By Lambert Strether of Corrente
Here’s something to listen to with your morning coffee; it’s a lecture on co-operatives, with Q&A following, by Gar Alperowitz at the New Economy Summit in Boone, NC, in April of this year. I like the title, because the agency in “What Then Must We Do” is explicit, in contrast (intentional or not) to [Anglophone usage of] Lenin’s famous “What Is To Be Done” (sez who?) where lack of agency signals the Bolshevik’s intent to tell people what was to be done. We know how that movie ended; there were a lot of movies that ended that way in the 20th Century. The video:
Alperovitz, then, is an advocate of co-operatives, which he sees (I’m sure I’m simplifying) as a means toward “economic democracy.”* I’m not anything like even ignorant about co-ops — readers? — but it strikes me that if I’m not hearing much about them in our famously free press, there must be something to the idea. So this post will have two parts. First, I’m going to provide a transcript for that part of Alperowitz’s talk that I found most relevant to the present day, with some interlinear comment, and then I’m going to provide some material on the co-operative institutions that Alperovitz mention in throughout his talk and in the Q&A. Spoiler alert: I wish I could say that collective ownership of the mean of production the co-op movement (“the new economy”) is the greatest thing since sliced bread, but I don’t know enough. What is clear is that a lot of very hard, and very pragmatic, thinking has been done. Whether that adds up to having laid any kind of groundwork, I don’t know.
So to the transcript; Alperovitz starts out — his audience is mostly students* — with a high level, potted history of how our current system of electoral politics came to be:
[11:45] What’s driving the entire process is a new historical context that suggests we aren’t going to go back to the old ways; what’s likely is a continuation of what you see, and that is growing pain. So let me say just a little bit about that. I don’t want to burden you with too much, but here’s one way to think about it. The pain levels are obvious. We’re talking about unemployment, poverty, climate change, dislocation, no jobs, no health care — I don’t need to give you this whole story, you probably heard it, more than that. But the question most people usually think about is this: Well, the pendulum will swing.
I grew up believing that, though by 2008 I thought more in terms of possibly stopping things from getting a lot worse. Now I don’t believe in the pendulum theory at all. I’m not sure anybody does, except for the bots of both legacy parties, who confuse a change in party leadership with change.
Maybe we’ll get a bunch of progressives back in, I suspect most progressives, and then we’ll change all that, because that’s sort of how it happened in the past. Or there’ll be a cycle; Arthur Schlesinger, Jr., the great liberal historian, thought that every 30 years there’d be a cycle. I don’t think so. I think you’re living in a period where that’s going to continue, and that that whole idea needs to be understood as an end of an era idea.
The French phrase being fin de siecle. Gramsci: “the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.” But to be fair, all the symptoms are not “morbid.” “Kakania”, Vienna under the last of the Hapsburgs, was not only Hitler’s home, but Wittgenstein’s, Freud’s, Mahler, and many other luminaries. And so with our own time?
So one way to think about that is this. What really happened was that the Great Depression occurred, a big crisis, and a lot of people got thrown out of office, and we had an opportunity for progressive change that was very unusual, because the huge crisis occurred. And that’s how most of the programs you know about, Social Security and the precondition of Medicare, and labor laws and so forth, that allowed the basis of that modern program was developed. The second one was that World War II occurred, and helped strengthen labor unions, which were part and parcel of the institutional power structure that created Medicare, and the environmental laws we now have. But it came out of very special conditions: The Depression, and World War II, and the post-war boom that followed.
A past that might seem quite foreign to Alperovitz’s audience.
What we’re likely to be entering, I think, is a period where the politics that was like that is itself decaying before your eyes…
Yep.
… in significant part because the labor union base of that politics is declining, and also because the special conditions are not likely. What you’re seeing is ongoing — very odd — pain and decay, and difficulties, long trends….
Yep.
… but not the idea that we’re going to get a simple cycle. Not the idea that we’re going to get a big collapse, the government is three times the size it was, relative to the economy, as it was in 1929. The context into which I think we all are living, and what is driving the pain, and creating the questions in our minds, is a context of stalemate, stagnation, and decay.
Yep.
That’s what you see around if you look at people’s lives in many part of the country, plus elite ownership.
That’s an interesting throwaway aside. “We are the 99%” is about income. “Elite ownership” is about social relations.
That’s a really interesting context. I don’t want to lay too much on you, but that is a very interesting context, because it is allowing — No — forcing people to ask different questions. What’s going on here in this rich country? That context is the kind of context that is driving people to look for unusual answers, and new experiments, and saying “We’ve got to find a different way, and we’ve got to build a new economy.” That’s what’s creating the new economy movement. …
So you’re living in a context of pain, but the positive side is that it’s forcing people to wake up, and get on with it. …
What I think the options are is that people who care about all this, and your friends out there around the country, and you’re at the beginning not the end, and their friends, and other friend around the world, not just here, are beginning to generate the ideas, the experience, the project, the institutions, the knowledge, the relationships, the contexts, which is the preliminary precondition for building a powerful movement — maybe — that can change the system. …
I agree. Some of us won’t live to see these changes, but we must pass on what we can, and do what we can do.
In doing that, I like to think about an old Chinese expression. Anytime you want to give a piece of advice you can say “I know an old Chinese expression.” So here’s one… The Chinese have an expression that you have to walk on two legs. So what do they mean by that? It means you both have to do what you can do the old way, as best you can, elect some good guy, and maybe he’ll help you out, organize in the normal way, and simultaneously begin this hard institutional development work and see if we can put those piece together over time. This is not an either/or game. It’s how do we do the best we can in the traditional ways, and simultaneously, walking on two legs, begin to lay the groundwork for something beyond.
Alperovitz’s perspective makes a lot more sense to me. I like it because it’s not romantic. Nor is it partisan. It doesn’t seem like bullshit.
And now part two: Here’s some material on the co-operative institutions Alperovitz mentions in his talk.
During the early 1900s, North Dakota’s economy was based on agriculture. Serious in-state problems prevented cohesive efforts in buying and selling crops and financing farm operations. Grain dealers outside the state suppressed grain prices; farm suppliers increased their prices; and interest rates on farm loans climbed.
By 1919, popular consensus wanted state ownership and control of marketing and credit agencies. Thus, the state legislature established Bank of North Dakota and the North Dakota Mill and Elevator Association.
Bank of North Dakota (BND) was charged with the mission of “promoting agriculture, commerce and industry” in North Dakota. It was never intended for BND to compete with or replace existing banks. Instead, Bank of North Dakota was created to partner with other financial institutions and assist them in meeting the needs of the citizens of North Dakota.
An obvious litmus test for a true “progressive” is whether they support any legislative and regulatory changes needed to encourage state banks, and co-operative banking generally.
2. Vermont’s 2017 single payer effort. (I love Alperovitz’s framing: “Democratic health care.”
All but ignored in the multitude of media coverage about the ACA and its problems, Vermont has become the first state in the union to pass a single-payer universal health care law for its residents. It has a snappy slogan: Everybody in, nobody out.
The system will be fully operational by 2017, funded by Medicare, Medicaid, federal money for the ACA given to Vermont, and a slight increase in taxes. Everyone will be able to go to any doctor or hospital in the state free of charge. No plans to figure out, no insurance forms to sweat over, no gotchas.
Dr. William Hsaio, the Harvard health care economist who helped craft health systems in seven countries, was Vermont’s adviser. He estimates that Vermont will save 25 percent per capita over the current system in administrative costs and other savings. Employers will suddenly be free to give raises to their employees instead of paying for increasingly expensive health benefits. All hospitals and health-care providers in Vermont will be nonprofit. Medicare recipients will no longer need to wade through an inch-thick book to choose supplemental plans and sort out other complex options in their Medicare enrollment.
Under the ACA, Vermont had to get a waiver from the Feds for a single payer program (hat tip, Dennis Kucinich, who made a “strange bedfellows” alliance with conservatives on his committee on “state’s rights” grounds). Another litmus test for a true “progressive” is whether they would support immediate waivers. Why wait ’til 2017 for single payer?
3. Evergreen Cooperatives in Cleveland, OH is an umbrella organization that supports several co-ops.
Rather than a trickle down strategy, it focuses on economic inclusion and building a local economy from the ground up; rather than offering public subsidy to induce corporations to bring what are often low-wage jobs into the city, the Evergreen strategy is catalyzing new businesses that are owned by their employees; rather than concentrate on workforce training for employment opportunities that are largely unavailable to low-skill and low-income workers, the Evergreen Initiative first creates the jobs, and then recruits and trains local residents to take them.
Another useful litmus test for “progressives” is whether they support strategies like Evergreen’s. Ohio is by no means the only state that is suffering….
3.1 Evergreen Cooperative Laundry
The co-op’s pilot business was the Evergreen Cooperative Laundry, which set up shop in October 2009 to service the Cleveland Clinic and University Hospitals. Today the laundry, which uses energy-efficient washers and dryers, is housed in a one-story LEED-certified building. Facing the street are three frescoes, each featuring the slogan PEOPLE PLANET PROFITS. That is the succinct philosophy of the Evergreen Cooperatives, and it suggests how their model upends the usual socialist–capitalist antipathy. The laundry employs fifty men and women, who clean twelve million pounds of linens a year and who will eventually own 100 percent of the company. Are they socialists who own the means of production, or capitalists who own their own company? The answer, I suppose, is that they represent a new economic model that eschews such false dichotomies. They have solid jobs and are accumulating wealth.
On a continuing basis, lettuce and herbs will be grown here and the first harvest will take place next week. No soil is used to grow the lettuce. Instead, the lettuce is grown in floats on nutrient rich water. Once the plants start to grow, they are transplanted in smaller groups to give them room to mature.
Mary Donnell, the CEO of Green City Growers said, “It’s from seed to harvest in about 35 days and we will pick it and it will be distributed the next day. So within 24 hours, it should be at its final destination which is fabulous when you think most of our lettuce comes from Arizona and California and spends days on a truck.”
“I add at least 2 to 3 people every week so we’ll be up to about 25 employees soon. We have 15 now and I have 3 more that will start in a day or two,” said Donnell.
Green City Growers is also the largest food production greenhouse in an urban area in the entire United States.
4. Mondragón and the System Problem
Mondragón Corporation is an extraordinary 80,000-person grouping of worker-owned cooperatives based in Spain’s Basque region that is teaching the world how to move the ideas of worker-ownership and cooperation into high gear and large scale. The first Mondragón cooperatives date from the mid-1950s, and the overall effort has evolved over the years into a federation of 110 cooperatives, 147 subsidiary companies, eight foundations and a benefit society with total assets of 35.8 billion euros and total revenues of 14 billion euros.
In the vast majority of its cooperatives, the ratio of compensation between top executives and the lowest-paid members is between three to one and six to one; in a few of the larger cooperatives it can be as high as around nine to one. Comparable private corporations often operate with top-to-median compensation ratios of 250 to one or 300 to one or higher.
Interestingly, the United Steel Workers sought out an alliance with Mondragon. Hey, maybe Mondragon wants to make airplanes! The Boeing machinists could help….
Meanwhile, some schadenfreude from The Economist, after a Mondragon division failed; white goods do pretty badly when housing collapses:
Fagor, with 5,600 workers, is a relatively small part of the whole. Even so, Mr Treviño warns that its fall “will have an uncontrollable domino effect on the rest of the group with major social implications.” He believes Fagor’s liquidation would create a €480m hole at Mondragon, including inter-group loans and payments the group’s insurance arm would have to make on Fagor workers’ unemployment policies. Mondragon has promised to find new jobs or offer early-retirement terms for as many as it can of Fagor’s Spanish workers, but this is a tall order in a country with 27% unemployment. Besides their jobs, workers stand to lose the money they had invested in the co-op if it is liquidated.
Britain’s even older co-operative movement (founded in 1844 and nominally owned by its customers rather than its employees) is undergoing a similarly harsh encounter with economic realities. Its banking arm, hit by huge bad debts after taking over another mutual lender, is having to bring in American hedge funds as outside shareholders, because its parent movement was unable to rescue it alone. The co-operative model has its virtues, but there are times when those nasty, money-obsessed capitalists have their uses too.
What a silly comment. Capitalists aren’t obsessed with money; capitalists are obsessed with capital. Could do better, Mr./Ms. Anonymous Economist Writer!
I would say: At the very least a hopeful, thoughtful movement to watch.
NOTE * That is, to them, Nixon is a historical figure from a bygone age.