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

October 5, 2015

The People’s Ride: A Co-op Response to Uber

Filed under: Management,Movement,Worker Rights — Tags: , , , , — John McNamara @ 11:23 am

I haven’t been a fan of the “sharing economy” primairlity because it really isn’t about sharing, it is about extraction. Uber, Lyft, AirBnB, TaskRabbit aren’t sharing anything, they are providing a technological interface for people to do menial jobs and extracting a huge percentage for the service.

In the case of cab drivers, Uber and Lyft disrupt a market that is closed and generally united against drivers and the passengers. The modern day taxi market is designed to maximize wealth for the owner of the company without regard for the people who generate the wealth or the public who need transportation. Uber and Lyft disrupt this by allowing basically anyone to be a cab driver and open up the market to make getting a ride as easy as it seems on tv (reality check: on TV the cab shows up instantly, but in reality it takes 15-30 minutes to hail a cab in New York City and up to 45 minutes during rush hour).

The thing is, Uber and Lyft aren’t changing the model. They have just found a way to beat the monopoly owners in most communities. They offer a high tech solution to ordering cabs, but this has already been offered in a number of cities (San Francisco and Madison are two that come to the top of my head). Drivers and consumers are still preyed upon and have their wealth extracted. One of the reasons that attempts by exisitng taxicab owners to defeat Uber’s growth have failed is that  most taxicab companies have already sacrficied any consumer or driver loyalty to their personal profit. The unknown devil of Uber is, at worst, going to be the same as the known devil of ABC Cab, but people might be able to get a cab quicker.

In general, Uber succeeds because it offers immediacy and convenience in an industry that has refused to modernize or focus on customer service and loyalty (in fact, most cab companies have moved away from hiring drivers as employees and made the driver the customer through charging them for the priviledge of driving which has removed the owner of the company from the people who use the company’s services–it was good for consistent profits, but horrible for customer service and loyalty from drivers and consumers).

In Grand Rapids, Michigan, a new model is underway. Since Uber has spent millions of dollars to re-write laws to exempt their model from existing taxi ordinances, they created a new market for drivers through a “Transportation Network Company”. This new model is basically the old cab owner model created by cab owners to distance themsleves from any responsiblity to their drivers or customers; however, now that it also distances the owners of the TNC form local laws, it offers the ability for drivers to form new driver-owned and customer-focused cooperatives.

Matthew Bair is leading the effort. They are working for a better work environment for the drivers. In there GoFund Me Campaign he writes:

“I am a substitute teacher in Grand Rapids, Michigan.  I believe in creating a new world for tomorrow’s youth.  Change needs to happen everywhere.  My whole higher education involved figuring out what that would look like.  People’s Ride is about creating a new economy and a better future.  It is about creating a different kind of job.  One where people are able to use both their brain and muscle together and be wholly human.  
People’s Ride is a worker co-op where those who drive also own and control the business.  If a work week is 5 days, a driver picks up people and collects fares 4 days while on the 5th sit in meetings to make decisions about the company.      
The co-op community here in Grand Rapids is growing.  Housing, live/ work co-ops, land, food, beer, bicycling, honey bee, ride sharing co-ops are working together in solidarity to bring about an alternative.     
People’s Ride has been up and running.  We have been following the Cooperative Development Institute’s guide to starting cooperatives.  As in the spirit of the cooperative movement, we collaborate and learn from other ride sharing cooperatives from around the nation.  We have the potential to grow very fast.  Right now we are focusing on putting in place a solid infrastructure.
We are raising money to pay for a car and to have a grand opening.  Any amount makes a difference!  Big or small, $10, $50, $100, $500, you name it.  A contribution of $50 makes you a consumer member and gives you 10% off, $100 gives you 10 rides for half off, $200 gives you 20 rides, $500 gives you 50 rides.   Help build the co-op community in Grand Rapids.  
People who do crowdfunding say that their success is owed to how many people are reached.  So please, after you make a contribution, send this to all the friends you can think of.  “

TNC’s may allow cab co-ops to thrive where previously they were shut out by shenanigans of the owners limiting the number of cabs in a community through medallions or out-right leglislation. TNC’s break open the oligopolies that exist in most cities. While I still dislike Uber and Lyft (and think that they need more regulation to protect workers and consumers), I can see the value of the TNC model in a modern technological age. I am hoping that the Grand Rapids project works and spreads to other cities. Ideally, with a collaboration between drivers in cooprativ TNC and cooperativ tech companies, a national or even international model of a collectivized TNC could take hold and propser benefitting drivers and customers alike.



August 11, 2014

Can Worker Coops Engage True Rehabilitation?

Filed under: Worker Rights — Tags: , , , — John McNamara @ 2:18 pm

Last May, I had the opportunity to attend the Canadian Association for Study in Cooperatives. It was held at Brock University as part of the annual Congress of Social Studies and Humanities Research Council. There were, as usual, a number of exciting and fantastic papers matched only by the lively and open discussions.

Perhaps one of the most fascinating presentations was work by Isobel Findlay from the Edwards School of Business at the University of Saskatchewan. I always enjoy her presentations as her work almost always examines how cooperatives can benefit and re-power the most marginalized populations in Western economics and culture. This presentation was no different as it considered the potential for worker cooperatives within the prison industry. This model would membership institutionalized women and provide them with the means to assist in the support of their families and maintaining a level of dignity during incarceration. It would also provide knowledge, skills and abilities that would be useful upon release.

People in the United States often see Canada as a euro-centric country that is “nice” and “pleasant’. Yet, far too often, it takes after the United States and its growing prison population is no exception. Canada’s prison population has increased 25% over the last ten years and the population of prisoners deemed “visible” minorities” has increased 75% ( Findlay also noted that Aboriginal women make up the fastest growing population with an 85% growth rate. She argued that “Marginality is too often a life sentence that takes the form of invisibility or hyper visibility. Over-policed and under-protected, it will cost Saskatchewan $13 billion over the next twenty years that could be used for better things.” She continued that if all citizens were truly treated equally (and by this I would understand that the incarceration rate for all groups would be equal to that of white men and women), it would bring $90 billion to the economy over this same time period.

Prison worker coops exist in other countries (mostly Italy) where those who participate have significantly lower recidivism rates. In one (and artist cooperative), one member said that “it made me realize that there are still people out there who appreciate who I am.” In Puerto Rico, there are three men’s worker coops and plans to start a women’s coop. Members learn the values and ethics of cooperation especially that of mutual self-help. It is clear that they also gain self-worth and confidence that they can succeed. These coops allow the workers to earn a wage that can be used to support their family and keep those connections strong.

Worker coops could create the support structures that the prison system currently fails to provide especially once people are out although this might require some amendments to laws that provide felons from associating with one another.

Findlay noted that this research is difficult because it challenges the command and control of the prison system and she noted that the “state” bristles when academics “commit sociology.” Nevertheless, it seems that the coop model could provide a means for true rehabilitation. I realize that has long ceased to be the focus of the prison system especially for those areas where it has been privatized and the inmates turned into product for the benefit of shareholders and for-profit corporations. However, as people can show that cooperation does more than simply provide a paycheck, society’s rulers might see a real community value to changing how we treat all members of our community.


Please note–I have never done “ads” on this site, but I do want to point out that I have a “go fund me” campaign right now to assist me in finishing my PhD. You can read more about it on that site and there is a link right on this page! If you can provide any assistance (including promoting my go fund me site through your social networks) I would greatly appreciate it.

January 27, 2014

Block of Cheese–#AsktheWH

Filed under: Movement — Tags: , , — John McNamara @ 9:39 am

As legend has it, in 1837, President Andrew Jackson threw open the doors of the White House to invite the people to come sample a 1,400 pound block of cheese. Presumably, they also petitioned the government while they were noshing. For fans of The West Wing, it may be one of the top episodes.

On Wednesday, January 29, President Obama is holding a virtual “block of cheese” day. It is a day in which the public is encouraged to tweet or post on various social media questions for the President or his administration to consider. Using the hashtag #AshtheWH, and 143 characters, we have the opportunity to raise the profile of worker ownership and worker cooperation within the administration as it engages in its effort to affect the income inequality in this country.

To have any hope of an impact, however, our message needs to rise above the likely millions of tweets. This means using the phrase “worker ownership” or “worker cooperative” and (if there is room) noting the US Federation of Worker Cooperatives or another group, the American Sustainable Business Council.

I have come up with a few tweets that I am happy to share (in fact, I hope people take the opportunity to send them along):

  • Worker Ownership creates a sustainable economy, will POTUS make it part of the agenda? #askthWH #ASBC #USFWC
  • Washington and Jefferson used worker ownership to rebuild the cod industry, will Obama use it to build a sustainable economy? #askthWH #ASBC #USFWC
  • Worker ownership promotes income equity and a sustainable economy. Make worker ownership part of the economic agenda. #askthWH #ASBC #USFWC

Feel free to come up with your own, edit these, or what have you. Please post tweets here as well in the comments. The more of us doing this, the more likely that the idea of worker ownership might get noticed.

The Block of Cheese event isn’t going to change the world, or even change Washington. I certainly don’t expect any sort of sea change to occur because of this, but we need to do even the small things to raise our profile and this is one that all of our members can do from their phones, tablets, and computers.


Next Week: More on the American Sustainable Business Council and the Big Tent of Worker Ownership

September 30, 2013

Governance of Worker and Producer Cooperatives

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

Earlier this month, I had the honor of representing US worker cooperatives on a panel about governance at the International Cooperative Governance Symposium held at the Sobey School of Busines, St. Mary’s University in Halifax, Nova Scotia. Bob Cannell of SUMA and CooperativesUK moderated the panel discussion that also included Dr. Fabio Chaddad from the University of Missouri and my fellow Wisconsinite Jerry McGeorge of Organic Valley.  Rather than discuss our panel discussion from memory (since I was presenting in an open format, I did not take notes), I would like to present the opening commentary from Bob Cannell. Unfortunately, this commentary did not actually get distributed to the audience prior to the panel’s convening so we had to wing it a bit. Nevertheless, I thought that Bob’s comments were very intriguing (and some might even say inciting). I will develop my response to Bob for next week’s blog, but am interested to hear what folks think. While this was for public distribution, I did ask Bob if I may post this to my blog and he agreed, so hopefully, he will jump in to clarify points or to continue the discussion. Any typographical errors or emphasis are mine.

Bob Cannell’s Opening Commentary

“The aim of this session is to challenge our assumptions about governance in worker and producer coops. What models and tools of governance do we default to without critical assessment?

“Traditionally, in Anglo-Saxon cultures at least, worker and producer coops are lumped together. Because we are the ‘other’ type when we prioritise consumer and financial coops. In the UK traditionally, producer co-ops were the ones that made things rather than being retail businesses. These days producer coops encompass agri-coops, marketing coops, bulk buying coops and other coops where small business people join together to increase their market share.

“This lumping together ignores the specific governance needs of worker owned coops. It assumes the same modes work for both. Indeed in the UK we have a serious ‘one type fits all’ problem where generic model constitutions have to be force fitted to worker coops. And they don’t work in practice.

“We have a governance gap. Legal constitutions that tell worker coops how they should govern themselves which do not work in practice in the special circumstances of a worker coop where the workers are owners and are also often the managers as well. Three hats to juggle. The old ways to govern are too slow, too cumbersome, too bureaucratic to fit modern business needs and the needs of small start up worker coops.

“Francophone, Italian, Spanish and Brazilian traditions keep worker coops separate and so think about their specific govenance issues.

Accidents of History.

“Are the governance needs of worker coops really distinct from those of producer and other coops?

“Are we habitually using the worng governance tools for workers coops just because we haven’t looked for better and fit for purpose tools?

“Governance. What is it? It’s the legal constitutions (andin the UK worker and consumer coops share the same legal constitutions) but it is also the management tools used in the coop to take decisions and resolve disagreements. We call these ‘cooperative working skills’. They can range from full executive management pyramids to flat hierarchy collectives. Skill needs in these are obviously very different.

“Worker coop governance traditions are very different in different countries and cultures. The relative success of the worker cooperative model is very different also.

“I am from the 1970’s anarchist worker coop tradition. My coop Suma is a radical collective with no CEO, no MD, no permanent chair. Indeed almost no executive management. It relies on the cooperative working of 140 largely self-managing members. Coordination is by consensus mostly. Yet we are very successful paying very high wages, big bonuses and out competing multi-nationals despite our small relative size. There are a few other successful worker collective in the UK but most just survive haphazardly.

“Our traditional worker coops from the 19th century were castasrophically unseccessful. They were run using orthodox executive management structures and failed enmasse either as businesses or being privatised if successful. Indeed the 1890 Cooperative Congress decided that the worker owned cooperative model had failed and cooperative production (for coop stores) should henceforth be owned by the consumer owned retiail coop socieities. Thus we moved from a cooperative commonwealth to a cooperative federation.

“Enough of the history lesson. Today we have only 400 small worker coops in the UK, the same as in the USA. There are no official worker coops in Germany or the Netherlands. More or less none in white Australia or white New Zealand.

“Why is the worker coop model so much more successful in so many Latin cultures: French, Italian Spanish, Brazil (but not Portugal) than Anglo-Saxon cultures? 2000 and rising in France, 25,000 in Spain plus Mondragon, 30,000 in Italy, many thousands and increasing fast in Brazil. Compare Quebec to the Anglophone parts of Canada.

“Is there something culturally specific about the governance needs of worker coops? Something they do right in Latin countries and regions and we don’t do properly in Anglo-Saxon ones? Something which some ouf our radical collective in the UK such as Suma and Unicorn Grocery have hit on but many others have missed? What is it that we can’t see?

“I have ideas which I’ll touch on in the discussion and cover in detail tomorrow in my presentation on complexity thinking and worker coop governance.

“Let’s look at Employee Ownerships. Very successful in the USA, 13% of business have either significant, majority or 100% employee owned but not employee controlled. UK has a  long tradition of employee owned business (John Lewis Partnership) and currently a big government push to expand the employee ownership sector. There is big competition between worker coops and employee ownership ideas in the UK.

“In the USA, worker coops only have had a federation since 2006.  Why is employee ownership ok in Anglo-Saxon countries by employee control is not?

“Does the distinction matter? It doesn’t seem to in Spain. COCETA and CONFESAL work together. What are the strengths of the worker coop model that the Latin countries use and the Anglo-Saxon countries do not?

“Clearly the opportunities to grow the worker coop sector in Anglo-Saxon countries are enormous if we can define goverance models that make sense to the Anglo-Saxon mindset. So what are they?

“Let’s enjoy speculating about those differences, about the weaknesses and strengths of thw worker cooperative model and how it should be governed.”

Thus ends the opening commentary that wasn’t.

I hope, that like me, you found yourself wanting to respond to Bob’s comments. Please do–I have thoughts that I will post next week, but hope that this is the beginning of a discussion.

April 11, 2011

Progressives Should Embrace Co-operatives

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

I was asked to speak to the Wisconsin Wave last Saturday. I missed my first chance, because I thought that I was supposed to speak at the part of the rally in front of Wisconsin Manufacturers and Commerce building (a trade organization that pushes a corporatist agenda in the state). I didn’t have anything prepared, but this is what I remember saying:

“I work for Union Cab of Madison, a worker co-operative and I also serve as President of the US Federation of Worker Co-operatives. The US Federation of Worker Co-operatives is a trade organization but we are nothing like the Wisconsin Manufacturers of Corruption. Our Federation ‘envisions a democratic society in which workers are in control of the management, governance and ownership of their places of work. Workplaces will uphold the values of empowerment, equity, dignity and mutual respect for all workers without discrimination. Workplaces will offer long-term stable jobs, a living wage and the opportunity for ownership for every worker.’ We believe in building a democratic economy.

We know that we need a better economy. However, we don’t need to invent it. A better economic model already exists. It is called co-operation. The International Co-operative Movement has over 800 million members of co-operatives and credit unions. One in three people in the United States, Canada, and the UK are members or either a co-operative or a credit union. Theses are people who have chosen to put their neighbors and community over profits. It is the only economic movement that has an international set of values, ethics and principles. These values are familiar to all of us who believe in a just society: mutual self-help, self-responsibility, democracy, equality, equity and solidarity. This economic movement also believes in openness, honesty, caring for others and social responsibility. Isn’t this the sort of economy that we want?

Why do we need to build this economy? Voting can only take us so far. We need to keep working on the recall, and the recount, but we need to recognize the limitations of voting. I’ve been voting since 1982, in every election, two years after the “Reagan Revolution”. It seems to me that voting has been little more than an organized retreat. We need to move forward. The reality is that as long as the commanding heights of the economy (energy, food production, communication, information, and transportation) are controlled by investor-owned, profit-driven enterprises, our government institutions will always be under attack. We need to seize the commanding heights of our economy through people driven enterprises–co-operatives.

We need to start now. On Monday, if you aren’t a member of a credit union, move your money out of the bank and join a credit union. Start shopping at co-ops as much as you can. Quit participating in their economy and make our economy the first choice. Let’s start building our economic movement now!

I know that this seems daunting. We are dispersed and the corporations are huge and powerful. However, and I will end with this, as I was walking down the hill just know, I was thinking of what happened in Spain. Shortly after the civil war, a young priest was on death row. The Pope told Franco that he had to quit killing priests, so they sent this young priest to a small industrial town in the foothills of the Pyrenness presumably to never be heard from again. When this priest got there, he found a town divided by class. The children of the workers had no school. Only the bosses kids got to go to school. He went to the bosses and asked them to let the worker’s kids go to school. They said “No. The schools are for our children.” This priest then began collecting pesos from the workers–whatever they could spare–and established a school for the children of the workers. 12 years later, five of those children went to University. When they returned, they went to work as engineers in the factories. They came back to the priest and said, “our work has no value, we want our work to be in line with the values that you taught us”. Those five workers and the priest started ULGOR Co-operative. Today, it is known as Mondragon Co-operative. It employs 180,000 worker owners. It has its own Social Security system, its own Kindergarten through University educational system and produces one-third of the Gross Domestic Product for the Basque region of Spain!

If five college kids and a priest can do this under the Iron Heel of Franco, then what can we do?!

If five college kids and a priest can fundamentally change their economy, then so can we. We need to say, ‘Yes We Can!'”

I tend to be a little somewhat of an introvert, but I was glad that I spoke. As I was getting ready and thinking of what to say, I kept remembering Mother Jones’ admonition to “speak even if your voice shakes!” I hope that people reading this will take some action. For instance, those of you with web domains could easily move your host to a co-operative host, as I do. Electric Embers would be happy to host your domain. Ask you co-op to start using the .coop domain suffix. It does cost a little more, but it helps promote co-operatives world wide and provides a strong brand.

October 11, 2010

Creating a Roadmap to 2040

Filed under: Movement — Tags: , , , — John McNamara @ 11:48 am

In high school, one of my teacher, John Gray, would joke about giving a pop quiz in which the students had 5 minutes to write down everything that they knew. The joke was that given the enormity of that task, most people just freeze. The result is a blank sheet of paper without even the basic equation 1+1=2.

In a sense, that is what I did last week without thinking about it. How can we possibly imagine the worker co-operative world of 2040 just like that? Obviously, we can’t know what shape the environment will be in (although I think we will be closer to 350 ppm if there are more co-ops than if there are less). We probably won’t see a wholesale revision of our global economy without a major event. Of course, that event might be so cataclysmic that we could be focused on basic survival.  Nevertheless, I still think that we need to start thinking long-term and developing some ideas.

One area, for the United States, is diversity. there are approximately 300 worker co-operatives in the United States. About 70 of them are members of the US Federation of Worker Co-operatives. I spent a few minutes categorizing them by sector the other day and here is what I found:

Grocery Coops 6

Design/Print Coops 5

Development, Bakery, Bike, Dayworker coops 4

Importer/Coffee, Media, ISPs 3

Cleaning, Finance, Bookstore, Landscaping/remediaton 2

Furniture, Industrial, Photovoltic, Cafe, Brewery, Tech, Engineering, Interpretors, Taxi, Childcare, home care,  1

One way to think about the future is to think about what industries we currently don’t operate within and how do we get there? What are the basic services that a community needs and can we find a way to develop a worker co-op to meet them? A large of of this has to do with the demographics of our country over the next thirty years.

As I mentioned last week, I will be 76 in 2040. I was born in the last year of the baby-boom. That means that in the next thirty years almost all of the baby boomer will have retired. Those that own business (small mom-and-pop shops) may not have heirs interested in running them. This group may be very interested in converting their business to their workers.

Could we, as a movement, plan to triple the number of existing worker co-ops each decade? That would create a population of 8,100 worker co-ops by 2040. Part of this can be accomplished through succession planning, but it can also be done through replication. The Arizmendi and WAGES models have already more than tripled their original size in just 15 years or less.

I’ll spend the next couple of weeks on this theme of 2040: how do we grow the movement? how do we make it an actual movement? How do we support each other? How do we create a path to 2040 and what do we realistically want to see when we get there?

September 21, 2010

The Agency Dilemma in Worker Co-operatives

Filed under: Movement,Worker Rights — Tags: , , , , , , — John McNamara @ 8:00 am

Last week at my other blog, Breathing Lessons, I discussed the Rochdale cul-de-sac as it applies to consumer cooperatives. This week, as part of this discussion over the future of US worker cooperatives, if not the labor movement in the United States, I want to put the spotlight of the Agency Dilemma on our movement.

It would be a mistake to presume that worker cooperatives, by their nature, enjoy an immunity to the agency dilemma. Race Matthews notes that even Mondragon has its issues. In the US, we have a lot of issues that arise from our culture as well as from the Agency Dilemma.

A More Critical View of Mondragon

First, while I am impressed with Mondragon and loathe to point out the cobwebs up in the corners, it is worth mentioning that perfection is a goal that we strive for, but can never attain. Thus, the criticism of Mondragon (and our own co-operatives) should be accepted in the effort to make them better.

The single biggest criticism of Mondragon has been their outsourcing labor to the developing countries without developing worker co-operatives. This not only runs counter to their principles but invokes the legacy of Spanish imperialism especially when they are engaging the South American economy. However, even within their co-operatives, Mondragon can succumb to elitism and a class separation among their workforce. Matthews cites research conducted by groups within and without Mondragon. Specifically the work of Cornell University anthropologist Dayvydd Greenwood and the ethnography of Sharyn Kasmir . Matthews also taps the work of Mondragon insiders José Luis González (at the time, the Director of Human Resources at FAGOR), and  Mikel Limenez. The work that Matthews uses is from his 1990 position as the Director of Sociological Research for Ikasbide, the predecessor of Otalara Institute. Mikel generally leads the tour groups.

While the workers love their co-operatives and appreciate them, they also recognize that there are “those above” and “those below” (Matthews, 1999, 225) They also speak of issues that should resonate with those of us in the United States, “we are less equal among ourselves than the workers in a capitalist firm; being members, many of us often have to put up with things that workers in other firms would not tolerate.” (Matthews, 1999, 225) Certainly, the 1974 strike revealed a very real rift along gender lines in the co-operatives. While the official discussion of the strike resulted in limiting the size of co-operatives (the factory co-op that suffered the strike had over 2,500 members), it did not talk about how the strike leaders were treated. According to Kasmir in The Myth of Mondragon, twenty-four leaders from the strike were fired (2/3’s of them women). Twenty-two were re-hired except for two women. They were unable to find decent employment in the Basque country for almost five years (public pressure finally forced their re-hiring). (Kasmir, 1996, 110-120) Kasmir’s work provides a Gramsci-esque critique of Mondragon. I can tell you that it is not well received by academia and considered flawed. It is an ethnography so her work does have certain limitations, but I think that it does raise some issues that shouldn’t be ignored.

The point is that our co-operatives can easily succumb to the dominant paradigm of capitalism. Even Mondragon can create an environment where mental and physical labor has separate value within the organization. We are not immune from creating agency theory. If our Human Resource department only has the corporate world of human resources to use for educating itself, it shouldn’t be a surprise that our HR departments talk and act like other corporations. Unless we create a structure that either flattens hierarchy or contains and channels its power, we are susceptible to it overcoming our democracies. If Mondragon cannot eradicate it despite their principles and culture, then it will be doubly hard for our US Co-ops.

The US Agency Dilemma

Our coops have few, if any, resources as worker cooperatives. While the Worker Co-operative conferences offer some skill sets and workshops, it can be difficult to translate between industries. We often have to turn to our industry and their “best practices.” As I have mentioned before, we need to critique the “best practices” rather than simply accept them. In whose interest are these practices best? My guess is that they work best for the managers first and the stakeholders second. The workers are far down the pecking order.

Because US culture bases itself on control and power, it creates an environment where it can be quite easy for our worker co-ops to mimic them. We often haven’t the time or energy to explain and debate every detail of the operations to the membership. It is easier to let individuals specialize in their area and run it. However, that needn’t take away from the democracy of the organization. For the smaller co-ops, it is easier to maintain a collective attitude; however, as co-ops grow, they cannot always follow the Rainbow Grocery or the Arizmendi models due to the needs of their industry. These co-ops do need some level of structure and we shouldn’t see hierarchy as an automatic failure or example of Agency. We shouldn’t simply hire managers to run our co-ops and then complain about their decisions.

The Danger of Agency

One of my current fears regarding the Agency Theory and US Labor Movement comes from the two sources. First, the traditional labor movement has largely given itself over to Agency long ago. Corporate officers and union leaders make as much as the CEO and have little in common with the rank-and-file. SEIU’s growth strategy has resembled Wal-Mart more than a people’s movement. In our movement, we are seeing social workers and “community developers” find ways to co-opt the movement to include well-heeled consultants and advisers. Elsewhere, worker co-operatives are being created to outsource unionized government services with lower paid and benefit-poor positions.

The Cleveland Model offers hope, but also offers dangers. It is an agency development model that focuses on good jobs and keeping the neighborhood intact. However, it is based on the benevolence of a couple of large institutions and has a control structure that will fill the key decider roles from the established philanthropists (at least initially). Capital, in Cleveland, is creating worker co-ops to serve it, but doesn’t really adopt the concept of the sovereignty of labor or the subordinate nature of capital. This might end up being a revolutionary act and greatly aid the development of large scale co-operatives, or it might be a wonderful act of charity that really can’t be replicated (and subject to the goodwill of the benefactors). The real test of this project will come when the primary financiers step aside and allow the workers complete control over their destiny.

How Do We Move Forward?

We need to create a set of best practices for worker co-operatives regardless of their industry, size, and structure. Certainly, the CICOPA Declaration on Worker Co-operatives can provide a lot of guidance in this effort. Worker Co-op Best Practices need to be aimed at diffusing the control and power of elite groups within the organization as well as preventing cliques and informal processes from overcoming the democracy of the organization. This can and should be a role for the US Federation of Worker Cooperatives or its “project” the Democracy at Work Institute.

We need to recognize that few workers come to our co-operatives with the illumination of the co-operative movement. We need to create the means for them to understand and develop. We need to follow Arizmendiaretta’s belief that our movement is an educational movement with an economic basis. We can’t simply teach people how to read a balance sheet or write a cash-flow statement and think that we are done. We need to teach critical thinking an analysis. We need to develop a work force where every member has the knowledge and intellectual skill to engage as a fully vested member of the co-operative.

This means working to overcome our culture of treating people and labor as mere machinations of the marketplace. We need to find a way to develop a new path through our co-operatives that provides a real answer to neo-liberalism. If we only try to democratize capitalism, then we really fail. We can only be a parody of our capitalist competitors: children playing dress-up as opposed to engaging as a true adult and providing a counter-weight, a true Third Road to Socialism and Capitalism.

To overcome our Agency dilemma and develop a true Distributist society, we will need to challenge our institutions and our co-operatives to step forward, to be leaders of the labor movement. My next post will discuss the idea of how to do that and creating a neo-syndicalist movement to counter the neo-liberals.


Kasmir, Sharyn The Myth of Mondragon: Cooperatives, Politics, and Working-Class Life in a Basque Town, State of University of New York Press, Albany, 1996

Matthews, Race Jobs of Our Own: Building a Stakeholder Society (Alternatives to the Market and the State), Comerford and Miller and Pluto Press. Syndney and London. 1999

July 12, 2010

Worker Co-ops and Workers or All in the Family

Filed under: Education,Worker Rights — Tags: , , — John McNamara @ 11:47 am

This might take several posts to really work through the issues, but the nature of worker coops conjures up visions of a workers’ paradise (and the source of the name for this blog); however, too often conflict rises and worker co-ops easily devolve into a deformed workers’ state (the alternative name for this blog when I am cranky).

Without a doubt, the biggest strength and greatest weakness of worker co-operatives revolves around the internal issues of discipline and treatment of workers. An acquaintance of mine in Madison told me about his two experiences with worker co-operatives. Both were bakeries (one small one and one large factory style).

The small one was controlled by the members who were mostly, in his words, Trustafarians. They weren’t interested in growing the business because they didn’t need to do so. For stiffs like my friend, who didn’t have a trust fund, this meant working for minimum wage. The love of making bread and doing one’s own thing didn’t pay the rent. To make matters worse, the paychecks would be distributed together in a basket. The core group often didn’t pick up their checks for months at a time! This only highlighted the economic disparity among the membership and made my friend feel belittled and embittered.

The larger bakery produced at a level where wages and benefits were competitive, but it was really controlled by management and had little input from the worker members. To highlight this, at the annual summer “employee” picnic, management provided commercial mass produced white bread and  buns and bread. My friend was shocked that management wasn’t even willing to spring for the worker’s own bread for the picnic and went for the cheapest crap that they could find.

My long career in worker co-ops (22 years) has seen a lot of internal disputes. I remember a trying time when it was external forces that threatened the co-operative and one fellow member noted that the success or failure of our co-op lies entirely within us. Regardless of the external economy or attacks on our company, we are, as Moses Coady would say, the Masters of Our Destiny.

I would like to pretend that size matters, but it doesn’t. As the tale of two bakeries suggest, the real struggle comes from activating co-operative values and interpreting them in the real world of worker co-operatives. There is a very interesting paper entitled Dispute Resolution in Worker Co-operatives: Formal Procedures and Procedural Justice by Elizabeth Hoffman. My co-op was the subject of this case study and I was president during the period of study. I have a few issues with the work (she never interviewed me or other officers for our perspective of what happened), however, I completely agree with her analysis and it ties in well with another important work, The Tyranny of Structurelessness by Jo Freeman. Co-operatives are societies and they require a certain level of bureaucracy and structure to work effectively. Unfortunately, a lot of people come to worker co-operatives because they want to get away from “the man” and stupid rules, and all the other BS of corporate America. As William Golding taught all of us, however, it just isn’t that easy. Humans are social animals and will establish a social order. It can be an order based on personality, mythology, power, or humanity (ethics, values and principles). For co-operatives, we choose humanity (or I hope that we do).  The point, however, is that an order will be created with or without our efforts.

How often do we hear bosses talk about their company as “being like a family”? I always find that annoying. How patronizing! However, they are simply trying to describe their structure which is based on personality and power. Sometimes I hear that language in co-operatives. We talk about the Yellow Family at Union Cab, but no one is talking about parents, we are talking about siblings, cousins, and weird uncles (I think after 22 years, I get the cranky weird uncle title). Of course, if we really think about this analogy, aren’t we also talking about sibling rivalry and all the BS that goes into dealing with families. There is a great line from the play, ‘night, Mother in which the protagonists speaks to her inability to choose her family.

The difference is that we chose to be part of our co-operatives. We voluntarily choose to join and participate. We don’t have the right to act like obnoxious siblings. We have an obligation to interact with our co-operative on the terms of the ethics, values and principles of the co-operative movement. This is not an easy step. Corporate America and the dominant paradigm created by them encourages us to act as siblings to their parenthood. Workers in our society are encouraged to fight each other (over race, immigration, gender, sexual preference, religion, creed and a host of other false differences) and let the parents (managers, politicians) control our lives.

Unfortunately, we sometimes bring this corruption into our co-operatives. Not all, but many, co-operatives mirror the paternalistic hierarchy of the corporate world. We create a “dad” or “mom” in the form of a General Manager and then act out the role of obedient and disobedient children (and attack each other in miming sibling rivalries). We need to be better than this and we can do it. Some feel that having more that 40 members means being forced into this world. Others might argue “human nature”. I think that we can do more and better by simply focusing on the Co-op Identity.

Rainbow Grocery is a great example of a large co-operative that has flattened its hierarchy. I am not on the inside, so I can’t speak to how their conflict mediation works, but they have shown a way that even a large co-op can eschew the Family Circus. Union Cab is currently revising its dispute resolution system holistically (for the first time in 30 years). The challenge for getting rid of “dad” or “mom” is that we can’t simply replace them with “big brother” or “big sister”. We have to really find a way for all of us in the society to exist as equals and take that responsibility seriously. This means spending a lot of money (co-operative assets) on education, training and information (the 5th Principle). It also means making requirements on our membership that may seem onerous (such as participating in the education, training and information).

I believe that part of the duty of a worker co-operative involves elevating its membership from the siblings of corporate America’s “families” and creating fully-developed human beings that can interact as equals and recognize their connection to the larger world of workers and economics. This will be how the worker co-operatives grow and move forward, not by imitating our former bosses but by creating a truly new paradigm based on our identity.

May 10, 2010

The Guiding Light

Filed under: Identity Statement Series,World Declaration — Tags: , , — John McNamara @ 5:20 pm

Over the last several months, I have used this space to discuss the two core documents for worker co-operatives: The Statement on the Co-operative Identity and the CICOPA Declaration on Worker Co-operatives. Worker co-operative practitioners need to read these documents. More importantly, they need to conduct their co-operative’s affairs and lead their co-operative with respect to these documents.

It really isn’t enough to post a sheet of paper on a wall with the words on them. While that is important, it simply doesn’t go far enough. We need, in our co-operatives, to invent ways to bring these documents to life. Co-operatives should adopt strategies such as including a statement with each policy proposal that details how this proposal expresses the identity of a worker co-operative in terms of these guiding documents. Trainings should begin with a review of the documents and how they interact with the training. Ultimately, even our operational decisions should reflect the guiding light of the co-operative identity and the declaration.

Unlike our competitors, our business must be intentional. We can’t simply throw pasta on the wall and see if it sticks. We need to consciously embrace the identity and infuse it into our operations, our planning, and our governance. If we aren’t really different from our competitors, then why co-operate? The way that we create that difference, a difference recognized world-wide, comes from expressing the collective values, principles, and identity of the worker co-operative. We don’t need to re-invent any wheels. We just need to make them turn.

April 15, 2010

Worker Cooperatives – a viable economic alternative?

Filed under: Uncategorized — Tags: , , — Bernard @ 2:20 am

A brief report on the CCCD California Cooperatives Conference April 2010

A multi-million dollar network of worker cooperatives in Cleveland, a successful alliance of Latina cooperatives in the Bay Area, and a worker cooperative store selling farm-direct food in West Oakland were just some of the projects presented at the California cooperative conference in Santa Rosa this past weekend.

Add to these ventures the news that the United Steel Workers are planning to create cooperatives so that union members actually own their jobs and not just rent them and one must ask, “Worker cooperatives? What, in America?”

This year’s conference organized by the California Center for Cooperative Development (CCCD) focused on “job creation and building community-based economies to strengthen communities, create wealth, and transform lives.”

The CCCD is a newly organized non-profit dedicated, as it says on its website, “to promote cooperatives as a vibrant business model to address the economic and social needs of California’s communities.”

In an age when an abundance of crises seem to accelerate mass anxiety, it is all too easy to feel disempowered and retreat into our personal lives. Signs of resistance and hope, which could prevent this sense of powerlessness, do not make the evening news or the front pages of our daily press.

Worker cooperatives, food stores and housing co-ops are a tiny sector of the America economy, but community activists are beginning to recognize their importance. As activists across the country move beyond a resistance strategy with essentially minor victories, to proposals for positive, long-lasting economic change, cooperatives increasingly become an option to investigate. Co-ops have a track record of providing a solid economic base to under-served communities. Cooperative Home Care Associates in New York provides above scale wages and real job control to over 1500 workers who would otherwise be exploited and marginalized. And right here in Northern California Alvarado Street Bakery, a worker cooperative, was highlighted in Michael Moore’s film Capitalism: A Love Story as an industrial bakery with good wages and benefits far surpassing the industry norm.

Historically, cooperative ventures have arisen from the efforts of ordinary people during previous economic slumps. In the Depression hundreds of self-help groups formed in California (and across the country) that used barter and time exchanges of labor to create an economy without money. The network created by these groups formed the basis for Upton Sinclair’s gubernatorial campaign in 1934.

Economic community development projects have been around for decades, and there have been successful revivals of failing communities. But all too often these “successes” do not benefit the original in-need population, as in the case of urban gentrification. In other situations the “revival” may last for a few years but then fail due to unforeseen outside economic forces.

What the current crop of activists recognizes is that to achieve longevity economic development has to happen from the ground up. Professionals are necessary to move a project up to scale, but they must take direction from below and not assume that pleading to the power structure to provide benefits will insure long-term success. The social change process cannot be a top-down, outside-in affair, but must be exactly the opposite. When it moves into the arena of economic development, the work of democratic planning and community involvement, the strong points of social justice activism, changes lives in meaningful ways.

The transformation of community activism into economic activism began before the current recession and financial crisis. The Just Wage movement began in the late 1990’s, for example, and has had notable results. Justice for Janitors campaigns and union organizing drives in the growing service sector are other successful examples that have affected many communities across the country. The current economic crisis, however, accelerated the search for viable solutions to economic hardships as they became even worse than before.

The latest developments that have caught the attention of community activists revolve around creating economic power closer to the point of production, not by seizing production in the Marxist paradigm (not in itself necessarily a bad idea), but by collectively developing production to serve as a source for jobs.

Cooperatives, for instance, are on the agenda of Restaurant Opportunities Centers United (ROC-United). ROC-United is opening organizing centers across the country. In Chicago they are planning a cooperative restaurant based on their successful Colors Restaurant in New York City. In Detroit community groups and union organizers are discussing the formation of a worker cooperative food store to serve the inner city. And across the country established worker cooperatives have organized regionally, adopting the form pioneered in the San Francisco Bay area by the Network of Bay Area Worker Cooperatives (NoBAWC, say No Boss!). NoBAWC includes over thirty worker cooperatives and collectives with over a thousand individual members. At the US Social Forum in Detroit this June, cooperative economics will be a major aspect of this second US Forum that follows the model of the World Social Forums. Organizers expect 20,000 activists to attend. And later this summer, the Federation of Worker Cooperatives will be holding its third national conference in Berkeley.

These developments are significant in themselves, but they become all the more important when they ally with related movements. The Cooperative Conference, for example, brought together participants with the Sonoma County GoLocal campaign. This is a new and savvy network organized as a cooperative to link businesses and individuals in a joint effort to retain local economic power. And to eventually expand the local economy with job creation.

Couple this endeavor with credit unions, housing co-ops, land trusts and eco-friendly businesses and what we have begins to look like a movement for real change. While Wall Street spins dreams of financial bliss, the nightmare they brought to Main Street may be lifting to reveal a brighter vision. An alternative, grassroots economy may be on the horizon that will create a quality of life to address the needs of people, not corporations.

Bernard Marszalek
April 11, 2010

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