On Cooperatives as an Alternative
Daisy Valera
A while back, Raul Jimenez sent in a comment about one of my posts referring to cooperatives. He asked about the benefits of this form of organizing work in relation to the development of private businesses.
He asked me to explain the advantages of cooperatives and cooperative associations, which is what I’ll try to do here.
Raul asserted that these entities look good on paper, but that they haven’t worked in our country or anywhere else.
First, my insistence on this method stems from the fact that it’s a way of beginning to eliminate the social problems caused by capitalist and totalitarian regimes.
In companies with which we’re familiar, employees compete against each other for their individual benefit. This promotes piecework and the exploitation of some by others, and therefore social differences.
The profits go into the pockets of the owners of the capital invested or into the coffers of the state, which redistributes it as it desires.
The end results favor the shareholders or administrative elites without them being concerned about the quality of the goods or services.
The major decisions affecting these firms are made by shareholders or they come “from above,” while those who produce have neither a voice nor a real vote, unless those voices side with the interests of their superiors.
In these dynamics, the purchasing power of workers tends to decrease, since this is the only way for the owners to maintain increasing profits. In cases of economic crisis, the numbers of laid-off or “available” workers tend to increase.
Another no less important point is that the objectives of the firm are not related to the objectives of those who work for it. Alienated labor thus becomes a brake on spiritual realization.
On the other hand, workers who associate into cooperatives benefit equally. Each person has only one vote, which has the same value as that of their co-workers. This transforms work into an activity of full participation that enriches life and stimulates the individual.
These associated workers are the ones who manage, have a voice, choose their representatives in cases where this is necessary, and no one benefits by virtue of their position. Pyramidal organization of activity doesn’t exist.
The objectives are determined by everyone and the aim is to increase the number of associates, not to reduce it.
I know that up until now there haven’t been companies like this in Cuba, so the efforts that have failed, as Raul Jimenez commented, were only monstrous copies of Stalinism, efforts that were cooperatives only in name.
In other countries like Spain, Mexico, Argentina and Chile, there exist valid examples of the operation of this system of work that could be a solution for the expected million and a half individuals to be laid off here in Cuba. “Real” cooperatives won’t be organized by the ruling class; it’s our task as workers to take the initiative.
Laurence Schechtman, thanks for your correct and constructive comments. If the workers in Cuba should be able to organize such coops, as you advocate, Cuba might have the honor of being the first socialist cooperative republic in history. In the meantime, we can only work in the US to make our country reach the same goal.
I wonder if you are aware of the amazing history of the worker-owned, Chinese Indusco, or “gung ho” industrial cooperatives, 1938-1959? They were the brainchild of the American Helen Foster Snow, and were organized first by New Zealander Rewi Alley? They were highly successful, inspiring the formation of similar coops all over Asia and Africa. They probably influenced Father Arizmendi of Mondragon much more than did the English coops.
Thank you Daisy for a wonderful article. There are of course thousands of examples of successful workers’ cooperatives. Mondragon, with scores of co-ops, its own bank and technical assistance, and about 100,000 workers, is the most famous. But they exist all over the world, and in the US it is well established that co-ops pay higher wages and last longer than comparable small businesses, despite conservative hostility. The level of real democracy within co-ops varies enormously, but many of them are extremely democratic.
I only hope that in Cuba the thousands of laid off workers will be free to form their own co-ops and demonstrate their superiority. We have seen in China and the Soviet world how easily state capitalism slips back into the corporate variety, creating disaster for people’s health and welfare. Creating real democratic co-ops is probably the only way to prevent that from happening in Cuba.
El Padrino
You should feel sorry for yourself. To say that Daisy, being from Cuba, cannot be held responsible for what she thinks and writes is the height of arrogance. This is the statement of a person who believes there is no mind control machine in the US and other capitalist countries that pre-fabricates and distorts the thoughts and opinions of the people.
Your idea of “wealth creation” indicates that you actually believe that the capitalist entrepreneur, like the slave-owner of old, gets the credit for wealth creation. I have news for you. It is the people who do the cerebral, artistic and manual work who create wealth, not the bloodsucking bankers, landlords, military industrialists and corporate and political bureaucrats who are destroying the environment and civilization.
Daisy Valera
I feel very sorry for you. Being from Cuba you cannot be held responsible for what you think and write. You know absolutely nothing about the success of wealth creation, and how it drives economies, stimulates competition and innovation, the best goods at the best prices, and makes a healthy tax base that pays for the wests social programs.
Excellent article. Let’s keep in mind that there are various kinds of cooperatives. Some are capitalistic, some semi-capitalistic, and some non-capitalist.
Retail cooperatives, like the one referred to by Michael Landis, are semi-capitalistic. They are patterned on the English “Rochdale” model that began in 1844. This model, based on customer ownership rather than worker/associate ownership, has been successful all over the world, but has serious limitations. Historically, the managers have tended to get more conservative as the customer base increases. Ultimately these managers tend to stand in the same relation to wage employees as a regular capitalistic owner.
The non-capitalistic cooperatives that can be so important in incentivizing social production in Cuba and eliminating economic bureaucracy are the type spoken of by both Daisy and “ClapSo.” These are worker-owned, and are our best hope for a workable form of socialism. The best example is, as Clapso says, the Basque “Mondragon” coops that have been in existence since about 1955.
Actually, a new socialist movement has arisen that sees workable socialism as cooperative. The best thumbnail description of this new form of socialism is “state co-ownership of the instruments of production,” as opposed to the “state monopoly ownership” of the Soviet/Cuban model. Now, if only the PCC could understand!
Additional note: The cooperatives to which Daisy refers as “monstrous copies of Stalinism” have been ill-fated attempts by bureaucrats to escape from the constipation of state monopoly in places like, for example, Yugoslavia under Tito. In these attempts the state would hang on to legal ownership of an enterprise–per the old statist mis-concept of socialism–but give the workers material incentives for improving efficiency. These always failed because the workers simply tried to mild the still-bureaucratic system for what they could get in the short term.
For “real” worker-owned cooperatives to succeed and prosper, the employee/associates have to have real legal ownership of the enterprise (although they might co-own it with the state to avoid a state tax-revenue mechanism.
In Western Canada there is a very successful Cooperative movement, with some 300 stores, individually owned by the “customers” – or members, selling everything from groceries to petroleum products. The members gain equity in the Co-op in relation to their purchases, and eacjh year a proportion of the profits is distributed to them as dividends. It keeps the profits in the community.
I am not going to get into the argument about cooperatives. The mere fact that most organizations are NOT coorperatives speak for themselves. The argument for or against coorperatives are nonesense and at best waste of time.
Can we force a social system upon a society? I mean, can you force a preference of forms of workplace organization upon a society? Yes, you can. Look at Cuba, N. Korea..China, USSR.. etc. and what happened? Are we going to use one utopia replacing another one?
Why Spain, Mexico, Argentina… why not East European countries? Why not China? Maybe cultural influences are stronger, but I thought Cuba can learn more from what happened in former communist countries than dreamed up some better forms of organizations which have all the benefits and little downside.
Daysi this is a good article because it reflects how little knowledge you seem to have about a capitalist system.
I could pick each of your statements apart and analyse them in detail but I will restrict myself to point that many of the affirmations you are making seem like a caricature of the real thing.
For example let me pick just one.
“Another no less important point is that the objectives of the firm are not related to the objectives of those who work for it. Alienated labor thus becomes a brake on spiritual realization.”
Let me ask. How is this different in any other system? I think this could happen in any system. Be capitalist or what you called socialist. Your socialism is nothing else than an extreme version of capitalism. State monopoly capitalism. The exploitation that you claim happens in capitalism. Also happens in your socialism. In fact I could proof that there is more exploitation on your system than in Capitalism.
Furthermore while you are dreaming of constructing a utopian society. The reality is that it is not possible because of other factors. Your type of society needs of a special kind of person “the new man” that does not really exist in reality and it will never exist.
I like to see any of the top political elite giving up for example their cars or homes or boats to the poorest cubans. Some of this people have multiple homes for each one of their wife and lovers.
Anyone who thinks cooperatives don’t work should take a look at Mondragón:
https://secure.wikimedia.org/wikipedia/en/wiki/Mondrag%C3%B3n_Cooperative_Corporation
It has been very successful for well over a half century. More cooperatives like this would solve many of the problems we face…
It’s high time the winter of our discontent
become the not so silent spring of ACTION!
Here in Brattleboro, Vermont, the local food coop started out rather modestly, in the basement of a house, some 30+ years ago. Later, they took over a failed super-market, and expanded one-by-one, into all the ajoining stores in the neighboring strip-mall. Now it has grown so much that it is building a new facility, a four-story, block-long building, with the store on the first floor, offices and community space on the second, and subsidized rental housing on the third- and fourth-floors. They even have an annex, a block away, which sells lower-cost items. Although each full- and part-time worker has a vote, as well as each customers who volunteers, or just pays annual dues, management makes most of the decisions, and the workers and members generally concur with these decisions.