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

February 13, 2017

Our Worker Co-ops Have a Unique Role to Play

Filed under: Movement — Tags: , , , — John McNamara @ 11:14 am

We are living in very interesting times.

It can be difficult to figure out a coherent strategy with which to negotiate the next 1,237 days (or more). We almost need an individualized strategic plan to manage all of the areas of resistance to understand when it is vital to be on the streets or in the workplace or with friends and family.

Worker Co-operatives have a key role to play during this era, but it will only be meaningful if they embrace their identity as worker-owned and operated enterprises. False co-ops, those who use the co-op label more for marketing while ignoring the principles, really aren’t needed. They do damage to the rest of us. I am talking about employer co-ops masquerading as worker co-ops or solidarity co-ops. Some of these, like cab “co-ops” that have only 3–4 owners and hundreds of workers. They use the co-op model to escape double-taxation and should really be Limited Liability Corporations. They don’t engage in the principles or values of co-operation.

The rest, the worker co-ops who strive every day to live their principles and values, to engrain the co-op ethics into the operations, to demonstrate the resiliency and power of worker control need to step up and do more. This is not the time to be insular and withdraw behind the doors of your meeting room. The nation needs to learn about worker co-ops, and more importantly, worker co-ops need to expand and build the movement.

Mondragon provides lessons for how to develop and succeed in a hostile political climate. I want to talk about two, that I see as key to navigating the new normal of the political landscape in the U.S.

The first lesson: control our capital and keep it inside the movement. Worker co-ops need to create full service banks owned by worker co-ops to support and develop worker co-ops. While credit unions have a role, they can be hampered by antagonistic legislation that favors banks. Let’s use that legislation to support co-ops.

The second lesson of Mondragon: expand the movement by investing in new co-ops and incubating them if necessary. Mondragon recognized early on that more worker co-ops would make their lives easier. With enough worker co-ops, the supply lines and financial support could keep the money in the co-operative sector and economies of scale could be reached in ways that kept the democracy alive in the workplace. When a co-op needs something that it doesn’t produce, and can’t find an affordable source aligned with its mission, it should create a new co-op to meet its need. This engages the intellectual capital and capacity of its membership. Larger co-ops may have people working for them because it is a co-op, not because they want to drive a taxi, provide home care, or engage in bike delivery. These members provide a great expansion opportunity for the co-op and the movement.

This might be a state by state, city by city effort with each community finding its own path. Some cities, such as New York, Cleveland, and Madison, are able to use taxpayer dollars to support and build a co-operative solution to meet city needs. Others cannot and need to find other methods. In either case, it is important for existing co-ops to step up and help create strong co-operative economic ecosystems.

Creating nodes of economic democratic organizations throughout the U.S. over the next four years might not be the showiest or strongest form of resistance, but it will build stronger communities that will allow more people to engage in other forms of resistance since they will have free themselves of wage slavery. It is a passive revolution of a sort, although it can easily succumb to the hegemony of the dominant capital model if the values and principles fall to the wayside of our work.

If we could quadruple the worker co-ops in terms of number and employees over the next four years and develop them into real economic democracies through strong governance strategies that overcome gatekeepers and philanthropic saviors, we would create not just an answer to Trumpism, but also to neoliberalism.

As we train our members to engage within our co-ops, we are also training them to engage within their communities. This will create leadership on neighborhood councils, city committees, county committees and even State boards and commissions. We can create a new form of community leadership to fill the current vacuum that only sees a dichotomy between the conservative and liberal factions of Wall Street. Some co-ops, of course, are already doing this and their efforts have paid off substantially (see New York City and Madison), but we need to make this a bigger and broader movement that reaches beyond traditional liberal strongholds and into cities throughout the country. By focusing on the values of co-operation and putting the practice of solidarity and cooperation among cooperatives into practice, we can build an incredible future that delivers on the American Dream.

January 23, 2017

The “We” Generation

Here we are.

The next two years will seem to bring to life the ancient curse, “May you live in interesting times.”

The need for mutual self-help and self-reliance along with solidarity will be at the forefront for many of our cooperatives and we, whether as members, educators, or developers, must rise to meet the challenges presented.

The pendulum of human history has shifted once more from the individualistic to the communal. This can, of course, be a good thing. People working together for the common good has helped move our civilizations from the dictates of a single ruler to more democratic and inclusive governments (even if it doesn’t always feel that progress continues).

I don’t subscribe to the cohort model of generations. I don’t think that being born between 1946-1964 creates a certain type of world view any more that being born in the 90’s makes one a certain way. I follow instead an idea put forward by advertising guru Roy Williams (working off others). This pendulum concepts suggests that humanity cycles through a “me” and a “we” period with the switch around happening about every 40 years. Each period has an upswing and a down-swing and, there are always outliers looking forward to the equilibrium (when the down-swing of one becomes the upswing of another)

Today, we are about the same spot as 1936, 1856, and 1776. Those time periods all involved a period in which people coalesced around a common “we” (1842-1882, 1922-1962, and 1752-1792 respectively). What does this mean to the development of worker cooperatives and the labor movement at a whole. The common “We” works in sometimes contradictory ways. The groups of the 1930’s brought about strong unionism among the working class even as others used perceived racial purity as the defining virtue. Likewise, the power of “we” fueled both the democratically inclined Revolutionary War and the rise of the Abolition Movement but the genocidal war against First Nations peoples also dominated the nation.

According to Williams, the moment of the switch between the Me Generation and the We Generation occurred around 2002-ish and the Year of Hope with the election of Barack Obama mirroring the Me Generation’s Summer of Love. It is worth reading the book (it isn’t a heavy scholarly read at all) to get the sense of it.

The question for us, as worker cooperators, is how do we enter this rather polarized world of “we”. In some respects, it provides some advantages as people seem more likely to see solidarity and common purpose as positive traits. The values and principles of cooperation should resonate and help the Decade of the Co-op shine. However, there is also danger in the neo-tribalism of the “we” that separates people by false categories (race, skin color, religion, gender, sexual orientation).  Further, cooperatives (and especially worker cooperatives) have a tendency to overly focus on internal issues and ignore the larger movement. Even with the relative growth and rise of the US Federation, co-ops don’t always stay engaged in their community and the larger co-op movement.

As much as I respect the work of the Federation and its offshoot, DAWI, we can’t simply subcontract the sixth and seventh principles of cooperation to apex organizations. They have important roles to play at the national and international level providing information, support, and connectivity, but can’t really provide a one-size fits all game plan for every community. We are special snowflakes despite our commonalities.

It will be important for those organizations to engage at the national level, but co-ops (especially worker co-ops) cannot engage in isolationism. They need to create local partnerships with the local labor organizations (even if it is only an expression of solidarity and event invitation), local political leaders, and other cooperatives. They need to also encourage the regional and national coop groups to stand with labor and identify worker cooperatives as something more than simply an economic model akin to ESOPs.

Now is the time for us to embrace our movement and make it move (as Jim Hightower might say). We need to tell our collective stories and educate people about real worker ownership (that involves more than owning shares) and how through worker ownership and worker control, the American Dream can be resurrected and expanded to include all of us.

September 25, 2015

Worker Development Brings a Better World

Filed under: Human Relations,Pensimientos,Reflections,Society — Tags: , , , — John McNamara @ 11:17 am


Work is the attribute that gives a person the highest honor of being a cooperator of God in the transformation and fertilization of nature and in the resulting promotion of human well-being. That people exercise their faculty of work in union with others and in a noble regime of cooperation and solidarity, gives them not only nobility, but also the optimal fertility to make every corner of the earth a mansion that is agreeable and promising for all. This is what work communities are for and it is them who are destined to make our people progress.


Work, in the modern era, may be seen as, and often is, as a drudgery. This is, I think, because work rarely has meaning for the individual (unless they are lucky enough to be in a profession). The effect of scientific managment (Taylorism) has been to deskill work to the point that there is little for workers to care about. It is an assembly line world and without ownership, it is no wonder that many feel like a cog in the machine. It places the individual worker alone and only motivated by self-interest.

Arizmendiarrieta saw work as an enobling act through worker ownership. It was a means to an end and the end was a fully developed human and community that would, in turn usher in world of peace and harmony. In acting in unision, collectively, people not only prosper but care for the environment in which they live. The pursuit of wealth includes a healthy ecological enviroment in which all prosper together. Lofty goals to be sure.

Today, Pope Francis, hit similar a theme in his speech to the United Nations. He said, “It must never be forgotten that political and economic activity is only effective when it is understood as a prduential activity, guided by a perennial concept of justice and constantly conscious of the fact that, above and beyond our pland and programmes, we are dealing with real men and women whove, struggle and suffer and are often forced to live in great poverty, deprived of all rights.” 

He also quoted his predescessor, Pope Emeritus Benedict XVI: “The econoligical crisis, and the large-scale destruction of biodiversity, can threaten the very existence of the human species. the baneful consequences of an irresponsible mismangement of the global economy, guided only by ambition for walth and power, must serve as a summons to a forthright reflction on man: ‘man is not only a freedom which he creates for himself. Mand does not create himself. He is a spirit and will, but also nature.’ Creation is compromised ‘where we ourselves have the final word. . . the misuse of creation begins when we no longer recognizes any instance above ourselves, when we see nothing else but ourselves.'”

There are, of course, many contradictions within the Catholic church and the Co-operative movement. Despite the lofty values of solidarity, social responsiblity and caring for others, many co-operatives do not engage them. Even Mondragon, has its troubles from time to time. Likewise, co-operatives are willing to engage in unsustainable ecological practices as well.

The words of Arizmendiarrieta, on the hundreth annivesary of his birth, resonate today because his work is not done. As Pope Francis concludes his visit to the US, on the even of National Co-operative Month, it is worth taking into account the nature of co-operation and how our co-operative movment, especially the worker co-operative movement engages our values and principles. Are we just about “getting to scale” or do we want to create a just and ecologically sustainble world that allow workers dignity and opporutnity for growth?


March 10, 2014

The Things We Know

Filed under: The Things We Know — Tags: , , , — John McNamara @ 7:00 am

This weekend I noticed a posting from a friend, colleague and mentor of mine: Tom Webb. He had found an old write up called The Things We Know. I am not sure of the source of this document, but if it comes from Tom, it probably has a rich history within the Canadian Maritime Cooperative Movement. I am sharing it today, but will spend the next few weeks, discussing each bullit point in more detail. So tune in, comment, and let’s have a great discussion about our coops (warts and all).

  • The successful cooperatives of the world are those that have grown out of the efforts and determination of the people themselves. It is not enough that coops be for the people, they must be of and by them as well.
  • The best coops are those that had dedicated and courageous leaders either in the very beginning or in their early) history
  • The capital created within the working of the cooperative is vastly more important than the financial resources of the members in the beginning
  • Coops make their best contribution to human welfare and social progress when they initiate policies and practices different from those of old line businesses
  • There comes a time in the development of every cooperative enterprise when it must have managerial ability of a high order
  • Coops that stand for something more than financial gains have amazing powers of survival in times of stress and difficulty
  • Coops that isolate themselves from other coops and refuse to join the bigger cooperative movement tend to shrivel up and die
  • Coops can withstand prolonged attacks from without, but they can’t survive weak or dishonest leadership within
  • Too much aid from government or paternalism of any kind will blight cooperative effort
  • Cooperatives with weak leadership resist change
  • There is no type business too big or difficult for the cooperative way
  • Too rigid a structure in organizational set up is a serious obstacle to progress in cooperative development, especially in a period of rapid change
  • Coops in which control narrows down to fewer and fewer hands tend to behave more and more like old line capitalism
  • A cooperative with no education program is in mortal danger

August 22, 2011

The Open Door Policy of Worker Co-operatives

Filed under: Pensimientos — Tags: , , , , , — John McNamara @ 7:00 am

The 6th Principle of Co-operatives is called, somewhat reflexively, “Co-operation Among Co-operatives.” I have talked about this in a previous post. Today, I want to focus on it from a different perspective provided to us by the spiritual guide of Mondragon, Father Arizmendiaretta. He wrote: “It is risky to make each co-operative into a closed world.We have to think of the inter-cooperative solidarity as the only solution to other problems of growth and maturity. We must think about a vital space appropriate to our circumstances.” (Reflections, 488)

In difficult economic times, it is tempting to close our doors and focus internally. Sometimes the argument is made that very survival of the co-operative is at stake. This is exactly the wrong time to close doors. It is the most important time to open them. It is only through solidarity that we find our strength as workers. This is true to for the entire labor movement whether they are using the traditional Wagner labor union (in the west) and social labor unions elsewhere, or the collective and cooperative model. We need each other to survive. Don’t think that the people who actually control the economy don’t know this–they engage in their own form of solidarity and destroy ours. They take great pains to convince our fellow workers to act against their class interest.

We need to engage each other more than at the regional, national and international conferences; however, these are important events. These events help us to start talking and formulating the physical structures that we will need to make cooperation among cooperatives more than a marketing tool. Why is that important? Look at the so-called P6 Cooperative Trade Movement. It sounds nice. It sounds co-op. It even uses the .coop internet suffix. But notice how the definition turns the co-operative movement into something else–the way that a product gets a P6 designation isn’t by being produced by a co-operative:

“Any P6 member can nominate products that meet at least 2 of our 3-point criteria:

  1. Small farmer or producer
  2. Locally grown or produced
  3. From a co-operative or non-profit organization”

Under this concept, privately owned farms (and what constitutes a small farmer or producer) or locally grown products  have an equivalence with co-operatives. More importantly, non-profits, which are notoriously undemocratic, have an equal stature with co-operatives. While this may work as a marketing tool for the food co-ops and the coffee roaster (a worker co-op) involved, it unnecessarily waters down the co-operative identity which, in the long run, allows Nestle and other corporations to easily co-opt the movement by creating non-profits to compete (and even join the P6 movement) with bona fide co-operatives. In my community, each and every one of my co-operative’s competitors would qualify despite not being a co-op.

The P6 model works for the consumer co-op world (and those providing it with goods) despite its inherent flaws; however, what should worker co-ops do to promote solidarity amongst ourselves in a way that builds our movement not sow the seeds of our destruction? Here are a few ideas:

  • Join your apex organization: in the United States, it is the US Federation of Worker Cooperatives. In Canada, it is the Canadian Worker Co-operative Federation.
  • Get involved in your organization: form work groups, communicate with directors, ask them to speak at your co-operative meetings.
  • Join the Worker Co-operative Federal Credit Union (unchartered). This has an incredible potential for our movement. When a worker co-operative joins, then all of its members may join as well. This could become our Caja Popular Laboral.
  • Shop Worker Co-op: I can tell you that I only buy Worker Co-op Coffee (Just Coffee and Equal Exchange). In Madison, I can buy worker co-op bread and granola, shop at a worker co-op pharmacy (Community Pharmacy), support a worker collective community supported radio station (WORT-FM), buy books from a multi-stakeholder bookstore (Rainbow Bookstore Coop).
  • Join your local network of worker co-operatives or help to create one.
  • Work with the WCFCU and local, regional and national networks to create a solidarity fund. Imagine if the 80 member co-ops of the US Federation committed 10% of their annual surplus to a solidarity fund and another 10% to a development fund as the Mondragon co-operatives do? Our co-ops would be able to navigate the tough times and take advantage of development funds to expand when the market beckons.

The co-operative community sees solidarity at a value. Workers see solidarity as a value, but also as an integral part of building a better world. We don’t support each other because we want to make money or define a difference between us and Whole Foods. We support each other because we are trying to build a better world, because we are engaged in social transformation and because, ultimately, our movement (whether you consider it part of the labor movement or the co-operative movement) is ultimately about the individual humans in our lives and helping each other to survive and expand, not just be cooler capitalists.

June 13, 2011

It Is Okay to Criticize Co-ops, We Know We Aren’t Perfect

Filed under: Pensimientos — Tags: , , , — John McNamara @ 7:00 am

In thumbing through Don José María Arizmendiaretta’s book of reflections (Pensamientos), I came across a neat quote regarding the value of criticism and acknowledging that co-operatives do not ensure perfection.

“We do not apologize for shortcomings that may be pointed out to us. We are on the way. We appreciate those who make us take conscience of our defects and also our lack of fidelity to some principles that we have taken as ours. Seeing ourselves as weak and powerless, but not disloyal to the cause of work and social justice, we ask all to help us.”

It isn’t uncommon to hear critics of our co-operatives (especially the consumer owned co-operatives) find some act on our part and cry foul. This charge always puts us on the defensive, but it hurts even more when the attack comes from within our co-operatives.

It usually begins with anger at a certain action and then broadening the meaning of that action to a failure of the co-operative (in terms of its principles) and even a failure of the entire movement as an alternative to the capitalist market economy. It depends on deeming our co-operatives, its leaders, or even its membership as hypocrites. The attack, however, is usually solipsistic at best and disingenuous at worst.

Of course we aren’t going to be perfect! First, we are humans who by our nature and limited knowledge of the world and events cannot know or contain all of the information to make the most perfect decision every time. Of course, the idea of “perfection” is, in itself, a social construction. It is quite honest and possible for members of a co-operative to have a legitimate disagreement over a strategy within the principles of the co-operative movement. They can vehemently disagree and even be diametrically opposed without being “wrong” and both positions may still be within the concept of the co-operative principles.

Secondly, our co-operatives do not exist in a vacuum or in a world in which co-operatives are the only business model. Why I won’t go so far as to argue that we can’t have socialism in only one country (or co-operation in only one workplace), we must recognize that the world is aligned against us. This gets to the interesting choice of Arizmendiaretta’s words in referring to our movement as “weak and powerless.” Of course, we aren’t–within our world. However, as recent events in the United States have shown, the power and strength of a single worker co-operative or even a national federation pales in comparison to a single investment group controlled by two brothers. While we would like to control our destiny as Father Coady would urge us, we really only have the power to strategically play in the Koch Brothers’ world. We can strive for and envision a day when it will be our world, we can scratch out small areas that allow us a certain amount of liberty and self-determination, but ultimately we will spend our energy reacting to the dominant capitalist class that we compete against.

In that struggle, we will make unpopular decisions. Some will be to survive another day, others will be to plant the seeds of revolution for a future not yet born, and others will be caused by the lure, and dominance of the capitalist myth. Like the Sirens calling to Odysseus, this call can be devastating to our co-operatives, however, we have a secret weapon to overcome it.

We criticize–we have open meetings, we have honest discussions. We criticize each other and hopefully we do so from a position of wanting to help our co-operatives succeed, not from egotistical battles of who is more co-operative than whom. By engaging in honest critique, by listening to our harshest critics, we can become stronger and use our values and principles to build an even better economy.

February 22, 2010

#24 Concern for Community

Filed under: Governance,Identity Statement Series — Tags: , , — John McNamara @ 10:06 am

Concern for Community is the last of the principles listed in the Identity Statement. It is the expression of the value of solidarity and social responsibility. It creates one of the multiple bottom lines for co-operatives. It is not enough for a co-operative to be a profitable business. If it fails to be a leader for a more just, verdant and peaceful world*, then it has failed as a co-operative and might as well just be a group of greedy stockholders. Too often worker co-operators become insular and prone to naval gazing. Our structure is set up that way. We are predetermined (if we don’t act or create other structures) to focus on internal operations to the exclusion of the outside world. If we don’t engage this principle, we can fall into a pit of arrogance.

Because I worked for a taxi co-operative, I see this particular principle as all encompassing. Concern for community, to me, means: yielding to pedestrians, not tailgating, not speeding through residential neighborhoods, helping people with their bags, helping the elderly and people with disabilities manage steps and slippery walks.

It doesn’t have to mean political action in the partisan arena. Indeed, I think that most co-operatives should generally avoid taking a partisan side until a political party based on the Cooperative Ideal comes into existence. It does mean caring about the community that we serve—not because they are potential customers, but because our co-operatives are part of the community and should be community leaders.

The ICA makes the short definition: “Co-operatives work for the sustainable development of their communities through policies approved by their members.”

Mondragon, parses “Concern for Community” into two separate principles that unpack the term a bit:


“The Mondragon Cooperative Experience , as an expression of its universality, proclaims its solidarity with all those working for economic justice in the sphere of the “Social Economy”, championing the objectives of Peace, Justice and Development, which are essential features of International Cooperation.”

Social Transformation

“The Mondragon Cooperative Experience manifests its desire for social transformation based on solidarity with that of other peoples, through its activity in the Basque country in a process of expansion which will contribute to economic and social reconstruction and the creation of a Basque society which is more free, just, solidary.”

The term, Concern for Community, is a huge concept. It is sort of a giant stew of issues. It might be about being good neighbors, good drivers, and good stewards of the land. It might mean participating in social development projects such as affordable housing, micro-lending, The Basque see promotion of the Basque language as part of this principle. Providing health insurance in an industry that normally doesn’t provide could be another example. Ensuring a living wage for workers in a consumer co-operative (or encouraging unionization of a co-operative’s work force) might be another expression.

For the worker co-operatives, it should mean excelling in customer service, being good stewards of the land that we control, creating systems to help our membership develop and succeed as human beings. We need to accept our roles as leaders in our community. We should conduct ourselves in a way that the general public (the community) will appreciate. We should set the standard of how a business treats the community as a whole if for no other reason than it is our community. It is where we earn our living, but it is likely also where we live our lives. Even in communities that have priced working people out of the central area (like San Francisco), it is still the co-operatives’ community.

Working for a better community means working for security for our members, their families, and their friends as well as our customers, their families and their friends and all of the other stakeholders that depend on us (our vendors, their families and friends) . It would be interesting to create a stakeholder map that listed everyone connected to our businesses and their connections (sort of like LinkedIn) to see the effect that our businesses have of the community. We are the George Bailey’s of the business world after all. As workers, we touch so many lives and, because we owners and control our destiny, have the opportunity to change people in a way that other businesses simply don’t.

It is really a small world out there spinning around a small sun in a enormous universe. All that we really have are each other. The co-operative community recognizes that and part of our job as co-op practitioners is to make that principle come alive through our co-operatives.

*I know that I am stealing from the NPR statement for some foundation, but it is such a great line!

Next Week: A summary of the Identity Statement including an examination of the writing of Dr. MacPherson as well as the comments on the 10th anniversary by Johnston Birchall.

February 15, 2010

#23 Co-operation Among Co-operatives

Filed under: Identity Statement Series — Tags: , , — John McNamara @ 8:57 am

I usually make the snarky comment that the only time that I hear about this principle is when some slacker co-op wants a discount or donation. . . that is horribly unfair, of course. Also, we should discount each other—we need to do what we can to keep the money inside the co-operative community!

This principle, however, brings the value of solidarity, caring for others and social responsibility into the principles. Co-operation provides the basic form of human survival. The Folks at Sesame Street get it right: Co-operation Makes It Happen!

The Statement on Co-operative Identity uses the following definition: “Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.”

This, of course, means that those of us in the North America should all join either the National Co-operative Business Association or the Canadian Co-operative Association as well as our sector. In the US, that would be the US Federation of Worker Co-operatives and in Canada, the Canadian Federation of Worker Co-operatives. We shouldn’t just join, but should actively engage these organizations. We also should put aside some biases.

One of the moments in my life that proved (to me) that I would never be a tele-marketer was when I fulfilled my duty as a USFWC director by calling members and checking in. This one high-tech co-operative contact told me that he wasn’t going to renew because he attended the New York Conference and thought that the workshop that he attended was allowed to be taken over by Industrial Workers of the World (IWW) ideologues. It didn’t matter to him that this was a third party organization or that other attendees should have the right to express their views. He wanted a workshop that talked about business, not this political crap.

Well, I couldn’t help but notice that he seemed to be speaking for the entire co-op even though I doubt that he actually presented a fair view of the federation to the other six members. I wonder if he even mentioned it. My interaction made me think that it was a “co-op” but that this guy was really the boss—which then makes sense that he didn’t want to hear from the IWW lest his fellow members catch on that co-ops should be a democracy.

In any event, the point of building the movement isn’t to bring immediate gain to one’s co-operative. It is to build the co-operative image as a valuable community asset. Arizmendiaretta noted, “It is a mistake to each a co-operative a closed world. We must consider inter-cooperative solidarity the only resource to be used to forestall other problems of growth and maturity: we must consider a growing development adapted to circumstance.” The reality is that we (worker co-operatives) have a lot to teach each other. Mondragon speaks of the concept of Inter-cooperation. They define this principle as a specific application of solidarity and a requirement for business efficiency. While it is great to be able to do business with each other, it is even better to support each other by trading concepts, trainings, and skills.

When I was younger (pushing 30) and president of Union Cab. I remember proclaiming that worker co-operatives in the US co-operative world and a blue-collar cab co-op was unique among worker co-ops. The upshot is that there was nothing to learn from the other co-ops. We were alone in the world and had to find our won way. I was young (and arrogant)—and there weren’t a lot of other worker co-ops known to us in the early 90’s. I hear our young leaders say that today and make a mental note to take them aside and have a talk. I also hear people lament our membership dues to NCBA and USFWC and The Co-operative Network wondering what our co-op gets out of our membership.

Well, we (individually and through our co-operatives) help build the movement. We help government officials understand what a co-operative is. We help each other learn how to co-operate better. We help other co-op sectors understand the importance of treating their workers well. We get back what we put into these organizations, but even if all we do is write a check, we help build the movement. This doesn’t have to mean just giving each other discounts. We should share our policy manuals, help each other find new ways of working together. In the US, we need to find a way to pool resources to provide some of the things that our individual co-ops cannot achieve on their own: affordable health care, pensions, retirement plans, etc.

I think that this principle needs to be expanded. Yes, the apex organizations can do a lot. However, we need to create local networks, marketing campaigns and even our own banking system. Even the casual observer of Mondragon recognizes that the Caja Popular had a significant (if not vital) role to play in the rise of Mondragon. The Cooperative Warehouse Society and the Co-operative Bank clearly played the same role in making The Co-operative* the largest consumer co-operative society in the world.

We all need each other to make the co-operative model succeed. I don’t want to limit this to just the co-ops either but to the other legs of the stool as it were. We need the academics who study and propose new concepts in management, who help educate as developers, or teachers, or professors. We need the politicians who help protect the co-operative model.

Co-operation among co-operatives starts with the individual but quickly moves on to the entire world. Our co-operatives need to educate the membership and help them to realize that they, but joining their co-operative, have joined an international movement of 800 million people. We aren’t in this alone, but together. If we can’t see the commonality between our worker co-operatives and the consumer co-ops or large Agriculture co-ops such as Land o’ Lakes, then we aren’t really seeing the co-op movement in its entirety.

When we take the time to understand the dynamics of a water co-operative in rural India, we make our individual co-operatives stronger. When we support the efforts of defending the co-operative movement in Bolivia and Argentina, we make the co-ops in the United States and Canada stronger. This isn’t a zero sum game where we take resources from our co-ops to give to other co-ops. Social capital, like fiscal capital, gains velocity as it travels. Both forms of capital, in the famous quip, are like manure, they only create something worthwhile if they get spread around.

*Normally, I hate it when organizations use a definite article in front of their name. I refuse to call Ohio State University, “The Ohio State University” and not because I’m a Badger through and through. However, if any organization deserves to use the definite article it is The Co-operative.

Next Week: #24 Concern for Community

February 1, 2010

#21-Autonomy and Independence

Filed under: Identity Statement Series — Tags: , — John McNamara @ 10:36 am

This is a good week for a discussion about the 4th Principle of Co-operatives. On my other blog, Breathing Lessons, I discuss the role of co-operatives in the race for Governor in Wisconsin. We, in the co-op movement, get pigeon-holed pretty quickly. Even amongst ourselves, worker co-operators get slammed as “commie hippies”. Even Michael Moore expressed shock on numerous occasions that the workers of Isthmus Engineering looked “like Republicans”.  I imagine that  lot of us in the worker co-operative world see farmer co-operators as red-necked, right-wing social conservatives. Of course, there isn’t any sort of litmus test for any sector. I’ve seen anti-choice and even “W” bumper stickers at the food co-op and even in the parking lot of Union Cab and the long haired George Siemon, “C-E-I-E-I-O”* of Organic Valley certainly changes the image of Ag Coops.

Of course co-operatives aren’t so monolithic, however, they do comprise themselves of self-selected members who have common social, economic, and cultural needs and connections.  They are also organizations that should have a degree of independence and autonomy from other groups. The 4th Principle of the Co-operative Identity says this:

“Co-operatives are autonomous, self-help organisations controlled by their members. If they enter to agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.”

Depending on the memberships interpretation of this principle, it might mean that the co-operative focuses internally and severely limits its effect outside of the membership. For worker co-operatives, which already have a tendency to focus too much on internal issues to the negation of customer service and market forces, this can be a dangerous sentiment. Our boards, however much they may want to feel the power, can’t really tell other organizations what to do. They generally cannot dictate terms to the banks or (for those in government regulated industries) to the government. In terms of the Federations, well, if one co-op dominated the Federation, then the other member co-operatives would be violating the principle just by joining, right?

Ian MacPherson wrote on this principle: “In a way, it is a restatement of the Rochdale commitment to political neutrality with an added emphasis on autonomy, whenever co-operatives associate themselves with other organisations. It is a reminder of how necessary it is for co-operatives to guard at all costs their capacity for independent action. It is only when co-operatives are genuinely autonomous that they can follow the wishes and meet the needs of their members energetically.’

The desire for autonomy and independence runs deep within us as humans. It drove the expansion of Europeans into the Western Hemisphere and beyond. It is, perhaps, the driving force of conflict between peoples as one group seeks the resources of another. Sometimes, once autonomy and independence are obtained, the oppressed too often become the oppressors. The following clip is  a nice discussion about the role of autonomy and indenpendence in a community (and I recognize for my UK friends that this only tells one side of the story):

Being Master of our Destiny is the heart of the co-operative movement. From the first Pioneers of Rochdale, the drive to throw off our economic and political masters became the motivating force to establish an economic system respectful of individual autonomy as well as the democratic decision making process required for group action. Co-operatives, by nature of their identity, exist as peer organizations. Regardless of our standing outside the co-operative, within it we are equals. Barack Obama is the President of the United States and a member of Seminary Book Co-operative in Chicago. His membership in the co-op makes him an equal member of the co-operative entitled to the same dignity as any other member regardless of his other job.

The point is, that we want to control our destiny but to succeed we also have to find a way for our organizations to work together. Autonomy and independence are important parts of the co-operative movement, but so is the root word, “co-operate” or “work together”. Our co-operatives gain strength from respecting our individuality while also requiring members to participate. The movement gains strength from respecting the autonomy of the organizations, while developing ways for them to work together and create synergy.

As Dr. MacPherson notes, our actions as co-operatives need to express the will of our members and protect the co-operative from co-optation by other sources. For worker co-operatives, this can be significant as they could easily end up as the employees of an organization rather than the owners, or so associated with political or social movement that they begin to falter as a business. It is important for us to consider these issues as we interact with other co-operatives and non-co-operatives. It is a lot easier to keep one’s co-operative autonomous and independent than to get that independence back.

*If you don’t get it, simply refer to the song.

Next Week: #5 Education, Training and Information

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

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