Co-op Nation

[Dan Clore]

News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo

http://www.zcommunications.org/co-op-nation-by-gar-alperovitz
Co-Op Nation
By Gar Alperovitz and Neal Gorenflo
and Michel Bauwens
Source: Shareable
Friday, April 20, 2012

In this interview, Shareable publisher and editor Neal Gorenflo and P2P
Foundation's Michel Bauwens chat with Gar Alperovitz, the Lionel R.
Bauman Professor of Political Economy at the University of Maryland and
co-founder of the Democracy Collaborative. Among his most recent books
are America Beyond Capitalism and (with Lew Daly) Unjust Deserts: How
the Rich Are Taking Our Common Inheritance and Why We Should Take It Back.

NG: In your book, America Beyond Capitalism, you say that 120 million
Americans are involved in citizen-controlled cooperatives and credit
unions, and that there are 11,000 worker owned companies in the United
States. This paints a totally different picture of Americans today than
seems to be popularly understood - that ordinary Americans are helpless
in the face of corporate and government power. Why are Americans so
blind to their own economic power? But on the other hand, are you sure
that this actually the case, have some of these older organisations lost
their original spirit?

GA: I spend a great deal of time asking, "Is there anything that the
major media—which greatly shape Americans' worldviews and
perceptions—aren't covering?" I try to learn what's out there, and I've
been doing it for longer than I care to remember. What I’ve found out is
exactly what you describe—an astonishing number of developments that the
press doesn't cover, either for lack of interest or funding for
on-the-ground reporting. For example, in addition to the numbers you
mention, in one form or another there are four to five thousand
neighborhood nonprofit corporations trying to benefit communities—some
good, some bad, some very interesting, some not so interesting. If you
include all forms of worker-owned co-ops, you’ll see that they come in
various flavors: some not so good, some wonderful, some changing. Even
employee stock ownership plans (ESOPs) are changing, by the way—a number
are becoming more employee-controlled and participatory. Some have
unions. There are close to three million more worker-owners in ESOPs
than unionized employees in the private sector, which suggests at the
very least an institutional power base that can be further developed.

Additionally, 25 percent of the American electric system is either co-op
or municipal, essentially socialized. Land trusts are developing at the
local level, so that when development occurs, the profits of that
development accrue to the owner, which in this case is public or
nonprofit. At the state level, there is a lot going on, like targeting
investments with public pension funds, for example. California is best
known for this, but the state of Alabama is also heavily targeting its
pension funds to finance in-state investments and even investing in some
forms of worker-owned companies. Nobody is covering them; they are not
being talked about, but just below the surface of media attention,
thousands of grassroots, institution-changing, wealth-democratizing
efforts have been quietly developing throughout the nation for the last
several decades.

To be sure, as you point out, many of the older forms have lost a good
deal of their original spirit. On the other hand, virtually all are open
to organizing efforts. Most credit union elections, for instance, are
largely uncontested. They could become arenas of democratizing
organizational efforts aimed at community-building investment
strategies. The same is true of many other institutions.

So I maintain a cautious and paradoxical optimism, despite the current
context of ongoing social and economic pain, the overreach of political
elites, and the radical decline of organized labor as an institution
that was essential to traditional progressive politics. The process of
institutional innovation at the grassroots—which responds to nearly four
decades of economic and political stagnation, pain and gridlock—suggests
further possibilities for larger scale and for more (and accelerating)
ongoing development, especially as social and economic pain continue.

NG: Your work with the democracy collaborative has resulted in a much
talked about experiment in the use of cooperatives to reduce poverty—the
Evergreen Cooperatives in Cleveland, Ohio—whichseem to be having some
success. The example of the Evergreen Cooperatives along with others is
fueling a growing enthusiasm for cooperatives as a fix to unemployment,
wealth inequality, and corporate power, especially among activists.
Shareable certainly has encouraged this. Yet, in at least one of your
public talks, you presented a balanced picture of cooperatives showing
both the good and the bad. What is the dark side of worker cooperatives?
Are there any legal formulas that could better balance out the different
interest of stakeholders such as those of the user/consumers, the wider
society, and the natural environment?

Co-ops have had a complex history because problems arise if there is not
an adequate capital source or an adequate market. What's going on in
Cleveland draws to some extent on the Mondragón federation of worker
cooperatives in the Basque region of Spain, a 56-year-old project that
currently employs about 80,000 workers and is involved in very
large-scale, technologically sophisticated endeavors.

The effort in Cleveland is also building upon the long developing
institutional work in Ohio, originating with the 1977 attempt at
community and worker ownership of the Youngstown steel mill. What is new
is that it involves an integrated complex of community- and worker-owned
cooperative enterprises targeted in significant part to the $3 billion
in purchasing power of nonprofit "anchor institutions" such as the
Cleveland Clinic, University Hospital, and Case Western Reserve
University. The first co-op business produces green laundry services on
a very large scale, using less than a third of the heat and water of a
typical competitor, likely making it one of the greenest services of its
kind in the midwest. There is also an industrial-scale greenhouse for
food services which will be on-line shortly; it will hydroponically grow
three million head of lettuce a year. Another part of the complex is
Ohio Cooperative Solar, which installs solar panels on the roofs of the
city's largest health, education and municipal buildings, and
weatherizes residential properties as well.

This emphasis on connecting worker-owned firms to nonprofits that are
anchored to the geographical area also attempts to address another
challenge that faces many cooperatives. A firm may be participatory and
internally democratic, but if its economic activity is mediated largely
through the market, it will often have to expand, compete, pollute or
cut corners in other ways. So Cleveland uses a quasi-public market - the
anchor institutions’ purchasing power, in this case - to help stabilize
these cooperatives and somewhat undercut some of the driving forces that
they encounter on the open market. (Mondragón, as a growth-oriented,
internationally competitive firm, is dealing with the global market
pressures and contradictions we're hoping to avoid.) I use "somewhat
undercut" because I think you can't do it totally or you will end up
with the problems of traditional socialism, in which the market is so
stable, so guaranteed, that there's no incentive to innovate. So,
there's a balance that we're trying to achieve where there is partly an
external market which includes the usual market forces. It's an
important principle to experiment with, develop and define further.

Another common shortcoming of worker co-ops is that often they fail to
explicitly consider issues of community in larger terms. The
worker-owned companies in Cleveland are linked to a nonprofit,
community-benefiting corporation. The co-ops return 10 percent of their
profits to a revolving fund, part of which is used for the community;
otherwise, they are independently run, worker-owned companies—except
that they can't be sold without the agreement of the community
organization. The goal is to rebuild community, not simply benefit a
small group of workers who may sell the company and run off to the
suburbs as soon as they make substantial money—after being financed and
developed by the basic complex. This project is located in a part of
Cleveland that is almost entirely black and where the median income is
$18,500 per family, so the larger focus on revitalizing the community is
crucial. Thus: both worker coops and community—both, and not either/or.

NG: While there does seem to be a significant and growing cooperative
movement worldwide, it's doesn't seem up to the task of replacing
corporate control of the provisioning of everyday life. Cooperatives are
slow to scale and regulations favor tightly-held corporations. What's
your dream strategy to accelerate the growth of the cooperatives worldwide?

First, the "demonstration effect" of community - and worker-empowering
success in one part of the country can radically shorten the time frame
of change in new situations, super-charging the dynamics of
institutional development. Developments like the Cleveland worker-owned
companies also serve to challenge the dominant ideology that there's no
alternative to very stratified, top-down institutions like corporations,
and they do so in a very practical, down-home American fashion.

Over the long haul the development of new awareness and of new
institutions—cooperatives, land trusts, municipal utilities, state
banks, etc.—can suggest a possible path forward over time to create new
strategic approaches that can complement and transcend traditional
strategies. Also the development trajectory in Cleveland has begun to
bolster support for its liberal mayor. At the same time, it has slowly
begun to suggest ways to make city officials less vulnerable to the
demands of major corporations seeking large tax inducements to locate,
often temporarily, in the city.

I view this moment as the most interesting period of American history
bar none, because we've run out of options in the traditional models. I
think that means we're in for a major, major period of debate,
experimentation and ferment about how to run the wealthiest political
economy in the world. This is in many ways more interesting than the
American revolution, because the principles on which the system is run
are being challenged at every level, and where that comes out is by no
means obvious, but there are many, many places where progressives can build.

What I've sketched involves a long, evolutionary process of several
decades. We are learning from the multitude of projects out there that,
in my view and at this stage of development, are giving people an
inkling of what might be. They're not much more than an inkling, but
that’s a good start. They give people a chance to theorize and to think
about what might happen if we put together, piece by piece, parts of the
political, social, and cultural movements that are dedicated to
community, democracy, equality. Obviously all this has to move to a
larger scale at some point. The challenge over time is to apply
principles learned at the local level to regional and national scale
solutions as time goes on and new openings develop. The U.S. did, after
all, nationalize General Motors and Chrysler, only to largely sell them
off ones the profits began to roll. In future, new forms may be possible
if the groundwork is properly developed over time. The same is clearly
true with regard to large banks, and also—inevitably—health care, where
the crisis building up ultimately will force this system to some form of
single payer or cooperative structure. In the health care case alone we
are talking about literally 20 percent of the economic system.

NG: I'm betting that the Evergreen Cooperatives project that you helped
kickstart has been a great learning experience. What advice would you
give to city leaders who want to stabilize their local economy through
cooperatives?

Yes, it has been an incredible experience on many levels and i believe
that its success has ensured that in the future we will see the
Cleveland model adapted in cities throughout the country. Clearly, the
first step in forming any new institution is to bring together a group
of people who believe such an effort is important. From there, people
that are interested in forming a cooperative or any other wealth
democratizing organization can learn from experts and from experiences
around the country and throughout history. Much of this kind of
information can be found on the Democracy Collaborative’s website.

Next is to take that information and ask what is appropriate for this
particular community. In Cleveland, a meeting was held that brought
together a wide array of representatives from throughout the community.
This was followed by many discussions and a lot of detailed work on the
ground to determine what would work for the area—including 140
interviews, many with procurement officers from the local hospitals and
universities, to determine what and if they would buy from local
cooperative institutions. Another important component is building
community support for the strategy. The process will naturally be
different in every community, but with every success (and possible
failure) it is likely to become more and more advanced and adaptable.

NG: The seven cooperative principles provide the foundation for economic
solidarity among citizens. They're inspiring, but in an age of global
warming there's a glaring gap - there's no mention of cooperatives’
relationship to the natural world. In fact, virtually all cooperatives
operate within in capitalist market economies and some encourage
consumption just like corporations. What is happening and what needs to
happen within the cooperative movement to connect governance of
cooperative enterprises to wise stewardship of the natural world?

First, I think that cooperatives and the cooperative principles often
foster an internal culture that is much more attuned to climate change
and other environmental issues than other economic institutions. Second,
larger-scale cooperative efforts such as the Cleveland cooperatives are
designed from the start to be environmentally sustainable. This is not
just to reduce their ecological impact—which in itself is vitally
important—but also to take advantage of the tremendous economic
opportunities that environmental sustainability can provide. For
instance, the laundry cooperative operates out of a LEED-gold building
and has the smallest carbon footprint of any industrial laundry in the
state. In addition to benefiting the environment directly, these
characteristics offer the “anchor” universities and hospitals in the
area an opportunity to “green” their own operations while simultaneously
investing in the community. (They often find both useful because it is
good business practice and because many are also personally committed to
such principles.) The other linked cooperatives are also similarly
environmentally oriented as a matter of principle.

Lastly, cooperatives can play an important role in economically
stabilizing and democratizing local communities (especially on a larger
scale as in Cleveland), both strategies are critically important to
environmental issues given the massive waste of resources—natural and
economic—expended when corporations play communities off against one
another in a race to the bottom to attract jobs and capital. The
schools, the housing, the roads, the hospitals, the government structure
in a city like Detroit, Cleveland or St. Louis are simply thrown away,
and the companies move elsewhere. We then must build new cities, new
roads, new schools, new hospitals, new city structures, with massive
capital and environmental costs that are just ignored. To the extent
locally anchored co-ops keep jobs locally this helps avoid all these
capital, carbon, and other environmental costs.

NG: Our species is in a distressing double bind. If we continue to grow
the global economy, we risk depleting our natural resources. If we don't
grow the global economy, we risk a radically destabilizing society as
much of our wealth is linked to growth. What role can cooperatives play
in opening up another option, one where widespread prosperity and
environmental sustainability are compatible?

The first step to addressing this critical issue is to re-define
“growth.” some kinds of growth are vital and beneficial both to the
environment and to prosperity—growth in renewable energy, growth in
sustainable agriculture, growth in the community-controlled finance
sector, etc. On the other hand, much of our economic system is tied to
the “grow or die” paradigm that forces Wall Street corporations to
constantly post increasing profits lest they be punished by
stockholders. It is this narrowly defined and haphazard economic growth
that is at the root of many of the threats to our environment.
Crucially, cooperatives are not inherently beholden to this
environmentally destructive form of growth. Cooperatives can, and often
do, decide if and how to grow based on factors such as community,
democracy, and the environment rather than a single minded focus on
quarterly profits. So too, larger forms of cooperative or public
enterprise can choose how—or whether—to grow.

MB: The resurgence of cooperatives is happening at the same time as the
emergence of open source production in software, nowtopian local
production of local food, the mutualization of shared physical
infrastructures and idle resources as documented by shareable, and in
general, the growing uptake of shared innovation commons and design
pools. Do you see any connection between cooperative forms of
organisation, and the decision not to privatize social, technical and
cultural innovation? Are cooperatives holding on to old formats of IP
protection or are they joining the tendency towards sharing knowledge so
that it can benefit all of humankind?

Certainly among some sectors of the cooperative movement you’ll find an
enthusiastic embrace of some of the trends you mentioned, more
generally, I think the situation across the emerging new economy with
respect to questions of property is analogous to the situation that free
software found itself in with respect to copyright. No matter how
ardently we desire to work within a commons-based framework, the fact is
the dominant legal and economic framework is based to a large degree
around private ownership. But that does not mean nothing can be done. As
I mentioned, the community land trust uses ownership of land to make
housing permanently affordable for the homeowners who live on that land.
In most cases, a very technical legal device—-ground leases—-are used to
make this kind of real-estate commons a reality. I’d argue that this is
similar to the kinds of legal maneuvering that free software licenses
need to do to turn the copyright system towards commons-based ends.

Because these forms of cooperative or commons-based ownership are built
within and depend on a legal and economic framework organized around a
different set of values (i.e. private property), it means that there’s
no guarantee that a project working under one model of cooperative
ownership will automatically be sympathetic to other forms. Just as it
is far from the case that every company using free software is a
worker-cooperative, not every employee-owned business is a paragon of
commons-minded workplace democracy. Although, as i noted, there are some
interesting studies showing that more and more traditional ESOPs are
becoming more democratic.

The initial challenge is to create awareness of different emerging
alternatives to traditional private ownership. Because these often have
to be quite technical to operate effectively on a meaningful scale the
intrinsic affinity between all of these models is sometimes obscured. On
the other hand, we need to foster a culture in which all these different
models are seen as complementary, developing a new sense of civic
responsibility in what I’ve called a “pluralist commonwealth.” It’s to
these ends that we’ve developed our community-wealth.org project: as in
open-source software projects, you need to both share the technical
“code” or know-how, but also build a community committed to the values
and norms that make the new ecosystem thrive. The general challenge is
to build steadily in the direction of a commons vision, over time, step
by step, overcoming obstacles along the way as time goes on.

MB: You have obviously a deep knowledge of the U.S. situation, but is
this trend also global, do you see similar resurgences across the world,
in Africa, Latin America, East Asia, the Middle East, or are there
cultural barriers? What is the state of international cooperation,
global action and information sharing in this field?

Certainly there are a lot of interesting experiments and developments
happening all over the world; the United Nations-designated
“International Year of the Cooperative” is also catalyzing a fair amount
of attention to what’s going on globally. The challenge of how to build
a sustainable and just economy on the global level is both a pressing
and massive challenge. The truth is we really don’t know how to truly
manage a cooperative economy successfully on a national or regional
scale yet. If anything, we should be learning from the experiences in
the global south to help clarify what might work here, but we should
also be sensitive to our own unique cultural situation. What worked in
Kerala, or Porto Alegre, or Mondragón may not work automatically in the
U.S. We also need to be willing to critically evaluate those
experiences. The design of “the next system” is, in my opinion, still to
be worked out. That said, there’s obviously a lot to learn if we study
what’s happening elsewhere with some care. For instance, many people
have been (justly) excited by the transformation of a number of
factories in Argentina into worker-owned cooperatives. What’s less well
known is that many of these cooperatives are now flourishing because the
sympathetic municipal government of Buenos Aires has found ways to shift
procurement towards the cooperatives, giving them a partly guaranteed
market. The trajectory here points toward a kind of hybrid planning
system in which cooperatives would be partly embedded in larger
community wide public systems, one which draws both on market mechanisms
and public institutions, something that confirms some of the design
decisions we helped make in setting up the Cleveland model. But
obviously the processes leading up to these two experiments—-the
decades-long experience of deindustrialization and decay in the rustbelt
on the one hand, and the swift shock of the Argentina financial collapse
on the other—-are very different, so one can generalize only so far.


--
Dan Clore

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"From the point of view of the defense of our society,
there only exists one danger -- that workers succeed in
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