The Workers' Paradise

May 3, 2010

CICOPA: Relations with Workers’ Organizations

Filed under: Movement,World Declaration — Tags: , , , , , — John McNamara @ 7:00 am

The final section of the World Declaration on Worker Co-operatives deals with the co-operative movement’s relations with the international labor movement. CICOPA calls upon the co-operative movement in general and worker co-operatives in particular to engage in dialogue.

The statement reads: “The co-operative movement should maintain a permanent dialogue with the trade unions, as the representative of the workers, in order to make sure that they understand the nature and essence of co-operative worker ownership as a distinctive modality of labour relations and ownership, overcoming the typical conflicts of wage-based labour, and that they support it in view of its importance and the prospects that it offers to human society.”

This post is quite timely as I was just discussing this in my May Day posting and fellow contributor, Bernard, also alluded to some other discussions. This is more important than the employer’s organizations. Workers must work together.

While I, personally, think that worker ownership is the way to go, I also recognize that it requires a lot of work that requires a serious commitment to education. Many people are quite happy working for a unionized workplace. They may not want the burden of having to manage the company in addition to doing the operations. One bike shop owner in Madison told me that his idea was to create the bike shop and convert it to a co-op. when he raised the idea with the workers, they weren’t interested. The workers liked working for him, but didn’t want to be tied down to the business—they liked having the freedom to leave when they wanted and weren’t really interested in committee meetings. The boss, in their mind, was doing a great job and created a great workplace, so why mess up a good thing.

We don’t train workers to be owners in our society. In fact, we do the opposite. We train workers to be subservient or even child-like. When companies talk of their business “being like a family” we can count on the “boss” being “dad” and the workers the “children”. As long as they are obedient and do as they are told, everything is fine. That is part of the dynamic with the aforementioned bike shop. Why would kids go out on their own when the parents are supplying everything they need and not making very many demands?

Of course, not everyone likes the child state. Many want to expand and grow. Labor-management antagonism derives from this dynamic. There comes a point, after all, when the interests of the child and those of the dad diverge. In families, everyone has a voice that is roughly equal (at least once everyone achieves the age of 18), but in economics, the voice of capital has a magnitude over that of an individual worker. Labor’s voice only matches capital when it pools the many voices into one. Labor unions provide a voice for the workers. They allow workers to focus on their jobs and act in their self-interest.

Labor unions, of course, also propagate capitalist society. Any honest capitalist will tell you that they prefer a unionized workforce. It may cost them a little up-front, but it also prevent wild cat actions, waters down demands, and even prevents revolution. Labor Unions seek a piece of the pie, they don’t want to talk about the recipe or the menu.

My preference, obviously, is for worker ownership. I fully believe that a world economy with worker co-operation as the dominant business model would be a sustainable economic system with a strong global community based on peace, justice, and equality.

It seems to me that labor unions help level the playing ground, but they don’t challenge an inequitable system (with the exception of the syndicalist union of the IWW). I support labor unions because of this, but I know that a better world is out there.

I have to recognize, however, that many workers simply don’t want to be worker-owners. I believe that attitude exists because of an education system that channels people into being either workers or bosses. An educational system that promoted co-operation over a profit-motive would create graduates who see work in a very different light. Don José María Arrizmendiarietta demonstrated this after World War II. The worker’s children in the small factory town of Arrasate (where he was sent) were not allowed to go to the school paid for by the plant bosses. Don José created a school for the children of the workers. Those children learned their letters and numbers under the co-operative teachings of the Jesuit priest. They also learned economics through the lens of Don José’s focus on a social economy in which the community economic structure would be based on education, justice, equality and equity. When the first group of students who earned their way into the University returned to their hometown and worked at the factory, they knew that they had to change the world. They knew that workers can run things if given the education. They left their jobs and retuned to Arrasate creating the ULGOR Cooperative and Mondragon was born.

The strategy laid out in the Declaration seems very reasonable. We, as worker co-operators, need to support the entire labor movement. We should support unions. However, we should also work to educate those in labor unions about worker ownership and encourage them to support us. We need to elevate their consciousness as well as our own. There are incredible partnerships to be made. We don’t need to choose between worker ownership and labor unions. As the hopeful pairing of the US Steelworkers and Mondragon might demonstrate, we can combine forces, and build the world the both groups want together.

March 30, 2010

Shoving utopianism in the closet

Filed under: Movement,Uncategorized — Tags: , , — Bernard @ 12:39 pm

At the end of last October the United Steelworkers (USW) and the Mondragon Co-operative Corporation, located in the Basque area of Spain, announced an alliance to explore joint projects in the United States. The Mondragon co-operatives are a diverse, transnational corporation with $20 billion in annual revenues and employing over 100,000 people, most of them voting members of the enterprises. And while they have extensive operations in countries like China and Mexico, they own only one small company in the US – a branch of a Spanish company that they purchased some years back.

A collaboration between a large American labor union and a successful and innovative foreign enterprise should have been headline news, but not surprisingly, given the paucity of today’s journalism, it never made the pages of your local paper.

And since their joint statement there has been little public information available. At the time of the announcement the USW made clear that they had no immediate plans to venture into what for both parties was uncharted terrain, and so those who saw great promise in this development have been patiently waiting for some follow up.

A “follow up” of sorts occurred at the beginning of March, this year, when Rob Witherell of the USW spoke at the Western Massachusetts “Jobs with Justice Conference.” Mr. Witherell has been charged with leading the USW team in discussions with Mondragon.

Witherell’s presentation(1) situated the USW/Mondragon discussions within the context of the deplorable economic conditions the US faces and suggested that new thinking along the lines of workers actually managing their workplaces could reverse the trend of industrial decline. Sustainable manufacturing situated in new technologies and worker control, as Witherall outlined, meant that communities eviscerated by runaway corporations, could rebuild with a solid foundation.

Overall the speech presented a dynamic future based on principles of corporate governance and worker collaboration hardly imagined in the US except with a few worker co-operatives, like the ones highlighted in Michael Moore’s Capitalism: A Love Story.

However, one aspect of his talk seemed not only contradictory to the main thrust of his presentation, but also emblematic of a certain frame of mind that I believe works against our best intentions for change. Here are the two short paragraphs in question:

To start with, let’s always remember that these cooperatives were started and supported not out of some utopian ideal, but rather a very pragmatic means of helping people put a roof over their heads, clothes on their backs and food on their tables. The goal was, and remains, to create jobs that can support their families and their communities.

The success of the Mondragon cooperatives comes from putting people first. Prioritizing people before profits – imagine that. We have become so conditioned to think that companies must prioritize profits above all else, usually for the sake of some group of unnamed, unknown shareholders, that’s is hard for us to imagine any alternative.

The first paragraph above negates a “utopian ideal” that in the second paragraph is explicitly endorsed: “putting people first” before profits.

Further, Witherell suggests that we “keep in mind that [Mondragon] is no utopia.” I fully agree with this sentiment and in fact serendipitously wrote on this theme(2) hours before the USW/Mondragon announcement was released last October. But ideals and facts are two different things.

Without venturing deeply into Fr. Arizmendi’s biography, as the priest who in the 1950’s counseled the five engineers who founded the Mondragon co-operative, most of his contemporaries recognized his quiet charisma. And too, they all knew his library was filled with classic texts of socialism and anarchism along with Catholic social teachings. And I will venture, based on my long-abandoned study of Catholic social thought, that, as we see in Fr. Arizmendi’s Pensamientos, he went far beyond the corporatist teachings of Pope Leo XIII, the so-called “socialist” pope of the 19th Century. If he wasn’t utopian then I don’t walk on my feet.

But this isn’t the point. We are not debating what Fr. Arizmendi wrote or said 60 years ago. The point is that today the term “utopian” is a gratuitous slur meant to show – what? The levelheaded seriousness of the writer? Is “utopian” a codeword for nonsense?

In their book Social Economy(3) Eric Schragge and Jean-Marc Fontan write the following:

Throughout its long history there have always been two competing visions of the social economy. The first can be described as pragmatic/reformist. It regards the social economy as playing a role in the management of individual and group social welfare through initiatives which target and are limited to specific problems and groups, for example agricultural cooperatives or mutual societies. Those promoting these projects are not concerned with changing the social order, but with making changes that would ameliorate specific problems.

A second position links the social economy with fundamental change, or the building of a new society – utopian/social change. Propositions to this end go back as far as … the 18th Century. This voice which was a counter-cultural current was actively repressed or marginalized by the dominant class and supporters of their ideology because their vision and practice constituted an attack on the social order. This perspective can be situated in relations to the traditions of social change movements of the left.

I would argue that today both perspectives need to be incorporated in our work. The pragmatic/reformist is the defensive strategy to cope with a world we have not made, but need to keep at bay, while we build the new society we want to live in. To denigrate vision, utopian ideals, is to relegate the necessity to maintain and practice our ethical beliefs to our Mission Statements. It’s like church on Sundays – hollow principles polished for public display.

I can understand why labor leaders would wish to tame a flamboyant remonstrance of rhetorical excess, though I favor them myself. (I prefer Albert or Lucy Parsons at their most mild exclamations to anything that Samuel Gompers managed to sputter on his podium.) The question of raising hopes beyond delivery, as our current president has shown, cannot be dismissed as besides the point. But to assume that evocations of our suppressed desires amounts to populist pandering and political manipulation is to condemn us to the most petty concerns lacking all motivational insights. The human spirit is not equivalent to a calculator. History would be a pathetic soap opera if that were the case.
Bernard Marszalek
3.30.10
- – -
1.http://wmjwj.org/keynote-speech-rob-witherell
2.http://www.cooperativeconsult.com/blog/?p=129
3.Black Rose Books (Montréal, 2000)

March 22, 2010

CICOPA: The Basic Characteristics of a Worker Co-operative

Filed under: Movement,World Declaration — Tags: , , , — John McNamara @ 1:47 pm

There are six basic characteristics of worker co-operatives in the CICOPA World Declaration of Worker Co-operatives:

  1. Creating and maintaining sustainable jobs, improving the quality of life for their members, creating dignity in human work, democratic self-management, and promoting community and local development.
  2. Free and voluntary membership
  3. The majority of workers in a worker co-operative should be members of the co-operative and the majority of a co-op’s members should be workers.
  4. The nature of the relationship with the co-operative is different from that of wage-based labor or independent contractors.
  5. The control and management of the enterprise is democratic, agreed upon and accepted by its members.
  6. Worker Co-operatives are autonomous and independent in terms of government and third party control as well as in the control of the means of production.

My co-operative, Union Cab, expresses the first characteristic in its mission statement: “To create jobs at a living wage or better in a safe, humane, and democratic environment by providing quality transportation to the greater Madison area.” I think that is a great summary of the first characteristic. This speaks to the core difference between worker co-operatives and other types of co-operatives. Our worker co-operatives exist to elevate the worker as a human being and to provide them the security and rights that they deserve as human beings. If a worker co-op isn’t engaged with this thought in mind, then it might as well be an US style ESOP or have a traditional ownership with a labor union representation. While we might joke about, there shouldn’t be self-exploitation in any worker co-operative.

The second and third characteristics bring up a serious challenge for modern worker co-operatives. I think that some worker co-ops misinterpret the “voluntary and open” clause. This isn’t to allow people to “choose” whether or not to accept their responsibility as an owner, it is to ensure that the co-operative doesn’t discriminate against visible minorities or create an enclave of “the right type of people”. It urges co-operatives to welcome all people and to create a co-operative that looks like their communities. I think that there is a danger in allowing a class of worker to exist in a worker co-operative who does not (through their choice or that of the co-operative) have a path that will lead to membership. Part of that danger is that the number of worker-owners will fall below 50%. In my mind, at that point, the worker co-operative ceases to be a “worker” co-operative and becomes an “employer” co-operative. This may create two classes of workers—those who are owners and those who are employees. Ultimately, I think that this will create different expectations for the groups. In addition, the workers need a controlling voice even if they allow other stakeholders.

The fourth characteristic brings up another point that I think is vital. Those of us engaged in a worker co-operative are a unique type of worker. We aren’t (and shouldn’t be) independent contractors and we aren’t wage workers. We need to quit thinking in that dichotomy even if the law doesn’t recognize us. If I had unlimited money and time, I would make the creation of a third worker, the worker-owner are legal reality. We need our own set of labor laws that recognize our control over the means of production.  This has many applications from labor standards to taxation. The US government’s rule show how bizarre the discussion is. They recognize a “partnership” of owners as long as each owner owns at least 2% equity. This means that the government recognizes a “partnership” of 50 people, but not 51. That is ridiculous. They need to recognize that organizations wherein the workers have “one person, one vote” are partners—are owners. This doesn’t mean that worker co-operatives should be free to self-exploit, but they should have more latitude to set their own rules and the tax laws should recognize that equity and profits work differently in a worker co-operative.

The last two characteristics speak to ensuring that worker co-operatives are not false fronts put up for other means. The membership must agree to the governance structure. If there is hierarchy, it needs to have control by the workers. Workers must have the ability to change their structure whenever they agree to do so. Lastly, just as all co-operatives must be independent, worker co-operative must work even harder at this. As a movement, we cannot tolerate pseudo-co-operatives masquerading as democracies when they are really controlled by government organization and politicians or as a means to defeat labor movements in emerging countries. Worker co-operatives should only be subsidiaries of a larger worker co-operative—and then, in a federated style similar to what Mondragon or the Italians follow.

The Basic Characteristics seem simple enough. However, there are many self-described “worker co-operatives” that do not meet them. These characteristics prevent the worker co-operative movement from being co-opted by multinationals seeking to enjoy good public relations while undercutting labor movements in emerging nations (or in developed nations for that matter. It instructs new worker co-op models such as The Cleveland Model in the way that a worker co-operative needs to be developed to ensure that the workers don’t become the well kept pets of social workers. It provides a check on existing worker co-operatives who need to grow and worry about the effect of difference types of workers entering their co-operative. There is no international or federal law defining worker co-ops in the US, Canada or the UK (although there should be), so it is up to those of us in the movement to hold each other up to these standards.

Next Week: Internal Functioning Rules of Worker Co-operatives

February 18, 2010

The Cleveland Model–Take One

Filed under: Movement,The Cleveland Model — Tags: , , , — John McNamara @ 7:00 am

Recently, The Nation sent out a broadcast with an article about the emerging worker cooperatives of Cleveland asking those of us in the bog-o-sphere to comment. As someone who has been an active member of a worker co-operative for over 20 years and involvement in the national and international movement for the last 4 years, I definitely have some ideas.

The folks are really doing this right. I spoke with one of the organizers of Evergreen Laundry a few years ago. They lined up the customers as part of the planning stage. The idea wasn’t to struggle as so many worker co-ops do in the beginning, but to start-up with a strong source of work (this was touch and go, but it appears that Case Western and other institutions will be sending their laundry to Evergreen). Second, the Mondragon style commitment to return 10% of surplus (the article calls it ‘pre-tax profits’) to a development fund. Third, I like the commitment expected from the workers that may require a long-term buy-in—I think that low-cost buy-ins have a tendency to devalue the membership or ownership aspect of the experience.

I’m a bit stunned at the amount of capital amassed. One of the well identified stumbling blocks for worker co-operative development in the United States has been the lack of access to capital. I realize that there are a number of groups, involved, I would like to know where  the $5 million came from and what strings are attached to it. I’m not casting aspertions, but I just have to assume that these organizations that ponied up the start-up cash expect to getting something out of the project and won’t want it to fail. A look at their website suggests that all three of the start-up co-operatives have the same group of customers (Cleveland Clinic, University Hospitals, Case Western Reserve, City of Cleveland, and Housing Network). This project is a great example of what can happen when different organizations working around economic justice, worker rights and sustainable communities break down the “silos”. I do hope that other communities learn from the Cleveland model especially Milwaukee and Madison (sadly, Madison’s current Economic Director doesn’t really seem to know much about that subject other than the standard refrain that government should get out of the way).

This does turn the traditional model on its head in that this was a top-down organizing effort. This likely helped with fund-raising as established rain-makers were able to tap into professional relationships where a gaggle of workers would likely be turned away with a shrug. I’m not so sure how I feel about that. I’m happy to see the effort up and running, but I wonder how much of the paternalism associated with a  top-down organizing effort will interfere with the transition to a true worker democracy in which the workers may make decisions that the founders fundamentally disagree with. I can see a dynamic where there could be a difficult (even fatal) transition in generational succession. This may be exacerbated by the management being chosen from a management class that may not really have anything in common with the workers. Will future managers be developed within the organization or sought within the existing worker co-operative movement?

Another issue with the top-down model involves labor relations during the start-up phase. Who will decide who gets off of probation and becomes a member before there are members? Will there be an appeal process? How will disputes get resolved without ownership or a labor union? They are creating good paying jobs (although the article didn’t really mention expected pay and benefits) in a very depressed area. I imagine a lot of people are looking forward to the work and see the ownership part as an abstraction. Working is a worker co-operative is not for everybody (at least not without a lot of therapy and training). We don’t refer to the Yellow Family at Union Cab for nothing, the relationships are very personal and very difficult to walk away from when times get tough. The intimacy of the work relationships due to ownership can make the disputes powerful and difficult to manage. Not everybody is ready for that or can deal with it.

This brings up my other concern: how will these co-operatives interact with the co-operative movement? A similar co-operative is Co-operative Home Care Associates of New York that generally doesn’t interact with the larger movement despite being the largest worker co-operative in the country. Will the Cleveland Model co-operatives join the US Federation of Worker Co-operatives? Will they subscribe to the CICOPA World Declaration of Worker Co-operatives? Will they subscribe to the Statement on Co-operative Identity?

I raise the last question because it seems that there is a trend to see co-operatives and worker co-operatives as an extension of the not-for-profit model of community development. We’re not. The growth of social workers creating co-ops is, I think, a danger for US co-operatives as they become more identified with a movement that tends to enable the worst aspects of capitalism. The rise of Policy Governance Model among consumer co-operatives is, in my opinion, a travesty that has allowed small cabals of managers and directors to create fiefdoms and barriers to expressing the user principles as well as the values of co-operatives. I would hate to see that cancer emerge into the worker co-operative world.

Finally, I have a small bone to pick. The authors make this comment, “These are not your traditional small-scale co-ops.” <COUGH, COUGH!> Union Cab with 230 members, Rainbow Grocery approaching 250 members, CHCA with over 1,000 members have been “traditional “ co-operatives for over 25 years. Granted the common stereotype is 5-10 member organizations, but the Cheeseboard and Arizmendi co-operatives all have over 30 members. The Cleveland co-ops are only looking at around 50 jobs per co-operative (according to The Economist). What makes these co-ops Mondragonish is the funding and mutual support mechanism, not the size of the organization.

I think that the Cleveland Model is an exciting development in the worker co-operative movement. However, it is one aspect. Our movement has been active for decades if not centuries. I am glad to see journals such as The Nation finally discover the co-operative model, although they probably could have covered the Democracy at Work Conferences (2006 in New York City and 2008 in New Orleans, and the 2010 conference in San Francisco). Perhaps they could ask their colleagues over as Dollars and Sense for tips on covering worker co-operatives.

To me, the best thing about the Cleveland Model is that it promises to open up some serious capital for worker co-operative development. It will still need to be determined how the strings attached to that capital work. It will also need to be seen if a top-down organizing model works to create a truly democratic work place and governance model or becomes another version of ESOP. Finally, after all the news of 2009, it is nice to be in a movement that isn’t entirely invisible any more.

We can, however, definitely agree that CLEVELAND ROCKS!

January 25, 2010

#20 Payment Solidarity

Filed under: Identity Statement Series — Tags: , , , , , , — John McNamara @ 1:50 pm

The Mondragon Co-operatives maintain the concept of wage solidarity. From the beginning, the ratio of the highest paid position (manager) and the lowest paid (new worker) was locked at 3:1. In the 80’s this changed and today there are some positions that earn a 6:1 ratio and one (the CEO of the International MCC) who receives 9:1. Even with the tripling of the upper end of the ratio, it is still a far cry from the 150 or even 300:1 ratios that modern stock corporations tend to employ.

What interests me about this principle (and I think that it should be in the Identity Statement as well), is that Mondragon expresses the co-operative value of solidarity. It puts solidarity into the operations of the co-operative.

The language of Mondragon follows:

“The Mondragon Co-operative Experience proclaims sufficient and solidarity remuneration to be a basic principle in its management, expressed in the following terms:

a) Sufficient, in accordance with the possibilities of the Co-operative

b) Solidarity, in the following specific spheres:

  1. a. Internal. Materialised, amongst other aspect, in the existence of a differential, based on solidarity, in payment for work.
  2. b. External. Materialised in the criteria that average internal payment levels are equivalent to those of salaried workers in the area, unless the wage policy in this area is obviously insufficient.”

Note that the principle calls upon the worker co-operative to either ensure that its workers receive the prevailing wage or, if that wage is too low, become the wage leader in their industry and area. The prevailing wage must be at least a living wage*  for the community.

The principle of pay solidarity helps flatten the hierarchy in worker co-operatives. The pay differentials are kept small as a means of valuing all work performed to help the co-operative succeed as well as valuing all workers in the co-operative from the very new to the very senior. This principle helps to deflate the ego within the co-operative. Is someone with 30 years in the co-operative worth more as a worker? In some senses, the  experience and knowledge of the industry that comes with 30 years of work can be vital to the success of the organization, but is it worth them being paid 30 times the pay of a new hire?

Does someone who manages the marketing of the co-operative do more to create wealth (by getting customers) than front-line workers? Should that ability earn more than others?

These are very real questions for worker co-operatives and they are questions which can cause a lot of divisiveness. The way that the worker co-operative addresses these issues can dramatically effect the co-operative to enable it to succeed or cause it to fail.

Does a flat compensation system (everyone gets the same pay regardless of their job duties) encourage good management or cause the people who have management skills to seek employment elsewhere? Does a staggered system of seniority and pay levels create an aristocracy within the co-operative?

It is important for worker co-operatives to find the right balance based on their industry and their internal culture. It probably needs to be revisited from time-to-time. One aspect, in thinking about payment solidarity, should be leadership development. If the compensation levels are set too low, then the co-op will likely become a training center for its competitors or other businesses. If it is set too high, the co-operative may create a rift between the high bracket managers and the low bracket workers. Creating an “us vs. them” mentality can only lead to failure of the co-operative.

To truly maintain solidarity in payment, co-operatives must employ measures to develop leadership among their own ranks. When we need to hire managers from outside, who know the industry, we risk a lot. The culture of a worker co-operative can be destroyed by outside management who bring the attitudes of the traditional corporations with them. I’ve seen this up-close and personal and also from a far. Good Vibrations recently demutualized (becoming a standard ESOP) after hiring outside management (and changing the pay ratio to do so). Now, I am sure that the decisions to demutualize were very complicated (and it was a unanimous vote of the membership); however, it was clear that the culture of the organization changed after they increased their pay ratio in order to hire a manager from the mail order industry.

Of course, once we develop management, we also will need to compete with the outside world to keep them. Thus, our development programs must be based on two concepts: the management needs of the industry and the management needs of the co-operative. Whether our management has a traditional hierarchy or done through committee and semi-autonomous collectives, these two concepts need to be part of the discussion. With this in mind, it can be easier to develop a payment solidarity plan that recognizes a member’s experience, knowledge and commitment while also ensuring that the  “floor” for workers (whether by position or seniority) remains suited to a living wage for the community. This is the opposite of the corporations who figure out the senior management pay and stockholder dividends first and then use what is left over for the workers.

From Don José María Arizmendiaretta, “Solidarity is not just a theoretical proclamation, but something that should be put into practice and made manifest, willingly accepting the limitations of team work and of association, since this is the way to enable people to help each other.” (as reported by José María Ormaechea in his book The Mondragon Cooperative Experience)

This marks the end of the Mondragon diversion. I have called these four principles the “worker co-operative user principles”. These four principles should, in my opinion, be part of the Co-operative Identity. Co-operatives, regardless of the sector, require people to do work to benefit the users. Because of this, co-operatives should see the worker as a primary stakeholder and create means for the worker to truly benefit from their experience in the co-operative. I will even go so far as to argue that all co-operatives should either have a membership class for the workers or actively promote the unionization of their workers. Co-operatives must avoid exploitation. If we believe in Fair Trade for farmers producing coffee, chocolate, sugar and the like, then we must also believe in fair trade for the laborers who get those products on the shelf.

*what is a “living wage”? Madison, WI sets their definition as 120% of the poverty threshold for a family of four (currently $11.21/hour). Dane County arbitrarily declared it to be $8.70/hour. I think that worker co-operatives should work on this definition. I think that it should be a wage that allows a family to experience security with regards to nutrition, housing, health, education, clothing and socialization. This number will vary based on the community. I don’t think that it needs to mean a single-income home, but it should mean that someone can take care of themselves and their dependents at a basic level. Probably a topic for another post. . . .

Next: the 4th Principle—Autonomy and Independence

January 18, 2010

#19 Participatory Management

Filed under: Identity Statement Series — Tags: , , , , , , — John McNamara @ 12:05 pm

The next principle from Mondragon is that of Participatory Management. This seems like a no-brainer for worker co-operatives. What is the point of going through all the work of setting up a worker co-op if the workers don’t actually have a say in how the place is run? They would be better off in a unionized Employee Stock Ownership Program.

I’ll get more into this in a second. First, I want to share the language of the principle from Mondragon (translated, as they all are, of course):

“The Mondragon Cooperative Experience believes that the democratic character of the Cooperative is not limited to membership aspects, but that it also implies the progressive development of self-management and consequently of the participation of members in the sphere of business management which, in turn, requires:

a)     The development of suitable mechanisms and channels for participation.

b)    Freedom of information concerning the development of the basic management variables of the Cooperative.

c)     The practice of methods of consultation and negotiation with worker-members and their social representatives in economic, organisational and labour decisions which concern or affect them.

d)    The systematic application of social and professional training plans for members.

e)     The establishment of internal promotion as the basic means of covering posts with greater professional responsibility.”

(source: The Mondragon Cooperative Experience, by José María Ormaechea, 2000)

Second, I want to parse the word management. We manage our co-operative whether or not we have a person holding a title with the word “manager”. Some co-ops manage collectively, some manage through a hierarchy, but we all manage the same things: assets, liabilities, equity, work performance, customer satisfaction etc. In this, as in most posts, I use the term management and manager in the broad sense.

Participatory management does not mean democracy and democracy does not mean participatory management. I say this because they are often linked together in a synonymous manner. A worker co-operative can have a strict top-down hierarchy that allows little or no member input and still elect its board of directors. Likewise, the concept of participatory workplaces can exist in capitalist organizations.

This principle exposes some dangers to worker co-operatives in that it is this area that the co-operative movement may be co-opted. World Blu has created a list of the “most democratic workplaces” for a couple of years now. While I have nothing against their mission, they misuse the word democracy when they mean participatory management. Only a handful of the companies on their list are co-ops or esops. In other words, they are honoring workplaces as “democratic” when the workers have no control over the governance of the organization. While I think that participatory management is a noble thing for a stock corporation to entertain, it isn’t democracy, it isn’t a right. It can be taken away as soon as the stockholders decide the experiment isn’t making them enough money. While I support World Blu’s efforts to humanize capitalism, I don’t think it will ever succeed on a grand scale but am glad that the workers in those business have a decent place to work.

A worker co-operative should abide by the values and principles of democracy. Participatory management should be another user principle for co-operatives even if it isn’t in the Identity Statement. It is the means by which the workers of the co-operative “use” their co-operative. Just as consumers use the products and services of a consumer co-operatives, workers use their ability to participate in decisions affecting their work life (roughly ¼-1/3 of our lives) as their right of membership.

Mondragon has created an excellent definition of participatory management. It isn’t simply deciding what type chairs to get for the office, it involves a complete involvement of the workforce in the operations and planning of the organization.

Note though, that the principle discusses the creation of “suitable” methods. Decisions have to be made and they have to be made in a way that enhances the organization in terms of serving their customers and succeeding in the market place. A restaurant can’t hold a membership meeting to discuss which person serves which table every time a customer walks in for dinner. A cab company can’t hold a debate about call assignment for each and every order. However, the co-operative can create methods of having these discussions about systems that ensure fairness and those methods should involve a wide range of voices from the membership.

Information has to be available to everyone or how can it truly run as a democracy. This isn’t on a “need-to-know” basis, but on the basis of ownership.

Another key point is that the co-operative needs to create bodies that will assist the worker-members in finding their voice. This might be a peer support program, a traditional stewards’ council, or even a labor union (although that is decidedly not what Mondragon is talking about). The bigger point being that management in a worker co-operative (whether run with a hierarchy or not) needs to establish means for worker’s to have a real voice in the discussion. Depending on the size of the organization (and the work week schedule) this will have different levels of formality. Rainbow Grocery is famous for its collectivist approach while Union CabMondragon models the labor movement through a stewards’ council and committee structure. uses a “social committee” in which elected representatives help provide input to the board and management as well as acting as a watch dog.

The last two points of the principle create an imperative of making participation systemic. As with the Sovereignty of Labour, this principle promotes the belief of internal promotion. The top end positions of a worker co-operative should generally not be hired from the outside of the worker co-operative movement. It is better for worker co-operative to create strong in-house training (and utilize professional development programs such as the Masters of Management: Co-operatives and Credit Unions) to develop the future leaders of the co-operative. One of the problems, in the United States, is that our co-operatives tend to be small and this limits opportunity for workers to advance and develop. It also limits the level of education and training that can be provided. However, we need to think beyond our stand-alone co-operatives. Just as Mondragon is a system of 180 or so co-operatives, we should start thinking of US Worker Cooperatives existing as an economic base.

Ormaechea chose this particular quote from Don José: “Co-operation brings people together in a collective task, but it gives each one responsibility. It is the development of the individual, not against the rest, but with the rest.”

By creating a base of strong management of our co-operatives we build the capacity for the movement to grow. We create the means for our co-operatives to cross-pollinate, to occasionally go outside of our stand-alone co-ops and we also create the means for the rank-and-file members to expand themselves, to develop themselves as people.

Next Week: Payment Solidarity

January 11, 2010

#18 The Instrumental and Subordinate Nature of Capital

Filed under: Human Relations,Identity Statement Series — Tags: , , , — John McNamara @ 10:20 am

“We do not aspire to economic development as an end, but as a means.”

–Don José María Arizmendiarrieta, spiritual founder of Mondragon

This Mondragon principle, in practice, operates more closely to the Identity Statement principle of Member Economic Participation. I included it in this side road of the over all series because I believe that Mondragon presents a nuance all too often lost in the co-operative movement and, in the silo-ed environment of the US worker co-operative movement, we often tend to forget the role of capital in our organizations is significantly different from that of our industry and capitalist competitors.

The role of capital in a worker co-operative should be two-fold:

1) ensure the on-going operations of the co-operative

2) allow the co-operative to maintain the highest level of safety and quality of work-life.

Thus, this principle presents the balancing act of worker co-operatives. As the opening quote suggests, if we are just in it for the money, what are we really trying to accomplish? However, DJMA has also said, “Cooperativism without the structural capacity to attract and assimilate capital at the level of the requirements of industrial productivity is but a temporary solution, an invalid formula.”

The definition of this principle is as follows:

” The Mondragon Cooperative Experience considers capital to an instrument, subordinate to Labour, necessary for business development and worthy, therefore, of:

a) Remuneration, which is:

  • Just, in relation to the efforts implied in accumulating capital,
  • Adequate, to enable necessary resources to be provided,
  • Limited in its amount, by means of corresponding controls,
  • Not directly linked to the profits made.

b) Availability subordinate to the continuity and development of the cooperative, without preventing the correct application of the principle of open admission.”

As a tool, the role of capital should not exclude members from participation in their co-operative. This is a key point for worker co-operatives. The level of capital investment by the member should be appropriate to the needs of the industry and the ability of the worker to contribute. Otherwise, the role of capital dwarfs the rights of the workers, the human beings.

Another important diversion for worker co-operatives is the separation of capital from profits. Too often I hear directors (who have come to us from the “for profit” world) talk about the need for “return on investment” or “return on equity” as the means for deciding the correct course of the co-operative. However, that places capital in a position of greater importance than it needs to be or should be. While a surplus (profit) is needed to re-capitalize the organization and to expand, that should be the limit of its effect. We should not seek to maximize ROI because that mindset leads to the disaster capitalism that has plagued our macro-economy for thirty years.

Capital, in a cooperative, exists to serve the needs of the members collectively. In a worker co-operative, Capital should mean ensuring good paying jobs, safe working conditions and the opportunity for human development. Co-operatives exists as a means for socio-economic transformation of the community, not for the further enrichment of the few who control capital. This may be one of the key differences of cooperation from its market based cousin capitalism. Capital, in a cooperative, should be used to elevate the human being, to eliminate (or minimize) exploitation, and create a sustainable community.

This may seem like an obvious concept, but it is not. Too often co-operative managers hear the siren song of the capitalists. When we start hearing managers talking about industry “best practices” we should immediately ask who those practices are best for. Are those practices “best” for the workers or the stockholders? Are they best for the consumers or the stockholders? Are they “best” for managers or the members? Are they “best” for the community or the stockholders? We need to see that our co-operatives must develop their own best practices for the industry. By creating best practices that do not get tied to maximizing ROI or ROE, we can create strong, vibrant workplaces that will, in turn, create sustainable, vibrant communities.

These are, I believe, the questions that Don Jose wants us to ask. We cannot simply pretend that we are at the grown-ups table when we manage our businesses. We cannot model the “industry” without focusing on the unique role of capital in our co-operatives. As the opening quote states, the role of capital is simply a means to a better future. It should never be considered an end unto itself.

Next Week: Participatory Management

January 4, 2010

#17 Sovereignty of Labor (Mondragon Priniciples)

Filed under: Human Relations,Identity Statement Series — Tags: , , , — John McNamara @ 1:00 pm

The Mondragon principle “Sovereignty of Labor” created departure from the cooperative movement. While the Rochdale Pioneers had good intentions, they abandoned worker cooperation in the 1870’s. The Fabian Socialist moved even further from the ideals of Robert Owen declaring consumerism as the lowest common denominator for human relationships eschewing workers as merely another stakeholder group. Even the French cooperativist Charles Gide turned away from worker associations. Sadly, this act left the labor movement adrift from the cooperative world even as organizations such as the Industrial Workers of the World and the Congress of Industrial Organizations developed worldviews akin to the ideal of cooperation.

In the US, as in most of the Capitalist dominated world, the idea of labor being sovereign is almost non-existent. Business schools spend a lot of money teaching future managers how to manage workers—increase their productivity and the companies profits Except in the more enlightened firms, managers treat workers as errant children. Likewise, the dominant culture makes work something to be avoided and champions obstruction as “fighting the man”. People who do work hard tend to be treated as suck-ups and “upwardly mobile”. We mock the Ragged Dick stories in which “by luck and by pluck and good boy may succeed”. We have been conditioned to hate work and to distrust anyone who suggests that we work hard. The wobblies ran a cartoon called Blockhead who ridiculed the “company man”.

A part of me says, “damn straight!” why should workers gleefully assist the people exploiting them? The life of a worker under capitalism is not any better than it was under feudalism. In some ways, it is worse. The bond between serf and lord was based on land, food and safety. Capitalism replaced those bonds of survival by monetizing them and making currency the commonality of humanity. The chattel slave became the wage slave in the first round of outsourcing that allowed the owner to reduce or eliminate the cost of housing and feeding the workers in their employ.

The Jesuits had a different tradition, thankfully. St. Ignatius, founder of the Jesuit Order, took his vows of celibacy just a few kilometers from Mondragon in the foothills overlooking Onati. The Basque followers of St. Ignatius believed that work could lead to transformation and salvation. In the Spanish Empire they attempted to covert the native Americans of the Tipu-Guarni* through worker collectives known at Jesuit Reductions and immortalized in the movie, The Mission. It was a modern day member of their order, Don José María Arizmendiarreta (DJMA) who would bring that ethic to the small town of Mondragon and teach five young mean the value of cooperation.

The Principles of Mondragon Cooperative Corporation state:

“The Mondragon Cooperative Experience considers that Labour is the principal factor for transforming nature, society and human beings themselves, and therefore:

a) Renounces the systemic contracting of salaried workers

b) Gives labour total primacy in the organization of cooperatives

c) Considers Labour to be worthy, in essence, in the distribution of the wealth created.

d) Manifests its will to extend the options for work to all members of the society.”

There should be a different culture in worker cooperatives, where the workers truly own and control the company. However, waving a magic wand cannot do it. To this end, it is important for worker cooperatives to adopt the notion of the sovereignty of labor. We need to instill a cooperative work ethic in our organizations. Not a work ethic based on enriching others (or even consumers for that matter), but of social transformation or us and our peers based on honesty, openness, and solidarity and caring for others.

Don Jose spoke often on this topic. “Man transforms and makes nature fertile through his labour,” he wrote”, and labour is the greatest asset that the community possesses: to live with dignity, one must embrace work.” Of DJMA, did not mean a mindless embrace of the protestant work ethic to benefit the sputtering Franco economic engine. He meant that workers should own their labor. They should be, as another Jesuit priest from the previous generation argued, “Masters of their Destiny”.

That is the point of this principle. We, as workers, should honor work. We should give to our cooperatives 100% of our effort. When we do this, we begin to transform ourselves and our community creating something of greater value. We must honor all work and recognize that all of those who work as members of our cooperative (or as people who may become members). Sometimes, this work ethic can turn itself on its head and we regard the presence of “management” or “leaders” as we would in the outside world. This is an incorrect understanding of this principle. Sr. Ormaechea denounces the “duplicity of individualism” which might make those of us in the US wince a bit.  However, the sovereignty of labor is in relation to capital not individuals. In the capitalist world, we have learned that managers and leaders tend to be the agents of capital, not labor (sadly this is even true of some labor leaders). The role of the cooperative should be to empower all workers. Management or leaders (as we shall see) come from the workers and belong to them—they are not alien to the work force, but part of it.

We do not invoke this principle by emulating Talyorist strategies or adopting a proprietor’s attitude towards co-workers. Treating our fellow members as our employees is not the correct method of expressing the sovereignty of labor. Instead, we embrace this principle by developing each other as co-leaders in our enterprise. We operationalize this principle by making decisions that enrich the lives of the workers (in terms of safety, education, and health) over the base need for profit. We honor this principle by treating each other as equals and as humans deserving of our respect and love. By doing these things, we change the nature of work from an act of necessity to one of social transformation. We overcome the cultural animosity acquired from being a wage slave to create a new culture of mutual self-help and self-responsibility.

*The currency of Paraguay is the Guarni, which represents the historic measure of wealth in the region (how many Guarni were owned by the Spanish slaveholders)

Next Week: The Instrumental and Subordinate Nature of Capital

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.

November 11, 2009

No More Social Clubs–Thoughts on the Steelworkers

Filed under: Movement,Uncategorized — Tags: , , , , — John McNamara @ 8:59 pm

It’s been a couple of weeks now since the groundbreaking announcement of potential collaboration between Mondragon and the US Steelworker’s Union. The press conference occurred just as, Bernard, an author on this blog and the host of Jasecon posted some thoughts about the role of Mondragon in US Development on this site. The announcement set a lot of us into action. Andrew McLeod posted some follow-up work while he was in the Land of Steel. I waited to write about this because I just wasn’t sure what to make of the whole thing.

During the press conference my thoughts drifted back to my first experience with unionized industrial workers. I spent a lot of my high school time in a group called the Toledo Sub-Mariners. It was a group of scuba divers dominated by autoworkers and other factory folks. It was an odd spot for the son of a doctor and nurse from the suburb of Ottawa Hills. Yet there I was. They told me stories of factory life. How scabs tended to be “accident prone”, the importance of solidarity and labor unions. One told me of the time that the managers at Davis-Besse, a nuclear power plant, found out that he dove and asked him to do some underwater electrical repair. He asked what was in the water. They said it was safe, but wouldn’t tell him. He refused the job and if he hadn’t had a union, he would have lost his job. The early ’80′s were a rough time in Toledo (as they are today). Don showed up at a meeting and announced his retirement. He was 57 and had 30 years in with American Motors (now Chrysler). He showed up to work and was given a broom. With 30 years seniority, he was back to doing the first job he was hired to do. Such is the life of the industrial worker in the United States.

My next experience was just a few years later. I had left Toledo and was a reporter for The Daily Cardinal--the older student newspaper of the University of Wisconsin-Madison. I was also a steward for the Memorial Union Labor Organization–an independent industrial union representing student workers at the UW’s student union. I reported and participated. I have never had as an electrifying moment as when we all stood and sang the anthem of Labor: Solidarity Forever! It was a great conference. Nurses from Buffalo, NY spoke of their successful union drive. There were workshops on organizing, grievances, and collective bargaining. The Teamsters for a Democratic Union were present.I forget the name of the keynote speaker, but during his talk, he spoke to those of us from the academic world. He said that the workers in the factories need to make common cause with the students. He then said that the students need to realize that there role is to support the unions from outside (put pressure on the politicians and the owners). “We don’t need you in the factories like what happened in the sixties.” I wasn’t quite sure of the history, but I got the message. They were perfectly capable of organizing themselves and wanted our support, but really didn’t want us telling them how to do it.

Ah, back to the present day. The press conference seemed quite devoid of “press” except for the people from Dollars and Sense and bloggers such as Andrew and myself. The questioning came from the federations, academics, and NCBA. It kind of felt like an alien spacecraft had landed and we curious humans (who knew a lot about aliens) were trying to figure out what was going on and how we might get to be a part of it.

I was happy when Leo Gerrard, the President of the International Steelworkers’ Union stated that he wasn’t interested in creating another “social club.” It was clear from his presentation that the Steelworkers were in this to create a future for themselves, their members, and their country. I know that Mondragon doesn’t mess around. They wouldn’t be here if they weren’t serious about investment. Gerrard made the statement that caused my little flashback. One of the participants asked how they (we) could help. Gerrard simply said that the USW and Mondragon would need several months to talk to each other and then would call a meeting for “allies and friends.” I don’t know if anyone else got the message, but it was “Thanks for the offer, but we know what we are doing and when we want your help, we’ll give you a call.”

So that is where I sit. I think that the Mondragon Co-op knows how to start worker co-operatives. They create about 30 a year and have been doing this for over 50 years. The Steelworkers know how to organize workers–they organized in 1937 and fought the “goons and ginks, the company finks and the deputy sheriffs who made the raids” (as the great Woody Gutherie sang). I don’t know if they need a bunch of middle-class over-educated kids from the ‘burbs telling them how to run their show.

I would love nothing more than to be a part of this historic movement, but I figure that I already am a part of it. The critical mass that makes worker ownership a viable option today (not the ESOP scam) has happened because of the work that we have all put into our co-ops to make them successful. While I would love to get a call from President Gerrard, there are plenty of things for worker co-operators to be doing. We need to build our Peer Technical Assistance Network. We need to continue to beef up our infrastructure. We need to continue to raise our profile. We need to build the US Federation.

The Steelworkers and “the Mondragon”* may be the sexy new kids on the block, but after 20 years in the worker co-operative movement, I’ve come to realize that it worth staying focused on the projects before me instead of veering off to the newest thing. Mondragon and the Steelworkers have both been around, organizing industrial workers, since before I was born. They will likely be doing it long after I am gone.

I welcome Mondragon to the US. I welcome the Steelworkers to the worker co-operative movement. It is a great moment to see the worker co-operative movement and the industrial labor movement join forces. I hope that they know about this great property in Janesville, WI that they can probably get for a song! I hope that they also know that an accessible, alternative fuel hybrid taxicab could be a great investment. But I’ll keep the voice in my head from that Labor Notes Conference. I’ll focus on supporting them and do my best to avoid instructing them.

Older Posts »

Powered by WordPress