Archive for September, 2012

A friend has asked me to write my thoughts on the Green Party’s recent Economic Democracy Motion. Specifically, what I thought about this paragraph:

“We will grant employees the legal right to buy out their companies and turn them into workers co-operatives. Buy-outs would be funded by a Green National Investment Bank and contingent on the co-ops following green and ethical policies. These co-operatives would localise economic decision-making and give employees incentives for greater productivity.”

I think that the proposers of the motion had their hearts in the right place, however I can see many potential problems which could come from such a policy, some of which I will outline here. Please bear in mind that this is not a detailed analysis of this policy, but just some initial thoughts.

Ultimately, the aim of this blog post is to help bring forward a better motion in the future as well as to encourage more reading, thinking and discussion within the Green Party on this subject.

Before continuing, I need to let you know that I have a lot of love for workers’ co-operatives and I really want them to grow in the UK. I studied them during my Masters and wrote a few papers about them at the time (see the papers Are workers’ co-operatives schools of democracy? A case study of two UK workers’ co-operatives as well as Power in Utopia? Analysis of two UK workers’ co-operatives through Steven Lukes’ three-dimensional lens). I have also volunteered in a community bike co-operative, helped set up a small eco-village run on co-operative principles and just before I became unwell, I was starting to set up a workers’ co-operative with a few others.

During this time – through exploring theory, ideals and what actually works in practice – I have discovered several things which are relevant to the Green Party’s Economic Democracy Motion.

Co-operative education

Firstly, the level of knowledge in the UK about co-operatives is very low, especially when compared to many other countries. Most people don’t even know what a workers’ co-operative is and how they work in practice. People are not used to – or trained – to work in a co-operative way. Almost everything in our society, from school to multinational corporations, teaches us to work in another way. I’ve written about this before in other blog posts (See here and here). As Professor Anderson has written about schools:

“For centuries, leading educationalists have advocated learning by doing, instead of by listening passively to confusing dry abstractions. Even very young and unschooled children can understand complicated aspects of democracy, rights, justice and respect, through their activities and achievements.

“Democracy is practical and pervades all relationships. We cannot avoid either ‘doing’ democracy or else being actively undemocratic; there is no middle way. Undemocratic schools powerfully teach, by example, lessons of intolerance, mistrust, disrespect, repression and fear of change. If they preach democracy, they teach duplicity.” (see more here)

Unfortunately most people in the UK go to undemocratic schools. Most people work in undemocratic workplaces. Most people do not currently have the democratic skills necessary to successfully run a workers’ co-operative.

So, just granting people the legal right to buy out companies as is proposed in the motion, without any previous co-operative training, whether in school or elsewhere, could potentially be disastrous.

In the UK, many are just plain alienated from each other and very far from having the skills necessary to make decisions together in a co-operative workplace. This is not to say that it isn’t possible. Just that you need a lot of support and training, preferably from a young age (The organisation Young Co-operatives does great work in this area. Please read a previous blog post I have written about them).

In this country, workers’ co-operatives often start out small with a few people who are dedicated to the cause, who are knowledgeable about the co-operative ideology, who do research on what works and what doesn’t. They experiment and, if they do well, expand and add new members, often with a trial period so that they don’t introduce people who wont fit within the co-op ethos.

If workers just decide to buy-out workplaces and turn them into co-ops, they sidestep this whole process, with all of the learning that comes with it. That makes it much more difficult for it to function. If workers just buy-out a company and turn it into a co-operative it will take a lot of time and effort for everyone to learn how to run it and make decisions together – this doesn’t really fit in with the capitalist system we live in, where there is a lot of pressure to produce and get good returns. It takes time for people to develop:

– financial management skills (e.g. working with budgets),
– skills related to meetings (facilitating, minute taking, working to agenda, consensus or voting methods, the self-confidence and ability to speak in public meetings, the ability to work towards a common goal),
– conflict resolution skills
– community organisation skills (working with and supporting local communities),
– knowledge about laws and political systems that affect the workplace and co-operatives
– and much more besides.

If workers buy-out an existing company, it would also make it much more difficult to exclude people who do not fit in to the co-operative ethos as there would be no initial trial period for all of the workers who buy into it.

Again, it is possible for people to do this and to make it work, as some examples in Argentina, Venezuela and elsewhere around the world have shown. However, it is more difficult and needs real determination – and ideally a lot of support from experienced co-operators – for it to succeed.

Cultural questions

One of the reasons why co-operatives have done so well in other countries or regions is because of very specific cultural, economic and social circumstances. It is not just about granting employees the legal right to buy out companies.

The best book that I know of which explores these specific circumstances is:

La Lega: The making of a successful cooperative network by P. Ammirato (1996) (see the first 10 pages of this book here)

It discusses the development of co-operative networks in Italy, Spain and the UK and is well worth a read.

Other insightful books include:

The Anarchist Collectives: Workers’ Self-management in the Spanish Revolution 1936-1939 by Sam Dolgoff (find the .pdf of this book here)

Making Mondragón: The Growth and Dynamics of the Worker Cooperative Complex by William Foote Whyte and Kathleen King Whyte

The Myth of Mondragon: Cooperatives, Politics, and Working-Class Life in a Basque Town by Sharryn Kasmir

I am not going to expand in this blog on the specific circumstances which enabled co-operatives to flourish in some of these regions. For more information read some of these books.

In 2012, Co-operativesUK estimated as part of their co-operative review that there are approximately 493 worker owned and controlled co-operatives in the United Kingdom which employ 78,500 people (see page 21 – these workers’ co-operatives vary in size, ownership and management structure). (please also see this document which has a much lower – and likely more accurate – estimate of the size of the UK co-operative sector which states there are around 3,000 employees in 431 workers’ co-operatives. It all depends on how you measure the sector.)

If the Green Party wants to have a much larger worker co-operative sector in the UK it must seriously engage with the history of how co-operatives have developed in other countries, and look at why co-operatives have succeeded in some regions and not others. The economic democracy motion, as it is currently written, does not reflect that kind of serious analysis.

Economic questions

Moving on to the economic question, how much would this economic democracy motion cost? What would happen if lots of people suddenly wanted to buy-out multinational corporations? Would the Green National Investment Bank be lending the entire amount the corporations are valued at, therefore effectively transferring ownership to the state bank until the workers pay the loans back? Or would the workers put up part of the money so they shared initial ownership with the state?

Also, who decides the value of these corporations? Would this policy massively decrease the value of corporations as they would know that they could potentially be bought out? What effect would that have on the wider economy? Also, how would this policy practically work, when some of these companies have hundreds or thousands of employees? What kind of infrastructure would need to be introduced for this to work?

And what would happen if lots of these new co-ops failed because the workers didn’t have adequate training on how to run a co-operative or couldn’t compete against existing corporations? Would the Green National Investment Bank then go bankrupt? Then what?

I’m sure there are many more economic, costing and organisational questions which could be asked about this motion.

For this to even begin to work, there would have to be massive knowledge sharing between the UK and countries with much bigger co-operative sectors. There would also have to be co-operative training, ideally from a young age, on a very big scale.

It would be easier – although not as far reaching – for the Green Investment Bank to focus on lending to new start-up and existing workers’ co-ops. If it wants to go further than this much more detailed proposals need to be put forward on how this would practically work.

Final thoughts

There are examples of the state trying – and failing – to use the co-operative model to save British companies in the past, for example  Scottish Daily News and the Meriden Motorcycle Co-operative (click on the link to see a good report on this). The state can help the co-operative movement expand, however it must be done in a way which learns from the mistakes of previous governments.

It is very important that the Green Party gets it approach right in regard to co-operatives. As I wrote in one of my papers, “because workers’ co-operatives demonstrate unique opportunities for work reorganisation, democratic management structures, economic self-governance and even a redefinition of work and property, as Adams et al. put it, “Worker-ownership offers a vision of what ought to be.””

Some people within the Green Party have studied co-operatives in-depth, such as Molly Scott Cato (see here for some of her work on co-operatives). I hope that they can put forward more detailed – and thought out – economic democracy proposals in the future which learn from the lessons of other countries and from the past.

Source of picture: Made – and promoted – by Calverts workers’ co-operative


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