The Path Forward for Worker Cooperatives

By Ricardo Fuentes-Ramírez

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Many activists have turned to developing and supporting Worker Cooperatives as a fundamental part of building alternatives to our current system. In one of his recent books, economist Richard Wolff explains that there are many types of cooperatives, and activists should specifically coalesce around those that are “workers’ self-directed enterprises,” or WSDEs. Not all worker-owned enterprises, worker-managed enterprises, or cooperatives are necessarily WSDEs. In some worker-owned enterprises, worker/owners simply leave the directing of the enterprise in the hands of a board of directors. Worker-managed enterprises are usually firms in which owners give more control to workers while expecting more profits or growth, serving the interests of the former, not the latter. Finally, cooperatives include a wide variety of institutions, including firms for cooperative purchasing or selling. Many cooperatives are simply groups of small capitalists purchasing inputs cooperatively. To be considered a WSDE, the appropriation and distribution of the product of the workers’ labor has to be done cooperatively, and the workers who cooperatively produce it are identical to those who cooperatively appropriate and distribute it. In these firms, workers collectively determine what the enterprise produces, the appropriate technology, the location of production, and all related matters. For Wolff, these types of worker cooperatives are the building blocks for a future alternative system.Wolff believes that if WSDEs organize mutual support and sufficient political strength, they might prevail in competition with capitalist firms. To ensure their growth and role in transforming society, Wolff delineates five main strategies. The first is to struggle for a government job program that provides founding capital to workers willing to commit to building WSDEs. He explains that “learning from and adapting the example of Italy’s very successful 1985 Marcora Law, which enabled workers to take over enterprises that were in crisis, the US government could offer unemployed workers a similar choice.” This includes providing government support for these WSDEs, such as technical assistance, subsidized or guaranteed credit access, temporary tax exemptions, preferential purchasing of WSDE goods and services, or requiring product labels to reflect the organization of their production, so consumers could recognize and choose WSDE products.

The second strategy is to seek alliances with the existing cooperative movement —for example, to create joint campaigns for a US version of the Marcora Law and to ease tax burdens on existing cooperatives. Third, seek an alliance with the trade union movement that coalesces around WSDEs developing alongside unions’ struggles against capitalist employers. Fourth, develop the organic intellectuals of the WSDE movement, that is, people who believe in WSDEs as instruments of social change, and are inclined and skilled enough to find effective means to communicate their beliefs and thereby build such a movement. Wolff argues “the program for increased WSDEs needs to support and build—in universities, labor unions, social movements, and beyond—the meetings, discussions, courses, and centers that can generate and train organic intellectuals.”

The last strategy Wolff mentions is to aspire toward the creation of a “new independent political party that will contest for governmental power to accomplish social change, with WSDEs as a major component.” This strategy is perhaps one of the most, if not the most important, among those discussed. For example, some activists interested in workers cooperatives apply what David Harvey has called a “termite theory.” That is, they believe worker cooperatives can gradually grow and replace capitalist firms, eating away at the institutional and material supports of capital until they collapse. The problem, for Harvey, “is not lack of potential effectiveness; it is that, as soon as the damage wrought becomes too obvious and threatening, then capital is both able and all too willing to call in the exterminators (state power) to deal with it.” Furthermore, worker cooperatives depend on flows from and towards financial and commercial institutions, which operate under a completely different logic. Even if they do survive this hostile environment, it would be by gradually mimicking the behavior of capitalist firms. In other words, it is fundamental that worker cooperatives, as well as WSDEs in particular, be conceived as political instruments, of education and organization, used towards the creation of a new independent political party that will contest for governmental power to accomplish social change. This way, the transformative power of worker cooperatives may be preserved and reinforced, and the prospects for change are better rooted as well.

For more on creating or supporting WSDEs, visit the Democracy at Work Website.