Co-operantics

A powerful and moving tribute to the late Elinor Ostrom by the Grassroots Economic Organizing Collective :

“Lin Ostrom died on this past Tuesday, June 12th, but there is no tragedy in the loss. We certainly doubt she spent her time feeling tragic about her cancer.

Yes, there is real pain in losing her, but the reasons for celebrating are just as real and much more abundant.  Her life contributed mightily toward reversing a major tragedy for all species on Mother Earth—that profound mistake in thinking known as the ‘tragedy of the commons’.

A few of us here at GEO had the immense pleasure and great privilege of working with a team from the Workshop in Political Theory and Policy Analysis at Indiana University in Bloomington on the Collective Action issue we published a year ago this coming September. One of our collective members, Michael Johnson, also met her in Amherst, MA, at a dinner that the Valley Alliance of Worker Co-operatives held for her. Everyone in attendance was impressed with her razor-sharp mind, but also charmed by her simplicity and down-to-earth graciousness. She may have known even then that she had cancer, as she continued working through the last year of her life until shortly before her passing. A rather impressive way to deal with the knowledge of one’s imminent death, no?

Another awesome message came from her relentless and joyful focus on what needed to be done to make the world better at all levels of her life. This seemed to free her from her being mired in that endless status-seeking in which so many of us are trapped in order to validate our lives to ourselves. Prestige seemed to be a big nuisance to her even as she turned it to the advantage of her work with a twinkle in her eye. Oh! that we should all be just a bit more free of that absurd Sisyphean effort.

Finally, her legacy includes a working community of scholars in deep solidarity with her at Indiana University and beyond. A stunning resource to pass on to all of us. Let us hope and help in any way asked that the ‘Workshop’ community deals with the huge transition that faces them with as much freedom from the nemesis of rivalry and status-seeking as is necessary to keep the Workshop on the course she and Vincent, her husband, set it on.

Her’s was an awesome life lived fully to the end. May we all continue to nurture her legacy.”

-The GEO Collective

Co-operatives – a heterogeneous category

As a previous blog commented, Cooperantics was lucky enough to get a ticket to the Rebellious Media Conference in London last autumn, headline speaker Noam Chomsky amongst a lot of other illustrious participants.

 http://rebelliousmediaconference.org/

After hearing the recording of the Q&A session on the published DVD, I had some further thoughts on Noam Chomsky’s reply to my question: Can the co-operative business model succeed where the capitalist business model has so evidently failed?

 His answer was as ever, thoughtful and informed. He said that yes, of course the co-operative business model can succeed, and has a long history of success, in Britain and other countries around the world. However he qualified this by describing co-operatives as a ‘very heterogeneous category’. He went on to explain that there are co-operatives where the participants really run it and there are co-operatives and worker owned enterprises where control is handed over to management. Referring to Mondragon, Chomsky described it as ‘worker owned but not worker managed’.. ‘they pick professional managers who act like professional managers’ and ‘they are investing overseas to exploit super cheap labour, not the kind of thing we’d like a progressive institution to do’.

 Noam Chomsky was accompanied on the platform by Michael Albert, a leading authority on political economy, U.S. economic policies, and the media. Michael Albert primarily focuses on matters of movement-building, strategy and vision, creating alternative media, and developing and advocating his participatory economics vision (“Parecon”).

Michael Albert had recently attended a meeting in Argentina with representatives of 50 occupied factories. At the start of the meeting there was a go round where people were telling their stories. At the start the mood was upbeat, but by the 4^th or 5^th person the mood became maudlin and by the 7^th person people were crying. ‘I never thought I’d say anything like this’ said the 7^th person to speak ‘but we took over workplace, we equalised wages, we instituted democracy but now many months later it feels the way it felt before, it’s alienating – maybe Margaret Thatcher was right there is no alternative’

 Michael Albert said that their mistake was to keep the old divisions of labour, which over time distorted their intention to be different, to be humane. This left them so demoralised they thought change really wasn’t possible.

 He concluded that yes, co-ops can be an important part of a project to change society but only if there is an understanding – not just a desire, but the understanding – that will cause the co-op to be a truly exemplary institution.

 I was sad to hear about the situation in the Argentinian co-ops, because they are so frequently used as an example of what can happen when working people take control – and I wonder if it is truly the case that in all instances they have retained the old divisions of labour?  But what a great answer and it is one we know already – it’s not enough to have the right legal structure, the right market conditions and the financial & human resources in place.

 For a co-operative to be a ‘truly exemplary institution’ there must be an understanding of how to work together within the legal structure and an understanding by managers that their role is a function like any other and does not confer any special status. Members also need to understand the rights and responsibilities of membership as well as how to work as a team, how to take decisions and delegate, how to hold management accountable, and lastly but most importantly, how to ensure participation and thereby commitment.

‘For All The People’ by John Curl

Uncovering the hidden history of cooperation, cooperative movements, and communalism in America

PM Press, PO Box 23912, Oakland CA 94623 www.pmpress.org

John Curl is a professional woodworker and a 30-year member of Heartwood Cooperative Workshop in Berkeley, California

For all the People is a magnificent, comprehensive and detailed history of co-operatives and collectives of all kinds in the USA. It covers so much ground, and in so much detail, that it’s hard to summarise in a short review, so I’ll highlight those details that particularly spoke to me.

The book starts with a look at the co-operative cultural patterns of indigenous peoples before the arrival of the Plymouth Pilgrims in 1620 and goes on to describe in detail how the co-operative movement has thrived and foundered, thrived and foundered again and again under different circumstances throughout four centuries of US history.

The concept of a federation of north American states was inspired by indigenous peoples of the Americas

It was the League of the Iroquois which inspired the concept of a federation of colonies. The first person to propose that the colonies unify as the Iroquois had done and speak with one voice was Canassatego an Onondaga Iroquois chief, at an Indian British conference in Pennsylvania in 1744.

The political system of the indigenous peoples of the Americas was an inspiration for Tom Paine

Tom Paine experienced indigenous democracy at first hand as secretary in negotiations between the rebels and the Iroquois in 1711. He studied the Iroquoian language and used indigenous society as a model in his writings.

Role of co-operatives in supporting working people as labour relations changed from skilled artisan to waged labour in the early 19^th century.

As in the UK, capitalist industrialisation in the early 19^th century forced a change on working people from being autonomous skilled artisans – with a range of strategies for survival and self-expression – to becoming wages slaves, reliant on only one source of income to feed their families and live their lives. Co-operatives became an important means of support, providing support for striking workers to co-operative warehouses, and co-operative stores.

Curl describes how in 1794, Baltimore shoemakers formed the United Journeymen Cordwainers and demanded the standard piece work rate be raised to 6 shillings. Their demand rejected, they went on strike, taking with them over half the city’s workers. They organised the first co-operative ‘manufactory’ in the United States, a large workshop open to all journeymen boycotting the masters’ shops. Soon some of the masters began paying the higher rates and the workers returned to their shops. It seems that the co-operative model was often used in this way, supporting the workers while they were on strike and abandoned once the strike was successful.

In the early 19^th century customers of country stores often paid their bills by trading produce, livestock or artisanal products for merchandise. Robert Owen’s store at New Harmony was the earliest prototypical co-operative store, which did business based on labour notes redeemable in the store. Community members received supplies, clothing and groceries on credit, which they redeemed with time credits for work performed.

Secret Co-operatives

The Knights of Labor was established in secret in 1869 by members of a Philadelphia taliloring cutting local trade union, blacklisted for striking. Its’ aims were ‘to secure to the workers the full enjoyment of the wealth they create, to harmonise the interests of labor and capital’ . One of their first principles was co-operation. When they went public in 1878, ‘we will endeavour to associate our own labors, to establish co-operative institutions, such as will tend to supersede the wage system, by the introduction of a co-operative industrial system”

The Knights of Labor called for public ownership of railroads and other commercial transport, of the telegraph and telephones, water systems and utilities; for an 8-hour day, equal pay for equal work, abolition of contract, convict and child labour. They were one of the first organisations to include white and black in the same union and the first to include women – KOL had 50,000 women members at its peak, including many housewives, whom the Knights of Labor recognised as workers.

The early1880s was a time of industrial expansion, machinery was being introduced on unprecedented scale and an increase in unskilled & semi skilled labour, cuthtroat competition, and wages forced down. At the same time the USA was experiencing the peak of immigration from northern Europe, and the beginnings of immigration from southern & eastern Europe, bringing 5 million immigrants, mostly unskilled. When industrial capitalism forced these immigrants into wage slavery, they organised production and mutual aid co-operatives.

By the middle of 1886 there were between 185 and 200 Knight co-operatives across the US, concentrated in the east and mid west. More than half were mines, foundries, mills and factories making barrels, clothes, shoes and soap, as well as co-operative printers, laundries, furniture makers, potters, lumberjacks; factories making nails,boxes, underwear, brooms, pipe and stoves.

Co-operative development

The KOL general co-operative board published forms of constitutions and bye laws that could be modified to suit any form of co-operative, and numerous articles on the nuts and bolts of different kinds of co-operation.

However, as usual, capitalists and competitors hit the Knights co-operatives hard, making it difficult for them to obtain credit, supplies and markets.

Solidarity co-operatives

In 1886, New York City’s district assembly 49 – one of the most radical of the Knights assemblies, established an extraordinary group of co-operatives.  A committee on co-operation, chosen by the whole district, managed all the enterprises. They offered non-interest bearing shares for purchase to individuals and labour organisations that were redeemable after one year. Investors could not determine which co-operative their funds would be used for. No profits went to shareholders, but stock was to be bought back by the co-operatives from profits.  Shareholders had no control over management. Of the net profits after salaries and debt payments, 50% went to expanding the co-operative chain, 25% insurance and 25% to a fund for buying land.

Solidarity Co-operatives in 1887:

• Solidarity fancy leather goods factory
• Plumbers co-operative association
• The Leader publishing association
• The Concord Co-operative printing company
• Solidarity cigar company
• Solidarity co-operative and distributive store
• Solidarity KOL watch case company

The book goes on to discuss the influence of Rochdale and George Jacob Holyoake, and to survey the role of co-operatives during the Civil War, the abolition of  slavery, the First International,  the First World War, the great depression, the New Deal and the second World War. There are numerous fascinating histories of individual co-operatives such as: The Get Even Quick Cattle Company, the Troy Lauundry Womens Cooperative and Nashoba, Tennessee, one of many communes established after the abolition of slavery.

It also looks at the Berkeley Co-op, Bay Warehouse Collective and the Heartwood Cooperative Woodshop,  with which the author was very much involved, and reviews co-operatives and the counterculture of the 60s and 70s. It also looks at early and 20^th century Communalist movements and ends with a survey of the infrastructure of the co-operative movement in the US today.

Why do worker co-operatives fail?

John Curl asks why so many worker co-operatives fail. He points out that the majority of all new businesses fail in their first year and that start ups are advised not to expect a profit for two years. He also points out that most enterprises are increasingly based on costly technology and that most co-ops start out under capitalised.

However one of the points that most clearly comes across throughout the whole book is the consistent opposition from corporate interests and the politicians that serve them. For example, the Sherman Anti Trust Act of 1890, declared illegal any combination or conspiracy to restrain interstate commerce. The Act aimed to outlaw the Trusts which controlled most of US industry in the wake of the Civil War. It supposedly favoured small business by curbing monopoly, but made no distinction between conspiratorial practices of big business and co-operative practices of small producers. It outlawed co-operatives engaged in interstate commerce and unions organising interstate strikes. The Sherman Act made numerous co-operatives illegal and was used to break strikes 12 times in the decade, but never once to break a Trust.

Curl concludes by describing how the system has failed dismally to provide a decent life, basic services or jobs for vast numbers of north Americans. He says that the corporations still fear worker co-operatives, for the same reasons they have used their power to put them down throughout history.

It’s clear that there has been consistent and significant opposition to the cooperative idea, throughout US history, however I believe that this is a result largely of historical circumstances which resulted in a political system located to the right of the political spectrum, which views worker organisation of any kind with fear and suspicion.

I also believe it is time to review the traditional focus of co-operatives – both in the US and the UK – on just one stakeholder group: consumer, employee, or community. A more sustainable way forward might be to explore the potential of the multistakeholder model, a model that takes into account the needs and concerns of employees and customers, as well as other stakeholders, such as suppliers, the wider community, the environment. A co-operative enterprise supported by all its stakeholders might perhaps have a better chance of surviving the slings and arrows of a competitive and individualistic society. The co-operative I work for – Somerset Co-operative Services – has developed such a model, which can be downloaded for review at: http://www.somerset.coop

There is a current of opinion growing and manifesting itself everywhere that not only have our political systems failed us, but also there are serious flaws in a business model that is legally obliged to look no further than the interests of shareholders. Surely one of the problems associated with capitalism is its primary focus on one stakeholder, namely the investor? As Noam Chomsky said in a recent interview, US CEOs and senior managers are caught in an institutional contradiction, they are obliged by law to maximise short term profit, i.e. to benefit the investors at the risk of ignoring other issues, such as  climate change. (see http://bit.ly/f5mfgr).

For all the People is an important and timely book – read it to see where co-operatives have succeeded, how they have supported and inspired working people to action and where and how they have failed. We can learn much from this history and we need to look back and learn in order to look forward and act.

‘I hope we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country’

Thomas Jefferson 1816