Worker Cooperatives: The Default Alternative to Predatory United States Capitalism
Introduction
It has become abundantly clear that capitalism is eroding economic development and working-class lives and damaging civil society itself in large swaths of metropolitan and small-town communities in the United States. The United States federal government is demonstrably averse to protecting working class lives and labor unions appear increasingly as defensive institutions combating corporate capital. On the other hand, we see from islands of examples of worker cooperatives in Argentina, Spain, Canada, Italy, the United States and elsewhere, that cooperatives do not need capitalists nor managers. Markets are required and so are, in most cases, regional states and municipalities through public policy interventions. My research in Argentina and the United States demonstrates that coalitions of worker advocacy, cooperative formation and public policies at provincial/state levels can come together to provide arenas of worker autonomous enterprise formation that attain productivity and longevity.
Cooperatives provide a more responsible, non-equity, stake-holder-oriented workplaces grounded within community settings. They represent workers defending local economic and societal assets against the ravages of corporate shareholders lack of community loyalties. Along with retiring employers’ succession decisions on behalf of their employees and increasing momentum among workers to start up cooperatives, eminent domain offers the most powerful, constitutionally prescribed, tool available for establishing worker cooperatives. Moreover, decentralized federal and autonomous unitary governmental systems have shown the greatest disposition to cooperative formation. Finally, the 2018 U.S. political election returns present the most propitious opportunity in many generations for a progressive public policy that would engender and foster worker cooperatives.
A Brief Historical Lens
Working class cooperative advocates often look back with misty approbation at the Paris uprising of 1871. Sadly, we cannot recreate the almost anarchic environment that preceded the Paris Commune of 1871. The standoff between the Parisian national guard and the French national military at Versailles produced the conditions that created several weeks of communal societal reforms that allow us today to imagine what political power, that Frederick Engels would later call “the dictatorship of the proletariat” on behalf of the working class, would actually look like.
Karl Marx saw the Paris Commune of 1871 as the potential ascendancy of worker cooperatives writ-large but he also envisioned they needed the help of a captured state to carry their reforms through. Marx lauded the creative potential of worker collective entrepreneurship as a germ of participatory socialism. In Capital, Vol. I written several years before the Paris uprising, Marx wrote, “The life process of society, which is based on the process of material production, does not strip off its mystical veil until it is treated as production by freely associated men, and is consciously regulated by them in accordance with a settled plan” (80). This is certainly what transpired during several weeks in the Spring of 1871 when workers controlled the levers of the Parisian social economy.
In evaluating the Paris Commune and its defeat, Marx in his Civil War in France continued to see capitalism as perpetually irrational, chaotic, convulsive though he still envisioned cooperatives as a counterweight:
“If co-operative production is not to remain a sham and a snare; if it is to supersede the capitalist system; if united co-operative societies are to regulate national production upon a common plan, thus taking it under their own control, and putting an end to the constant anarchy and periodical convulsions which are the fatality of capitalist production—what else, gentlemen would it be but communism, ‘possible communism’?”(1998: 89-90).
Frederick Engels, in 1891, on the 20th anniversary of the Paris Commune in a new edition of Marx’s Civil War in France, wrote of the workers of Paris engaged in “forming a cooperative society for the purpose and further for the amalgamation of these societies into one great cooperative organization.” (16).
But Marx realized, nonetheless, the need for state intervention as a necessary supplement for tipping the balance on behalf of the working class. In terms of public policy intervention, Marx understood the state’s partly autonomous role when he examined the Bonapartist case in his The18th Brumaire of Louis Bonaparte (1963) after the failed 1848 revolution. The state was no longer seen as an exact reflection of all bourgeois interests as Marx and Engels had earlier depicted in The Communist Manifesto when they wrote of the state as simply “the executive committee of the bourgeoisie.” It is when capitalism demonstrates its irrationality that room is made for the possibility of a necessary alliance between portions of the state, whether national, provincial or municipal, with the working class. Since the Bonapartist and Bismarckian advent, we can see the state as the potential provider and purveyor of societal capital writ-large as much as the representative solely of the capitalist class.
And this brings us back to the understanding that as Marx wrote of the accumulation of capital as being historically “dead labor” which implies that workers themselves are a prime capital resource. As Marx wrote so stirringly in Capital, Vol. 1, Ch. 10, “Capital is dead labor, that vampire-like only lives by sucking living labor and lives the more, the more labor it sucks” (233). We want to accentuate that idea of workers today as living capital without the need of capitalists.
Monopoly capital controls employment and the lives of workers while it can move in and out of communities at will, depending on bottom line profits. Workers are totally dependent on the whim of the market free-for-all with social need and benefits providing, at best, a very subordinate safety net. Capitalism separates people in the productive process, yet it brings people together at the very same time. This provides workers with the wherewithal to see themselves as the actual and collective producers of goods and services that could stand alone without the intervention of the owners and managers.
The “dictatorship of the proletariat,” often used by Marx since 1850, is, of course, difficult to envision today, but public policy on behalf of the working class is much more likely to be on the agenda in the not too distant future as conditions of the working classes continue to deteriorate under U.S. capitalism. As I have briefly laid out above, Marx and Engels clearly saw that a combination of worker cooperative formation and critical state intervention could combine to provide a decisive challenge to capitalism.
Worker Cooperatives Pervade the U.S. Economy
One of the U.S.’s major economic development defects are the unequal control and use over property rights once employers declare bankruptcy or decide to move their enterprises elsewhere. This authority would include the land, buildings, machinery and equipment and other resources used to achieve previous profit margins. The forgotten contributors in these ventures are the workers who have produced the products and services, often over long years of gainful effort and involvement. The workers have contributed mightily to the accumulation of capital and cannot simply be shunted away because of the mobility of capital. Capital and labor together have a contract with society that should not be broken unilaterally by one of the partners. Employment, taxes to the state and municipality and other responsibilities, often from past subsidies to these employers, cannot be abnegated. The capital that has been enhanced by the workers involved cannot be allowed to disappear from the community but must be reorganized by the workers’ use of that same capital. Only social ownership of production can avoid the economic injustices and inequities that firm dislocations bring in their wake and worker cooperatives provide a viable solution to these continuing crises in the United States.
We are admittedly under a two-front challenge of economic financialization and globalization and a cyber technological revolution which has dramatically augmented pressures upon how capital impacts upon the working classes. Present economic conditions represent “exploited human lives all along the global supply chain” (Scholz 2016:3). U.S. labor unions have shown they cannot meet the challenges of downsizing or runaway enterprises, nor do they share in the co-determination of corporate board decisions (Holmberg, January 7, 2019). Worker cooperatives, on the other hand, have shown that their prime allegiance is to their communities upon which they depend and upon their stake-holders, not their shareholders. Cooperatives have shown these anti-capitalist capabilities as well as community out-reach commitments in many Western Hemisphere and European countries, but the primary case of the Argentine worker recuperated enterprises presents the foremost exemplar to privately-held hierarchical enterprises (Ruggeri, Polti and Antivero 2018; Ranis 2018).
Neither can labor unions, by and large, confront technological changes because they are imposed upon them from the top down whereas within work cooperatives, technological innovations would be applied as a decision by the worker-owners for the enhanced benefit of all rather than simply as a money-saving device. The key to this question is who owns the technology and for whose ends and for what purpose. Technological unemployment is an increasing challenge within globalized capital but worker cooperatives can mitigate these blows by spreading the hurt, decreasing the work-week if necessary, increasing the necessary retraining and meeting the challenges collectively rather than relying on the managers’ decisions to cut and run. In essence under cooperative decision-making, technology would not be used as a weapon of discipline, punishment and betrayal. Worker cooperatives can use science and technology not as dangerous to employment and requiring layoffs but as rational approaches to productivity gains and reductions of labor time. Marx has written of the capitalist creating the discipline of the military barracks at work, while cooperatives maintain almost the opposite of that top-down controlling environment, by substituting self-management options for the collective good of the enterprise.
The hierarchy of management and the differentiation between the skilled and unskilled employees common in the capitalist firm is also mitigated in a cooperative since it is to the benefit of all to have everyone as highly skilled as possible rather than keeping some members of the cooperative super-exploited and marginalized members of the enterprise. This would be truly self-defeating from every objective of a workers’ cooperative.
The market under capitalism is a given, how capitalism has used it, stoked it, controlled it on behalf of a few owners and managers is another matter entirely. Cooperative human interactions and interactivity have the potential of confronting the dystopia of more and more irresponsible enterprises benefitting from and then abusing their powers within the communities that welcomed and sustained them (Ranis 2016).
In the United States, the contemporary neo-liberal reality of the Trump administration, suffused with hypocritical, pseudo-populist concern for the working class, there is little opening from the executive branch that would favor worker cooperatives. However, the Democratic Party landslide victory in the House of Representatives in the 2018 Congressional elections bodes well for a far better appreciation of the worker malaise in the U.S. It was the largest and youngest freshman class elected in fifty years, and the most women ever elected (127). Significantly, the Congressional Progressive Caucus grew from 78 to 96 members (Talbot, January 14, 2019). Even before the election of 2018, there were growing signs that cooperatives have a significant place in economic development where local communities approach them as serious contributors to working class productivity and democratic workplace organizations. In the U.S. the federal decentralized political structure is critical to aiding and abetting working-class cooperative formations and creating an environment that, by way of their examples, can lead to a growing understanding of their positive place in democratic economic development. Globally, there is much evidence that federal and decentralized unitary political systems give rise to cooperative formations. Witness, for example, the proliferation of cooperatives in the Province of Buenos Aires in Argentina, the Quebec Province in Canada, the Emelia Romagna region of Italy and the Mondragon cooperative in the autonomous Basque region of Spain.
My central argument is that worker cooperatives, achieved through local startup initiatives, employer succession decisions on behalf of their employees and public policy interventions, including the most powerful instrument of eminent domain, are all applicable tools and are available on behalf of workers and communities with significant and multiplier consequences. I have previously argued, for example, that the use of eminent domain by state and municipalities offers the U.S. an alternative and constitutionally accessible methodology awaiting use on behalf of the working-class cooperative formations (Ranis 2007: 193-208; Ranis 2014: 51-69).
Moreover, from the grass-roots, principally at the municipal level, community-based organizations have sharpened their critique of corporate capitalism (Schneider 2018). It has become increasingly clear that at this municipal level there is support from the public sector for worker cooperatives as alternative economic self-managed enterprises. Cooperatives provide one of the possible paths to a post-corporate capitalist economic system that would benefit enormously from such public policy interventions. It is a rational approach to keeping workers on the job, avoiding unemployment and poverty and the accompanying societal alienation this brings. And it can be defended as the ethical approach to a democratic socialist society.
There is certainly a growing predisposition toward cooperatives in the U.S. though we cannot yet call it an explicit movement. For example, U.S. political candidates and especially the younger population in recent surveys have demonstrated considerable support for socialism as opposed to capitalism (Richardson, November 4, 2017; Stockman, April 20, 2018). A large proportion of U.S. voters see the political and economic system as skewed against them. Many young people are economically worse off than their parents, students often loaded with college debts and, with or without a degree, finding it difficult to find employment and when they do it is often in non-unionized and precarious jobs. This accounted for the substantial support for Bernie Sanders within the Democratic Party primaries, running as a Democratic Socialist and, ironically, giving a certain impetus to the electoral college victory of Donald Trump, though many other factors were at work in his accession to the presidency.
Trump’s pseudo-populist campaign filled a void, overlapping with some of the same constituency that had supported Bernie Sanders and Barack Obama. Trump had clearly stood out among the Republican Primary candidates as the autonomous, seemingly straight-talking candidate who spoke the language of the U.S. average person. It gave elements of the U.S. working class hopes that someone represented them in an ever more uncertain and precarious economy. Added to this negative outlook, is the fact that in 2016 only 8.5% of U.S. workers continued to be employed in manufacturing sector (Amadeo 2018). In 2016, of those who thought their financial situation had worsened, 77% voted for Trump (Bellamy Foster, June 1, 2017). A bleak picture has also emerged concerning Trump’s base of white men and women without a university bachelor’s degree. They are dying in droves, committing suicide and poisoning themselves with drugs and alcohol at much higher rates than among African Americans and Hispanics. In 1999 mortality rates of whites with no college degree were 30% lower than for African-Americans. By 2015, their mortality rates were 30% higher (Bendix, March 24, 2017).
Though Hillary Clinton’s popular vote was infinitesimally less than President Obama’s vote total, the electoral college votes concentrated in certain rust-belt states played a significant role in Clinton’s defeat despite her 3 million popular vote margins over Trump. For example, just 74% of white Obama voters with only a high school diploma or less, voted for Clinton (Cohen, August 17, 2017). Trump’s main support came from white male voters in skilled blue-collar industries in production, construction, maintenance, repair and transportation within the Rust Belt (i.e. Iowa, Michigan, Wisconsin, Ohio and Pennsylvania).
Trump’s subsequent abandonment of his pseudo-populism and his clear absorption by corporate capital and Wall Street, was seen by his corporate tax cuts to 21% for the wealthiest 1% and a subsequent Republican House measure that would cut $537 billion from Medicare, $1.5 trillion from Medicaid and $4 billion from Social Security benefits over the next decade in order to balance the budget because of the Trump tax cuts (Werner, June 19, 2018). Complementing this were his deregulatory executive orders and cabinet appointments (in health, education, environment, housing, finance and labor), many provided by the Heritage Foundation, the right-wing think tank since he became president (Mahler, June 24, 2018). The jargon of “Make America Great Again” and “draining the swamp” have been defrocked for all time.
This has inspired a resurgence of populist activism from the left unparalleled in recent U.S. history. The Women’s March against Trump in major U.S. cities in January 2017 were the largest in U.S. history. Over 4 million marched against his election and marked the beginning of public demonstrations against the Trump regime throughout 2017 and into 2019. Though there is no direct correlation, the continual massive outpouring since the ascension of Trump is evidence that the U.S. public is open to novel approaches to the political economy. This suggests that there would be support to the creation of working-class cooperatives, those directed at many of the laborers and employees that had mistakenly supported Trump because of their economic malaise. It also makes them available to a turn to the left and the demand for the government to come to their aid in an uncertain economic environment. This is corroborated demographically and electorally as we move from the “Silent Generation” through the “Baby Boomer,” the “Generation X”, the “Millennials” to the “Generation Z.” Each population segment represents a higher Democratic voter turnout more open to progressive social policies on the left (Bonica, July 29, 2018). In the latest Generation Z survey, 70 percent said they wanted the government to do more to solve the nation’s problems (Levin, January 24, 2019).
I believe, leading up to the 2018 mid-term congressional elections, there was a growing predisposition among municipalities in the U.S. in a time of federal government employment policy passivity and stagnation, to take the leadership in defending working class and middle-class worker jobs. This can be readily understood in the many areas of municipal initiatives that superseded conservative federal policies in such areas as living wage campaigns, voter registration reforms, paid 2-week vacations, mandatory paid sick days, sanctuary city declarations, LGBT rights, decriminalizing marijuana usage, rental vacancy regulations, reforming local firearm safety laws, smoke-free establishments, sugar-free and soda tax ordinances (see for example, Riverstone-Newell, Summer, 2017).
Presently there is only one national worker cooperative legislative policy that has passed into law in the U.S., but there are significant congressional proposals that have been introduced since 2016 and there are important municipal ventures being created throughout the United States. These measures and advocacies demonstrate that progressive politicians are increasingly recognizing that corporate capital cannot unilaterally control the economic lifeline of communities.
The backdrop to this is what has been described as a growing silver-haired tsunami (the baby-boomers) occurring where millions of small and medium sized companies exist with owners at or near retirement who would be open to succeeding their businesses to their workers as cooperatives. One estimate expects that of 12 million businesses, 70% are expected to change hands in the next several years (California Association of Business Brokers, 2018). Without such succession plans, businesses may close, workers lose their jobs and communities suffer economic downturns. The U.S. has the precedent of thousands of housing, consumer, farm supplier, marketing, utility, and financial-credit union cooperatives. The International Cooperative Alliance (ICA) helps orient retiring company owners to sell their companies to their employees, cement their legacy, promote community economic development and root capital locally. They support grassroots cooperative startup efforts. Their views are that there is a need to promote specific ventures in focused economic areas to provide the needed scaling up of large cooperatives to have a major economic impact in a given community.
It is also estimated that there are already about 7,000 employee formally-owned businesses (Employee Stock Option Plans-ESOPs) that employ over 14 million workers in the U.S., though, in almost all cases, these are, by and large, simply company stock shares provided their employees without significant decision-making rights or inputs. Increasingly some democratic legislators see this as an opportunity to expand the concept of ESOPs toward more empowering cooperative formations, saving jobs, creating working class opportunities and maintaining investment in local communities. Both Bernie Sanders and Hillary Clinton, for example, during the Democratic Primaries of 2016 expressed support for corporate tax benefits for company profit-sharing with their employees. More importantly, Bernie Sanders, along with three other Northeastern senators, Kirsten Gillibrand, Patrick Leahy and Maggie Hassan, on May 10, 2017, introduced legislation in the U.S. Senate on encouraging workers to take a responsible role in the production process. The WORK “Worker Ownership, Readiness and Knowledge” Act would provide $45 million funding over 5 years for state employee ownership centers, to provide training and technical assistance to current and prospective owners in the various U.S. states. It is geared to promote employee ownership and participation in business decision-making. The focus is based on the reality of ownership succession planning and employee participation in that process. These centers are targeted to retiring business owners, senior managers, community groups and economic development organizations. The act envisions a data bank to help employees to find legal, financial and technical advice in connection with business ownership and provides courses for employee participation in employee-owned companies, thereby spreading the use of successful worker participatory techniques (S1081: introduced May 10, 2017).
Complementing this proposed legislation, Sanders, along with the same three Northeastern senators, on the same day, May 10, 2017, introduced a second piece of legislation that would create a U.S. Employee Ownership Bank with $500 million in funds for low-interest loans and financial assistance for workers who want to buy out the businesses where they work and organize them into cooperatives as well as Employee Stock Ownership Plans (S1082: introduced May 10, 2017).
Neither of Sanders’ Bills have passed the U.S. Senate, but a Bill co-sponsored by Senator Kirsten Gillibrand of New York, entitled the Main Street Employee Ownership Act, was introduced by Nydia Velázquez of New York, passed by the U.S. House of Representatives on May 8, 2018 (H.R. 5236), passed by the U.S. Senate (S2786) and signed into law on August 13, 2018. Similar to Sanders’ concerns, it advocated for the increasing availability of loans from the Small Business Administration to companies transitioning to employee-owned cooperatives or ESOPs. Secondly, it provided training to promote successful management, governance and operation of a business purchased by its employees. It is the sense of this legislation that cooperatives, by the nature of their organizational structure, would have difficulty accessing private lending and thus require public funding sources. Melissa Hoover, Executive Director of the Democracy at Work Institute remarked, “We applaud this commitment to provide education, microloans and training through the Small Business Administration, which will cultivate healthy business successions to employee ownership, saving critical business assets and keeping our communities strong and prosperous” (Democracy at Work Institute, August 14, 2018).
With the landslide Democratic Party victory in the House of Representatives in 2018, there is a progressive coalition led by Freshman Congresswoman Alexandria Ocasio-Cortez of New York that is advocating for a Green New Deal that had the immediate support of the 2020 Democratic candidate for the presidency, Senator Elizabeth Warren of Massachusetts (Kaufman, January 20, 2019). The Green New Deal clearly sets out a 10-year target window of 100 percent renewable energy. Its draft text centers on local governments and civil society groups to lead the way, particularly local communities most sensitive to and conscious of climate change and environmental harm. The focus is on deindustrialized towns intent on “building wealth and ownership at the community level.” In order to achieve this outcome, the Green New Deal advocates for a new public bank or specialized public banks to undertake public financing as a crucial component for expanding cooperative and public ownership (The Next System Podcast, December 12, 2018).
At the state level, on April 25, 2017, revised and amended on April 13, 2018, New York State Senator Jamaal Bailey introduced a bill that has the support of the New York State Senate and Assembly that would establish a State University of New York-based center for employee ownership. The intention of this legislation is to provide education and outreach on employee ownership succession and provide business owners information on transferring full or partial ownership to their employees. In addition, the bill advocates succession planning so that a business can continue when the owner retires or moves on by spinning off the business to a cooperative-owned enterprise. In that regard it will provide loans of up to $100 million to pre-existing businesses to support employee succession purchases (S5685). On October 24, 2017, Governor Mario Cuomo signed another bill into law sponsored by Senator Bailey that provides training to individuals for the successful management and operation of new businesses purchased by individuals to provide for their continued employment through the formation of worker-owned cooperatives or employee owned enterprises (S6794).
Bailey was joined by New York State Senators Andrea Stewart-Cousins and Daniel Squadron as they focused on the need for legislation to empower worker-owned enterprises with the release of a Senate Democratic Policy Group study (June 1, 2017) that argued, employee-owned businesses created jobs three times faster than traditional firms and have shown 11.5% average growth from 2002 to 2012 compared to a growth rate of 7.1% for publicly traded companies, layoff rates of 2.6% of its workers versus 12.1% for traditional companies in any one year, provided significantly higher wages and retirement benefits, and are more profitable by way of productivity gains. Nationally, it has been argued, that there are more than 2.3 million companies, employing one in six workers whose owners are at or near retirement. This includes, for example, 181,000 businesses in New York State employing 1.6 million workers (Democracy at Work Institute, August 14, 2018).
There are already many good examples of successful owner succession plans throughout the country. Maine and Vermont provide two such cases. One example is the Island Employee cooperative of Deer Isle, Maine with 60 workers. The former owners of a combined Ace hardware store, a supermarket and pharmacy, on retirement, wanted to make sure the jobs they created and the businesses they initiated remained in the community. So, the owners sold them to their trusted employees. A second cooperative, the New School of Montpelier Vermont, that served students with physical and emotional disabilities, was sold to its staff by the retiring previous founder who wanted to make sure its mission continued. It has approximately 25 members, teachers and staff personnel.
Several other examples of successful succession cooperatives include A Child’s Place, a child care facility sold by Gregory and Linda Coles of Queens, New York to their loyal employees in 2017, A Yard & a Half, a landscaping company in Massachusetts sold to her employees by Eileen Michaels in 2013 and a group of 36 individual subcontractors coming together to form the Metis Construction Cooperative in Seattle in 2008 (Anzilotti, May 21, 2018). In all the above cases there are significant capital gains tax advantages for owners who, when they retire, sell their companies to their employees. This advantage is apart from the stated position in every case of the owners wanting to see their companies stay in the hands of long term, known and trusted employees.
A recent cooperative study by the Democracy at Work Institute demonstrates the varieties of cooperatives that have formed through succession owner experiences.1 These examples of the varieties of succession cooperatives that have formed demonstrate clearly that there is no industry or service that cannot be converted by and for the workers and that this growing trend needs public policy involvement and support.
In the U.S., moreover, there are now 33 states that provide for benefit corporations (B-Corps). These corporations differ from typical corporations, run strictly for share-holder profits, in that they may have secondary socially redeeming characteristics that have a positive impact on society and the environment. In other words, their approach goes beyond their fiduciary responsibility to the shareholders. This allows them, in those states, legal protection against shareholder suits if the company focuses, for example, on giving to charities or lobbies on behalf of the environment or the community in which they are situated.
Another arena that provides a sense of responsibility to employee rights and involvement is represented by the American Sustainable Business Council which has 200,000 members, including such employee-friendly firms as New Belgium Brewing, Eileen Fisher, Dansko, Ben and Jerry and Patagonia. Their slogan of “people, planet and profit” is based on the notion that their employees are as important as stakeholders as well as shareholders. Their stated approach is that workers’ share in ownership provides stronger worker commitment to the job and greater company productivity and sustainability.
In addition, New York State has a Self-Employment Assistance Program (SEAP) geared to allowing an individual to use his or her unemployment benefits to invest in entrepreneurial training to initiate a business idea that has been percolating instead of looking for another job during that time period. Success stories are varied and include a human resource service agency, a canned fruit preserve provider, a portrait photographer and a graphic display company https://labor.ny.gov/seap/entrepreneur-resources.shtm (June 28, 2018).
In New York City, for example, there is the Cooperative Economics Alliance of New York City (CEANYC), a service organization that provides technical assistance, political education, leadership development and marketing training which aims to expand community-led and democratically oriented worker, consumer and financial cooperatives, community trusts and gardens and low-income housing cooperatives. Its stated goals are to raise awareness of the role and value of cooperatives and to advocate for a New York City Office of Cooperative Economics to promote a more solidarity-oriented economy.
Nevertheless, the overall picture for worker cooperatives in the U.S. is still far below its real potential. There are only approximately 350 worker cooperatives with 7,000 employees in the U.S. The New Era Windows cooperative (formerly the New Republic Windows and Doors Company of Chicago) is the only one of two manufacturing cooperatives in the U.S., though there are several industrial bakery cooperatives in California (Alvarado and Arizmendi Bakeries). The largest worker cooperative is the New York City based Cooperative Home Care Associates with 2300 members. New York City and Madison, Wisconsin have been the most pro-active municipal city councils in the country in terms of support for worker cooperatives.
The New York City Council has dedicated $5 million to cooperative development over the last three years via the New York City’s Worker Cooperative Business Development Initiative (WCBDI) within the NYC Department of Small Business Services (SBS). It has provided support for such cooperative start-up needs as business plan development, financial planning, market research, succession planning and bookkeeping. In their 3rd annual report, the WCBDI lists the multiple cooperatives that they have initiated. A sample includes: Artisan Sewing with 24 members, All Hands and the Cook with 10 members, Beyond Child Care with 39 members, Golden Steps Elder Care Cooperative with 14 members and Syllable Cooperative with 12 members (Working Cooperative Business Development Initiative, 3rd Annual Report, 2017). This has been complemented and coordinated with the New York City Network of Worker Cooperatives (NYCNOWC) which offers an annual educational and informational inter-cooperative conference, multiple cooperative seminars, as well as marketing and legal services. There are also two other such cooperative organizations: The Network of Bay Area Worker Cooperatives and the Valley Alliance of Worker Cooperatives in Massachusetts. Madison, Wisconsin has funded $1 million a year since 2016 for municipal cooperative development.
The city of Cleveland also combines an interesting Green multi-cooperative model tied to anchor institutions such as leading universities like Case Western Reserve University and Cleveland State University and prominent hospitals such as The Cleveland Clinic and University Hospitals. Based on the procurement, investment and spending needs of such institutions, the Democracy Collaborative has fostered the growth of complementary cooperatives such as the Evergreen Cooperative Laundry, Ohio Cooperative Solar and Green City Grocers. In addition, the cooperatives commit themselves to shrinking their carbon footprint as well as setting aside a portion of their profits to funding new cooperatives (Alperovitz, Williamson and Howard, February 11, 2010). Several other cities, Chicago, Cincinnati, Pittsburgh, Richmond and Oakland, California have committed themselves to stimulate cooperative development.
The impact of the huge Spanish/Basque Mondragon cooperative corporation experience has had its impact on the United States cooperative development as well. Under the auspices of the United Steel Workers’ Union, since its 2009 agreement with Mondragon, has been working in conjunction with cooperatives in various rust-belt cities like Cleveland and Cincinnati. For example, in Cincinnati there is the Cincinnati Union Cooperative Initiative (CUCI) that borrows from the Mondragon experience in forging enterprises and businesses that empower workers and community interests over simple profit maximization. CUCI is a cooperative incubator that has fostered several community businesses: Our Harvest provides access to locally grown food that is supplied to schools, universities and hospitals in Cincinnati; Sustainergy promotes insulator technology to reduce energy expenses; Apple Street Market develops grocery stores in underserved neighborhoods; Renting Partnerships creates affordable housing that allows renters to build equity. In the last year, CUCI has also provided employers with information and support on selling their businesses to their employees, focused especially in the manufacturing sector.
In Chicago, one finds the Manufacturing Renaissance, another cooperative incubator, which offers education and training to high school students for integration into local industries, demonstrating that good paying technical jobs do not require university education. It focuses on paid student internships, expanding the available workforce and providing community partnerships in advanced technology.
These initiatives are important examples of local legislation and worker-based associations across the U.S. that understand and advocate for employee ownership of industries and services. Worker owners and managers would create wealth that remains and reverberates within the communities by way of future investments and everyday consumption. In this regard, the U.S. needs a national cooperative bank, broader but akin to the proposed Sanders bill of 2017, similar to the Bank of North Dakota that would focus on creating and maintaining working class jobs in the U.S. and act as a preventive against the continuing outsourcing of jobs.
Thomas Hanna has argued that low cost loans to small and medium-sized businesses and low-income populations require a decentralized, localized public ownership of the banking system responsible to the local needs that would include worker enterprise ownership. In that regard, the Bank of North Dakota weathered the U.S. financial crisis and recession of 2007-08 with the lowest foreclosure rate and credit default rate in the country while continuing to make loans to local consumers while private banks were freezing credit (Democracy Collaborative, July 2, 2018). In fact, public ownership itself can serve a democratic and socially just society in a way that is precluded by private ownership (Hanna, December 12, 2018). Johnston Birchall has also convincingly shown that throughout the 2007 economic crisis European cooperative banks outperformed private banks whose major focus had been on shareholder-driven stock values (Birchall 2017).
One of the finest examples of the importance of public policy and its impact on worker cooperatives is in the transformation of Emilia Romagna, one of the least developed sections of post-war Italy into one of the strongest regional economies. The model for such intervention is the Italian Ley Marcora of 1985 which sought to preserve and promote economic revival and stem the tide of business closures during economic downturns. Its response was to foster entrepreneurial initiatives and survival skills by way of worker cooperatives. The law offers laid off workers the “right of first refusal” (see Bernie Sanders’ 2017 proposed senate bill above) and the opportunity to relaunch a failing company or business. It weaves together various funding streams and financial and technical assistance, allowing the workers to receive in one lump sum, three years of unemployment compensation as startup capital for establishing a cooperative. The law also provides for two state financial aid corporations that support working class cooperatives: Foncooper and Compagnia Finanziaria Industriale. Three major Italian cooperative federations (Legacoop, Confcooperative and AGCI) also provide loans and credits. The Marcora Law has sustained 300 companies as cooperatives, saving 13,000 jobs. After the recession of 2007-08, their survival rate was 87% compared to 48% for traditional capitalist firms (Nittoli, August 11, 2016).
Worker cooperatives have a successful track record worldwide and, in the U.S. In bad times cooperatives reduce wages and hours instead of laying off workers. In addition, they have higher survival rates than capitalist firms as has been documented in Argentina, where there is a long history of recuperating worker-run factories and enterprises. Cooperatives have shown there that they are counter cyclical in that, when the economy is sluggish and conventional businesses close, cooperatives tend to proliferate and weather the storm (Ruggeri, T. Novaes and Sardá de Faria 2014 and Ranis 2016).
Eminent Domain, the Remaining Unused Tool of Worker Cooperative Formation
Despite all the above public policy initiatives, eminent domain remains the most powerful interventionist tool on behalf of the working class. Eminent domain intervention, sanctioned by U.S. federal and state constitutional court decisions (e.g. Kohl v. United States-1875; U.S. v. Gettysburg Electric-1896; U.S. v. Chandler-Dunbar Co.-1913; Berman v. Parker-1954; Poletown Neighborhood v. City of Detroit-1983; Hawaii Housing Authority v. Midkiff-1984; and Kelo v. New London-2005), has become a fundamental requirement to intervene on behalf of the greater public benefit and public welfare (Ranis 2014). It is one of the main options for both curtailing the arbitrary rights of private property owners and enhancing the social rights of the larger community. Municipal councils and state legislatures, pursuing the economic viability of their towns and cities, can be the source of support for eminent domain legislation and worker cooperative formation despite the federal government’s executive branch’s hyper-neoliberalism.
In Berman v. Parker (1954), Berman’s department store lost in the Supreme Court against Washington, D.C.’s advocacy for redeveloping a blighted neighborhood that included low income housing in Southwest D.C. and in Hawaii Housing Authority v. Midkiff (1984) the Supreme Court argued in favor of taking land from 72 landowners who owned 47 percent of the land to redistribute it to its property renters in pursuit of “good democratic governance.”
In the Kelo v. New London (2005) Supreme Court decision, the court ruled in favor of allowing New London, CT. by eminent domain to take over property for reasons of “public purpose.” In conjunction with the previous construction by Pfizer Inc. of an adjacent corporate park and in an effort to rejuvenate a deteriorating section of New London, the city planning commission developed a commercial, residential and recreational project in a sweeping attempt at a broad development plan for an economically depressed city. The court ruled on behalf of New London’s economic development plan based on the “takings clause” of the U.S. Constitution’s Fifth Amendment, which states, “…nor shall private property be taken for public use, without just compensation.” Justice John Paul Stevens wrote for the majority that expropriation of private holdings as part of urban development is justified for the public purpose of increasing jobs and tax revenues. Kelo is just the latest Supreme Court finding that can be justifiably used by labor on behalf of the American working class.
Much has been made of Kelo and the negative impact of eminent domain in its use by state and municipal powers to transfer property rights from individual homeowners in poorer, marginal neighborhoods to larger private property enterprises that will achieve larger tax revenues. However, most eminent domain initiatives are not used to condemn mom-and-pop groceries or small homes for the sake of replacing them with larger operated businesses but rather with large urban, community mixed public and private complexes. These complexes provide increased employment, an enhanced tax base, urban development and community edification. As one legal observer indicated, “When desperately poor urban communities are revitalized the vast majority of people in those neighborhoods benefit-the area is more beautiful and livable, the jobs are more plentiful and inner-city problems are curtailed. In Kelo, the city of New London was suffering from deep decline, high unemployment and fewer residents today than in 1920” (Gostin 2006: 10-11). The ultimate goal of the Kelo decision was aimed for the greater good of the New London population; of that there could be no doubt despite any subsequent fallout coming out of the 2007-08 recession.
The Kelo decision should focus American community groups and labor on activating municipal councils and state legislatures to promote a constitutionally affirmed right to expropriate factories and enterprises that have decapitalized their firms, fired workers and announced their plans to leave their states or the U.S. in search of cheaper labor and deeper tax concessions. These businesses leave in their wake depressed American communities with ever-deepening unemployment and poverty. The use of eminent domain in such cases does not benefit in the least a private developer or interest but is applied for the public good on behalf of a group of workers which will redound to the general welfare of the community. Eminent Domain, via the Fifth Amendment’s “takings clause” has been used in America for over 180 years. It is clearly a part of the vision of the writers of the US Constitution that legislators have the right to expropriate property for a greater public purpose (Harrington 2002: 1245).
As the many Occupy movements in the U.S. from New York to Oakland and the multiple massive turnouts by women, minorities and young people since the retrogressive policies of the Trump administration have shown, there is an increasing groundswell for democratic alternatives to plutocracy. Workers themselves can similarly respond to capitalist employer decisions to close enterprises, remove machinery and break what is a social contract. Worker occupations are the necessary and required response to runaway companies, just as Occupy Wall Street (OWS) was to financialization and corporatization of the American economy. Public opinion had cast a favorable eye on Occupy movements as they touched deep-seated values among all sectors of society (New York Times, October, 26, 2011). Worker cooperatives, however, have the organizational staying power and proven longevity that OWS was not able to achieve.
Where cooperatives have flourished, they represent a major challenge to public policy, though it is not an orthodox left-critique of capitalism. Rather, it represents a challenge to employers that has a majoritarian basis because their working-class needs and demands are so reasonable yet comprehensive. They typify the real frustrations of the precariously employed, the unemployed and the underemployed and should receive empathy and support of most citizenry in any capitalist country.
The Occupy movements claimed legitimacy for the commons and public spaces (Harvey 2012). Workers have those rights to claim their factory and workplaces, and those rights are even more specifically grounded in time and place. Occupy Wall Street represented an important breakthrough that demonstrated that we can indeed come together at crucial times as community activists, students, academics and progressive labor unions to create a social movement (Ranis 2011: 1-23). Workers need to claim this same right explicitly because they have already put in decades on the job when the owners claim bankruptcy or decide to downsize, outsource or abandon their community (Ranis 2007: 193-208). With this claim they can rejuvenate not only the workplace but the community in which the factory or enterprise resides and become a force for community revitalization.
There are two principal stumbling blocks to the use of eminent domain in the U.S.: a) the understandable but misguided willingness of cohesive and militant groups of workers to finally accept severance pay and walk away from their jobs and b) the underlying ideology of the sanctity of private property. In the former case this was seen most poignantly in the Stella D’Oro Bronx, New York bakery workers (2008-09) and the Taunton, Massachusetts aerospace workers (2010-11) (Ranis 2016: 112-114). In the second case, it is only since the advent of Reaganomics that John Locke’s ideas of the sanctity of private property are being promoted via the Institute of Justice (1991) a right-wing think tank, and the Castle Coalition (2001), a right-wing advocacy group, which have fastened on ‘eminent domain abuse’ as a term of opprobrium which muddies the waters of its potential positive uses and outcomes on behalf of the working class. These impediments can be counteracted by political education of both the general public and policy-makers by organized movements, community activists, academics, public intellectuals and progressive labor union locals.
The processes of creating cooperatives from runaway enterprises will not be an easy road but once negotiated successfully, provides a recognizable default methodology that will redound and reverberate in multiple settings nationwide. Workers on learning that their factory or enterprise is about to move, close or claim bankruptcy, need to occupy the facilities. This is paramount. Without this first step, the rights of workers to achieve fairness and justice will usually be given short shrift, not be recognized or even considered. It will often just be the case of another factory or enterprise closing down.
It is crucial that workers enlist the backing of the surrounding community—this prospect has been made considerably easier since the Occupy movements of 2011 and beyond and the multiple municipal mobilizations since the advent of the Trump presidency and the accessibility of social media. A groundswell of support is a necessary ingredient in achieving the ‘righteous indignation’ that workers deserve and will get for being deprived of their livelihood and the community losing a contributor to its health, welfare and comity.
A workers’ cooperative, when organized, can demonstrate its labor history and potential viability and longevity within the departing firm. Establishing a cooperative is not a difficult process and each state has clear stipulations on accomplishing the legal reorganization of the enterprise. Additionally, there are many pro-bono lawyers willing to assist.
Public sector intervention by way of the legal tool of eminent domain should be applied by local city councils and/or state legislatures. By and large, workers usually do not have the financial wherewithal to purchase the existing enterprise. What is of great importance is that the workers are occupying and reorganizing a company or enterprise that has clear assets that are recognizable and worthy of being restored to the workers and valuable for the municipality and the state in terms of taxes, employment and community revitalization.
Finally, in most cases, after the application of eminent domain and the compensatory payout to the previous owners, it will be necessary to grant a short-term public subsidy or low interest public seed loan to the workers. In some cases, it may require, allowing the workers to attain funds from non-profit funding sources that enable them to buyout the leaving owners. State and municipal public subsidies and tax breaks for industries and real estate builders are very common within the U.S. states. The same financial response needs to be made for protein jobs, enhancing tax rolls and preventing community decay with accompanying unemployment and resulting poverty. It is a public investment that will redound to the locale in multiple ways. The key is to stop the process of another enterprise ending its existence in that community.
We need to use eminent domain, along with succession cooperatives and bottom-up cooperatives, as responses to the declining power of the U.S. trade union movement. Eminent domain remains in the arsenal of public policy within each state. It is as much part of development alternatives as the legislative rights to tax and spend, zone for economic purposes and regulate for consumer and environmental protections. In the U.S., eminent domain has been used for many decades for creating public parks (Shenandoah, Great Smoky Mts., Redwood Forest, Everglades, et al.) building public schools, libraries and hospitals, municipal offices such as post offices and custom houses, constructing highways, airports and sport complexes, in the name of urban and community development and for the public benefit. It is especially appropriate to apply this same rationale to protect against the loss of industrial and service jobs of the U.S. working class and the decay of communities.
When workers occupy factories, enterprises and businesses, they are not really taking something. They are trying to keep something that is already theirs: through their work, through their years of producing important goods and services, through allowing capital to be invested, through supplying the community with their taxes, their consumption expenditures and their everyday involvement in the civic life of their community.
Factory occupations, sit-ins and petitioning public authorities to save jobs are the necessary backdrops to advocacy for the application of eminent domain procedures. The formation of worker cooperatives by U.S. working-class and middle-class employees has major potential when supported by community organizers and political activists combined with local progressive municipal labor councils.
American labor unions, by and large, have acquiesced by simply focusing on slowing down employment contract givebacks. They have bargained with corporate owners under the rules of the game that severely limit and undermine the rights of the workers. And outside the collective bargaining contract conditions are far direr. Elizabeth Anderson makes the strongest case that most employers have sweeping legal authority over workers’ lives both on the job and off-duty under employment-at-will rights that provide them with sweeping, arbitrary and unaccountable powers. She calls this “private government,” a virtual dictatorship (Anderson, 2017).
In this regressive scenario, the only way for the working class to have autonomy is if they run the factory or enterprise themselves, as opposed to endless worsening collective bargaining contracts. Workers must initiate eminent domain proceedings in every case of a runaway ownership. It must become the de rigueur default initiative everywhere in the U.S. so that the strategy becomes a reflexive, multiplier process accepted as a legitimate legal response to arbitrary and irresponsible behavior by private owners. Worker-managed enterprises represent an attempt to subvert and even bypass the traditional capitalist firm as they experiment with workplace organization that avoids the top-down controls of the capitalist hierarchical firms. They plant the seed that in market economies that there is another way of organizing work.
It is not logical that communities stand idly by and allow enterprises that have fed at the public trough for decades, to decide to get up and leave when eminent domain is an available tool. Eminent domain remains an untapped viable legal mechanism that will place worker rights at the center of the political debate in the defense against the continuing decline of decent jobs in the U.S. and will reactivate what Marx considered a major advance within capitalism itself: the free association of worker producers.
Though the future has positive possibilities, the present nefarious neoliberal economic conditions can only be altered when increasing governmental autonomy is separated from the capitalist class’s direct interests. It requires political power emanating from governmental sources. As I have indicated, it is unlikely that originating initiatives will come from the U.S. federal government’s executive branch, though the 2019 makeup of the House of Representatives provides a more public- interventionist minority among the Democratic Party membership. More likely is that a form of intervention will emerge from municipalities and Democratic state governments with large legislative majorities in such states as Massachusetts, California, Illinois, New York, Maryland, Vermont, Connecticut, Rhode Island, Hawaii and others. Major U.S. liberal municipalities and state governments have the resources to leverage the working class’s economic potential. This can be accomplished by buying out compliant owners or expropriating with compensation recalcitrant owners and then, in most cases, providing subsidies and long-term loans to working class cooperatives. These publicly beneficial interventions via employers’ succession policies and eminent domain would allow a more progressive, democratic economy still imbedded in the marketplace but with clearly more socially redeeming characteristics and outcomes. These interventions would make it abundantly clear that workers are capital, that authentic capital is the working class, and that though the market seems essential, capitalist owners and managers are not.
The future of cooperatives lies in the local, secondary and community economies. Cooperatives cannot compete, in the first instance, with large transnational capital, but they can develop close to their consumers and suppliers in small towns and cities and become the bulwark of resurgent, indigenous and local economies that focus on local needs and local aspirations and which allows them to expand from there.
When economies under capital are going well, workers are easily used and abused as laborers and employees. It is only in crises when capital shows itself as unfaithful to community and country that workers find in themselves the only available resource to step in to protect jobs and livelihoods. Thus, there is ample reason to help workers to run industries and services in good times as well. What is needed in such times is the governmental uses of public policy interventions, including the laws of eminent domain. We already have evidence that in the public sector, social infrastructure investment in public transportation, hospitals, schools and roads could also be more aptly used and beneficially reciprocated by cooperatives than by private enterprises (Hazen, May 13, 2010). Because their ends are much more clearly aligned, they would then complement and reinvigorate each other and the wider community.
Once established, cooperatives are better able to weather financial volatility because they are not responsible to the demands of shareholders but rather to themselves as stake holders. Their commitment is local and community based and their horizons connect them to their fellow citizens. They will be more immune from the rise and fall of risky investments and avoid recycled monetary gains and losses. The key for cooperatives is producing to satisfy use values in their community, not to predominantly create profit linkages elsewhere and it is this that is their cardinal essence.
Conclusion
It is really only within the bounds of the social relations of a cooperative that working people’s full potential are manifested as they show themselves to be multifaceted rather than unidimensional in their human characteristics.
We have to go back to early Karl Marx’s poignant writings in the Economic and Philosophical Manuscripts of 1844 to fully understand the human being’s basic alienation when they do not control their means of production (Marx 1975: especially 270ff). It is not just leftist rhetoric. I have seen it first hand in occupied enterprises and testimonies at cooperative conferences. It is real and it is telling. Worker cooperatives are the most profound ideological confrontation to the concept of the division of labor so basic to capitalist production. Cooperatives do not accept the individual’s inevitable task separation from other workers within an enterprise which is the basis of human distancing and alienation that Marx wrote about in his Manuscripts and The German Ideology (Karl Marx and Frederick Engels 1976: especially 46ff). These job features under capitalism that have been promoted by Frederick Taylor (1911) and critiqued by Harry Braverman (1974) depict worker estrangement under deepening capitalist industrial organization and control. These conditions are clearly confronted by worker cooperatives.
The neo-personalism, the right-wing offensive rampant in the world just now, exemplify the way in which large sections of the working class feel this alienation, this apathy, this distance from control, that often lead them to opt for leaders who seem to show them the way to attain their needs but continually betray them.
With the widespread capitalist offensive in the United States, cooperative formations remain one of the defenses against the deterioration of working class conditions, unstable jobs and trade union defeats at the hands of the Supreme Court, by way of the Janus Decision (Janus v. American Federation of State, County and Municipal Employees, Council 31, June 27, 2018) and continuous concessions at the bargaining table. When you have the present confluence of interests in the U.S. between the national government and corporate capital, it becomes an iniquitous alliance that bodes poorly for the working class in a societal system such as ours that has a porous social safety net.
Cooperatives can provide islands of producing at a pace and for an end decided by the workers themselves. Since we know from Marx’s insights in Capital, that capital exists and flourishes not only by producing but even more by exchange value, cooperatives must enter the marketplace in the same way. Yes, the market will still be an energizing force, but as worker cooperatives develop, proliferate and possibly federate, the markets’ powers will attenuate and use values can begin to predominate over exchange values. In this way, the cooperatives will begin to focus on their responsibility to the overwhelming majority in the community and society. As Karl Polanyi makes us aware there are times when political democratic initiatives intrude on the so-called market self-regulating ideology (1944). It is in those times of crisis that worker cooperatives can penetrate the body politics as prime economic players.
There is no good reason why state powers, whether at the local levels or at various state levels, representing the overwhelming majority of society, will not eventually recognize the right of workers to run their own enterprises. At such key moments, they will form alliances against a regressive and largely anti-social capitalist class. This premise remains clear because, throughout history, even the national state sector had to intervene to rescue the capitalist class from poor and malignant anti-societal decisions and practices. As Ralph Miliband has written, the capitalist state has relative autonomy (1969), that is, from the capitalist class and must often exercise that role to preserve the very viability of the society itself from that very same capitalist class. We can go further. Local municipalities and states can initiate alliances with the working classes to provide for economic development which would be in their mutual interests. Public sector representatives would increasingly see worker cooperatives as confederates in such alliances.
It is here, that we argue, that eminent domain can play a leading interventionist role as public policy on behalf of the state in alliance with the working class. It is a potential governmental/working class link within the U.S. liberal capitalist polity that will emerge from local state and municipal origins. Its goals are to maintain economic development, worker employment opportunities and community viability.
We cannot accept Francis Fukuyama’s “The End of History” thesis that western forms of liberal democracy are the end period of socio-political and economic development and that the extant capitalist system as it now exists, will persist (1992). Rather the working class’s intelligence and resourcefulness that has been captured by the capitalist class for the purpose of profit for a minority of property holders and shareholders could easily be used in cooperative ventures for socially redeeming production geared to the needs of the community and society at-large. The capacity of the working class has to be unleashed and applied for the greater majority—that is a critical point of departure for creating a more just and equitable humanity.
Cooperatives don’t rely on exploitation of its workforce, are usually ethical in dealing with each other and bring out the creativity of its workers to the benefit of all. In this form of workplace reorganization, owners, administrators, foremen and forewomen can be subsumed by workers taking on these roles on rotative bases through democratic and participatory elections and continual representative evaluations by way of popular assemblies. It is also likely that technological and productive innovation breakthroughs under the aegis of cooperatives will be available for the whole community and not be shunted off by private profit accumulation, hitherto the methodology of the capitalist enterprise. Technology and marketing work for capitalists for purposes of profit, but among worker cooperatives such innovations can be used for larger social principles and needs. Because it is the workers that give technology its reason for being and for whom it is employed.
Cooperatives do indeed confront capitalism. They do not confront capital. Capital is really, as Marx understood, 200years after his birth, labor exploited and dead labor of the exploited past. Capital represents the capillaries that allow production and markets to behave as they do within society. It is the egregious behavior and immorality of how capital is appropriated and misappropriated that has to be contested.
There is also the basic question of income distribution and poverty that trade unions have confronted historically and have never been able to resolve (Cohen, July 14, 2018). Entertaining the alternative and allowing workers to control and manage the means of production would end the seemingly inevitable disjuncture between the few capitalists and the many workers. Under normal capital-labor industrial relations the “common good” is always tilted on behalf of the employer and not the employee; that, within the cooperatives, will naturally be abolished since that disjunction will have disappeared. Under capitalism, the worker thinks it rational that she receives a modicum of benefits whereas the owner reaps the majority of rewards. This is illogical, irrational and counter-productive. In essence, the wage relationship itself disappears and is replaced by the surplus value distribution decided among the cooperative’s membership. This effectively ends a basic capitalist-labor hierarchy and introduces cooperative decision-making.
After all, in most economies, United States, Western Europe, Latin America and elsewhere, the typical enterprise is a small business with an employer and few employees. These labor relations would lend themselves most easily to cooperative restoration since inter-employee relationships are already highly personal and interactive. Cooperatives allow the workers for the first time to end the hierarchy and subordination implanted under capitalism and never fully abrogated by the labor movement. Labor has, unfortunately, not spent most of its energy challenging the capitalist class’ authority, but rather their niggardliness toward their workers.
An ensemble of human relations is only possible when workers can spend one-half of their waking day in multiple roles just as they do in the other half of the day as parents, partners, children, companions and so on. This allocation of time within a worker’s day allows the working class to combine mind and physical proficiency in a self-satisfying manner that cannot be observed under a capitalist-employee scenario.
Abstract leftism is not the precondition for cooperative formation but rather it develops through on-the-ground understanding of how its very organization is essentially an anti-capitalist venture. Nor do democratic socialist proponents of cooperatives need to defend themselves before the critiques of revolutionary leftists when they can argue that they are making an extraordinary difference in the working lives of individuals, enterprise by enterprise.
Society is a given. State regulations of one kind or another is required. An exchange of products and services, no doubt, is essential. However, the source of those exchanges is not written in stone, because it goes against human emancipatory striving and development and sooner rather than later these relationships will lead to cooperative forms of human production.
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Notes
1 In the East, there are the South Mountain Company of Martha’s Vineyard in construction with 33 employees, a cooperative since 1986; Red House Builders of Burlington, Vermont in home building and restoration with 25 employees, a cooperative since 2003; Real Pickles of Greenfield, Massachusetts, a vegetable pickling production with 18 employees, a cooperative since 2013; the Rose Garden Early Childhood of Buffalo, New York, a childcare facility with 23 employees, a cooperative since 2017. In the Midwest, there are the iconic New Era Windows Cooperative with 15 employees, a manufacturing cooperative since 2012; the North Wind Renewable Energy, of Stevens Point Wisconsin, a Solar Energy Company with 12 employees, a cooperative since 2017; the Pattycake Bakery of Columbus, Ohio with 15 employees, a cooperative since 2013. In the Southwest, there are the Technicians for Sustainability of Tucson, Arizona, a renewable energy cooperative formed in 2017 with 30 employees; Namasté Solar of Boulder, Colorado, a renewable energy company with 300 employees formed in 2011. In the far West, there are the California Solar Electric Company, a renewable energy company with 17 employees formed in 2018; and A Slice of New York Restaurant of San Jose, California with 33 employees, formed as a cooperative in 2017 (Democracy at Work, 2018).