Posted on

The Potential of Worker Co-operatives

Alain BridaultPhoto_Alain_Bridault-Septembre_2008 100x100_0
October 28, 2010
CWCF Annual Conference
Vancouver, British Columbia

In the anglophone world of co-operation, the history of modern co-ops began with those who were called the Pioneers of the city of Rochdale, now a suburb of Manchester (England). The Pioneers were issued from the ranks of the proletariat; they were factory workers. They had conceived, in the middle of the nineteenth century, the first and the most historically ambitious Strategic Plan to rebuild all the economy and all of society on the basis of co-ops.

Their Plan was set in three stages: First, as they were poor factory workers unable to raise enough money to invest in their own factory, they chose to start, in 1844, with a small consumer co-op, with no employees, functioning on the voluntary work of members.

The first stage of that plan was an enormous success. With that first entreprise, their goal was to accumulate enough money with the year after year profits of the co-op to be able to start their second stage, to fulfill their real dreams, create a factory owned by its workers. The second stage was a total failure.

Their third stage was to conquer the agricultural sector and buy farms. This was to enable the workers to feed their families. The third one was a partial success. And the fate of that plan shaped all the future of co-op history, almost everywhere in the world, for more than a century. What was a full success, were the consumer co-ops; dozens and then hundreds of consumer co-ops were created in the second part of the nineteenth century everywhere in Great Britain.

The factory workers were at that time the social class which was rapidly growing. That came along with the rapid spreading of capitalist entreprises. Thus, the consumer co-ops became the second new type of democratic organisations that factory workers of that time invented to protect and promote their mutual socioeconomic interest with the other type of organisation being trade-unions and, eventually, the Labour party.

However, the pioneers could not know at that time the fate of their plan and the future of that small collective tool they had built, the consumer co-op. So they started the second phase of their ambitious plan several years after they created that first consumer co-op. They built a cotton mill as the first industrial worker co-op in the world.

But they were not able to raise enough money from the profits of the mill to re-invest in the development of that factory. They had to accept private investment. Alas, rapidly, those private investors began to own the majority of the shares and that first industrial worker co-op disappeared in 1862.

That failure, because of a lack of capital, was at that time seen by the prominent social analyst Beatrice Potter-Webb as the proof that, in her words “worker co-ops were doomed to fail.” At that time, the co-op future already seemed to reside with consumer co-ops which were booming everywhere.

In fact, almost no worker co-ops were created in Great Britain during the century after that failure, until the beginning of the 1980s. And the re-birth of worker co-ops in Great Britain in the 1980s was, to a large part, due to a new model of industrial co-op which was a tremendous worker co-op success and which proved that Beatrice Potter-Webb was wrong. That was the literally extraordinary experience of the worker co-op in the city of Mondragon in Spain.

Mondragon’s co-ops proved that the dream of the Rochdale Pioneers was not a utopia.  If the co-ops develop a way to attract capital from their surroundings and are able to remain under the entire control of their employees, they can be a success. Because of Mondragon, we know we can do it! As a certain somebody said two years ago: Yes, we can!

That’s my first conclusion about the potential of worker co-ops. But I have another one, and to demonstrate it, I will, once again, go back to the history of co-ops, but from another source of that history, from the French history of co-ops.

In France, the “co-operative idea”, and in particular the idea of worker co-ops, did not come from the same social class as in Great Britain. It did not come from factory workers, but from artisans, from trade workers with very strong professional credentials: typographers, cabinet makers, masons, etc.

They invented a formula for “associations of production workers” at the beginning of the 1830s. They did this to protect their trades – which were threatened by the massive wave of economic industrialization which was starting to appear on the continent some decades after hitting Great Britain.

Dozens of these types of co-operative associations began to be formed; however, the force of this industrial wave was such that the co-operatives remained very marginal. The numbers of these “artisanal workers” continued to decline at a sharp rate over the 19th century, as the numbers of factory workers increased at an equally sharp rate. And so the social layer that held up the worker co-operative movement in France languished progressively until it contained fewer than 5% of total workers. The development of the worker co-op movement was stalled.

It must be pointed out that, for over one century, a time called the “century of hegemony” in the world of industrial production (between the 1870s & 1980s), the worker co-op model didn’t necessarily have a promising future, even if several co-ops did prosper – notably in printing and construction. It was still on the fringes. During this period, it was the consumer co-op model that developed the most.

But today, times have changed. We are no longer part of an economy dominated by industrial production. As Peter Drucker pointed out, we live in a “knowledge society.” The strength of business at the heart of this new economy is no longer mechanized work, is no longer manual labour, is no longer work where the worker is not required to think; it’s no longer the world described by Charlie Chaplin in his film “Modern Times.”

Companies today succeed only with highly qualified staff; they can only develop by mobilizing capacities and continuously improving their productivity and their innovative capabilities. This new economic reality restores the worker co-op model to its full potential.  In fact, the worker co-operative appears very well adapted for this new economic order.

With the return of this professional competence as a basis for business success comes the return of the social strata of artisans that we are witnessing. We are not only talking about blue collar workers now; the artisans are of the white collar variety.  However, it is the same type of people. Whether blue collar or white collar, they share the same relationship to their work and their organization, the same pride in their skills, the same taste for a job well done.

It is for this reason that I say that the social layer carried by the worker co-operative sector is poised for ever-increasing growth. Here in Canada and in other developed countries, the conditions for extensive worker co-operative development are now in place, and have been in place for a very long time.

For if the creation of cutting edge companies no longer depends on the ability to raise enormous amounts of capital, but the ability to assemble professional skills and competencies, it opens a new possibility for white-collar artisans to create their own businesses that they themselves control.

And these new worker co-operatives formed by these new artisans have the potential to be, by nature, more competitive than private firms operating in their industrial sectors. Indeed, to attract and retain these skills, private companies must now make themselves attractive by using such methods of participatory management, offer profit sharing, providing a work environment that allows their employees to meet all their expectations and needs, all the way to the top of Maslow’s famous pyramid of needs.

So they must do their best to copy the inherent advantage of a worker co-operative. But this copy can never match the actual model because you will never see a private company pay all of its profits to its workers! It is also the fact that all the profits belong to workers that facilitates the mobilization of workers at their jobs and facilitates their true sense of company ownership. It is precisely this ability to mobilize its worker/members that is the core strength of the worker co-operative. It is here that the worker co-operative is unbeatable. This is my second conclusion about the potential of worker co-operatives.

We can do it! Yes we can!