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As I entered the reception for the opening evening of the 5th National Worker Cooperative Conference (as compared to consumer cooperatives which most of us are more familiar with) I experienced a kind of euphoria.  

After all, we had just finished the keynote speech by Congressman Chaka Fattah, a nine-term progressive leader from Pennsylvania, who introduced The National Cooperative Development Act into Congress. When passed, the bill will considerably improve government support for developing a cooperative economy here in the States and bring us more in line with Europe. Moreover, the Small Business Administration had just agreed to provide some funding for cooperatives and --wait for it -- the UN had declared this the UN Year of the Coop!  We had arrived! No longer were we a little side note of Utopian idealist organic food coops -- we had gone mainstream!

The creation of a society based on democratic, grassroots cooperatives as an antidote to capitalism has been a dream many of us have worked toward.   The modern cooperative movement began with the 1844 Rochdale cooperative experiment in England (http://en.wikipedia.org/...), continued through the anarcho-syndicalist cooperative movement beginning in the 1880s (frequently associated with Emma Goldman and the IWW), was energized by the farmer's populist rebellion in the 1930s in the United States, and in recent years the Mondragon model formed in Spain in the 50s (100,000 workers and 12 billion in assets) and the industrias recuparadas in Argentina in the 1990s.   But for the first time-- perhaps more through objective necessity as we globalize and shift from an industrial economy to a digital economy--it seems to be a vision whose time has come and is actually within our grasp.

So I was prepared to enjoy the kind of movement simpatico and joie de vivre that revitalizes all us activists when we get away for the weekend with like minded souls when we are in a period of radicalization-- and, to manage, of course, to gather new information and contacts to bring back to the struggle.

After Rep. Fattah's presentation -- which he finished by noting that both he and his wife were active supporters of REI (Recreational Equipment Incorporated which is a world famous consumer cooperative geared to hikers, runners, and other outdoor types) --  I sat down with a plate full of delicious organic and vegetarian food.  Next to me sat an enthusiastic young blonde who just happened to be the treasurer of the finances at the Occupy Wall Street site. She was discussing an educational cooperative venture that she and her boyfriend were planning to establish on their farm in New Hampshire. They would bring inner city kids out for an educational experience combined with a practicum in farming to help counteract  the decaying educational system in New York City. How wonderful I thought.

But be careful what you wish for. It was just at that point that the discussion started to get tricky. The first group of kids for their cooperative project, it turns out,  were going to be from a charter school in New York City.  The school was given $250,000 by Walmart.  When I and another community organizer sitting next to me seemed taken aback that they would partner with the charter schools and Walmart, the woman  acknowledged the problem but noted that they would not be in any way beholden to Walmart and they hadn't been able to find any other way of funding the project.
peg_walmart1
Forget the fact that one of Walmart's primary goals is to privatize education while still ripping off public resources (private charter schools, which have no accountability or oversight,  are frequently housed in public school buildings at public cost, leaving less room and resources for the "less fortunate" who did not get into a "charter" school). Forget that this mirrors Walmart's modus operandi in their stores where Walmart bad mouths unions as it accumulates its billions, yet pays it's employees so little that the employees  must apply for Medicaid and Food Stamps to survive (government programs which Walmart also bad mouths).

The young couple seemed unaware that by simply accommodating Walmart's funding of the charter school model, they were furthering privatization of public education. Before we condemn the ignorance and gullibility of the young couple too much, we have to remember that Bill Gates, Obama and Al Sharpton support the charter school program as well. However, the young woman's general  lack of awareness of the struggle over Walmart and her obliviousness to the consequences of their choices did make me question how their coop project would fit in with the broader intent and principals of the cooperative movement.

So I turned to my left and zoned in on another conversation where a very articulate man was promoting "crowd funding" as a way to raise capital for cooperative projects (one of the most difficult problems the coop movement faces). With great enthusiasm, he spoke about how easy it would be to raise investment money over the internet once the jobs bill had passed and "crowd funding" became legal. Forget the great possibilities for fraud that this opened for coops and the community, or that his enthusiastic promoting of outside investors contradicted the concept of worker owners as the only shareholders, a concept necessary to keep the cooperatives democratic-- he was off on a vision of larger and larger capital investment monies for ever bigger and more grandiose cooperative ventures.  Again I wondered where the cooperative principles that drove the movement had gone.
peg_anonymous1
Melissa Hoover, the Executive Director of the U.S. Federation of Cooperatives and a tireless worker for a cooperative movement based on cooperative principals, noted that since its inception, the Federation tries to be a "big tent" for all cooperative ventures.  And the conference was, indeed, filled with many creative approaches for developing a truly democratic, grassroots cooperative movement that could actually develop into a full blown cooperative economy (which I will discuss later). However, the total spectrum of values and approaches was on full display at the conference, including  many of the tendencies that take us away from our cooperative principals.

Those who hold to a "pure" worker owned/worker controlled model with no accommodations to the capitalist system under which we live were counter-posed by those who feel we have to be pragmatic "businessmen" and unquestioningly accommodate capitalist mechanism such as outside investors. Those who come out of the historical radical anti-capitalist anarcho-syndicalist tradition were counter-posed by a new bunch of anarcho-capitalists (libertarians) who hold to the grassroots anti-Statist aspects of cooperatives while still clinging to capitalist free market values, failing to see that the capitalist financial systems are as controlling as the state. (http://anarchism.pageabode.com/...)

It was obvious in the opening events I related that I had I already encountered both anarcho-capitalists and pragmatic capitalist hustlers . This tendency continued in a legal workshop which focused on getting coops to use limited liability corporations where individual members are not responsible for debts incurred by the cooperative. The Limited Liability Corporation was touted as a way to avoid "risk" to the exclusion to an analysis of other cooperative legal forms. The LLC is one of the main causes of our current 1% capitalists ability to speculate without accountability to the company or the community. And the main speaker at one economic development workshop promoted growth of  the individual cooperative to a sufficiently large scale (read millions) to fund capital intensive projects without mentioning how a community of cooperatives could, through a cooperative network and shared funds, support large scale capital intensive projects just as well.

Somewhere in the course of the conference I thought back to Rep. Fattah's reference to REI, a consumer cooperative that is fashionable with the progressive crowd. I  remembered that, when I lived in Seattle in the 1970s where REI was founded, a young woman who came around the women's center worked in an REI factory making sleeping bags.  She told us she was making minimum wage, the factory was poorly lit, hot and the air was full of lint. She said she had no benefits and that the Asian women who worked on the floor just above her (they apparently separated the Asian and Caucasian women) made about $.25 an hour less. I wondered if conditions had changed.

So, just to get us back to basics, here are the agreed upon principals of the cooperative movement.  Once we have these clear, we can talk:   
     

Seven Cooperative Principles: Cooperatives around the world generally operate according to the same core principles and values, adopted by the International Co-operative Alliance in 1995. Cooperatives trace the roots of these principles to the first modern consumer cooperative founded in Rochdale, England in 1844.

1. Voluntary and Open Membership
Cooperatives are voluntary organizations, open to all people able to use its services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2. Democratic Member Control
Cooperatives are democratic organizations controlled by their members—those who buy the goods or use the services of the cooperative—who actively participate in setting policies and making decisions.
3. Members' Economic Participation
Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.
4. Autonomy and Independence
Cooperatives are autonomous, self-help organizations controlled by their members. If the co-op enters into agreements with other organizations or raises capital from external sources, it is done so based on terms that ensure democratic control by the members and maintains the cooperative’s autonomy.
5. Education, Training and Information
Cooperatives provide education and training for members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperative. Members also inform the general public about the nature and benefits of cooperatives.
6. Cooperation among Cooperatives
Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
7. Concern for Community
While focusing on member needs, cooperatives work for the sustainable development of communities through policies and programs accepted by the members.

Why do co-operatives fail as co-operatives? By seeking advice from experts who will not see, speak or hear about co-operation. The above heading is the title of an article by David Griffiths that is excerpted below:
"It is important to understand why co-operatives fail as co-operatives - why they cease being co-operatives. In addressing this, it is necessary to differentiate between economic and co-operative failure:

Economic failure is when a co-operative fails as an ongoing and viable business -
it is unable to compete, generate profits and survive as a business.

Co-operative failure is when a co-operative ceases to practice co-operative
values and principles irrespective of its economic viability. The business may
continue to operate and generate profits but its adherence to co-operative values
and principles has become legalistic and token….

The starting point for co-operative failure lies in the formation decision and the
formation process. The formation decision is when a decision is being made about
whether or not to form a co-operative. The formation process is the process
undertaken to form a co-operative…

A co-operative is member owned and controlled. The members of the co-operative
are the users and the beneficiaries of the co-operative. It is critical that this
fundamental characteristic of co-operatives is understood and accepted.
What, then, does this exactly mean? It means that each and every member actively
uses and participates in the co-operative. This has two inter-related dimensions -economic and political.  

The  management practice [must] reflect and reinforce co-operation.
Co-operative boards appoint managers to manage co-operatives on behalf of the
members. The board needs to be careful that it does not assume that it's role is to manage the co-operative and that the managers role is to manage the business.
This creates an unhealthy division that will not necessarily be noticeable in the
short-term but will have long-term unintended consequences. There should be no
separation between "co-operative" and "business". Instead, there is a need to
recognize that co-operative managers need to integrate co-operative values within
their management practice.
Without this integration, there will invariably be conflicts between "co-operative" and "business" success - potentially exacerbated by long-serving managers whose longevity could reinforce this separation. This is not to be confused, however, with the division of responsibilities between a board and a CEO or manager…

Co-operatives, then, fail as co-operatives when they cease practicing co-operative
values and principles. They may continue as a successful business - competitive,
profitable and growing and open to demutualisation….

Co-operative failure is not inevitable. It is, however, the inevitable outcome of the
failure of a co-operative to recognize the importance of co-operative values and
principles and making decisions that are incompatible with these values and
principles:
• A co-operative may choose, for instance, not to recruit as new members its non- member users [and workers]yet allow the non-members to become an increasing proportion of users. This was an important element in what happened to the Victorian Producers Co-operative Co Ltd.
• A co-operative may decide to raise capital through non-member shareholders and, therefore, create a conflict of interest between the member and non-member shareholders and could contribute towards the co-operative’s demutualisation.
• A co-operative may decide not to provide ongoing co-operative education and training for its directors, members, managers and staff. Co-operative values and principles, therefore, are expected to be the product of osmosis.
• A co-operative may market its products and services but its marketing does not identify the co-operative as a co-operative - denying that the co-operative difference is a marketing advantage."

ENOUGH OF THE DOWNSIDE. ON TO THE HIGH POINTS OF THE CONFERENCE!

The diversity and internationalism of the cooperative community. The best part, as always, is the chance to talk to individual cooperators putting into practice our theories I spent some time with a CWA union representative working on a coop proposal for Cincinnati and had lunch with two Latina women from the Workers Justice Center in Northwest Arkansas who are helping immigrants set up cooperatives (this is a growing part of the coop movement).

As an individual participant I could not attend all the workshops and choose to focus on the domestic cooperatives since I have written on the International cooperative movement before (see DK     ). In the International year of the Cooperatives, however, the conference did host a workshop on cooperatives in the global South (Argentina, which currently has over 10000 cooperatives was represented by Jose Hernan Orbaiceta, a Board member of urban coops of INAES, the national institute for cooperativism and social economy in Argentina.  The workshop explored how domestic and international co-op development efforts might demonstrate solidarity with each other.

In other workshops and chatting in the hallways, it became clear that the cooperative movement is far more advanced and accepted abroad. I ran into folks who had come from as far away as Sweden (the Secretary General of CICOPA, the international federation of worker cooperatives, who had worked on development of cooperatives in China, India and Central Europe and Japan (Represented by the Japan Workers' Cooperative Union).  The International component was a nice addition.

A comparison of the development and growth of three different domestic cooperatives: 1) a green architectural & engineering firm, South Mountain Company in Massachusetts went from one worker/owner to 19 with 11 other workers who either choose not to be owners (2) to workers who are in transition to cooperative membership. The firm is currently grossing 9 million dollars  2)a 4 woman food delivery service, Valley Green Feast,  that specializes in  distributing fresh grown vegetables -- the women work part-time, they currently have revenues of $104,000 a year and are growing rapidly. 3) worker -owned coop that processes natural fibers into knitting yarns and has grown from 4 workers to 12 workers of which 7 have currently been admitted as cooperators and has an annual income of $400,000.

The best part was that we had the chance to discuss with the workers how the type of business they had effected how closely they adhered to the cooperative model, etc. Cooperatives with professional members frequently have greater pay scale differentials for workers to be competitive in the market and it is important to know who and how they determine what the differential in wages will be. Tech cooperatives are on the rise, by the way, and there was a separate workshop just on the tech coops (IT and Web companies).  Most of the tech coops have been started by younger people who have a commitment to the social justice values of cooperatives, although there are still wage differentials for professionals. On the other hand, the smallest of the cooperatives, has compensated for its size by participating with a cooperative network where each cooperative gives back 5% of their annual revenue in interest and surplus to the umbrella group (YAK) to help fund future coops as well as providing support for existing coops.

Can non-worker investors be included without the workers losing control of the enterprise? In an ad hoc discussion in the legal workshop, Daniel Fireside from Equal Exchange, a fair Trade coffee cooperative with assets in the millions, seems to have come up with a possible solution to one of the thorniest problems of the real (as opposed to the theoretical) cooperative movement:  Equal Exchange has a special category of non-worker shareholders who buy Preferred Stock which pays a dividend of anywhere from 5-8% dividends (much like a bank loan), but who have no say in the corporations decisions.  These preferred stockholders are paid back first, right after the bank loans.   This keeps both the outside shareholders from decision making and makes the worker-shareholders accountable to the cooperative since they do not receive their dividends until both the banks and outside shareholders are paid.  The workers would set the limits on how many outside investors would be allowed. What do you think? Is this a solution or would David Griffith raise some questions? My own Marxist tendencies lead me to question whether we can ever fully achieve our goals when we are operating under capitalism using capitalist structures.
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Who will lend you money and give you a step by step plan to start your coop? The next best part of the conference was those workshops that give you exactly the information you need to get a coop going.  Since 1975, Chris Clamp, of the Cooperative Fund of New England has provided $25 million in loans to more than 560 co-ops at reasonable rates with the kind of coop friendly support you are looking for (coopfund.coop). Paul C. Vasquez (pevasques@mail.com) works with the Industrial Cooperative Association (ICA) which provides excellent support for tech coops, though at a significant price.

There has recently developed a field of professionals to help people start cooperatives, especially with blossoming of all the "cooperative incubators" (community development projects attempting to set up several inter-connected cooperatives in depressed low income areas). While some of the new developers can seem like outside interlopers to the movement, there are several good committed coop educator groups that provide a basic course (usually 11-13 sessions)to help you set up your coop. Naemi Giszpenc  (ngiszpenc@cdi.coop) with the Cooperative Development Institute (cdi.coop) provides a free online syllabus for all budding educators and start-up. Green Worker Cooperatives in the Bronx, New York (omar@greenworker.coop) helps worker-owned green businesses rooted in democracy and environmental justice get started. There is a fee, however, as I believe they are an independent coop with no other funding and need to support themselves.

For putting this bash together and allowing us to have these very real, very pertinent  discussions and disputes, a final Thank You to the:

US Federation of Worker Cooperatives (USFWC),
Worker Owned & Run Cooperative Network of Boston (WORC'N),
Valley Alliance of Worker Co-operatives (VAWC),
Eastern Conference for Workplace Democracy (ECWD

And to the 11 person three story cooperative house in Somerville that put me up for the weekend.  (Who knew? They decorate, have healthy plants, delicious vegetarian food and great conversation.  And they have an opening.)

Originally posted to Anti-Capitalist Meetup on Sun Jul 01, 2012 at 03:00 PM PDT.

Also republished by Anti-Capitalist Chat and Community Spotlight.

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Comment Preferences

  •  Social Networking and Reposts of this diary: (10+ / 0-)

    We are broadening our reach. Check us out on:

    The Stars Hollow Gazette

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    Join our group at Facebook and get notifications from us about posts and other important news and events.

    De air is de air. What can be done?

    by TPau on Sun Jul 01, 2012 at 03:18:48 PM PDT

  •  Thanks for this excellent report and discussion. (6+ / 0-)

    In many ways, what was being discussed at this conference is one of the oldest debates in the cooperative movement. When Robert Owen converted the mills at New Lanark in Scotland into the first producers cooperatives (1800) the debate started on how to finance these cooperatives. Owen held that it was fine to borrow money from outside or to get the wealthy to donate them (as he himself had done). Others, like William Thompson, argued that they should be self-funded (interestingly he left his land to the cooperative movement upon his death).  Producer and worker owned cooperatives existed in the UK. The Rochdale Pioneers established the first successful consumers cooperative in 1844, using their own funds and labour. They broke the back of the tommy and truck shops (like company stores in the US) see http://www.sirhowy.com/... which finally were outlawed in 1887 for all workers. The shop on Toad Lane provided good quality groceries to workers at good prices. It still survives in the Cooperative Store in the UK.

    Thanks for raising such excellent points in the post, I wish they were not revisiting debates that most people that were supporters of cooperatives and cooperators had thought they have concluded. But it is excellent that we had someone there with such a keen understanding of the history of the movement and its aims.

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jul 01, 2012 at 03:29:50 PM PDT

    •  The fact is that money always influences a project (7+ / 0-)

      and profit becomes more important than the workers. As a union organizer who identifies with workers, I am very protective of our rights and voice in the workplace.  It's not all about money.

      At the same time we do need capital to develop economies of scale.  the trick is how to do this without compromising worker control of the project.  Mondragon has been fairly successful at this, though they too have increasingly strayed from worker control.  The Fair Exchange concept  which allows for outside investors yet keeps decision making control with the workers (see reference in article).

      •  That exactly was the point that Thompson raised (3+ / 0-)
        Recommended by:
        Justina, shaharazade, Odysseus

        and why he argued against borrowing money or getting money from capitalists to start them; in his books (written in 1824) he discussed the distorted effects in production caused by capitalism where what is produced is determined not on the basis of workers' needs, but on what creates profits. The whole structure of production (both the level and composition of output, i.e., how much and what is produced) becomes determined on the basis of profitability instead of needs of the majority (the working class). The Fair Exchange concept sounds more along the lines of what Owen argued.

        I agree with you (and William Thompson) completely and that became the dominant position in the movement.

        Certainly, expansion should be less of a problem if the money that the coop earns is ploughed back into the coop rather than disbursed to members; but a serious expansion to reap economies of scale may be difficult to fund if it is early in the development of the coop. In that case, borrowing will need to be paid back as soon as possible; there is a clear danger of interference in the coop by outside investors which sabotages the whole idea of a coop. It really helps that you have such a good understanding of the situation.

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jul 01, 2012 at 03:49:29 PM PDT

        [ Parent ]

        •  How about P2P (1+ / 0-)
          Recommended by:
          Geminijen

          lending, which would allow expansion without selling stock. These are schemes where an online broker matches up loans with lenders and assess risk. This would get startup cooperatives out of dealing with both banks and stockholders. I have only begun to research P2P companies (so I don't know if people are pleased with them or not beyond what's posted on their websites). Has anyone here had experience with them?
          This is a UK comparison website.

          "There's a crack in everything; that's how the light gets in". Leonard Cohen

          by northsylvania on Mon Jul 02, 2012 at 12:59:29 AM PDT

          [ Parent ]

          •  Is this like the crowd funding I mentioned in (1+ / 0-)
            Recommended by:
            bigjacbigjacbigjac

            the article?  The guy who was promoting it seemed very much the money and investment hustler so I am leery (he said they would be just like other investors).  Also, there is a lot of fraud in online lending, but I really don't know much about this either and would have to research it.  Maybe you can do it and write a diary on it?

  •  The links to www.coopfund.coop and www.cdi.coop (4+ / 0-)
    Recommended by:
    NY brit expat, TPau, Geminijen, Justina

    are not working because there's a www.dailykos. in front. Same with the emails.

  •  What a great and uplifting post: (5+ / 0-)
    A comparison of the development and growth of three different domestic cooperatives: 1) a green architectural & engineering firm, South Mountain Company in Massachusetts went from one worker/owner to 19 with 11 other workers who either choose not to be owners (2) to workers who are in transition to cooperative membership. The firm is currently grossing 9 million dollars  2)a 4 woman food delivery service, Valley Green Feast,  that specializes in  distributing fresh grown vegetables -- the women work part-time, they currently have revenues of $104,000 a year and are growing rapidly. 3) worker -owned coop that processes natural fibers into knitting yarns and has grown from 4 workers to 12 workers of which 7 have currently been admitted as cooperators and has an annual income of $400,000.
    I just loved that! Wish I could have been there!

    De air is de air. What can be done?

    by TPau on Sun Jul 01, 2012 at 03:55:15 PM PDT

    •  Agreed, it is wonderful to see this and that the (3+ / 0-)
      Recommended by:
      TPau, Justina, shaharazade

      movement is growing and doing well, big smiles on my face!

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 01, 2012 at 04:01:28 PM PDT

      [ Parent ]

  •  I think it is the point that David Griffiths... (6+ / 0-)

    makes about there being two types of failure is a key point that gets missed. It is getting missed in Mondragon right now. Failure as a business means the cooperative eventually vanishes and the workers lose. But the workers eventually also lose if the cooperative fails on principles because the workers go back to being subservient to management.

    De air is de air. What can be done?

    by TPau on Sun Jul 01, 2012 at 04:22:11 PM PDT

  •  Wonderful Post, Geminijen! Very Hopeful. (5+ / 0-)

    Will be back to comment at length, but just wanted to thank you "up front" for a great post!

    Convict Bush, Cheney and their torture cabal. Support universal health care,unions, WikiLeaks and Occupy Wall Street! Time for a totally new, democratic economic system. Turn the corporations into worker cooperatives!

    by Justina on Sun Jul 01, 2012 at 04:31:38 PM PDT

  •  Community centered vs. Job centered (5+ / 0-)

    I think another interesting observation is the way all the American and most of the European coops are centered around a single manufacturing or service industry.

    Mondragon is unique, from what I can see, in that it started its life organizing around the needs of a single community: Education, then Jobs, then Health Care, then Housing, then back to Education and Jobs, etc. That focus was instrumental in creating the organizations initial stability in tough times.

    It would be interesting to see a city or county organize itself in that manner. Start with the local services: Education, police, utilities, etc. Then work outward to the construction for needed cheap housing or adult education, or farming and harvesting of community owned lands, etc. Would such organization create stability? I would like to see the experiment redone in our modern hard times.

    De air is de air. What can be done?

    by TPau on Sun Jul 01, 2012 at 04:33:19 PM PDT

    •  I think some of the city council planning groups (5+ / 0-)

      in the communal lands in Venezuela are organizing somewhat in this manner.  Justina may knw better than I do.  I hope to check out their approach next Spring.

    •  It would be. (1+ / 0-)
      Recommended by:
      Geminijen

      It should be mentioned that Father Arizmendiarreta showed up in Mondragón in 1941, began the educational aspect of Mondragón in 1943, and saw the first industry start in 1955.  

      It also helped that the Catholic Church was heavily involved at a time when Franco's propaganda machine married Church and State.  Free elections, civil rights and free speech not being an option in Franco's Spain, he had to bless such movements to keep the Communists and separatists at bay.  (Small-d democrats were sent to labor camps and prison.)  Add tariff protections and strict labor laws designed to keep workers pacified (excellent job security, for starters), so it was hard for competing enterprises to undercut Mondragón's workers during the first years.

      While the last two paragraphs argue against the feasibility of co-ops in 2012 America, consumer cooperatives are growing in size and strength.  Your diary gives the impression that worker cooperatives are going through a Cambrian explosion, with all sorts of models evolving.

      "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

      by Yamaneko2 on Sun Jul 01, 2012 at 09:01:55 PM PDT

      [ Parent ]

      •  There are a number of producer coop forms evolving (0+ / 0-)

        but more in other countries where governments are more supportive than here.  We do currently have a movement of "cooperative incubators" where local governments, institutions and NGOs are trying to use the coop model to create jobs in depressed low income areas.  they are not huge in numbers, but a regular accepted part of the economy at this point. Of course, there is always a rise in coops during depressions as they stabilize the local economy.

  •  Purpose of the LLC (5+ / 0-)
    Recommended by:
    TPau, Geminijen, FG, Odysseus, northsylvania

    The purpose of the LLC and the corporation is to protect the personal assets of people who invest in a corporation from damage to the assets they keep out of the corporation.  If I invest $100 in ShinyHappyCoopCorp and it goes under in such a way that invites lawsuits, the bankruptcy court can't take my cats and computer away.  

    The concerns about such organizations "going corporate" are valid, but the remedy is in found in tailoring the corporate charter and bylaws to provide for frequent elections and broad participation and limit the concentration of voting power (as the Green Bay Packers do).  

    If the idea of "corporate personhood" is offensive, urge the development of laws that permit organizations to form that are allowed a profit, pay lower taxes, and are forbidden from political participation in lieu of a Constitutional amendment barring corporate participation in politics.

    "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

    by Yamaneko2 on Sun Jul 01, 2012 at 05:13:34 PM PDT

    •  All good insights Yamaneko. Thank you. (1+ / 0-)
      Recommended by:
      northsylvania

      De air is de air. What can be done?

      by TPau on Sun Jul 01, 2012 at 05:35:47 PM PDT

      [ Parent ]

    •  absolutely correct (0+ / 0-)

      The corporate entity serves a valuable role in any business venture, even one based on cooperative principles.  Tailor your charter and bylaws, for sure, but don't let ignorance and fear turn your cooperative into a liability.  

      •  Without accountability, too often the individual (0+ / 0-)

        starts pursing their individual interests instead of the community interests.  This is ok if you are a capitalist, but it is the very opposite of a cooperative venture which requires cooperation for the community as a whole.  People can choose, to some degree which value system they prefer -- individual capitalist competition with no accountability to the group (especially for outside investors who don't even work at the enterprise and might easily prefer an investment that takes jobs abroad for cheap labor to one that keeps the workers in their community with stable jobs).  You are preaching exactly what Griffiths warned about -- the separation of business and cooperative values.  Can't do it. It doesn't mean however, that a committed group can't succeed because we have plenty of evidence that good coops do generally follow the coop principles and succeed -- it is usually when they don't follow the principles that they end up bickering, getting into tradtional on the job power struggles and go under--or just turn in to regular businesses.  SEE DAVE GRIFFITHS ARGUMENT BELOW.
        It is hard to think outside the capitalist system when you have been a part of it for so long -- and I'm sure we can't really step outside the system or pretend we are not influenced by it.But picking the simpistic solution is not always best in the long run. We can grow and even develop bigger cooperate networks without tossing the principles out the window.  The growth will, however, be a little slower.  But as the development of coops in hard times has shown us, it is often more sustainable.

  •  Cooperatives Must Be Totally Worker Controlled. (5+ / 0-)

    The following quote from Griffiths concerned me:

    The  management practice [must] reflect and reinforce co-operation.
    Co-operative boards appoint managers to manage co-operatives on behalf of the
    members. The board needs to be careful that it does not assume that it's role is to manage the co-operative and that the managers role is to manage the business.
    This creates an unhealthy division that will not necessarily be noticeable in the
    short-term but will have long-term unintended consequences.
    The creation of "Boards of Directors" seems to take decision-making out of the hands of the workers, especially when it comes to "appointing managers".  It creates a type of class division ab initio.  My notion is that all the workers must participate in all the critical decisions of a cooperative and do all the "administrative" jobs as well on a rotation basis.  

    If there are to be "managers", they need to be elected by the workers in that work group themselves, subject to immediate recall by a specified number of workers in the group.  It is dangerous to create classes of managers versus workers if the managers cannot be quickly removed.

    As to obtaining funding from Walmart, yee Gods!  Given the difficulty of raising start-up funds for cooperatives, restricted stockholders might be one way to raise the needed funds, provided these restricted stockholders have no control over any aspect of the decision-making.

    Here in Venezuela, the government will provide 0 or low-interest loans to get cooperatives up and running, but to obtain this help the cooperatives have to follow government regulations that require the broadest possible democratic participation in all aspects of the cooperative.

    Convict Bush, Cheney and their torture cabal. Support universal health care,unions, WikiLeaks and Occupy Wall Street! Time for a totally new, democratic economic system. Turn the corporations into worker cooperatives!

    by Justina on Sun Jul 01, 2012 at 05:19:02 PM PDT

    •  Sigh...having just had the Supreme Court, once... (1+ / 0-)
      Recommended by:
      shaharazade

      again, assert Corporate dominance over our lives this week, I can't help but long for the day we can look at the examples Venezuela has given us.

      De air is de air. What can be done?

      by TPau on Sun Jul 01, 2012 at 06:04:15 PM PDT

      [ Parent ]

    •  many of the forms occur in the language of the (0+ / 0-)

      laws of a particular country.  In a number of smaller companies, the worker owners together form the  board of directors for policy decision making purposes.  The Walmart example was clearly a problem for most cooperators and only the libertarian variety who do not see the cooperative as an anti-capitalist form.  As the equal Exchange model suggests, you can control outside investors and prevent them from decision making -- however, I believe one still has an obligation to the larger community not to involve clearly corrupt capitalists as our funders.
      The Venezuelan model generally does not put restrictions on the cooperatives it helps fund.  In the U.S. model some of the outside stake or shareholder NGOs have prevented the workers from actually taking decisionmaking control of the cooperative even though they official "Own" the cooperative.

  •  Great diary with so much good food for thought n/t (1+ / 0-)
    Recommended by:
    Geminijen

    I dreamed I saw Joe Hill last night, alive as you and me.

    by plankbob on Sun Jul 01, 2012 at 06:03:23 PM PDT

  •  Distinctions of principles and ideologies (5+ / 0-)

    When I see "statist" and the like, I get the phantods. These words denote abstractions, and the abstractions can become thimbles under which the pea is hidden. Just as the well intended fall into the old ruts of "start up capital" and "growth potential" -- which is flat B-school (or B.S., for short) -- so the worries over the State are a bit second order.

    Inevitably, the worker owned start ups, like Performance Bicycle or R.E.I., grow, and in growing sneak capitalists in, and, in serving capitalists become capitalists. (Performance began beautifully it turned into a "pee in the cup" place of business for minimum wage work.)

    I see greater hope for businesses that maintain as a goal low or no growth. Remember that capitalism must grow to cover the inequality of wage. Worker owned businesses do not have the same compulsion to the same degree, and it is invariably in the "we need to expand" phase that they let in the weasels. "Serving Ann Arbor" or "Supplying Austin" should be enough of a mission.

    Finally, those companies that go from investor controlled to worker controlled are the best, it seems to me, as they have the heavily capitalized physical plant in place but finally get to have decisions made by people who have a stake in the product.

    Every reductio ad absurdum will seem like a good idea to some fool or another.

    by The Geogre on Sun Jul 01, 2012 at 06:51:22 PM PDT

    •  Referring to my comment immediately upthread (4+ / 0-)

      I am naturally worried to see our coop expand, look a tad cookie cutter, albeit in an especially creative and welcoming way.  It's the borrowed money that worries me most.  I know debt can be used to control as well as naturally changing behaviors.

      As to your final point, a convincing article in Harpers a few years ago mounted argument that the economic dominance of Germany results from real worker power in corporate decision-making.

      The Congress exists primarily to ensure the reelection of members of Congress. - Bacevich

      by geomoo on Sun Jul 01, 2012 at 07:14:27 PM PDT

      [ Parent ]

      •  I am a little unclear what you meant ot imply by (0+ / 0-)

        citing the german model.  could you clarify?

        •  The internet ate my comment (2+ / 0-)
          Recommended by:
          Geminijen, northsylvania

          This is all I can muster second time through.  I didn't find the article in the time I have to spend.  The claim was that Germany experienced less outsourcing than other countries because after WWII, to avoid giving leadership to former Nazis, the Allies created a system in which workers have significant input into decision-making.

          The Congress exists primarily to ensure the reelection of members of Congress. - Bacevich

          by geomoo on Sun Jul 01, 2012 at 08:42:30 PM PDT

          [ Parent ]

        •  German model = labor seats on board of directors? (4+ / 0-)

          I would assume that this is the structure being referred to:

          Board-level employee participation examined

          Supervisory board

          The proportion of workers' representatives on the supervisory board is determined by the statute of the company concerned, but must be at least one third of all members and not greater than one half . The president of the supervisory board is always a representative of the shareholders and holds a casting vote (Article 79, as amended by the law of 20 June 2001 amending the LPWM - see below).

          Workers' representatives on the supervisory board are elected and recalled by the employees' council, which informs the assembly of the company's shareholders about the representative chosen. The method of election and of recall of workers' representatives on the supervisory board is determined by the rules of procedure of the employees' council (Article 79).

          Workers' representatives on the supervisory board represent the interests of all workers within the mandate of the supervisory board, in accordance with a special law and with the statute of the company (article 80).

          Workers' representatives on company boards receive the same remuneration as the other members of these bodies. There are no legal differences between the rights and duties of the workers' representatives and the other members of the supervisory board.

          When labor is a full participant in corporate governance, certain kinds of looting behavior become impossible.

          -7.75 -4.67

          "Freedom's just another word for nothing left to lose."

          There are no Christians in foxholes.

          by Odysseus on Sun Jul 01, 2012 at 09:26:51 PM PDT

          [ Parent ]

          •  In response to Odysseus - the German model you are (2+ / 0-)
            Recommended by:
            northsylvania, Odysseus

            describing does not fit the definition of a worker owned and managed cooperative, but does show increasing worker participation in decision making.  The limit on the supervisory board to 1/2 workers, however, insures that workers never have real control.  One of the forms in the U.S. is the Employee Stock Option Plan, where the employees own shares in the company --however, unless they own a majority of the stock and have significant voting rights, it is not considered a worker owned and managed corporation.

    •  The Geogre: What is a phantod? (0+ / 0-)

      Google didn't help me to decipher the meaning!
      (Just curious.)

      The rest of your words make sense to me, especially:

      I see greater hope for businesses that maintain as a goal low or no growth. Remember that capitalism must grow to cover the inequality of wage. Worker owned businesses do not have the same compulsion to the same degree, and it is invariably in the "we need to expand" phase that they let in the weasels. "Serving Ann Arbor" or "Supplying Austin" should be enough of a mission.
      Although it seems the growth of a "model" by it's replication in the form of independent "cells" would be OK.

      This is all kind of new to me but very interesting...


      I kinda screwed up with a careless uprate so (for now?) I'm a "No Rate" pariah. So when I give a comment "+110% n/t", please consider that a recommend. (That's my workaround fix to participating in this community!)

      by The Angry Architect on Sun Jul 01, 2012 at 10:49:11 PM PDT

      [ Parent ]

      •  Ha. (2+ / 0-)
        Recommended by:
        The Geogre, isabelle hayes

        I am old enough to be conversant with the fantods as well as the heebie-jeebies and willies they so closely resemble. They live in that grey area between healthy skepticism and paranoia.
        Edward Gorey was particularly fond of them.

        "There's a crack in everything; that's how the light gets in". Leonard Cohen

        by northsylvania on Mon Jul 02, 2012 at 01:18:47 AM PDT

        [ Parent ]

      •  :-) "Screaming phantods" (1+ / 0-)
        Recommended by:
        bigjacbigjacbigjac

        Mark Twain is the first use I know of (in print) of "phantod." It is one of the many Americanisms for unspeakable feelings of doom or dread -- heebie jeebies, creeps. It's a term both for the uncanny and for a precognition of doom.

        I think you are right that repeating individual co-ops works, or should work, but the mistake we on the left have made in the past is maintaining such connections between them that we insist on purity. Purity extends to operation. Operation extends to control. Then, effectively, it's no independence at all, but just spread, and the second unit lacks the capacity to respond to its local conditions.

        If there were a kind of mail order start up kit that ended with, "Or not, but this is what works" it might be wise.

        Every reductio ad absurdum will seem like a good idea to some fool or another.

        by The Geogre on Mon Jul 02, 2012 at 04:11:40 AM PDT

        [ Parent ]

    •  excellent anaylsis. But even those that start as (0+ / 0-)

      outside investors tend to stay in the more traditional capitalist mindset unless the workers are involved in the decision making process from the very beginning.  We see some of these problems in the Evergreen model in Cleveland which was started by nonprofit ngo's hiring the first workers -- unfortunately, although they have made some nice living wage jobs for workers who have a hard time finding employment, they still have not turned decisionmaking control over to the workers.

  •  Three strikes and you're out (3+ / 0-)
    Recommended by:
    Geminijen, shaharazade, northsylvania

    Bill Gates, Obama and Al Sharpton, who you acknowledge like charter schools.

    Those three went down in the order listed.  Former truth-speaker Sharpton was the saddest of all.

    I haven't finished yet, but I am excited to report that our town of 50,000 or so just moved into our new food coop building.  With minimal personal involvement beyond the first 3 or 4 years, I have watched it grow from get an order together and, when there are enough, order a barrel and split it up to, beginning last week, a store we own in partnership with the local housing authority.  The new building includes affordable housing in the upper floors, as well as administrative offices for the coop.

    We've always had a child care room from the very beginning.  That's great for moms or dads to work their hours--justs bring the infant or toddler and entertain others, who will in turn entertain your infant.  I wish I knew more to report the details.  It bothers me that they borrowed money, but probably from a Vermont bank, which isn't as bad.  I have been acquainted with the manager for thirty years.  He stayed at my home when he visited Boston a few times, and he had me take him around to Bread and Circus and Whole Foods and he was studying everything they did.  I admit I didn't take it too seriously.  Here we are 30 years later, and he has knocked my socks off.  I'm so proud of our town.  Brattleboro, VT, with outstanding warrants for Bush and Cheney.

    Local cheese, local meat, local vegetables, local eggs, local frozen gluten-free pizza, etc.

    Anyway, that's specific.  There is so much to respond to in this diary.   Again, charter schools are anti-democratic, just as stated, notwithstanding the luminaries who support them.

    Incidentally, coops hold promise of ameliorating the daunting social conditions described by postemotionalism, as I diaried about in this forum.

    Sorry, I'll have to finish the diary later.  I'm sure I haven't yet read the best part.  Thanks, Jen.

    The Congress exists primarily to ensure the reelection of members of Congress. - Bacevich

    by geomoo on Sun Jul 01, 2012 at 06:56:17 PM PDT

    •  Just read the workable answer to investment (2+ / 0-)
      Recommended by:
      shaharazade, Geminijen

      Good idea.  I do know that a housing authority also shares decision-making authority.  This doesn't seem to trouble the people I know who have kept up with the details.   Anyway, good answer.

      The Congress exists primarily to ensure the reelection of members of Congress. - Bacevich

      by geomoo on Sun Jul 01, 2012 at 07:19:34 PM PDT

      [ Parent ]

    •  Found your example of the local coop's growth (0+ / 0-)

      exciting, but was surprised at your statement that they followed the model of Bread and circus and Whoel foods.  From what I understand,m that model started out ok, but quickly became one of those coops that sold out to corporate interests and had very unfair wages for workers, etc. Am In thinking of the same cooperative group?

      •  Yeah, no joke, especially Whole Foods (2+ / 0-)
        Recommended by:
        Geminijen, northsylvania

        No, it was little details, like how they presented the produce, what equipment they used for display, that kind of thing.  It may me nervous just talking that way, because there is an element of sales.  But there's nothing wrong with making things work, up to a point.  We are still a coop, and they are responsible about their purchases as much as they can be and have a complete market.  The main thing, to me, is that this is controlled locally with decision-making by residents, some of whom have been involved with the coop from the start.  For example, it would be possible by popular sentiment to get a certain source of food banned.

        I miss the old funky building, but I like thinking they'll be viable, and the familiar lay-out probably supports that.

        The Congress exists primarily to ensure the reelection of members of Congress. - Bacevich

        by geomoo on Sun Jul 01, 2012 at 08:29:42 PM PDT

        [ Parent ]

      •  Not every business technique is bad. (2+ / 0-)
        Recommended by:
        Geminijen, northsylvania

        As a manager given a degree of authority by the membership, wouldn't it be his duty to study what similar operations are doing so that their better practices could be adopted and their worse practices avoided?

        "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

        by Yamaneko2 on Sun Jul 01, 2012 at 09:07:53 PM PDT

        [ Parent ]

        •  In a cooperative community I expect the same (1+ / 0-)
          Recommended by:
          northsylvania

          concern for the community that I expect from all socially responsible businesses -- equitable distribution of the dividends (or fair wages if there are employees), environmentally conscious products and work conditions, no racial or sex or gender discrimination, no products that will be used in war, emphasis on supporting the local economy. Once they place maximization of profit above community growth and development I believe they are in violation of the cooperative principles.

          •  Higher expectations that private business? (2+ / 0-)
            Recommended by:
            Geminijen, bigjacbigjacbigjac

            I may not have the headline right, but your expectations may not all be reasonable.  

            Environmentally conscious work conditions and no discrimination by race and sex are required by Federal and state law.  Gender discrimination is a fair addition -- a doctrinaire capitalist would abhor it because it shrinks the pool of potential workers and shuts out skills.  

            "No products that will be used in war".  While it's a good general guideline, perfect enforcement can be difficult.  Avoiding the DoD is easy enough -- it is extremely hard to break into that market.  On the other hand, if you develop a product that's superior to military issue in ways that you may not even conceive, members of the military will write home, ask for it and use it to fight battles.

            "Emphasis on growing the local economy".  By all means, source and hire locally.  You may end up serving  clients on the other side of the globe, however.

            "Equitable distribution of the dividends/fair wages"  This is doable if "fair and equitable" is not necessarily equal.  Mondragón's associates vote in compensation ratios between highest- and lowest- paid between 3:1 and 9:1.  

            "Environmentally conscious products"  Fair enough.

            "Politics should be the part-time profession of every citizen who would protect the rights and privileges of free people and who would preserve what is good and fruitful in our national heritage." -- Lucille Ball

            by Yamaneko2 on Mon Jul 02, 2012 at 12:41:07 PM PDT

            [ Parent ]

            •  One of the 7 coop principles is serving the (1+ / 0-)
              Recommended by:
              bigjacbigjacbigjac

              interests of the community.  The things I cited are those expected of social responsible investing.  Many individuals and groups choose not to participate in making military products or supporting military goals.

              Obviously we can't just step out of capitalism --even Mondragon has forgone or modified some of its principals --when it began the ratio was2:1. Also, they are including more and more non-member workers & they have a whole category of temporary workers, usually women, who do not count as members of the coop. When they say they didn't have to layoff coop members in the downturn, did this include these workers? Would also like to know what % of the workforce they are.

              which is why we need a more revolutionary change at some point -- but building networks of cooperatives that base their goals on people, good use and distribution of our resources, etc instead of capitalist profit might change the general tenor of the comunity so that we will be more ready to fight for an other than capitalist system when the time comes..

  •  There would have to be rules? (0+ / 0-)

    Nope, can’t support that.

    •  Even having no rules is a rule. (1+ / 0-)
      Recommended by:
      northsylvania
      •  Reminds me of that song by Rush: "Freewill" (2+ / 0-)
        Recommended by:
        northsylvania, Geminijen
        [Chorus:]
        You can choose a ready guide in some celestial voice
        If you choose not to decide, you still have made a choice
        You can choose from phantom fears and kindness that can kill
        I will choose a path that's clear
        I will choose freewill


        I kinda screwed up with a careless uprate so (for now?) I'm a "No Rate" pariah. So when I give a comment "+110% n/t", please consider that a recommend. (That's my workaround fix to participating in this community!)

        by The Angry Architect on Sun Jul 01, 2012 at 11:02:20 PM PDT

        [ Parent ]

        •  I lkike the poem and my free will says I can work (0+ / 0-)

          with others and don't have to make capitlist profit maximization my first goal.  maybe I won't be a millionaire but plenty of coops have shown that you can make a decent living, stay in your community (not be outsourced) and have some say in the kind of community you create.

  •  Wow, I have been following this group for a while. (1+ / 0-)
    Recommended by:
    Geminijen

    And the Diaries are always densely packed with information and ideas many of which are new to me, and require time and thought to digest.

    This one is no exception, and I need to spend some time exploring the many referenced links...

    I am very interested in the notion of the coop, as it relates to possible relocalization of sustainable, diverse and robust economies.

    As with much of what I read on DKos, I realize how much I do not know, and how much I have to learn, but find the idea that government incubation of coop model may be gaining traction in US to be exciting.

    One idea that I ran across recently that I have been intending to research further seems like it might somehow be relevant to this topic:

    In October, 2011, Governor Brown signed into law AB 361 creating a new category of corporations in California: Benefit Corporations, whose bottom line can legally be more about social and environmental issues than profits.
    Thanks for your work!


    I kinda screwed up with a careless uprate so (for now?) I'm a "No Rate" pariah. So when I give a comment "+110% n/t", please consider that a recommend. (That's my workaround fix to participating in this community!)

    by The Angry Architect on Sun Jul 01, 2012 at 10:59:26 PM PDT

  •  The Walmart charter school issue: (1+ / 0-)
    Recommended by:
    Geminijen

    Suggested class reading materials.

    1. Das Kapital, Chs. 1-7
    2. The Communist Manifesto
    3. The Origin of the Family, Private Property and the State
    4. Imperalism, The Highest Stage of Capitalism
    5. The State and Revolution

    The young woman said she would not in any way be "beholden to Walmart." One wonders, does she really believe that? What does she think would happen if she had a class on union busting at Walmart, or a class on how immigrant labor is used to pick produce sold at Walmart, or a class on how Chinese labor is paid $2 a day to produce five hundred t-shirts sold at Walmart for $10 a piece?

    She probably made it though college without once having to read anything by Karl Marx. The American education system and media have brainwashed another generation.

  •  Worker Cooperatives (0+ / 0-)

    Greetings all,

    I was directed here from the national workercooplist (Yahoo). I did not attend the Boston conference and was eager to read some feedback (so far none from "official" sources). For someone not intimately involved with w-c, this is a good report. I have been associated with cooperatives since the 60s and am recently re-leisured from one. After leaving my w-c, I got involved with a group of activists from various social justice groups to try to connect the w-c's to the larger, though amorphous, grassroots economy. We have maintained a wiki since our festival a few years ago and for those who want to search out that activity see: www.jasecon.org
    To read a few - recent - essays on w-c's see this: ztangitext.wordpress.com/
    Comments welcome and I will check back and respond.
    Thanks!
    -Bernard

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