Are We Not Owners? We Are Workers!

Last Winter, Fifty by Fifty ran a series of blog posts about the sale of the ESOP New Belgium Brewery to Kirin. It was a great series of posts of which I was honored to participate. This was and is an important discussion about the role of worker (or employee) ownership. However, one editiorial didn’t appear on the site, but was published in one of my favorite publications, Counter Punch by one of my favorite thinkers on worker-focused economics, Bernard Marszalek. In this article about the sale of the 4th largest craft brewery, Righteous Capitalism vs. Cooperative Values, he discusses the notion of being a worker owner and it is worth for all of us to consider his position.

Specifically he argues:

“The fatal error of cooperatives decades ago was to emphasize ownership in imitation of the ESOPs. Almost from the inception of cooperatives as collective economic projects in the early 19th century, they were characterized as urban commons, duplicating in those new settings the centuries old practice of rural lands held in common by an exclusive group, like the families of a village or parish. So, the operative term for participants in cooperatives isn’t owner, but member. Retail co-ops serve consumer-members, housing co-ops have members whereas condos have owners, and worker-members manage worker cooperatives.”

As Bernard argues, neither the “employees” (to use a term of wage-slavery) of an ESOP or the workers of a co-op are truly owners. For the ESOP, the workers have little control over either their shares (which a Trustee often manages) or a say in the operations (although this can vary a bit). For worker co-ops, the members often have significant control over the workplace, but cannot actually sell their share of ownership or take their retained equity (I should know, Union Cab still holds my equity from 1993).

I agree with Bernard–let’s retire the concept of calling ourselves “worker-owners”. We are worker-members. We are stewards of the co-op doing the work to keep it resilient to honor the work of the previous members (who built a co-op for us), and maintaining the co-op’s ability to provide for the members of the future.

The concept of community ownership (in this case the community of workers) is fundamentally different from capitalist ownership. The latter seeks to use up assets and resources. It is extractive in nature and anti-communitarian. The former seeks to build a community that transcends the individual and builds a thing of lasting value to society.

Worker-Members creates a conceptual model of considering the generation of members prior and those yet to be. The term creates a community that challenges the extractive concept of ownership. A co-op member builds communal wealth and connects the individual to something bigger than themselves.

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Co-ops in the Time of Corona

A Special Message to My Readers:

I don’t get a lot of comments on this site these days. That is likely my fault in my attempt to keep the bots at bay. However, I really want you to comment. I want to hear about what your co-ops and your community is doing to support each other right now. Perhaps we can make this a record of this historic time (perhaps GEO will coordinate the stories in an anthology). Please register and comment (or upgrade your status and post).

I Return to Your Blog Post. . . .

As the Corona Pandemic continues to build steam, worker co-ops are at a crossroad.

Like other small business owners, worker-owned businesses don’t neccessarily have a deep supply of money to weather this storm. While worker co-ops can prioritize the health and well being of the membership (share hours, across-the-board pay-cuts, etc.), ta bottom exists. At some point the the fixed costs have to be paid (the rent, the mortgage, utilities, taxes). As governments require people to shelter in place, no plan is presented to protect any small business let alone our worker co-ops.

We need to save each other. We need to fight for all of us.

At some point, the government will have to intervene and provide support, but how do our co-ops survive until the politicians of this age finally recognize that the neo-liberal model of trickle-down economics simply doesn’t work in a global economic and health crisis. Tax cuts are meaningless if there isn’t any income to tax.

In Olympia, the local co-op network, CoSound, has convened a meeting of co-ops in the region to figure this out. It meets later today to begin a process of working together stay strong (or at least viable) during this crisis. Ultimately, co-ops need to manage their fixed costs and hope unemployment insurance can keep the membership together. Combining this with group purchasing (which is how consumer co-ops started out in the 70s) and political action to force elected officials to do more than simply shut down the ability to earn a living. We must demand that the supply side also supports workers ability to survive during the crisis. I expect that local co-op networks across the country will be doing likewise.

What does this mean? I am sure that everyone has a favorite tactic. Seattle is currently providing $800 for families to buy groceries. There are a number of ways to go, but we need to make sure that we support each other and work together to demand that our elected officials recognize that there is no “safe” path forward. They need to make the hard decisions to keep our communities solvent even if that means losing the next election. We also need to reach out to the larger labor movement and work with them to protect all workers. Today, more than at any point in my lifetime, the need for class solidarity means survival.

A nice thing about the time-off is that it provides the means to organize, agitate, and lobby. Even if we can’t rally in front of their offices, we can make sure that they hear us. I don’t have a good rallying cry, but we must argue that our communities remain intact.

Assuming that our movement survives, we need to plan for the next crisis. The US Federation of Worker Co-ops has done a good job getting in front of the wave and helping us to navigate resources. We need more. We need a Solidarity Fund. This could follow Mondragon’s model: 10% of surplus before disbursement form every worker co-op to be held by the Federation. It could be distributed on either an at-need basis or in a national crisis through grants or low-interest non-extractive lending with the aim of covering fixed costs through the crisis.

This is a crucial moment for our movement. We could easily lose the majority of our co-ops but we can also fight hard to make sure that we keep as many as possible. It is ultimately up to us.

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Tech Co-op’s Are on the Rise. . .

A couple of weeks ago, I posted about the desires to create co-op version of “Uber”. One respondent on a different forum noted that I was in “violent agreement” with the platform co-op community. I was glad to hear that! But some also saw my post as technophobic focusing on my age (Ok, Boomer!), so I feel the need to talk about some of the incredible tech co-op that are popping up!

Here in the PNW, a couple of communities are using Althea-mesh software to provide direct access to the internet with cooperative ownership by the users. These ISP co-ops (Clataskine Co-op and Tacoma Cooperative Network) provide true net neutrality through community ownership and control of the ISP. The payments are made through Althea blockchain cryptocurrency (which is linked to the US dollar).

Other tech based co-ops include Motion Twin, a worker-coop which produces on-line games, and Modo (a consumer car sharing co-op in Vancouver).

I’ve also mentioned Resonate, a music streaming app that has membership for producers (artists) and consumers and uses blockchain as well.

Last year, Working Systems, a software developer servicing labor unions, converted to a worker co-op and I am currently talking with a couple of platform start-ups (since they are still in the start up phase, I don’t really want to name them, but one will be about encrypted storage and file sharing. The new Employee Trust in Washington (a project of SIEU, PHC, ICA Group) will be working with the independent contractor caregivers providing homecare through medicaid. Of course, The Workers’ Paradise has always been hosted on Electric Embers, a worker cooperative. A common theme in these co-ops is taking control of the technology and operating an ethical basis.

This was the point of the previous article: we can’t simply replicate a corrupt extractive model, offer memberships, and then call it a day. We have to make the operations aligned with co-op values and principles. and that means strengthening communities, not just disrupting them because that is what technology does. When I hear the word “disruption”, what I hear is someone saying that they don’t really care about upending people’s lives. That the folks losing their jobs or community are just collateral damage in the march of progress filled with a unfounded optimism that everything will work out in the end.

On one of the social sites on which this blog posts, some asked about Eva. Eva was presented to me as a retort to my post: “hey, what about Eva” but it wasn’t easy to find information. Eva is a platform co-op offering “ride sharing”. I use the scare quotes because, as someone on argued, “it isn’t really ‘sharing’ if your charging for the service”. Anyway, the website doesn’t offer a lot of information about the co-op (they told me that the site is do for an overhaul in April), but this interview on Each for All Radio (a co-op itself), with Dardan Isufi, Eva co-founder and Chief Operating Officer, provides a deeper dive into their model. If you listen to the recording (about 49 minutes), you will hear that Eva works with brick-and-motor cab companies, has staff in the cities it serves, insists on 35 hours of training, police background checks, and maintenance reports. Most importantly, Eva doesn’t engage in price gouging (known as “surge pricing” in the industry and covers the insurance cost directly for the drivers (another core difference from Uber/Lyft), the latter is likely an aspect of Canadian and Quebec laws).

The response from me: Eva is not trying to replicate Uber or Lyft.

They are an example of what I was talking about. I am glad to learn more about them and they were very generous in answering my questions in a separate forum. I obviously write from a US perspective (and my Canadian experience is mostly english-speaking Nova Scotia), but avoid US exceptionalism and ackowledge that I can’t know the different laws in every country, province, and state. Eva told me, they can’t provide service to people who need wheelchair accessible vehicles or to people who don’t have a smart phone (and debit/credit card). Apparently this is the law in Quebec (and Eva is working to address that, but politicians move slowly). So, hourra por Eva!. The biggest lesson that I learned from this exchange is to tread lightly with the Quebecois!

The bigger story from all of this is that almost a decade after the forming of the Tech Co-op Network, tech co-ops have begun popping up all over. They don’t have the capital to become household names like Spotify and Uber, but they are building the foundation for a tech community based on human values and a lot of them organize as multi-stakeholder co-ops when it makes sense (such as streaming services). For an industry known notoriously as anti-union and libertarian, the new generation of developers promises a different future of tech in which the technology serves its community and not the other way around.

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The Government Will Not Save Us

Regardless of the outcome of the Iowa Caucus tonight, our salvation as a community (however you define it) and as a species will not come from politicians. It will will only come from our collective efforts to build a better world.

Government as it has been formed, does not exist to solve problems. It exists to control and maintain order. Claus Offe, in his collection Disorganized Capitalism, argues that the role of capital and government tend to feed off of each other. Specifically, the capitalist simply asks government to get out of the way, to do less while other groups (labor, communities) seek to have government intervene. This creates a form of social entropy that requires constant work to maintain.

Of course, sometimes the needle moves as it did during the abolition movement, the populist and progressive movements, and most recently the New Deal. Each of these efforts though further prove the point, that without constant effort, the government will default to doing less.

If we want a better world, it is imperative that we make that world. There is an incredible opportunity now to change our economy from a mercantilist/capitalist model to a more cooperative model. Project Equity estimates that only 20% of existing small businesses. According to JPChase:

“Over 99 percent of America’s 28.7 million firms are small businesses. The vast majority (88 percent) of employer firms have fewer than 20 employees, and nearly 40 percent of all enterprises have under $100k in revenue. 20 percent of small businesses are employer businesses and 80 percent are nonemployer businesses.”

Rather than trying to “get to scale”, we have an opportunity right now to help many of these businesses remain in their communities providing jobs as either worker cooperatives or community (multi-stakeholder) cooperatives. In 9 short years, every one born during the Baby Boom will be 65 or older and the majority will be over 70. Rather than watch the further consolidation of wealth into fewer and fewer hands, we can change communities, create cooperative corporations, and build an economy based on meeting needs, not maximizing profits.

What this could mean is that the majority of the corporations would no longer be asking government to do nothing. A cooperative economy might be asking the government to be a partner in building a better world. Gary Hart, a former Senator from Colorado, wrote his PhD thesis on the Jeffersonian view of what the US could have been. Jefferson, during the drafting of the US Constitution, was Ambassador to France and not part of the deliberations. Hart’s book, Restoration of the Republic: The Jefferson Ideal in 21st Century America, Jefferson envisioned a world that looks a lot like Robert Owen’s communities. Small, (5,000 people or less) but connected in networks and federations to meet the needs of the community. The common defense would not be through a police force or army, but more like a volunteer fire department (that are so common in rural Washington).

A cooperative economy might even make government somewhat obsolete. I have always been amazed at the similarity between Mondragon’s organizational chart and that of the IWW’s vision from 100 plus years ago. A government that is an outgrowth of the cooperatives that we engage to meet our needs would not need to be interventionist. It would be a true partner with the communities that feed into it.

Tonight, the 2020 campaign for president begins in earnest. Regardless of who wins tonight, the nomination, or the presidency, we can only make the world a better place and safe it from ourselves by working cooperatively to create an economy based on meeting the needs of the planet and its residents. The ability to be Masters of Our Destiny lies within us.

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No, a Co-op Version of Uber or Lyft Isn’t Possible

I often see posts and efforts regarding platform co-op that want to co-operatize the “gig” economy. I understand the desire. The co-op community missed this change in our society in a big way. It happened very quickly and utilized an industry whose culture tends not to support collective action (either through labor unions or cooperatives). One of the regularly recurring concepts is to replace Lyft or Uber with a co-op version. I try to be an optimist, but not only don’t I think that it is possible, I think that the co-op community should be thinking about how to reinvent the use to technology in line with the cooperative identity.

Uber and Lyft are not new to the taxicab industry in terms of their model. The only difference between these companies and the traditional taxicab companies, is that they were able to operate in multiple cities and afford political influence at a level that most taxicab company owners could only dream about. The manner in which Uber and Lyft treats the drivers and passengers is part and parcel of the industry that it pretends to replace. It is predatory and extractive.

The primary reason that I don’t think that a co-op version of Uber/Lyft is possible comes from a simple aspect of their plan. These apps are available to provide services in thousands of communities. While it might be possible to create a co-op spanning a similar geography, it would be difficult to have a meaningful democratic control and economic participation through multiple languages, cultures, and nationalities. In addition, Uber and Lyft exist, in my view, more as research labs for their investors (Google among them), so even breaking even isn’t the priority that it would be for a driver-owned platform. It may be possible to simply serve a single area. However, drivers for Uber and Lyft don’t make any more than cab drivers even with millions in marketing support provided by these companies, I a skeptical that a one community company can breakthrough in a single market.

Secondly, a key part of the Uber/Lyft plan works on ignoring liability insurance. This falls on the individual drivers (although there are umbrella plans provided through these companies, the insurance only kicks in if the driver’s insurance is exhausted). However, as far as I know, most insurance companies will not cover pay-for-service transportation on individual plans, which means that the drivers and passengers are completely at risk. Uber and Lyft have a phalanx of lawyers, lobbyists, and a mountain of cash to change laws (as they did in Wisconsin and Virginia) and fight lawsuits.

As to why the platform co-op model shouldn’t re-create Uber, the first act of this company, and others like it, in most cities was to break local ordinances on public transportation (in many cities, such as Madison, taxicabs are considered a “public conveyance”). Most importantly, they effectively red line the ridership based on their ability to own a smartphone, access to either a credit or debit card, and physical abilities. This simple act eliminates a huge percentage of people who need curb to curb transportation. They pretended to have no control over the drivers, even though they do through the software, and this allows drivers to red line their service area for other reasons. These are not cooperative values or cooperative ways of conducting business. Whatever drivers do to collectively challenge the Uber model, they must not copy it.

Taxi cab companies serve their communities and are generally tied to the community. The platform driver model allows a driver with no ties to the community to swoop in and cherry pick rides during peak events. With no connection to the community, there is no responsibility to the community. Co-ops have the ethical values of social responsibility and caring for others. The 7th Principle of Cooperation is Concern for Communities.

Taxi co-ops tend to operate on the co-op values of self-help, self-responsibility, solidarity, and many others. I point out these three, because a connection exists between the drivers of a taxi co-op that enables drivers and staff of the co-op to protect each other, help each other, and provide the education, information, and training that is fundamental to cooperation and a democratic community. A few years ago, I had the opportunity to interview some of the members of Union Taxi in Denver. They pointed out that with the co-op, their lease dropped by $500/week ($26,000 a year). This meant having weekends to spend with their children. At the same time, they still made more than the Uber drivers, had the support of their peers, and access to material support (maintenance, group purchasing, etc.).

A platform transportation co-op that I could get behind would be a secondary or tertiary co-op that provides technical support for the 7-8 taxi co-ops in the country that would offer multi-city support for consumers, provide dispatch and management software for the taxi co-ops, and help start new taxi co-ops. The individual co-ops would be members of the app co-op, pay dues and service fees, help build the co-op community, and have a national narrative about licensed, trained, and safe drivers. They could message the co-op difference about creating safe working conditions, decent pay and benefits, and being a part of the communities that they serve. The could even encourage passengers to add to a co-op development fund as part of the fare (over the tip, of course).

Posted in Human Relations, Platform Coops, Worker Rights | Tagged | 1 Comment

Social.Coop: A New Year’s Resolution for You

If you are looking to connect with the co-op world on-line there are a number of resources. However, a unique one is This is a cooperative owned and managed social network site through Open Collective. There is no cost to join or participate; however, if you want to be a voting member, that level of participation starts at $1 per month. Participation includes being involved in decision-making using Loomio and there are also workgroups helping to manage the site. You aren’t obligated to participate, but everyone is welcome.

You might see some familiar names and people. Some folks cross post on other formats as well (I tend to post a link to my page).

It doesn’t have the flashiness or functionality of reddit or facebook. The interface reminds me a bit of tweetdeck, but it is our place in the internet within the Mastadon world.

Come join us in 2020!

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New Belgium Brewery Goes Flat

A couple of weeks ago, a tremor ran through the “employee ownership” establishment when New Belgium Brewing announced that it had sold itself to Kirin, a Japanese conglomerate with international holdings. New Belgium was a highly touted ESOP (Employee Stock Ownership Plan) that boasted 100% “employee ownership”. The workers will receive an average $100,000 payout. Kirin’s subsidiary, Little World Beverages, which is the official buyer says that everyone keeps their job and everything will remain the same.

I’ve been wondering when the craft beer market would begin consolidating. A few years ago, shockwaves went through the Cascadia craft beer community when 10 Barrels sold to Anheuser-Busch and worse, Full Sail sold to an investment company. New Belgium, around that time, also acknowledged that they would be open to a seller. There was another ESOP brewery in Oregon that sold as well, but I can’t remember the name. It was notable because, as with Full Sail, the trustees were the founders. At this brewery, the couple that were trustees also had a majority share. They said that they wanted the workers to vote on the sale so that they could “feel like owners.” ugh.

Fifty by Fifty created a great discussion about the sale and what it means to employee ownership. I mainly come down in the same commentary of Sonja Novkovic and Erbin Crowell (which shouldn’t surprise too many people). In addition, I would add that, as I mentioned in my previous post, the point of worker ownership goes deeper than creating decent paying jobs (just like the point of labor unions is more than wages and benefits). Ultimately, worker ownership must be about human development and human dignity not only in the workplace but in the community served by the workplace. If human dignity and development isn’t centered in the project, it only offers a few pennies in return for maintaining a larger system aimed at using up people and the planet.

What I found interesting in the commentary was the lack of information about the sale. I held off writing about this because I have more questions than anything. I wonder how the voting went. Was it a unanimous decision such as with Good Vibrations? What is a majority of shareholders? With Full Sail, it was “near unanimous” for the sale (the trustees held 42%). What constituted a majority of shareholders (a minority of actual workers for instance could hold a majority of shares). The reported payout of $100,000 per worker was not reported as either an average or a median number. I think that it would be useful to see a breakdown of how the sale price is distributed to the workers.

That said, $100,000 isn’t a lot of money today. By comparison, Burley Bikes, a co-op in economic crisis, sold in 2005 or so and the workers averaged $30,000 (about $40k in today’s dollars). It will certainly be life-changing for some but will the trade-off be worth it. How does it compare to the wages of these workers? I know that Kirin claims that no jobs will be lost, but there isn’t a guarantee (and if the workers haven’t unionized, it would be a good idea to do so in my opinion). Eventually, Kirin’s shareholders will expect a return on their investment and this will either come from wages, expanded growth in a market that is already saturated, or a sale to a larger company (Miller SAB, AB, etc).

The constant drumbeat of the established worker co-op movement has been how to “get to scale” for several years now. But when companies get to scale, the pressure to sell out becomes even greater. There are ways of “getting to scale” that can still center the individual human in the equation: Rainbow Grocery, Union Cab, Equal Exchange come to mind. Other larger co-ops,such as Cooperative Home Care NY, use labor unions to help keep the social purpose of worker ownership alive. The idea of using a retirement plan in lieu of true worker ownership or real social change has always seemed flawed to me.

I can see using ESOPs as an aspect of a worker co-op, but agree with others that we need to quit calling ESOPs worker owned. Perhaps we should just refer to ESOPS as Worker RVs (retirement vehicles). An ESOP paired with a worker co-op (though a Limited Co-op Association) would allow the best of both worlds, but I don’t know of an example. However, the workers need to democratically control of the business or it will always be investor focused which is inherently pro-capital and anti-labor.

If worker ownership centers only on maximizing wealth for the employees, it will ultimately do little more than create marketplaces for the real capitalists to exploit. Our movement needs to be about more than making the marketplace great for investors again. To paraphrase an old adage: we don’t need to sell ropes to the bosses to hang us with.

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Worker co-ops are not the solution, but a vehicle (and a sturdy one at that).

“We do not aspire to economic development as an end  but as a means.”-– Don José María Arizmendiarietta (029)*

In early December, I attended a workshop in Post Falls, Idaho for Reimagining the Rural West. This initiative of the Western Governors Association includes several workshops and the Post Falls event included a panel discussion on the power of cooperation. It was convened by the Governor of Idaho Brad Little.

During the discussion on cooperatives and their role in rural communities, a state lawmaker from Idaho made a comment about the importance of agency among individuals. She expressed concern about seeing cooperatives as a solution and a flawed history of professionals coming into communities with empty promises.

Here is the full panel the discussion:

On the way back to the airport, I kept thinking about those sentiments and how the co-op movement in unique in community development in that it uses professionals to facilitate the discussion and share experiences, but the actual development and organization has its foundation in the people of the community. Even when a top-down model operates, it quickly gives way to the members of the cooperative.

“The human person that proceeds to cultivate his or her abilities with the only objective of being productive, insensibly and fatally becomes a slave to the productive machine.”— Don José María Arizmendiarietta (030)*

Co-ops aren’t a solution to the community’s problem. The solution resides within the commitment and energy of the people. Co-ops offer a vehicle in which everyone’s agency remains intact through a shared purpose and democratic structure. More importantly, the very act of cooperation is reciprocal, especially in a worker cooperative.

Co-ops that only engage in commercial activity don’t reach their full potential. The real power of cooperation is the development of the individual as a human being. Co-op developers generally only come into a community when asked by the founding members of a co-op. They don’t bring empty promises or gimmicks, they bring experience, advice, and tools, but it is always the members of the co-op that create the vision and work to fulfill it.

Arizmendiarietta speaks eloquently of the role of co-operatives in human development. I’ve heard many worker co-op members also speak eloquently of how their experience in a co-op helped them gain new understandings and uncover latent talents and skills. The “co-op”, at least for worker co-ops, is never an outside actor coming into to “save” a community. Worker co-ops are the community and its members are working to build a better world at the local level. In the process , but the members and the community mutually benefit–the definition of mutual self-help.


*Arizmendiarietta, J.M, Pensiamentos translated by Cherie Herrera, Cristina Herrera, David Herrera, Teresita Lorenzo, and Virgil Lorenzo. Otalora Management Institute.

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Willy St: Co-op for Consumers, Union for the Workers

Beatrix Potter ( who with her husband Sidney Webb led the Fabian Socialists (predecessors to the Labour Party in the UK) generally opposed the notion of worker co-ops. The argument went something along the lines that all humans share the status of “consumers”. A worker co-op would create a tyranny over the consumer. For this, and many other reasons, the co-op movement in the UK has largely focused on consumer co-ops (until recently that is). However, the Fabians also supported labor unions and helped form the Labour Party (and to some extent the Co-operative Party). The Labor and Co-op Party run as sister parties in the UK and right now, I believe that the Co-op Party has a record number of candidates (50) for the current election. For many years then, the operating rule has been “co-op for consumers, unions for workers”.

Of course, that this the UK experience. In the modern US experience, consumer co-ops have generally only been friendly to labor unions in competing businesses, not their own. Right now, a historic effort is underway in Madison, Wisconsin to negotiate a contract between the Williamson Street Grocery Co-op and United Electrical Workers. UE won an election among the workers with a staggering 80% of the voting workers in support of representation by UE.

Willy St. Management, while claiming to be pro-union, hired a firm that specializes in helping companies undermine labor unions and sent out a 1950’s era management letter attacking the union right before the vote. Nevertheless, at this point, everyone seems to be negotiating in good faith.

The Union has been engaging the consumer-owners of the co-op as allies (and I am a former member). This short video provides a very concise argument for why anyone who supports cooperation should also support labor unions:

My take has always been that, in a consumer co-op, the consumers are joining together democratically to speak with one voice in the marketplace to meet their needs. Likewise, the workers should also be able to come together in a democratic fashion and speak with one voice. We need to disabuse ourselves of the idea that just being a co-op makes a group of 35,000 people a “good employer” especially when almost all of the power of ownership is concentrated into the single person of a General Manager.

If the idea that consumers can band together to get a stronger voice in the market, why shouldn’t workers also band together to get a stronger voice in negotiating working conditions and compensation.

As Carl notes in the video, the wealth created by the Willy St. Co-op didn’t just happen or fall out of the sky. It came from the hard work of over 450 employees of the cooperative.

The co-op movement has always been about social justice. The Rochdale Pioneers started out as a means to gain universal suffrage, create a fair marketplace, and overturn the social injustices of the Industrial Revolution. The Co-op Movement and the Labor Movement began hand-in-hand in Manchester, UK. The board of the Willy St. Co-op and its management should be embracing the union, not fighting against it.


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Sociocracy: The Worker Co-op Operating System

Over the last couple of years, I have had the incredible opportunity to work with Sociocracy For All (SoFA). This organization has worked diligently to bring the concepts of sociocracy out of the “best kept secret” category and into the mainstream of organizational culture. I sit on the Co-op Circle for SoFA which meets about every four weeks to discuss the aspects of building sociocratic practices in the co-op community.

Sociocracy offers a form of governance and management that operates on the fundamentals of inclusion, transparency, and consent of the governed. In the US, it has been referred to as Dynamic Governance due to the tradition of red-baiting in the US. The method, however, seems like a perfect model for worker-owned and operated businesses.

If this is the first time that you have heard the term, I would invite you to visit SoFA’s website and watch a few of the intro videos. Essentially, it was a system of interlinked work groups (called circles) that are based on the primary aim of the circle. For instance the board of directors might be called the “mission circle” and it job would be that of any board: create policies that enhance the mission and review other circles in terms of their ability to enhance the mission.

In this sense, Sociocracy offers a different form of hierarchy. The format is often considered a “hierarchy of work, not a hierarchy of power.” It turns out, that worker co-ops create this concept even if they don’t follow all the standard formats. Two large co-ops, Union Cab of Madison and Rainbow Grocery Co-op both use a systems of autonomous management groups linked to a steering committee or team. Again, Rainbow and Union don’t use “Sociocracy”, but one can easily see the connection between these organic co-op structures and the official format of Sociocracy.

There are better posts and video about the ins-and-outs of sociocracy. The aspect of Sociocracy hat doesn’t always get discussed or understood is that it challenges the notion that “governance” and “management” are separate things. In a worker co-op, in my opinion, they simply aren’t separate. The same people making governance decisions make management decisions and often the line between the two is fuzzy. In a traditional organization based on the capitalist mode, Governance is designed to protect the equity of the owners against labor while management is designed to control labor in the furtherance of protecting that equity. When worker co-ops adopt this model, they fundamentally undermine their missions. The very aspect of a traditional hierarchy privileges capital over labor (see Kathy Ferguson’s Feminist Case Against Bureaucracy).

Worker co-ops need a different governance model. The Collective/Consensus model works as long as the co-op is small, but it can also be difficult to change once the organization gets too big to effectively manage as a collective and can also be rife with informal hierarchy and soft power. Sociocracy allows small co-ops to learn strong transparent governance/management practices in a system that grows with the organization.

Sociocracy, of course, doesn’t automatically remove soft power and informal hierarchies, but it does create a place where those aspects can be contained, exposed, and reduced in power. When I first learned about it, I realized that Union Cab effectively stumbled its way into a sociocracy-like model. It seems to be an Operating System for cooperation in general, but for worker co-ops in particular.

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