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Catalyzing worker co-ops & the solidarity economy

Concerns about "Scaling Up"

March 1, 2014
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by Marty Heyman

"Democracy" is a complicated idea and difficult ideal to establish as a political, economic, and social objective. Democracy is relatively easy in "the small," groups of under, say, a couple of hundred people who can come together for deliberations. I wonder, however, about scaling Democratic institutions beyond that generally accepted limit of effectiveness.

My concerns are both private (from my personal experiences) and drawn from our collective experiences. I have well over 45 years of experience in private sector organizations and a few passes through the public sector as a volunteer. I've been a member of GEO for several years now and both the members of the Collective and the resources of the GEO Newsletter Web-site have been enormously helpful in shaping my views and deepening my appreciation for the challenges and opportunities.

First, I would like to comment on my private sector experiences. After several decades of classical Capitalist Corporate institutions, a group of like-minded founders (of which I am a member) have been fostering a non-hierarchic, democratic organization. We are a classical "C Corporation" in formal structure. It is very reassuring to the larger enterprises we service. However, we attempt to minimize the political and social hierarchy within the organization. Our people are actively involved in discussions on all topics and are asked to be candid and honest (and polite). The enterprise is intended to be co-operative-like in governance and operation.

Scoring our efforts after fourteen years, at best I can give us a C+. We're still well under 20 total people, but we struggle to get many of them actively involved in the governance process. And that's a factor that makes me wonder about Democracy as a technique for governance and social interactions. The biggest problems are quite simple. Our people, even some of our more mature and biggest contributors, look for leaders to follow. This is not to say that they are uncritical or afraid to speak up but all too often, they acquiesce quietly to some decision or direction one of "the elders" makes or sets. We have to go out of our way to create discussion sessions to generate discussion and involvement. And it doesn't seem to help to keep pointing this out. I think such problems of deference are a major challenge to the program of rolling out and scaling Democracy up.

The answer, just as we are doing in our firm, is mentoring and re-education. This is the cause that Michael Johnson has been so passionate about here in his blogs and articles on the GEO Newsletter Site. It is something that has to be done for the individual member or participant and it has to be handled in the structure and governance model of the institution. It is an important design criteria for the institution and the core-team members have to be highly committed to the Democratic ideals and values. In the face of today's Neo-Liberal, competitive and materialist philosophic foundations, this is an enormously difficult challenge. I see years of organizational evolution and team-member mentoring even for our own little group.

The observations from the broader world are just as troubling. We have the recent decision by the Mondragon Corporation to wind down Fagor Electronics as a concrete example. It is not that the decision was inappropriate or ill-advised. It was that the decision was made by the governing technocrats in a top-down fashion. And that is a challenge that is related to the deference problem I mentioned above, but it is different. The deference shown to "experts" (technocrats, representatives, "managers") results in a reduction in democracy in governance. The Mondragon Corporation's managers felt empowered to make the decision on behalf of the worker-owners. They did not feel compelled to involve the worker-owners in the process. In virtually all walks of life, we defer to experts. We expect them to demonstrate excellence in their field and generally are not disappointed. But, it is a form of delegated representation  that implies that we defer decisions to them and this is contrary to Democratic process. It is this very attribute of Representative Democracies that renders them autocracies; we collectively create a superior class to rule over us. Technocrats, bureaucrats, and experts of all stripes become, de facto, an upper class with such powerful influence on governance, finance, or other realms become, de facto, an upper class. They are chosen by the many but responsible to nobody in particular. The fact that they become easy to corrupt should be considered an obvious corrolary.

So, the Democratic Failure at Mondragon, to pick one example of many, is that the worker-member-owners were not party to the decision. We know this to be true from the pictures of the workers protesting the decision. We read about the thoughtful steps the technocratic elite took to protect the interests of the worker-member-owners but they were paternalistic and, ultimately, autocratic. Can we find reasons why the Mondragon Corporation did both the right thing and the best thing it could under the circumstances? Probably, but only if we accept the authority of the technocrats, the representatives, to exclude the active participation of the worker members. Over the years, the Mondragon Corporation instituted policies that made these events leading to the the decision to close Fagor perfectly predictable and well within the defined norms and standards by which that leadership measures itself. Until an event like this happens, worker-member-owners were content to let "management" deal.

It is hard to be too harsh in criticism of Mondragon in this instance. It is naive to be a single-minded idealogue and demand a degree of excellence rarely (if ever) achieved in Democratic structure. However, it is important for us to take this example of an exemplary co-operative institution that has demonstrated such a troubling "failure" and to ask what can or should be done. We want to evolve our social relationships (political, economic, civic, religions) towards a more Democratic basis. We want to reduce the degree of autocracy. But if we are to continue to rely on representational and "expert" structures that defy Democratic process, we will merely re-invent roughly what we already have. The best we could hope for would be that the next set of representatives or experts are more sensitive to our desires (a joke).

For now, that is enough. There is a very constructive dialog going on the topic here in the GEO Newsletter and elsewhere. We have the still fresh memory of Occupy, which did not go the way of angry mobs with torches and pitchforks to reassure us that Democracy can harness the energy of its members. To those who ask, "what then must we do?", I say we must stop teaching the young to demand an active participatory role and to accept the responsibility to become Democratic participants.


GEO blogs are part of our mission to provide a platform for co-op practitioners and solidarity economic organizers to share their thoughts and experiences with a wider audience.  Any views and opinions expressed are those of the author and do no necessarily reflect the views of the GEO Collective.  If you would like to start a blog on GEO, please contact

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