Gar Alperovitz on Mondragon and the Potential of Worker Owned Co-ops Economy

Gar Alperovitz, professor of economics at the University of Maryland, speaks on Real News Network about the potential and limits of worker cooperatives, contrasting them with the planned economy of Walmart. He discusses, as these enterprises become larger, how synergies can develop among them.

More at The Real News

Print Friendly, PDF & Email


  1. Clive

    I really don’t have any issues with co-operatives per se but the problem is that there’s nothing intrinsic about a co-operative which ensures good governance. The decline and ignominious fall of Britain’s Co Op Bank (well covered by Francis Coppola at illustrates the point.

    Having had some involvement with a couple of co-operative corporations which have gone mainstream, I can’t but help recall the quote (I’ve checked but alas I cannot find who it is attributed to) that, if one was to form a Society to Rid the World of Bastards, within 6 months the bastards would have taken it over and be running the show. In and of themselves, they can’t overcome the darker sides of human nature and are just as likely to become self-serving if not an out-and-out menace to society.

    Even 7 or 8 years ago, people I knew on the inside of the aforementioned Co Op Bank relayed tales of woe about how it was run primarily for the benefit of the top management and any wider good to the rank-and-file members, let alone the communities it was supposed to serve was a mere happy co-incidence. Sound familiar ? Okay, it didn’t have Jamie Dimon, but conceptually the entity that it became it wasn’t that far removed.

    1. JohnB

      I wonder (speculative) if it’s an issue of how much responsibility people want to take on:
      An ethical/good person will enter into management and take on responsibility for all of their failures, and harm that does to the business, while success is credited to the business and they are just ‘doing their job’ to keep the business running.
      An unethical-person/powermonger/bastard will enter into management, and will aim to defer all responsibility off of them, and onto others, and will aim to take credit for the businesses (and other workers) successes, and abuse their power within the corporate hierarchy, to keep competition for the role away.

      So, maybe there’s kind of a Gresham’s Dynamic here: Unethical people automatically have a competitive advantage, due to how their willingness to engage in unethical acts benefits them, and also keeps the stress of the job down – an ethical person, will be at a competitive disadvantage due to their acceptance of responsibility and blame, and will have a higher degree of stress in the job than the unethical person.

      So perhaps the problem, is in some way down to a dynamic like that; with ethical and potentially good managers/execs being repelled from the role (being happy with their lower-stress earnings, lower down in the corporation), and unethical managers/execs being attracted to the role (they can avoid/defer their responsibilities onto others, while maintaining the image/illusion of responsibility/competence, and their unethical nature provides them with a lot of tools for maintaining their position and solidifying the hierarchy).

      The solution to it, may be forcing normal workers within the company, to periodically take up management roles, and learn the ropes, so that the company constantly has a pool of management-fit workers, who are on-call at any time to take on management positions (to have responsibility thrust upon them, whether they like it or not) should it be decided there’s a problem with the management – maybe even to shuffle the management on a regular basis, and have the company not have a dedicated management crew.

      This would be pretty similar really, to how a ‘worker-run’ co-op might run at times, except a little less anarchist/syndicalist, and thus hopefully less prone to the problems that voluntary/anarchist/syndicalist organizations tend to have, with poorly focused management (as another article in links from a few days ago, detailed well).

      1. psychohistorian

        I think you speak of a fantasy world here where “good” people can be forced into management. Have you ever thought about the plutocrats that own the corporation you talk about? They decide who is management and what their goals are. They would no more force “good” people into management roles then they would jab a stick in their eye. Those “good” people might ask questions like why would you want to build and locate all those Fukushima nukes where they are and that can’t be tolerated.

        We need to end wealth accumulation. That, IMO, is the only way to change the incentives in social organizations to favor more humanistic management for the long term existence of our species.

        1. john v. wylie

          Interesting commentary. Experienced with Grower-Owned Co-ops in California fruit and vegetable processing and marketing industry. Saw many grow and evolve to large Management-serving organizations, run by and for top Management. Could answer be perhaps strict limitation of size, and forced annual rotation of governing boards? 100 to 150 members seems to be the magic no. Is no rule saying various small groups can’t synergize and co-operate is there?

        2. JohnB

          Sure, the owners wouldn’t agree to it – but the corporation exists at all, due to the very special legal privileges provided to it by the state, so the state can force corporations (either selectively or wholesale, with a new class of corporate entity), to shuffle their management or give more equal opportunity in management roles, with the subversion of this being treated as fraud.

          It could be a new class of corporation, with a new special set of regulations/rules for enforcing this, and corporations like today could be made the (very special and unusual) exception, which are subject to their own extremely stringent type of regulation, way tougher than what we have now.

        3. Paul Tioxon

          As the republicans are fond of saying in during the recent ceremonial reflections on the war on poverty, the war was lost… we still have poverty. They are right, the war that needs to be waged is the war against wealth. As soon as we get rid of that, there won’t be much to fight about. Other than the usual, women and sports titles.

        4. Nathanael

          I’ve seen a situation or two where decent people who didn’t want to be management were essentially conscripted into management. They often promptly delegated their responsibilities to other, completely unsavory people.

          People who are hungry for power and money will always find a way to start acquiring it. The only way to deal with this is to have a system where they are simply not permitted to get more than a certain amount of money — or power. Beyond a certain point, the wealth has to be taxed away. This will usually prevent the power from overaccumulating as well.

      2. JohnB

        fajensen gave a very interesting link in another thread, showing the benefits of selecting people at random for managerial roles within hierarchies:

        I think something like this (though perhaps in a different form – more aimed at giving everyone a shot at management experience), would fit in extremely well with what I’ve described above – and this seems to give real-world backing for it.

        It also builds upon another study they did, which applied the same process to politics – interesting, that that also gave better results, and this kind of makes sense too:
        It stops any power-hungry factions, from gaining and holding disproportionate power, within a hierarchy.

    2. calabi

      I dont think the Coop Bank or any of its parts was or has ever been a true coop. There supermarkets are run just like any other. Minimum wage paying no say in anything.

  2. Peter Dorman

    In the case of Mondragon, what the coops need is Keynes. Good businesses, bad businesses, democratic businesses, autocratic businesses, well-run businesses and complete messes all fail at a high rate when deliberately deflationary macropolicy results in an unemployment rate pushing 30%.

    More coordinated planning is important for other reasons. Here’s an old post on what Dewey-inspired industrial policy might look like.

  3. Paul P

    From a talk on Mondragon by economist Al Campbell:
    Mondragon workers went on strike at some point. Striking against themselves. I can’t remember the date or the issues, but have the impression that it was over the usual labor- management divide. Mondragon managers listened to its workers and made changes, including structural ones, to address the discontent.

    On issue of the bastards are weeds, always trying to take over the garden, surely we can think of ways to weed them out before we give up on the enterprise. Founding cooperative documents can prohibit selling the coop or its assets to a profit making corporation. You sell the coop and the proceeds escheat to the state. Successful coops have sold out for the benefit of those cooperators who happened to have been around at a fortuitous moment. Limits on management salaries, tenure, and the pool from which managers are drawn, open access to books and contracts–post them online–to be examined by everyone. These suggestions are off the top of my head. They may or may not have merit. But, coop structure to achieve social purposes, probably has been studied, and can surely be studied.

    On a different, but related issue: during public hearings on the NYC, I argued for all City contracts to be put online for public examination. Seven million auditors to assist the agency auditors. Can’t have that much public scrutiny, can we? The Daily News today has an expose’ on excessively high salaries of the presidents of the library systems in the various boroughs, focusing on the Queens head thief. Good work Juan Gonzales. I wouldn’t want to
    endanger your reporting, but this type of information should be at everyone’s fingertips without investigative reporting.

    Public library president.

  4. F. Beard

    Worker-owned co-opts are fine. But what’s to prevent worker-owed co-opts from borrowing from the government-backed credit cartel and becoming oppressors themselves? Is that not, in fact, what has happened in the case of at least some modern corporations? Or how did labor and capital ever become distinct otherwise?

Comments are closed.