overseas–they win by getting social conservatives to the polls to vote against gay marriage, abortion, and immigration.

Attacking capitalism and what happened on Wall Street by pointing out the teachings of Jesus seems a meaningless gesture and assumes a lot about people who go to Church. In my travels, I find that the christian movement types tend to see Wall Street as much a den of iniquity as Las Vegas–with the same rules. They already see the sin of greed at work. In the more extreme cases, the conspiratorialists even see the combination of non-christian forces at work controlling the economy and the government. They already agree that Jesus would disapprove of the type of capitalism (cheating capitalism) at play with the Banks. Using this imagery might have the unintended consequences of reinforcing beliefs about the role that non-Christians play in the economy.

I think that this time would have been better spent explaining why co-operatives are a better market economy. He could have made it a nice transition by asking the question, WWJD and then focusing on to incredible works to come out of the energy of Jesuit Priests: Moses Coady with Co-op Atlantic and Don José María Arrizmendiarietta with Mondragon. Instead of the discussion with the priest and bishop, he could have talked to Andrew McCleod a co-op developer and author of the book, Holy Co-operation which details how the teachings of the bible (Old and New testaments) promote the idea of a co-operative economy (had I known this was part of the focus, I would have let the production company know).

I argue this not just to see my co-op in the film, but to make the case that we can have a market economy based on democracy. Moore gives us the false choice between and economic model and a philosophical value (capitalism or democracy). This is the other short-coming of the film–it doesn’t seem to know what it wants or to understand the subject. We are taught that capitalism replaced feudalism. To me, capitalism did not replace feudalism it simply replaced the human at the top with currency. Instead of owing service to the lord for a piece of land and the ability to work, people now serve the dollar. As the barter/trade/service system became replaced by a market economy, we kept the basic anti-democratic structure of feudalist practice known as “The Golden Rule” (those who have the gold, make the rules). Capitalism, keep in mind, came of age when slavery was a constitutional right in the United States of America and the right of kings was only beginning to be successfully challenged. As our communities became more democratic, we started to resist the excesses of capitalism to make it fit to our collective world view. This led to government regulation and the constant push and pull between the masses and the wealthy elite.

So, Moore is correct. Capitalism is not something that we can fix. It isn’t evil, though, it is just an economic system using the market place for a society that no longer easily exists with the majority view of the governed populace. The idea of democratic capitalism is an oxymoron. Co-operation on the other hand, is a democratic method of market economy that has stood the test of time. I wish that Mondragon has allowed Moore to film (the rumor is that they were worried about the response by General Motors, one of the major customers). I would love to see Moore follow this movie with one about Co-operation. He could tour the co-operative societies and movements of the United Kingdom, Canada (Maritimes, BC), Spain, Italy, Argentina, Japan, and countless other countries. This is a market economy that began in earnest in 1844 with 24 pioneers in Rochdale, England and now numbers over 800 million people world-wide. Even in the United States, the co-operative movement provide wages of around 75 billion dollars a year, 2,143,256 jobs and revenue of 652 billion dollars (source: UW Center for Co-operatives)

In summary, go see the film. It is fun and will be worth your time and money (especially if you like hiss-the-villain movies). The version of The Internationale at the end is worth the price of admission. Moore does make us realize how basically unfair capitalism has become especially when the top 1% make the rules for the rest of the 99% to play by (and how willingly they will destroy each other proving that the is no honor among thieves).  In interviews, Moore uses the analogy of a pie served to ten children. If one child takes 9 of the pieces for himself, the other kids will immediately know that act is unfair, yet we accept it everyday in our economy. You will cheer for Marcy Kaptur*** and wish that we had more elected representatives like her. You will leave, I hope, feeling inspired to change the world.

If you also leave the theater completely unsure of how to change the world, I would suggest going down to join your local consumer co-operative, moving all of your banking to the credit union that serves your area, switching your insurance to a mutual insurance company such as Nationwide and, if you feel really into changing the world, discussing with co-workers the idea of collectively going into business as a worker co-op and putting your boss out of work.

As Ghandi and others have said: Be the change you want to see.

**I want to thank Rob Rowlands (University of Birmingham, UK) who presented this quote as part of his paper on a Mutual Neighborhood. Please watch Breathing Lessons for a future post on that intriguing subject.

***Having grown up in Toledo, OH, the movie made me feel proud of that my history (not only because of Kaptur, but the Cleveland: We Not Detroit video as well).

July 24, 2009

Wisconsin Looks Toward Spain

Filed under: Movement — Tags: , , — John McNamara @ 11:05 am

Okay, that is enough of the summer re-runs for now. I will probably post other old posts in the future as they seem relevant or just to build up this site’s history and archive. For now, let’s get back to the present. . .

Recently, a group announced efforts in Iowa County, Wisconsin to create a “Mondragon Style” Co-op to distribute food through out the Midwest. While any new business venture in the current economic climate should bring applause to the area’s residents, this one is unique because they are using one of the most successful worker co-operatives as their model. Mondragon is a large corporation consisting of factories, research facilities, consumer outlets, grocery stores, a k-college educational systems, a financial system and a complete health-care/social security system. It operates either as a worker-cooperative or a multi-stakeholder co-operative in which the worker stakeholders retain an equal share to the other stakeholders.
Many people consider co-operatives to be just another business. The difference between Sunkist and Tropicana is one of marketing. However, they are different. The Co-operative business model, while still based on a market economy, has key differences from their capitalist cousins. While both operate on market principles, the co-operative also operate on a set of values and principles specific to the co-operative model. The USDA refers to three of these principles as the “user principles” and they include open and voluntary membership, democratic member control and member economic participation. This is the “co-operative difference”

This difference means that the co-operative business model operates on a multi-bottom line approach. It focuses on financial sustainability over maximizing the return on investment. It seeks to benefits its users based on their usage with the principle of democratic governance at its core. In a worker co-operative, the users are the workers. They control the means or production, but still operate under the principles of co-operatives. They interact directly with their customers.
Democracy and Co-operatives
In essence, “Democracy” is the shibboleth of the co-operative movement. While others use it in a very broad sense that allows governments to act in bizarre ways, the co-operative movement has always made it their core belief. In the early days of modern co-operation, the activists saw the new world of capitalism and worked hard to present a different viewpoint. It wasn’t just providing good, wholesome food at prices workers could afford, it was really about creating a democratic society. While capitalism replaced the serf being tied to the land with the worker being tied to the machine, co-operation was about the bond between people and their community. The people who created Rochdale were also fighting for participatory workplaces and Universal Suffrage.
While the first set of “Rochdale Principles” never mentions democracy that omission was likely because democracy was such a common value among the small membership that it wasn’t needed to be expressed on paper. One-member, one-vote in the co-operative was the base belief for people who were trying to change their government to one-person, one-vote.
In the modern era, the Co-operative Identity mentions democracy thrice. Once in the definition of a co-operative; once in the values of co-operatives; and once in the principles of co-operatives. In the principles, it is explained as follows:


“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.”
The Mondragon system has other principles that go beyond the Co-op Identity. They believe that there should be “payment solidarity” among the workforce and limit the highest paid to the lowest paid to a 6:1 ratio—yes, 6:1. They also believe in the supremacy of labor and the subjugation of capital. Ultimately, though, they believe in education and the role of work should be social transformation.
If the new Iowa Co-op truly follows the path of Mondragon, the socio-economic and the political landscape of south-central Wisconsin could look very different and very improved in the coming decades. Roughly ten worker co-operatives exist in central Wisconsin today (including Dane County). It is a growing sector of the co-op movement nationally.
For those seeking social change, they should embrace worker cooperation as their economic movement. Capitalism isn’t broken. It was always intended to benefit the people who put up the most money. If you want an economic system that benefits the community, it already exists in the form of co-operatives.

October 28, 2007

The Ownership Society

Filed under: Movement — Tags: , — John McNamara @ 9:08 am

October 2, 2006

That was the buzz a few years ago from the White House. They, meaning the kleptocrats and their Wall St. friends, wanted to open up the locked box of Social Security and allow people to “invest” their social safety net into the market place. Certainly, the market can do a much better job of helping people prepare for retirement than the government (oh, excuse me: tha gubnint). So, came the pronouncement from the CEO of USA, Inc. that he would create an “ownership society” in which people had a sense of owning their destiny.
Of course, the “ownership society” already exists. It shows up in the forms of cooperative business structures as grocery stores, HMO’s, bakeries, engineering firms, home nursing, home care, cab companies and a host of other businesses. It also provides lower cost housing and, in some case, acess to automobiles. Of course, the idea of collective ownership isn’t what the “ownership society” is about. It is about paying a company a fee to manage your money and hoping that they manage it correctly. Isn’t a true ownership society about taking economic control of one’s life and not just handing money over to a private firm who charges a fee?

Here is a fun essay about the Co-operative Ownership Society.

After a false start in April, this space will continue. I have recently entered St. Mary’s University’s Masters of Management: Co-operative and Credit Union’s program. It appears to have been created to develop strong management practices for the co-op world. Prior to this course work, the only option was the tradtional M.B.A. which pulled its co-op minded (and funded) students away from their cooperatives and toward their capitalist competitors. In addition, I have become more active with the movement. Expect to hear more about both in the coming months.

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