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Catalyzing worker co-ops & the solidarity economy

Saving Jobs and Businesses in Times of Crisis

The pattern of WBO [worker buyouts] emergence in Italy is indicative of the socio-economic and socio-political conditions that reduce the barriers and opportunity costs for work-ers contemplating starting a worker cooperative from conversions. That is, WBOs tend to emerge in national contexts where there has been a general decline of economic circumstances merging with a country’s historical and material particu-larities, including an established and supportive cooperative movement, traditions of workers’ activism and strong unions, and various forms (to a greater or lesser extent) of institutionalized assistance mechanisms. In these contexts, as Johnston Birchall alludes to, workers have historically ‘set up workers’ cooperatives that took over failing firms or parts of firms that were still viable’ (Birchall, 2003, p. 48). As Avner Ben-Ner further articulates, in a comprehensive study comparing the conversion of capitalist firms (CFs) with worker-owned firms (WOFs):

Declining economic conditions . . . reduce the obstacles present to WOF formation. . . . The buyout of a CF entails particularly low formation obstacles because the firm is already in existence and because the cost of purchasing capital that lacks alternative uses is lower. Thus industrial decline and reces-sions simultaneously increase the demand for WOFs and lower the obstacles to their entry, increasing the probability of WOF formation. Governments and other organizations may accentuate the trend of WOF formation if they realize that WOFs constitute a comparatively inexpensive measure to combat loss of 164 Marcelo Vieta employment and unemployment. . . . As relatively large numbers of WOFs are established they become more widely known, and the recurrence of reces-sions or decline of industries prompts even larger waves of WOF formation. (Ben-Ner, 1988, p. 23)

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