Will co-op businesses be the basis of the next wave of the American economy?

“To transform society, co-ops have to be part of a political movement,” contends Professor Sam Gindin of York University

No 683 Posted by fw, February 24, 2013

“So if you look below the surface, it’s not just co-ops, but co-ops are probably the most developing form. It’s not inevitable that this will move forward, positively and powerfully. But it’s also not inevitable that it will stay at the margins. And I think that’s partly a question whether people take it very seriously and begin seeing it strategically as part and parcel of developing the basis of maybe the next kind of wave of the American economy.”Gar Alperovitz

“Co-ops can really only work in a sustained way — other than just being marginal and doing some progressive things — but to really work they have to be a part of a transformative project. They have to actually be a part of a political movement that is transforming society, and that the co-ops themselves are only one part of it.”Sam Gindin

Can worker owned businesses help transform capitalist economies? The Real News Network addresses this question in the following 7:30-minute video, embedded below. To see the original report, with its error-filled transcript, click on the linked title below. Alternatively, a corrected version of the transcript appears below the embedded video.

Worker Owned Businesses Point to New Forms of Ownership, Jessica Desvarieux, Reporter, The Real News Network February 14, 2013

Can co-ops come out of the margins of the economy and be part of a larger political project to transform how things are owned?

CORRECTED TRANSCRIPT

[The remarks by TRNN reporter Jessica Desvarieux (JD) are in italics]

JDUnions in America are on a decline. It’s a fact — and according to the bureau of labor statistics, today only about 11 percent of American workers are a part of a union. That’s a stark difference from the 1950s when one out of three Americans belonged to one. But although unions are submerging, worker-owned businesses in America are on the rise. Traditional worker-owned cooperatives represent democratic workplaces where each employee has a stake in the financial health of the business. That means each member has one vote in making company decisions. In the new documentary Shift Change, we see thriving examples of employee-owned businesses in the U.S., like this bakery in San Francisco.

Tim Huet, Arizmendi Association — Too often I thought people who were working in progressive organizations, we were trying to protest other things, we were trying to stop other things. But we weren’t trying to build an alternative to that. And to really have a democratic society we have to have the people who have democratic values, be able to produce bread, be able to produce bicycles, and books and the things that we need.

Madeleine Van Engel, Arizmendi Valencia — I like having a say in how the business is run. I think that when people share ownership, they take ownership.

JDOwnership is the key ingredient in the co-op business model. Shift change travels to Mondragon, Spain where a 50-year-old network of cooperative businesses is the backbone of society. With 84,000 employees and 25 billion dollars in annual revenues, this region around Mondragon has the lowest unemployment in Spain.

Mikel Lezamiz, Director of Cooperative Outreach, Mondragon Cooperatives – The world has changed, but most businesses operate in an authoritarian way, that is centralized just as it was fifty or eighty years ago. It is possible to strike a balance, for a business to be profitable and to have as its highest goal to enrich the whole society. This is the future, not only for cooperatives but for any modern business in the twenty-first century.

JDAt the AFL-CIO headquarters in Washington DC a panel of guests spoke of the importance of supporting co-operatives as a way to provide a pathway to long-term economic stability.

Gar Alperovitz, Cofounder, Democracy Collaborative – So if you look around the country, there’s the bank of North Dakota which is a public bank, there is a movement building up which is changing and democratizing the ownership of wealth. Co-ops are some of the most important part of that, directly owned cooperative structures historically have been the key. And there is 130 million people involved in co-ops in the United States today, a large percentage of those in credit unions. One-person, one-vote banks if you like. There are two things driving it. One is the large scale pain that people are feeling. Nothing else is working for many people. And I think that’s why you’re seeing the experimentation and the development. And I think that’s why you’re going to be seeing more of it. And at the other level, people tend to forget nationalization has happened in the United States because of crisis. We took over the Chrysler Company. We bailed out General Motors. AIG, the largest insurance company in the world, was nationalized by the United States government. So there are different forms of democratization popping up for different reasons. In these cases, we sold them back as soon as they made a profit on the public money. But in the future, we may see such larger transformation of this kind as well. Famously, already in the state of Alaska, oil revenues are used by the state to give everyone a dividend as a matter of right. It’s another form of democratizing ownership. So if you look below the surface, it’s not just co-ops, but co-ops are probably the most developing form. It’s not inevitable that this will move forward, positively and powerfully. But it’s also not inevitable that it will stay at the margins. And I think that’s partly a question whether people take it very seriously and begin seeing it strategically as part and parcel of developing the basis of maybe the next kind of wave of the American economy.

JPThe call for the next wave of the American economy is being heard by some established unions like the United Steelworkers. International president Leo Gerard says that his organization now has a strategic alliance with the Mondragon cooperative.

Leo Gerard, International President, United Steelworkers — I think it’s important to find a new way of doing business that’s going to have a greater reward to workers. Not just in the economics of work but in the dignity of work. And we think that was a really good model to work from.

JPNow after the most recent “right to work” legislation was passed in Michigan — which further undermines unions by allowing workers not to pay dues. Gerard says he recognizes that times are changing.

Gerard – I think that the unfortunate attack on workers and on trade unions that led us to the greatest income inequality that we’ve had since the Great Depression. And clearly that economic model has not been working for workers for more than 30 years now.

JPThough cooperatives have gotten people working, professor of York University in Toronto, Sam Gindin, says co-ops have their limitations.

Sam Gindin, author, The Making of Global Capitalism — When you’re operating within a capitalistic society, it puts severe pressure on you to compete on their terms. The other problem is that they’re still very marginal because they’re trying to operate outside of taking power where it is. So if looking at credit unions for example, they’re operating in the context of leaving the financial system, the bulk of it, to the banks and investment houses. I mean any major bank in United State is larger than all the co-ops put together. Co-ops can really only work in a sustained way — other than just being marginal and doing some progressive things — but to really work they have to be a part of a transformative project. They have to actually be a part of a political movement that is transforming society, and that the co-ops themselves are only one part of it.”

JPGindin worked 20 years in the Canadian Auto Workers Union and acknowledges that unions still have not be able to address the vacuum in the labor movement….in short, he says, “Workers have to lead the fight.”

Gindin — The public sector workers for example they are getting hammered today, and they are not going to survive unless they can show that they are the leaders in the fight for public services. The private sector workers are getting hammered. And even when there are subsidies that workers support for companies, it turns out that doesn’t guarantee their jobs. So workers have to think about what’s an alternative, how might we actually convert auto plants so that we use those skills for making the kinds of things that we’re going to need for the rest of the century around the environment. Now once you start talking about those larger things and fitting co-ops into that kind of a model, then I think you’re beginning to think about what change really means and how these different pieces fit into it.

SEE ALSO

  • There is hope! We are laying the groundwork for the “Next Great Revolution” – Gar Alperovitz, posted July 17, 2012. People at the grassroots level sense something is wrong but don’t quite know what to do about it.  But they do know there has to be a better way. The better way, according to Alperovitz, is a bottom-up transformative change. The question is: Can we rebuild a democratic system from the bottom up that changes ownership of capital from big corporations to worker-run businesses and, concurrently, is inherently Green?
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