The Cooperative Movement in
Century 21
By John Curl
“There is nothing new under the sun.”
2010
Red Coral
INTRODUCTION
In 2002 the UN General Assembly recognized that cooperatives “are
becoming a major factor of economic and social development,” and urged
governments to promote their growth by “utilizing and developing fully
the potential and contribution of cooperatives for the attainment of
social development goals, in particular the eradication of poverty, the
generation of full and productive employment and the enhancement of
social integration;... creating a supportive and enabling environment
for the development of cooperatives by, inter alia, developing an
effective partnership between Governments and the cooperative
movement.”(1) Recently the UN declared 2012 to be the
International Year of Cooperatives.
The people of the world do not care what you call the economic system
as long as it works. For the last century ideologists of both
capitalism and state socialism have made extravagant claims and
promises about the superiority of their economic ideas, but the proof
was in the pudding. Neither one was able to bring peace, prosperity,
and social equity to the world on a sustainable basis. That overarching
goal could not be accomplished by either economic system, because
neither was actually geared to bring it about. Social justice requires
full employment, while capitalism structures unemployment and
marginalization into the very bones of the system. Capitalism
privatizes the world, transforms power and property into money, reduces
people to labor or marginalized unemployed, disempowers democracy, and
crashes periodically with disastrous consequences. State socialism
centralizes power in the hands of bureaucrats, planners, and party
hacks, disempowers civil society, and rigidifies into a
self-perpetuating overly-centralized establishment which inevitably
makes monumental social planning blunders. The economics of the 21st
century must be based on intense practicality, not false ideology.
The cooperative movement of the present and near future operates
primarily in the spaces that the corporate system cannot and will not
fill. Cooperatives can provide a dignified living for the many millions
who would otherwise be unemployed or marginalized. Cooperatives build
bridges between people in conflict, as they did between east and west
after World War II and during the cold war. Cooperatives played an
important role in the formation of the European Union, and are
continuing to build bridges today between Palestinians and Israelis,
Bosnians and Serbs, and in conflict areas in Indonesia, India and Sri
Lanka. (2) Cooperatives and social enterprises are the world’s
best
hope of achieving peace, prosperity, and social equity in this new
century, and it is there that the eyes of the world need to turn.
The movement for worker cooperatives, workplace democracy, and social
enterprises is resurgent around the world today. Grassroots social
movements have turned to cooperatives in response to the depredations
of globalism and the worldwide deep recession, to improve people’s
living conditions and to empower them. People band together into
cooperatives because they need others to share work, expenses, and
expertise, and because they prefer working in a democratic situation.
Many of the new social enterprises are arising from spontaneous
initiatives of grassroots groups, and many are being organized,
coordinated, and backed by nonprofit development organizations,
governments, and communities. (3) Nonprofits have turned to
organizing social enterprises to fulfill social equity missions.
Communities and governments have turned to them for economic
development.
In the US today 85 percent of jobs (nongovernment and nonfarm) are in
the service sector (4), and these are often best performed by
small
enterprises. Startups in this sector do not have to begin with
expensive, cutting-edge technological equipment. It is here in
particular that cooperatives and other social enterprises are able to
successfully set up. This sector will continue to be fertile ground for
cooperatives for the foreseeable future. In addition, small industrial
and artisanal enterprises also do not require expensive technology, and
that is another strong sector in which worker cooperatives and social
enterprises operate successfully.
But as the size of the firm increases, maintaining direct democracy in
the workplace becomes increasingly difficult and complex. Large modern
firms based on sophisticated technology, expertise, and management do
not lend themselves easily to direct democracy, and efficiency of scale
often conflicts with democratic processes. However, worker cooperatives
have functioned successfully in America in medium-sized enterprises.
(5) Mondragon, the world's largest group of worker cooperatives,
centered in Basque Spain, has a workforce of over 92,000.
(6)
Today’s movement is not primarily focused on transforming large
corporations into
cooperatives, although it does put workplace democracy and social
equity squarely on the table. Larger enterprises are the territory of
the labor movement, which has been reduced to an extremely weakened
state in the US; only when workers force changes in the labor laws will
American unions win the space to put workplace democracy in large
enterprises on the immediate agenda. I will not deal with
the questions of workplace democracy in larger enterprises in this
paper.
Cooperatives are both a natural formation of human interaction and a
modern social movement. They are probably the most integral and natural
form of organization beyond the family. Without simple economic group
cooperation and mutual aid, human society would never have developed.
On the other hand, the cooperative movement was one of the first social
movements of modern times, with roots at the beginning of the
industrial revolution, and was an integral part of the early labor
movement.
A dynamic has always existed between cooperatives as a natural social
formation and cooperatives as a social movement. The social movement is
based on the natural formation, and on the widespread perception that
modern society has interfered with and denied the natural work
democracy that humans crave. Market capitalism lauds the employee
system as the basis of human freedom but, as most employees understand,
the system has also almost always been a tool of oppression and
bondage. The cooperative movement aims for liberation from oppressive
social stratification and alienation.
What makes the new resurgence of the cooperative movement different
from what came before? To elucidate that question, we need to take a
brief look at some of the history of the movement. Since I know the US
movement best, I’ll focus on that history. Since this is a world-wide
movement, I’ll also relate US history to some other developments around
the world. There are many approaches to the history of the cooperative
movement, and various visions of its goals and mission. Every country
has its own equally important history. The saga is not simple.
To begin in a traditional American context, Thomas Jefferson wrote,
“Whenever there are in a country uncultivated lands and unemployed
poor, it is clear that the laws of property have been so far extended
as to violate the natural right. The earth is given as a common stock
for man to labor and live on.” (7) That was a key concept of
Jeffersonian democracy, and the underlying basis for Abraham Lincoln’s
Homestead Act, which opened millions of square miles of land to people
who were willing to work it. In today’s world we cannot all be small
farmers, but these concepts still apply inalienably to the varieties of
work as we know it. These ideas form part of the legal and historical
basis for the American government providing a supportive environment
and enabling infrastructure for cooperatives.
AN OUTLINE HISTORY
OF THE COOPERATIVE MOVEMENT IN THE USA (8)
Worker cooperatives were organized by some of the very first North
American labor unions in the early 1800s. The earliest unions came out
of guilds, which included both masters and journeymen, and structured
the industries. They were basically mutual aid organizations. At the
point that masters became bosses, the journeymen broke away and formed
separate organizations. These developed into what we know as unions.
They too specialized in mutual aid. In many of the earliest strikes,
the journeymen formed worker cooperatives, sometimes temporarily to
support themselves during the strike, and sometimes to continue on a
permanent basis. These cooperatives were facilitated by the fact that
most industrial production was still done with comparatively simple
hand tools.
Worker cooperatives became a modern movement with a broad social
mission in the 1830s, in reaction to the injustices of the rising
capitalist system and the concomitant impoverishment and disempowerment
of the working classes. Worker cooperatives were promoted by the first
national labor organization, the National Trades’ Union (NTU). In the
early 1870s, shortly after the Civil War, the National Labor Union
(NLU) renewed the American worker cooperative movement, and honed its
mission. In the early 1880s worker cooperatives found their greatest
manifestation in the labor movement in the Knights of Labor (KOL), the
largest labor organization in the world at that time, which organized a
network of almost 200 industrial cooperatives. This was the era of the
domination of the great industrialist “robber barons,” enormous social
strife, and the KOL cooperative movement was in the thick of it.
Back in the colonial era, the early American governments were dominated
by elites of large merchants, bankers, and plantation owners These
elites continued to control federal, state, and local governments
during the first decades of independence. As the industrial capitalist
system increasingly predominated during the 19th century, manufacturing
and railroad magnates joined the other privileged interest groups in
asserting dominance over government for their own benefit. Under the
control of these power elites, on the whole government was antagonistic
to the cooperative movement. Control of state and local governments
varied by place, and regional powers vied for a place within
national power. Democracy for ordinary working people was mostly window
dressing. People were treated as just labor input in the economic
machine. In colonial America, a large part of the early work
force was made up of indentured servants, people who signed themselves
into temporary bondage in exchange for passage to America. These were
slowly replaced in the North by wage labor (including child labor and
prison labor) and in the South by slave labor. The capitalist
system, the conquering ideology in the Civil War which abolished
chattel slavery and replaced it with “freedom,” was based on the wage
system. The employer-employee relationship was a subtler form of
bondage in which people rented themselves to other people for specific
time periods and under specified conditions. Other forms of the same
system included piece-rates, share-cropping, tenant-farming, and
various labor contracting. The social mechanism used to compel enough
people to rent themselves into this temporary bondage, was poverty. The
endless flood of immigrants to America provided a seemingly
inexhaustible bounty of willing victims. The union movement was the
revolt of the wage slaves.
Worker cooperatives by the decades after the Civil War had become
integral to the overall strategy of the labor movement. At the same
time as the Knights of Labor fought for higher wages and better working
conditions, they were also attempting to construct a vast chain of
cooperatives, with the mission of abolishing what they called wage
slavery, and replacing the capitalist wage system with workplace
democracy in what they called a Cooperative Commonwealth. This concept
arose autochthonously in America, parallel to the growth of the
socialist movement during the same period, to which it was conceptually
interrelated. (9) The Cooperative Commonwealth vision was based
on
free associative enterprises in a regulated market economy, with the
government relegated to infrastructural functions and public utilities,
such as water systems, roads, railroads, etc. This concept was
fundamentally distinct from the state socialist concept of the
government running the entire economy with all workers as government
employees. The Cooperative Commonwealth vision was Jeffersonian.
During this same period, between 1866 and the 1890s, American small
farmers also organized cooperative movements with similar motivations,
strategies, and ends. Thanks to Lincoln’s Homestead Act, the rural US
at that time was populated widely by freeholding farm families, who
organized cooperative movements for purchasing supplies and marketing
farm products. Their opponents were the railroads, bankers and
middlemen. The main farmer organizations were first the National Grange
(NG) and later the Farmers’ Alliance (FA). Parallel to the union
movement the farmer cooperatives saw their mission as organizing an
alternative economic structure that would supercede the existing one, a
vast network of cooperatives that would be the lever of their
liberation from economic oppression. Historian Michael Schwartz called
the Farmers’ Alliance Exchanges “the most ambitious counterinstitutions
ever undertaken by an American protest movement.” (10)
As the worker and farmer movements developed, the consumer cooperative
movement formed a third stream of the cooperative movement. The
consumer store movement started independently in America at an early
period, but was destroyed by price wars with capitalist competitors.
Later consumer cooperatives achieved some success after adopting the
British Rochdale system of keeping prices at about market rates and
giving rebates to member customers. Cooperative stores run by farmer
organizations and unions were notably successful. But the other side to
the Rochdale approach was that they ran the stores managerially with
workers as employees and not necessarily co-op members. This approach
was expanded into an alternative version of a cooperative commonwealth
in which giant consumer cooperatives owned all the factories and farms,
with the wage system universalized instead of abolished. By this twist
the consumer cooperative movement abandoned what had been a core goal
of the worker cooperative movement: workplace democracy and liberating
workers from wage slavery.
The Knights of Labor was defeated in 1886-87, in the wake of the
national May Day strike for the 8-hour day in 1886 and the ensuing
Haymarket riot and nationwide crackdown. The KOL worker cooperatives
were
destroyed at that time by the combined forces of the capitalist system
and the government. This was the ultimate triumph of industrial
capitalism in the US, and the end of the era when industrial workers
thought they could defeat the system economically and supercede
capitalism through peaceful competition by building an alternative
parallel cooperative system. As the KOL waned, the American labor
movement continued on a different footing from the European movement.
In most of Europe the socialist movement and workers parties had become
an accepted part of the political landscape, while in America they were
excluded from the mainstream. As historian Kim Voss wrote in The Making
of American Exceptionalism, “American industrial relations and
labor
politics are exceptional because in 1886 and 1887 employers won the
class struggle.” (11)
In rural America the capitalist defeat of the cooperative system was
completed a few years later, when the Farmers’ Alliance likewise saw
their cooperatives destroyed and their organization defeated by a
coalition of bankers, wholesalers, and manufacturers who cut off their
credit, supplies, and ability to do business. (12)
The FA and the KOL played one last card. Forming a “third party”
alliance, they went into electoral politics and were instrumental in
organizing the Populist Party, the most successful third party in
American History. They ultimately joined with the
Democrats and narrowly missed electing William Jennings Bryan to the
presidency in 1896. (13)
After the demise of the KOL, the surviving American Federation of Labor
(AFL) began its domination of the mainstream US labor movement. The AFL
abandoned the idea of abolishing the wage system, and instead focused
only on negotiating contracts and working conditions. Some unionists in
the Industrial Workers of the World (IWW) and other organizations
continued to fight for industrial freedom and workplace democracy, but
instead of building cooperatives they looked to take over the existing
industries.
In the 20th century the consumer cooperative movement became the
dominant cooperative philosophy in the US, promoted by the Cooperative
League (CL), the most important national coordinating and educational
organization. For much of the century CL excluded worker cooperatives
and even farmer marketing cooperatives (farmer supply purchasing
cooperatives were however acceptable to them).
The modern cooperative movement developed in other industrializing
countries at the same time as the US movement. Every country had its
own variation, related to its level of industrialization. France, first
influenced by the ideas of Proudhon and then anarcho-syndicalism, was
similar to the US in its focus on worker cooperatives, self-help and
solidarity. The movement in Germany focused on banks and credit for
farmers, artisans and small entrepreneurs. In Italy it was a diverse
mix of worker, farmer, banking, and consumer cooperative experiments,
with the Catholic church ultimately organizing a parallel cooperative
movement. The movement in Britain started around the same time as the
US, and in the 1830s involved thousands of artisans, farmers, and
unions forming labor exchanges as part of the National Equitable
Labour Exchange, with large warehouses in London and Birmingham. A
parallel movement organized the Grand National Consolidated Trades
Union, an umbrella organization which immediately became embroiled in
labor struggles and came under harsh attack by employers and
government. Under duress both the labor exchanges and the union
collapsed. When the British cooperative movement revived in the 1840s
in Rochdale, it found great success as a consumer movement, and carved
out a niche for itself through its core compromise of not threatening
the market and abandoning workplace democracy. The British success
resulted in consumer cooperative philosophy dominating much of the
international cooperative movement as well the US movement during the
20th century, while worker cooperatives and workplace democracy became
relegated to the realm of impractical dreamers and radical groups.
THE NEW DEAL AND THE COOPERATIVE MOVEMENT
When the economy collapsed, the “Self-Help” cooperative movement,
stressing mutual aid and barter, quickly became widespread among the
unemployed and underemployed. It was truly a spontaneous mass
movement. These cooperatives produced a variety of goods for
trade and self-use, and organized exchanges between laborers and
farmers, in which people would work for a share of the produce. They
sprang up in many locales around the country, and became a part of
daily life for many people. Money was scarce. Scrip was sometimes used.
By the end of 1932, there were self-help organizations in 37 states
with over 300,000 members. A survey in December 1934 counted 310
different groups, about two-thirds of them in California with over a
half million members. (14)
The Great Depression of the 1930s and the New Deal changed the
relationship between government and cooperatives in the US for a
generation. While the movement had always had isolated supporters among
elected officials, as a whole government was anything but supportive.
With the New Deal the American cooperative movement won support at the
highest level of government for the first time. The New Deal was also a
great backer of the labor movement and adhered to strong government
regulation of the capitalist system.
Roosevelt’s programs provided enormous help to rural and farmer
cooperatives. But urban cooperatives were not a significant part of the
programs. Above all, industrial worker cooperatives were excluded. The
New Deal drew the line at helping cooperatives that challenged the wage
system.
One of the New Deal’s first acts was to set up a Division of Self-Help
Cooperatives (under the Federal Emergency Relief Act), providing
technical assistance and grants to self-help cooperatives and barter
associations. (15) The “community projects” program in California
included cooperative industries such as a wood mill, a tractor assembly
plant, a paint factory, and hosiery mills. However, the law stipulated
that production facilities set up with FERA funds could not be used in
money transactions, while self-help cooperative groups usually tried to
include money in their exchange arrangements whenever possible, as well
as producing articles for their own use. This provision seriously
undercut many self-help co-ops’ ability to function, since everyone
needed cash badly. In some situations, FERA cooperators could receive
pay, but only to produce articles for their own use.
The Farm Credit Administration (FCA) of 1933 set up Banks for
Cooperatives, which had a very significant effect on the farmer
cooperative movement. With a central bank and twelve district banks, it
became a member-controlled system of financing farmer, telephone and
electric cooperatives. After having been set up with government
seed-money, the FCA became self-supporting. The banks were not
permitted to give assistance to consumer or industrial cooperatives.
Banks for Cooperatives became an indispensable institution for
organizing and stabilizing farm cooperatives for the rest of the
century. (16) The Farm Security Administration (FSA) of 1935,
initially part of the Resettlement Administration, set up to combat
rural poverty, helped organize 25,000 cooperatives of all types among
about four million low-income farmers. The Rural Electrification
Administration (REA) of 1935 promoted cooperative electrification in
rural areas. Only about 10 percent of rural homes had service at that
time but through REA loans, local electrification cooperatives served
almost 300,000 households, or 40 percent of rural homes by the end of
1939.
While the New Deal’s backing of farm cooperatives was instrumental in
the rural recovery from the depression, the exclusion of worker and
urban cooperatives helped only to maintain working people in a state of
disempowerment, and dependent on government relief or work programs.
Even though industrial production facilities were sitting idle around
the country, the New Deal never supported the idea of workers taking
them over with government backing and restarting them as cooperatives.
The celebrated wave of factory seizures by workers, beginning with the
Flint sitdown strike against General Motors in 1936-37, in which
strikers occupied several plants for 44 days, repelling attacks from
the police and National Guard, had as its goal union recognition, and
the Flint sitdown ended in GM’s recognition of the United Auto Workers.
A wave of sitdowns followed, with over 400,000 workers occupying plants
and businesses around the country in 1937. The wave faded as the courts
and the National Labor Relations Board held that sit-downs were illegal
and that sit-down strikers could be fired. In the following decades
many other powerful tools that American workers used in the 1930s to
unionize were taken away.
From the New Deal’s beginning, reactionary forces worked tirelessly to
stymie it, and succeeded in dismantling it piece by piece after World
War II. Few cooperatives survived the war, and those that did
were attacked by the dogs of McCarthyism, and most purged of any
connection to a social movement. Government regulations over capital,
corporations and the market were removed thread by thread, while worker
organizations were diminished and hamstrung by new laws and
regulations. Small farmer cooperatives found a fierce enemy in
escalating corporate agribusiness.
In the 1960s and 1970s, a new generation rediscovered cooperation,
collectivity, and communalism, creating their own structures and
definitions, inspired by a new political opposition movement and in
turn shaping that movement. In a unique way, the Sixties gave new life
to a vision of America that, unknown to most to the new visionaries
themselves, closely reflected the older cooperators’ dreams. Like their
forebears, the new co-ops and collectives struggled between their dual
identities as “pure and simple” cooperatives and a radical social
movement.
The most important milestone for mainstream cooperatives in that period
was the chartering of the National Cooperative Bank under President
Carter in 1978, to service all types of nonfarm cooperatives.
Shortly thereafter the country sunk into decades of a long rightward
spin under the suffocating cloak of Reaganism and its false promises of
prosperity through deregulated capitalism. Until the bubble finally
burst in 2008 and the economy came crashing down.
URBAN HOMESTEAD MOVEMENT IN NEW YORK CITY (17)
The most successful contemporary radical cooperative movement in the US
is a local movement spanning the last four decades and led by an
inspiring grassroots spirit of revolt: the building occupations of the
urban homestead limited equity cooperative movement in New York City.
In the mid-1960s, many New York landlords in low-income neighborhoods
abandoned their apartment buildings because they considered them not
profitable enough, averaging 38,000 abandoned units a year by the end
of the decade. The City foreclosed for non-payment of taxes and serious
code violations, and assumed ownership as “landlord of last resort.” In
1969 a group of neighbors on East 102nd Street in Manhattan, mainly
Puerto Rican families, took over two buildings by direct action and
started rehabilitating them through sweat equity as cooperatives. That
touched off a direct action tenant movement in other neighborhoods. In
1970 groups of squatters took over vacant buildings on West 15th,
111th, 122nd streets, and along Columbus Avenue around 87th Street,
proclaiming the community’s right to possession of a place to live. The
City reacted by evicting most of the squatters, but public outcry
resulted in their granting management control of some of the buildings
to community organizations for rehabilitation by the tenants
themselves. Several cooperative development nonprofits were formed,
including the Urban Homestead Assistance Board (UHAB), which became the
most effective organization. In 1973, 286 buildings were slated for
urban homesteading, but funding obstacles undercut their efforts.
Forty-eight of these buildings were actually completed as homesteaded
low-income limited-equity co-ops.
In the 1980s New York tenant groups led many squats, taking over
abandoned buildings illegally at first and rehabilitating them. By 1981
the City had become the owner by foreclosure of about 8,000 buildings
with around 112,000 apartments, 34,000 of the units still occupied. At
the urging of housing activist groups, particularly UHAB, the City
instituted urban homesteading programs to legally sell the buildings to
their squatting tenants for sweat equity and a token payment, with a
neighborhood organization or a non-profit development organization
often becoming manager during rehabilitation. By 1984, 115 buildings
had been bought as limited-equity tenant co-ops under the Tenant
Interim Lease Program, with another 92 in process. UHAB provided
technical assistance, management training and all-around support.
Autonomous groups of squatters continued to take over buildings, with
an estimated 500 to 1,000 squatters in 32 buildings on the Lower East
Side alone in the 1990s. Hundreds of Latino factory workers and their
families squatted in the South Bronx. The City’s response changed with
the political winds. Some City administrations curtailed the homestead
program and evicted many of the squats, but some squatter groups
successfully resisted eviction. In the ‘90s the City renewed its
support of tenant homesteading, and by 2002 over 27,000 New York
families were living in homesteaded low-income co-ops. Over the last 30
years UHAB has worked to successfully transform over 1,300 buildings
into limited equity co-ops, and 42 more buildings are currently in
their pipeline containing 1,264 units, most of them in Harlem and the
Lower East Side.
The urban homestead movement is based in law on the concepts of
squatters rights and homesteading. Homesteading is by permission,
usually on government-owned land or land with no legal owner. The
homesteader—like the squatter—gains title to the land in exchange for
the sweat equity of working it for a certain time period, usually 10
years. In many cases people who start as squatters become homesteaders.
Squatters rights and homesteading have been part of US and English
common law since very early times, and are deeply embedded in American
history. With squatting—legally called “adverse possession”—the
squatter takes possession of the land or building without permission of
occupancy from the legal owner. Squatters use adverse possession to
claim a legal right to land or buildings. The idea is that a person who
openly occupies and improves a property for a set amount of time is
entitled to ownership, even though that property may have originally
not belonged to them. For the first thirty days of occupation,
squatters are legally trespassers liable to eviction without cause.
During this time squatters are usually discrete about their presence,
but open enough to be able to document their occupation. After thirty
days, they gain squatters’ rights—or tenants’ rights—and in New York
thereafter can only be evicted by a court order. At that time the
squatters often openly begin to undertake major renovations or
improvements.
The basic concept has been used beyond housing elsewhere in the
Americas. The core idea of the Mexican Revolution (1910-17) was “land
for those who work it,” and that concept was enshrined in the Mexican
Constitution as the ejido system of communal property. The Brazilian
Constitution (1988) says that land that remains unproductive should be
used for a “larger social function." (18) Brazil’s Landless
Workers
Movement (MST) used that constitutional right as the legal basis for
numerous land occupations. The largest social movement in Latin America
today with an estimated 1.5 million members, MST has peacefully
occupied unused land since 1985, won land titles for more than 350,000
families in 2,000 settlements, and established about 400 cooperative
associations for agricultural production, marketing, services, and
credit, as well as constructing houses, schools, and clinics.
RECENT FACTORY OCCUPATIONS
The same core concept has been applied to production and business
facilities by the recovered factory movement in Argentina, Brazil,
Uruguay, Mexico, and Venezuela. Most of these started as occupations of
shut-down or bankrupted factories and businesses by their workers and
communities, and reopened as worker cooperatives. Many of them have
received government recognition and support, particularly in Brazil,
Uruguay, and Venezuela. In Argentina there are about two hundred
worker-run cooperative factories and businesses today, most of which
started as plant occupations during the economic crisis of 2001-2002.
Argentina’s is the largest worker-recuperated movement, despite
receiving less government recognition and support.
The recent wave of factory occupations was next taken up in Ontario in
2007, when Canadian workers occupied three plants that were shutting
down, and forced the owners to honor their severance agreements, but
there was no plan to reopen these factories as cooperatives. The spirit
arrived in the US in December 2008 in Chicago, when over 200 workers,
members of United Electrical Workers (UE), staged a factory occupation
at the shut-down Republic Window and Doors plant, demanding their
vacation and severance pay, or that the factory continue its
operations. (19) They were given only three days’ notice of the
shut-down, not the 60 days required under federal and state law, and
the management refused to negotiate with the workers’ union about the
closure. After 6 days of occupation, the Bank of America and other
lenders to Republic agreed to pay the workers the approximately $2
million owed to them. Meanwhile, the workers explored ways to restart
the factory, including the possibility of a worker cooperative, and set
up a “Windows of Opportunity Fund” to provide technical assistance and
study this and other possibilities for re-starting production. But, as
a union representative has since explained, “the fact that no real
movement of worker-run enterprises exists in the US makes this option
much more difficult at this point.” (20)
Instead of reopening as a worker cooperative, a firm specializing in
“green” energy efficient windows bought Republic Windows in February
2009, and a union spokesman said that the new owner will offer jobs to
all laid-off workers at the reopened plant. Nonetheless, that the UE
union at Republic seriously considered a worker cooperative is an
excellent sign. Historically many unions have feared their position
would be weakened by worker cooperatives because they blur the line
between workers and management. The labor movement, at least on the
international level, has moved beyond that stasis today. The
International Labour Organization (ILO), affiliated with the UN,
strongly supports worker cooperatives today as a strategy to achieve
full employment, and is working closely with the International
Cooperative Alliance (ICA), which represents the international
cooperative movement. While the new cooperative movement is currently
still embryonic in the US, it has the potential of becoming that “real
movement” whose lack the worker at Republic Windows bemoaned.
A recent event of enormous promise is the collaboration, announced in
October, 2009, between the United Steel Workers Union (USW) and
Mondragon International. The USW is North America’s largest union, and
Mondragon is the largest group of worker cooperatives in the world,
centered in Spain’s Basque regon. According to USW International
President Leo W. Gerard, they are exploring a partnership “towards
making union co-ops a viable business model that can create good jobs,
empower workers, and support communities in the United States and
Canada… Too often we have seen Wall Street hollow out companies by
draining their cash and assets and hollowing out communities by
shedding jobs and shuttering plants. We need a new business model
that invests in workers and invests in communities." Mondragon
president Josu Ugarte added that their "complimentary visions can
transform manufacturing practices in North America. We feel inspired to
take this step based on our common set of values with the Steelworkers
who have proved time and again that the future belongs to those who
connect vision and values to people and put all three first." (21)
Today all over the US production and business facilities sit idle,
while the sector of unemployed swells. The government has mortgaged our
grandchildren’s future to bail out the banking system—for the most part
those same banks that own title to the idle production facilities—with
little in return. It would seem perhaps a small step for the US
government to become “landlord of last resort” like the City of New
York, and open tens of thousands of shuttered business, idle factories,
and closed plants to worker cooperatives in exchange for sweat equity.
That is a great stimulus plan that the economy sorely needs.
CONCLUSION
Today’s cooperative movement has centuries of history behind it. At the
same time it is also a new movement of a new generation. Like every
social equity movement, the cooperative movement rises and subsides,
and its deeper goals cannot be permanently achieved because society is
always changing: all social goals must be constantly renewed, and all
social movements must go through cycles of renewal.
Some tendencies in today’s movement differ in several aspects from the
cooperative movement as it was not long ago:
• it has returned to its mission of democratizing the workplace;
• it encompasses experimental structures of social enterprises;
• it is included by diverse nonprofits as part of their mission
strategy;
• it has increased its worldwide character, with the international
movement having stronger influence over national movements;
• it is reforging a close alliance with the labor movement;
• it has returned to direct action activism with housing, land,
business, and factory occupations;
• it is achieving the backing of government in creating a supportive
and enabling environment for the development of cooperatives;
• it is part of an international strategy, coordinated by the UN, to
reorganize the world economy with the cooperative sector a permanent
part, helping to provide full employment for the unemployed and
marginalized people of the world.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
John Curl is the author of For
All The People: Uncovering the Hidden History of Cooperation,
Cooperative Movements, and Communalism in America, (Oakland, CA: PM Press, 2009).
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
NOTES
(1) UN General Assembly, “Resolution on Cooperatives in Social
Development,” UN Resolution A/RES/56/114, Adopted 18 January 2002.
http://www.copac.coop/publications/unpublications.html
(2) Rita Rhodes, The International
Co-operative Alliance During War and Peace, 1910-1950, (Geneva:
ICA, 1995); International Co-operative Alliance, “Peace-Building
Through Cooperatives,” (Geneva: ICA, 2006),
http://www.copac.coop/idc/2006/2006-idc-ica-en.pdf.
(3) For international examples, see the 11 case studies in
Johnston Birchall, “Rediscovering the cooperative advantage:
Poverty reduction through self-help,” Cooperative Branch, International
Labour Office, Geneva: 2003, 31-62. The Uganda Shoe-shiners Industrial
Cooperative Society began spontaneously. Nepalese hill community
forestry user groups took over sustainable management of the public
forests with support from the government. Milk Vita dairy cooperatives
in Bangladesh began in a government program with international aid, and
became independent. Women’s agro-tourism cooperatives in Greece were
first initiated as a public development strategy, and then by
grass-roots initiatives such as the Zagora co-op in Pelion. Tribal
people’s cooperatives in Orissa, India, were started as pilot projects
through the International Labour Organization and an NGO partner. The
water cooperative of Santa Cruz, Bolivia was initiated by the
community. Labor cooperatives in Finland were spontaneously organized
by a variety of groups.
(4) Douglas B. Cleveland, “The Role of Services in the Modern US
Economy,” (Washington, DC: Office of Service Industries, US
Chamber of Commerce, International Trade Administration, 1999),”
http://www.ita.doc.gov/td/sif/PDF/ROLSERV199.pdf
(5) Current examples of successful worker cooperatives involving
larger groups include Sustainable Woods Cooperatives ( Lone Rock,
Wisconsin), Equal Exchange (West Bridgewater, Massachusetts), Arizmendi
Association of Cooperatives (Bay Area), Cooperative Care (Wautoma,
Wisconsin), Chroma Technology Corp (Rockingham, Vermont), Rainbow
Grocery (San Francisco). Cooperative Home Care Associates (New York
City), WAGES (Oakland), Big Timberworks (Gallatin Gateway, Montana),
Union Cab of Madison, and Isthmus Engineering & Manufacturing
(Madison, Wisconsin).
(6) Mondragon Corporation: Economic
Data,
http://www.mondragon-corporation.com/language/en-US/ENG/Economic-Data/Most-relevant-data.aspx
(7) Philip S. Foner, ed., Thomas
Jefferson: Selections from His Writings, (New York:
International Publishers, 1943) , 56-57.
(8) See John Curl, For All The
People: Uncovering the Hidden History of Cooperation, Cooperative
Movements, and Communalism in America, (Oakland, CA: PM Press,
2009). A detailed survey of this history can be found in my book.
(9) The extent of the worker cooperative movement was nationwide
and regionally balanced. Early centers of cooperative growth were urban
metropolises such as New York City, Philadelphia, Chicago, and Boston,
followed by smaller cities including Cincinnati, Detroit, Milwaukee,
Minneapolis, St. Louis, Baltimore, New Orleans, and San Francisco, as
well as numerous small towns. Between 1865 and 1890, 72 worker
cooperatives were opened in New York State; 69 in Massachusetts; 61
Illinois; 48 each in Pennsylvania and Ohio; 24 Minnesota; 20 Maryland;
17 Indiana; 15 Wisconsin, Kansas and Missouri; 13 Michigan; 12 Iowa; 11
New Jersey; 10 Louisiana; 9 Kentucky; 8 Connecticut; 5 Virginia and
West Virginia; 4 Georgia; 3 Maine, New Hampshire, Rhode Island,
Alabama, Arkansas and Texas; 2 Tennessee, North Carolina, Oregon,
Washington Territory, and District of Columbia; 1 each in Vermont,
Delaware, South Carolina and Mississippi. New York City had the
greatest concentration (38), followed by Chicago (27), Minneapolis
(18), Philadelphia and Baltimore (16), San Francisco (15), Cincinnati
(14), Milwaukee (13), Boston (11), St. Louis, New Orleans and Detroit
(9). In addition 11 were in Canada, with 3 each in Montreal and
Toronto. The leading trades (in descending order) were boot and shoe
making, iron molding, printing-publishing, cigar making, coal mining,
barrel making (cooperage), glass making, clothing manufacturing,
furniture manufacturing, carpentry, and shipbuilding. See Clare Horner,
“Producers’ Co-operatives in the United States, 1865-1890.” Ph.D.
diss., University of Pittsburg, 1978, 229-43.
(10) Michael Schwartz, Radical
Protest and Social Structure: The Southern Farmers' Alliance and Cotton
Tenancy, 1880-1890 (Chicago: University of Chicago Press, 1976),
217.
(11) Kim Voss, The Making of
American Exceptionalism: The Knights of Labor and Class Formation in
the Nineteenth Century (Ithaca: Cornell University Press, 1993),
232.
(12) Curl, For All The People,
111-17.
(13) See Norman Pollack, The
Populist Response to Industrial America, (Cambridge: Harvard
University Press, 1962); Hicks, J. D. The
Populist Revolt (Minneapolis: University of Minnesota Press,
1931. Reprinted. Lincoln: University of Nebraska Press, 1961); Lawrence
Goodwyn, The Populist Moment
(London: Oxford University Press, 1978).
(14) Clark Kerr and A. Harris, Self-Help
Cooperatives in California (Berkeley: Bureau of Public
Administration, University of California, 1939), California Emergency
Relief Administration, 135-38.
(15) For the New Deal cooperative programs, see Paul K. Conkin, Tomorrow a New World: The New Deal
Community Program (Ithaca, NY: Cornell University Press, 1959).
(16) Joseph G. Knapp, The
Advance of American Cooperative Enterprise: 1920-1945 (Danville,
Illinois: Interstate Printers and Publishers, 1973), 260 ff.
(17) Ronald Lawson, The Tenant
Movement in New York City, 1904-1984 (New Brunswick, N.J.:
Rutgers U. Press: 1986); Johnston Birchall, “Rediscovering the
cooperative advantage: Poverty reduction through self-help” (Geneva:
Cooperative Branch, International Labour Organization, 2003), 32; Urban
Homestead Assistance Board, “Programs Overview,” “Co-op Development,”
http://www.uhab.org; Robert Neuwirth, “Squatters' Rites,” City Limits Magazine,
September/October 2002.
(18) Jeffrey Frank, “Two Models of Land Reform
and Development -
Brazil, Z magazine, November 2002; Sue Branford, and Jan Rocha, Cutting the Wire: The story of the
landless movement in Brazil, (London: Latin American Bureau
2002); Brazil’s Landless Workers Movement, “About the MST,”
http://www.mstbrazil.org/
(19) Michael Luo, “Sit-In at Factory Ends With 2 Loan
Agreements,” New York Times,
December 12, 2008; Michael Luo and Karen Ann Cullotta, “Even Workers
Surprised by Success of Factory Sit-In,” New York Times, December 12,
2008.
(20) Benjamin Dangl, “Firing The Boss: An Interview with Chicago
Factory Occupation Organizer,” Toward
Freedom, January 15, 2009,
http://towardfreedom.com/home/content/view/1506/68/
(21) Carl Davidson, “Steelworkers Plan Job Creation via Worker
Coops,” Znet,
http://www.zcommunications.org/steelworkers-plan-job-creation-via-worker-coops-by-carl-davidson,
November 3, 2009.