Cooperatives as a form of Socially Responsible Business
by Tim Huet, Arizmendi Development and Support Cooperative

In Italy, an economy slightly smaller than that of California, more than three-quarters of a million people are employed in worker cooperatives, and Italian cooperatives are the leaders in several industries. If 750,000 Californians were employed in worker cooperatives, I perhaps would not be in the habit of explaining what a worker cooperative is. The Italian, Spanish, and Basque Constitutions specifically endorse cooperatives as a favored vehicle for economic development. These governments came to recognize and encourage worker cooperatives because of the impressive contributions worker cooperatives have made to job creation and economic stability. For instance, the Mondragon Cooperative Corporation, founded in the destitution and devastation that followed the Spanish Civil War, now employs over 66,000 workers and has accumulated assets of $14.6 billion dollars. The Mondragon Cooperative Corporation contributes the majority of what would be the Basque gross domestic product and has added jobs even during periods of deep recession throughout Spain.

So what is it about worker cooperatives that can make them such favorable vehicles for job creation and economic stability? It is perhaps obvious why workers who own their business might be motivated to work harder and smarter, resulting in a competitive business advantage. But there are also economic and social advantages related to the fact that worker cooperatives are, by their nature, rooted in their communities. When the workers receive the profit of their labors, the money gets spent back into the local economy rather than being siphoned off to distant and dispersed shareholders-investors; spreading the wealth among the workforce makes for a strong consumer base. Worker cooperatives keep jobs and money in their communities; the worker-owners are not going to vote to send their jobs overseas or to some state with lower taxes and environmental standards.╔

Because the workers live near the business, they make decisions that reflect the values and interests of the surrounding community. Compared to absentee owners or dispersed shareholders, worker-owners are not likely to approve of polluting the area surrounding the business. Quite the opposite: one of the cooperatives in which I enjoy membership, Rainbow Grocery, has installed San FranciscoĂs largest solar array, serving as a demonstration project for the surrounding community.

From the Arizmendi Association, I can provide another environmental example of how worker-owners vote in a way that reflects the greater communityĂs values and interests. The worker-owners of our bakery located in traffic-congested San Francisco voted to give a 10% discount to holders of public transit passes and customers who arrived by bike. This is just one example of how worker-owners attend to more than just the financial bottom line.

Because worker-owners represent a diverse range of community interests and make decisions in a relatively open democratic fashion, worker cooperatives are not given to the conspiracy and corruption we have recently witnessed with many large stockholder corporations. By broadening the base of economic decision-makers×through encouraging worker-ownership×the government may ultimately realize greater social benefit than through evolving new ways of policing concentrated wealth; concentrated wealth will always counter-evolve beyond existing regulations, because massive financial incentive and resources provide the will and the way to evade public accountability.

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