ANS -- The Foundation of a New Democratic Economy Is Worker Self-Directed Enterprises and Cooperatives and Community Work Are Part of American DNA

Two articles, a short "series".  this is it: the answer to the country's problems.  And the world's.  Are you going to read it?
find it here:  http://truth-out.org/opinion/item/14076-cooperatives-and-community-work-are-part-of-american-dna   
and here:   http://truth-out.org/opinion/item/13823-the-foundation-of-a-new-democratic-economy-is-worker-self-directed-enterprises  
--Kim
P.S. apparently, you can read them in either order.

The Foundation of a New Democratic Economy Is Worker Self-Directed Enterprises

Thursday, 10 January 2013 15:02 By Kevin Zeese and Margaret Flowers , Truthout | Op-Ed

(Photo: Andy / Flickr)A commitment to democracy logically should extend to the place where adults spend most of their lives. Workers in control of their own workplaces are much less likely to ship their own jobs overseas, underpay employees or pollute their own communities.


The economic collapse and slow recovery that has led to high unemployment and under-employment, coinciding with an extreme wealth divide in which workers have a shrinking share of the GDP, means people are looking for new approaches. How can we create an economy that works for all Americans?

Through his new project, Democracy at Work, economist Richard Wolff strives to develop a social movement that puts in place a reorganization of the economy built on a foundation of employee control of the workplace. Employees would act together as their own bosses in a fully egalitarian, democratic workplace where workers run the business, share the assets and create a workspace that runs in harmony with not only its workers, but the entire community.

We join him in this effort through our project, It's Our Economy, which seeks to create economic democracy, with worker ownership at its foundation. Economic democracy is consistent with the democratic ideals of the United States. And employee ownership is an all-American approach to problem-solving that has been supported by people on the Right and Left. Workers will relish the democratic structure; businesspeople will appreciate its entrepreneurial spirit. In our next column we will review the history of worker ownership and communalism that dates back to the founding of this country, indeed, pre-dates European settlement of North America.

We are not starting from scratch. There are thousands of successful, majority worker-owned businesses in the United States. The largest majority employee-owned business is Florida-based Publix Super Markets, a $27 billion company that employs 152,000 people. That's more workers than Costco and Whole Foods combined. As we finish the international year of the co-op, worker ownership is growing. One in five adults in the world are members of co-ops; and a majority of Americans find cooperatives to be less expensive, more trustworthy and to provide better service than traditional businesses.

As political economist Gar Alperovitz reports, "There are 120 million members of cooperatives in the United States; 20 percent of the American electric system is either co-op or municipal, essentially socialized. Land trusts are developing at the local level. At the state level, there are many approaches, like public pension funds, for example. California's is the most well-known, but the state of Alabama is heavily using its pension funds and even investing in some forms of worker-owned companies."

Wolff argues that workplaces need to go beyond majority ownership, to "Worker Self Directed Enterprises" (WSDE). He makes a strong case that workers in control of their own workplaces are much less likely to ship their own jobs overseas, underpay employees or pollute their own communities. As workers' enterprises become fully functioning, they benefit those who participate as workers as well as the customers and communities they serve.

Much of what goes wrong in US-European capitalism is due to how corporations are organized - hierarchical and undemocratic. As Wolff says "people go to work and do what they are told rather than participate." The undemocratic workplace is dominated by a handful of people - owners, stockholders or a board of directors. Those who make the decisions create greater wealth and power for themselves, usually at the expense of their workers; and not surprisingly they get involved in politics to ensure that they continue to keep their power and wealth.

Worker Self Directed Enterprises are a new way of organizing. Workers have the capacity to direct decisions in their workplace. As decision-makers they have to live with the decisions they make, like moving jobs overseas, replacing workers with technology or polluting their environment. Wolff says: "If we are committed to democracy, then the workplace where people spend most of their adult lives should be democratic."

Especially when an economy is not working, it is time to say "this system does not do what we need, we can do better." Throughout history, there has been a gradual move to self-governance. As Wolff notes, "We don't need kings, nor do we need to be governed by a few at the workplace." To accomplish this transition to a decentralized and democratized economy, we need to build a social movement that takes this message to the American people.

A large portion of the population already agrees with us. These ideas are majoritarian, but are not realized because wealth is in the hands of a few and politicians need concentrated wealth to sustain them and remain in office. This wealth also controls the media and limits discussion. Thus, we also need to continue building an independent, citizen's media to broaden discussion and understanding.

Worker Self Directed Enterprises are built on the experience of the worker cooperatives. The phrase WSDE is used to emphasize that workers make the decisions. The largest cooperative in the world is the Mondragon Cooperative - a network of 250 co-op enterprises that makes up the 7th largest corporation in Spain, with 85,000 worker-members who make the decisions. Mondragon defied the economic collapse in Spain. And now Mondragon is joining with US steelworkers to develop worker-owned steel mills in the US.

There is experience-based evidence that worker directed enterprises can have advantages over traditional corporate models. According to a study by Harvard and Rutgers researchers, companies with substantial employee ownership often outperform those without, because of lower staff turnover, stronger trust relationships at work and greater innovation.

The companies that succeed do so in large part because of the "innovation engine" that is unleashed by worker ownership. Group innovation is free fuel for a business that is created when people's passion is ignited toward innovating together and employees are engaged in creating better products and better ways to deliver them. This strategy seeks to create a competitive advantage in the marketplace.

What are the some of the keys to success? Research shows successful businesses realize that innovation comes from differences in thinking, therefore engaging many workers encourages innovation. Most of the time innovation does not mean new technology, but new solutions to problems, rearrangements and improvements in operation. Allowing experimentation, trying new approaches and sharing the lessons from these efforts means all can learn and innovate further. And success comes from sharing information not only with employees, but also with suppliers and customers. The entire organization is rewarded for its innovation and values of teamwork and sharing. Worker ownership is a practical, not utopian, model of organizing workplaces.

Changing the workplace is not only about more successful business; it is about people living more fulfilled lives. Wolff points out that many workers view work and workplaces negatively because they are not organized to be positive experiences for workers; that "Happy Hour" is something that takes place outside of work. "If more enterprises were employee-owned, fewer workers would face daily exploitation. The ratio of average CEO pay to worker pay (currently, an astounding 380:1) would shrink. Inequality, which harms society and hampers economic growth, would lessen."

Employee Self-Directed Enterprises will also change politics as they put democratic power in the workplace and build wealth among workers. As the balance of power shifts, majoritarian solutions to the challenges the country faces will no longer be taboo. The foundation of political democracy will move from a small number of owners, to worker directors thereby broadening the base of government.

This article is based on a radio interview with Richard Wolff on Clearing the FOG (Forces Of Greed). You can listen to the interview here.
Copyright, Truthout. May not be reprinted without permission.

Cooperatives and Community Work Are Part of American DNA

Tuesday, 22 January 2013 16:28 By Kevin Zeese and Margaret Flowers , Truthout | Op-Ed


A United Farm Workers (UFW) activist speaks about the organization's flag and its history to a reporter. In the 1960's the UFW set up several community mutual-aid associations, including a credit union and cooperative store. (Photo: Randy Bayne / flickr)There is so much in US history that has been hidden or mythologized that ignorance is more common than knowledge even among the best informed. That is how we felt when we read For All the People and then interviewed the author, John Curl, on Clearing the FOG radio.

Curl's area of expertise is very important for those of us seeking transformational change to a new, more equitable economy and participatory democracy. His book methodically and authoritatively traces the hidden history of cooperatives, cooperation and communalism in US history. He shows how these models of economic democracy were intertwined with many of the transformational changes the country has made, including breaking from English empire, ending slavery, and gaining women's suffrage, worker rights and union rights, as well as civil rights. He also shows how economic democracy has been in constant battle with concentrated-wealth-based capitalism, which is threatened by a more equal distribution of wealth. This history is critical for advocates to understand; therefore, For All the People is essential reading.

Why Cooperatives, Cooperation and Communalism Matter

Creating transformational change is not only about protesting what we do not like and resisting and refusing to cooperate with the power structure; it also requires us to simultaneously build the world we want. If big-finance capitalism does not serve the people, what will? The mass of people who struggle through their daily lives need to know there is an alternative available that will meet their needs and improve their lives. People who urgently require employment, housing, food and other immediate needs can work together now to solve their problems in ways that also undermine big-finance capitalism and build democratic and sustainable systems.

Changing the economic system to one that is more democratic is fundamental to shifting political power away from concentrated wealth and to people. However, decentralized and democratic economic systems will not address all of the crises that exist sufficiently. Some, such as finance, health care, energy, climate and transportation require national approaches and coordination. When political power begins to shift, these bigger solutions can be put in place and greater transformation will be possible.

History reinforces the idea that to achieve transformational change, we must proceed on twin tracks: protesting and building. Mahatma Gandhi changed his emphasis in the mid-1930s, a dozen years before independence from the British Empire, to work focused on building economically self-reliant communities from below (sardovaya, or social uplift for all). This became an adjunct to the strategy he is most known for, satyagraha (noncooperation and civil disobedience to unjust laws). Gandhian economics meant thousands of self-sufficient small communities with self-rule and the need for economic self-sufficiency at the village level joined together in a cooperative federation of village republics. This is bookended by the Gandhian social ideal of dignity of labor, equitable distribution of wealth, communal self-sufficiency and individual freedom.

We discovered this two-path necessity when we were organizing the Occupation of Washington, DC at Freedom Plaza. We learned that change required a strategy of two parts: protesting what we oppose, and building what we want; to make the goals of the occupation clear, we called it Stop the Machine, Create a New World. The latter approach is important for many reasons and deserves more attention than the former because it builds community, solves urgent problems, builds wealth for individuals and communities, and creates the society we want.

The Early History of Cooperatives and Communalism

Curl begins before the European settlement of North America with the continent's natives. There were hundreds of tribes and nations north of Mexico which were based on community and working together to solve problems. Curl writes, "every account stresses community over individualism as their overriding core value." Indeed, the concept of individual private property in land and natural resources was unknown; tools were shared, as were the bounty of agriculture and hunts.

When it came to European colonists, "cooperation permeated the entire way of life." This was true in wave after wave of settlers, whether from Britain, France or Spain. They built houses for each other, plowed fields and shared food; they cleared land and built communities together. There were community gatherings to husk corn, quilt and sew, pare apples and launch ships.

The Spanish colonies, now the Southwest of the United States, were given community land grants by the king for groups of ten or more people. Large sections of common land (ejidos) were put aside for the entire community to share for farming, hunting, water and wood gathering. Of 295 land grants, 154 were community land grants. The common ejido could not be sold. Restoration of ejido lands was one of the central goals of the Zapatistas in the Mexican Revolution of 1910.

In New England, the battle between corporate power and individual rights existed from the very beginning. The first colony of Pilgrims threw off their investors who treated them as indentured servants (a forerunner to modern wage slavery) and instituted self-government. Their community started as a commune and evolved into a cooperative. People worked communally, the product of their work was stored in a community warehouse and needs were taken from a common store. The first major independent industry in Plymouth was a fishing cooperative.

To summarize the early colonial experience, Curl writes, "Cooperation, not competition resounded as the dominant chord across the continent." This self-government and cooperative economy was in constant conflict with the corporations empowered by the British Crown that ruled the colonies, finally leading to the American Revolution with rebellions like the Boston Tea Party, a revolt against the corporate monopoly of the British East India Company.

After the American Revolution, Cooperatives Continued, as Did the Battle With Concentrated Wealth

After the revolution, cooperation continued as a mainstream of the colonial economy. Artisans joined together in "cooperative warehouses" to buy materials at reasonable cost and distribute their products without a middleman. Benjamin Franklin organized 50 neighbors and friends to form the first subscription library, each paying 40 shillings to start the collection. The Union Fire Company, also organized by Franklin, provided for mutual aid in case of fire and was copied in many cities. These evolved into mutual insurance companies owned by a group of people together to insure each other against loss from fire, death or accident. These were copied in ten cities by 1800 and spread to farmers in the 1820s, becoming one of many forms of farmer cooperatives.

In 1831, Alexis de Tocqueville wrote admiringly of mutual aid associations in the United States in Democracy in America: "Americans of all ages, all conditions, and all dispositions constantly form associations ... associations of a thousand kinds ... I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object for exertions of a great many men and inducing them voluntarily to pursue it...."

Throughout the early 1800s, there were a variety of cooperatives. As conflict between workers and owners developed, cooperatives supported workers during strikes. Workers formed cooperatives when they walked off jobs because of low pay and the requirement to work sun-up to sun-down in 75 hour work weeks. These gradually developed into the first unions, which courts often found to be illegal restraints of trade. By the 1830s, workers were winning the right to ten-hour workdays.

This was also a time when economic panics and bank failures became a pattern in the US economy. When there was economic collapse, communalism and cooperatives arose. People worked together to meet their needs. Among the most common were cooperative stores that involved barter, mutual aid and low prices for members. Often when these cooperatives grew to compete with traditional capitalism, capitalists fought back by refusing to sell them goods or transport their products and by undercutting their prices.

Mutual cooperatives formed to build homes for workers. A group of workers would pay monthly into a fund that was used to pay for building homes. The mutual co-op would hold the mortgage until the homes were paid for. These essentially became mutual savings banks, forerunners to the community banks and credit unions of today.

The issues of westward expansion, homesteading and slavery became dominant in the mid-1800s. The wage slaves of industry realized that if chattel slavery moved west, it would mean wages would stay low. This helped create a mass movement for stopping the westward expansion of slavery as well as for abolition. A number of key leaders of the abolition movement were also involved in the labor and cooperative movements, including Horace Greeley and Frederick Douglass.

Many workers put their hopes for liberation from wage slavery in the Homestead Act of 1862 signed by President Lincoln, which gave federal land grants to people (including freed slaves and women). Westward expansion and homesteading also presented a conflict with concentrated wealth, which wanted the land for its profit. In the end, homesteaders only received a quarter of the available land, with railroads and developers taking the rest.

As farming moved west, so did the cooperative movement. Farmers found themselves a small cog in a national chain, forced to buy overpriced seed, supplies and equipment and to pay excessive prices to transport their goods to market on railroads. A national grange movement developed, initially as a secret society. In 1868, the Minnesota Grange organized the first purchasing and marketing cooperative. In a few years, granges sprung up throughout the Midwest and Southwest as mutual aid societies fighting floods and bug infestations, with farmers educating each other and joining together for purchasing and marketing. Granges operated cooperative grain elevators, warehouses, shipping stations, processing plants, grist mills, bag factories, brick yards, blacksmith shops, cotton gins, rail and ship transport, and even banks. Cooperatives were the backbone of the famed farm belt of American agriculture.

The granges became political, joining the Greenback Party, which sought to put more money in circulation to break the power of banks and monopolies. The railroads were a particular impetus because they charged farmers huge freight rates. Farmers made no profits off their crops even though the prices were so high that people in urban areas starved.

There was rapid growth when the granges joined the Greenback Party; by 1875, there were 19,000 local granges with 758,000 members. Their slogans were "Down with Monopolies" and "Cooperation." In 1878, they joined with the Knights of Labor, uniting farmers and workers in the Greenback-Labor Party and adding the eight-hour workday, union rights and women's suffrage to their agenda. They elected members of Congress and state offices, "Repudiationists," who called for the cancellation of many debts. They never gained enough strength to enact their programs and when they passed laws regulating freight charges, industry fought back by refusing to carry grange goods.

Worker and farmer rights movements were on the rise and the cooperative movement was rising with them. The largest workers' organization in history up to that time, the Knights of Labor, which formed in 1869 and had more than 500,000 members, included replacement of the wage system with worker ownership as one of its central beliefs. The Knights were involved in strikes as a protest against wage slavery, building cooperatives to construct a liberated future and Greenback-Labor politics to pursue their agenda in government.

In 1877, there was a national railroad strike involving tens of thousands of workers. Knights of Labor from many trades joined in and farmers from granges provided the strikers with food. State militias supported the strikers by refusing orders to break the strike, instead fraternizing with the strikers. The strikers took control of the cities of Pittsburgh, St. Louis and Chicago.

The tides turned after the stolen election of 1878. Rutherford Hayes made a deal with Southerners to remove troops who were protecting blacks during Reconstruction in exchange for the electoral votes of three states that New York governor Samuel Tilden had actually won. Once troops were removed from the South, President Hayes turned the troops on the strikers, killing over 100 workers, injuring 500 and arresting more than 1,000. The strike was broken and the Knights of Labor wounded.

In the mid-1880s, the movement for an eight-hour day was in full force. A national general strike was called on May 1, 1886; 200,000 workers joined the strike and hundreds of thousands more joined in protests marches. The strike continued for four days, and on May 4, Chicago police shot six picketing workers in the back. A protest was held at Haymarket Square that night. Police moved in to break it up and a bomb went off. Police shot wildly into the crowd, injuring many. This triggered police violence across the country to break up the general strike. Three months later, eight "anarchists" were unjustly found guilty of the bombing, among them a leader of the Knights of Labor Eight-Hour League. This verdict led to a reaction against the Knights of Labor by the entire economic system, marking the group as a source of violence and destroying their cooperatives and movement.

The 20th Century New Deal and the 60s Revolt

Despite initial legal challenges, the cooperative movement continued and unions grew during the 20th century. Rather than breaking up monopolies, the Sherman Antitrust Act of 1890 was used against cooperatives and unions because it declared any "combination or conspiracy" to restrain interstate commerce to be illegal. Fortunately, the number of independent farmers' cooperatives continued to grow because the government looked the other way. It would have been politically costly to enforce the law against farmers. Then the Clayton Antitrust Act of 1914 exempted many cooperatives from the Sherman Act and legalized collective bargaining.

During the New Deal, programs developed that helped to build cooperatives in rural areas. For example, in 1935 the Rural Electrification Administration (REA) was created to promote bringing electricity to rural areas, where only 10 percent had electricity at the time. The REA made loans available to electricity cooperatives. In four years, 40 percent of rural homes had electricity. The cooperatives also forced private power corporations to lower rates and expand coverage.

The Tennessee Valley Authority, established in 1933, encouraged electrical and soil conservation and cold storage, as well as canneries, mills, dairies and craft cooperatives. The Farm Security Administration (FSA), set up in 1935 to combat rural poverty, supported a variety of mutual aid cooperatives that helped with supply purchasing and product marketing, veterinary services, insurance, water and medical care. In the South, land-leasing cooperatives were set up to resettle farmers on land that was more productive. Farmers leased large plantations together, a program opposed by the more conservative Farm Bureau. The FSA supported every form of mutual aid, helping to organize 25,000 cooperatives among 4 million low-income farmers.

The 1933 New Deal National Recovery Act created a Consumers Advisory Board to protect consumers. Mary Rumsey, appointed by FDR as chair, said, "Today, the need is not for a competitive but a cooperative economic system." Roosevelt signed executive orders protecting cooperatives when business interests tried to weaken them.

But it was not all good news from the New Deal. Support for cooperatives stopped at urban areas, where they would directly challenge concentrated economic power. The Federal Emergency Relief Act only allowed barter pay at their cooperative-funded production facilities, not much-needed cash, while the Works Progress Administration (WPA) promised a cash job at a decent wage to every unemployed person able to work. Advocates tried to convince Roosevelt to count cooperative work hours as WPA hours but were rebuffed. This one-two punch undercut the self-help movement. The New Deal was unwilling to make self-help cooperatives a permanent part of the economy. Hundreds of self-help groups around the country collapsed.

During World War II, much of the farmer cooperative infrastructure was dismantled by agribusiness, which weakened the FSA. When wages were reduced after the war, President Truman used wartime powers to seize basic industries and end strikes. The passage of Taft-Hartley started the slow decline of unions, which continues today. The cold war and the McCarthy Era purged radicals from unions and public life.

When social justice movements developed in the 1960s, collective work and cooperation reappeared. The National Farm Workers (later the United Farm Workers) set up several community mutual-aid associations, including a credit union and cooperative store. The Student Nonviolent Coordinating Committee set up producer and marketing cooperatives. The Selma to Montgomery civil rights march led by Dr. Martin Luther King Jr. resulted in the formation of the Southwest Alabama Farmers Cooperative, which had 1,800 families as members. The Black Panther Party ran a series of survival programs including a health clinic, free shoe factory, food and clothing co-ops, communally built and owned housing, transportation for elders and a breakfast program for children. In the counterculture of the 60s, people sought to build a new social system "within the shell of the old" based on cooperation and sharing. Collectives were formed as nonhierarchical groups that lived or worked together, based on equality and participatory democracy. These included free health clinics, law collectives and free schools, as well as bookstores, media and films.

Since the 1970s, cooperatives and communalism have continued. In our last article, The Foundation of a New Democratic Economy Is Worker Self-Directed Enterprises, we described the state of cooperatives today and quoting political economist Gar Alperovitz: "There are 120 million members of cooperatives in the United States; 20 percent of the American electric system is either co-op or municipal, essentially socialized." Economic democracy is gaining a foothold in the United States, and worker ownership and credit unions are only part of the progress. Today there is a strong cooperative infrastructure that can assist people in developing and managing cooperatives.

The American Personality Is Cooperative; Transformational Change Is Within Us

Understanding this history allows us to better understand ourselves and the character of the nation. We are people who work together for the common good. Cooperation is embedded in our DNA. We are not the false stereotype portrayed in the corporate media of people who "make it on their own" by not caring for others and becoming driven by greed. In fact, all people who rise to the top do so on a broad foundation of inherited and unearned commonwealth infrastructure, scientific and technological knowledge, as well as labor. As Warren Buffett has said, "society is responsible for a very significant percentage of what I've earned." From the founding of the country, community - people working together to solve common problems and make a better life for all - has been central to the national personality.

Throughout history there has been a struggle between economic democracy and capitalist economics over social justice transformations. As Curl writes: "The tapestry of US history is woven with the day-to-day struggles of hundreds of millions of ordinary people for better lives. Mutual-aid organizations such as cooperatives and unions have always been near the heart of those struggles. Those struggles embody the 'pursuit of happiness' that the Declaration of Independence boldly asserts is our inalienable right."

The current rise of economic democracy comes at a time when there is an awakening to the power of protest and resistance. The concentrated wealth of a big-finance dominated economy which hoards wealth while millions starve is more fragile than it seems. Once again, social justice transformations are taking hold at the same time as economic democracy and worker-owned enterprises fill the void of collapsed economies. If we are intentional about building the economy we want while protesting what we oppose, and if we learn the lessons that past efforts provide, we will more quickly achieve the transformations we seek. Resistance and economic democracy will continue to rise because dysfunctional government cannot respond adequately to any of these urgent crises.

The rise against neoliberal economic globalization began in the late 1990s with protests against the World Trade Organization and has continued with the Arab Spring, Spain's indignados, and with the Occupy and Idle No More movements. It comes at a time of tremendous ecological challenges, the end of cheap carbon-based energy, a massive wealth divide, high levels of poverty and extraordinary communication abilities between people all over the world. We are at a critical convergence in history where, as Thomas Paine said at the conclusion of Common Sense, "We have it in our power to begin the world over again."

You can hear our interview with John Curl, author of "For All the People: Uncovering the Hidden History of Cooperation, Cooperative Movements and Communalism in America" on Clearing the FOG Radio.

This article is part of a two-part series with " The Foundation of a New Democratic Economy Is Worker Self-Directed Enterprises."
Copyright, Truthout. May not be reprinted without permission.