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Catalyzing worker co-ops & the solidarity economy

The Cooperative Commonwealth

An Alternative To Corporate Capitalism and State Socialism

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August 23, 2012
Body paragraph

Presidential Address, November 1996 [1]

Reflexive Statement

This paper reflects my long-standing interest in worker co-ops' workplace democracy, and societal alternatives to corporate capitalism and state socialism. Cooperatively organized economies, in my opinion, provide a social framework which promotes humanistic values including empowerment, equality, social justice, and genuine democracy.

Much of my work on cooperatives has taken place within the context of a scattered network of friends and colleagues. At the 1979 meeting of AHS I made a brief presentation about the sugar worker cooperatives in Jamaica; there I met anthropologist Monica Frölander-Ulf, with whom I then did a study of those co-op (Frölander-Ulf and Lindenfeld 1985). A few years earlier, I had begun working with the short-lived national Federation for Economic Democracy, whose Chair was William F. Whyte, and whose Director was C. George Benello (also an AHS member). I helped found a local affiliate of the federation, which subsequently became the technical assistance group PACE of Philadelphia. With George, Len Krimerman and others I edited the bimonthly Changing Work and later worked with Len on the successor Grassroots Economic Organizing Newsletter [GEO], as well as on an anthology on workplace democracy (Krimerman and Lindenfeld 1992). After George's untimely death, I also helped edit a collection of his essays on grassroots and workplace democracy (Krimerman, Lindenfeld, Korty & Benello 1991).


Corporate capitalism sucks. Major corporations poison our environment with toxic wastes, they market products known to be defective or even lethal, and they devastate our communities through plant closings that idle thousands. At the same time, the corporations and the wealthy pay reduced taxes, shifting the burden onto the rest of us. How can they get away with this? In part because they fund politicians of both major parties who are in positions to protect their interests. Fifteen percent of the population -- some 40 million Americans, including at least 16 million children -- live in poverty, while wealth is increasingly concentrated in the hands of a small elite. The CEO of Coca Cola has accumulated nearly $1 billion in deferred compensation all by himself! (N.Y. Times, 10/13/96).

To mitigate some of the worst excesses of capitalism, reform movements have pushed for various health and welfare programs, though the U.S. has lagged far behind west European industrial countries in the scope and quality of its welfare policies. By the mid 1990s, the already flimsy and badly frayed social safety net of ours was further torn apart by bipartisan welfare cuts concurrent with our government's continued lavish AFDC program, aka [also known as] Aid For Dependent Corporations.

In Europe, capitalism was challenged by revolutionaries as well, as anarchist, socialist and communist movements struggled to replace capitalism with a better system. Beginning with the revolution of 1917, the Russian Communist Party set up a state socialist economy, later expanded to other countries in the Soviet orbit. Its top-down socialism was not much of an improvement over capitalism, and the Stalinist excesses were far worse. The people of central and eastern Europe deposed the Communists when they had an opportunity to do so. Their motto was, state socialism sucks! The basic flaw of the Communist systems (including Yugoslavia) was the combination of socialism with an authoritarian political system.

A major problem with corporate capitalism and state socialism is that they are both based on the concentration of economic power in the hands of a small elite unaccountable to the rest of us. Economic systems are not limited to these two choices, however. There is a third way, referred to variously as the social economy (Bruyn and Meehan 1987), or the cooperative commonwealth. The building blocks for this alternative already exist in the cooperative movement, which broadly speaking includes consumer and worker co-ops, employee owned companies, credit unions, community development loan finds, service credit systems and local barter and service exchange networks.

A major landmark of the cooperative movement was the co-op store initiated in 1844 by a group of unemployed flannel weavers in Rochdale, England. Since then, there has been an extensive development of consumer and worker cooperatives, including the 19th century U.S. worker co-ops supported by the militant Knights of Labor trade union, the collective settlements or kibbutzim in Israel that go back to 1911, and the post-World War II development of the influential Mondragon network in Spain and the legion of several thousand worker co-ops in the Emilia Romagna region of northern Italy.

I will begin here with a discussion of the Rochdale Pioneers, whose cooperative ideas can be traced back to Robert Owen in 1820. Then I will discuss the characteristics of worker co-op, look at three contemporary cooperative networks, and examine the recent development of service exchange and barter networks. Finally, I will come back yo the problem of putting he pieces together to build a cooperative commonwealth.

The Rochdale Pioneers

The first cooperatives represented a peaceful attempt to build an alternative economic system by organizing peoples' institutions that would co-exist alongside capitalist ones, and would gradually expand to involve the majority of the population as cooperative producers and consumers. The Rochdale Cooperative of 1844 began in the aftermath of bitter strike.

At the end of the unsuccessful weavers' strike in 1843, twenty-seven men and one woman (Ann Tweedale) found themselves blacklisted; they could not get any kind of work. They formed a collective discussion group, "The Equitable Society of Rochdale Pioneers," which spent months discussing how their political beliefs could best be translated to action. (Giese 1982).

The goals of the Rochdale Pioneers were far reaching and visionary; they set out to build not only consumer co-op but all housing co-op and manufacturing co-ops leading ultimately to a worker-controlled economy. This was their program, stated in their own words:

The establishment of a store for the sale of provisions, clothing, etc.

The … purchasing or erecting of a number of houses, in which … members desiring to assist each other in improving their domestic and social conditions may reside.

The manufacture of such articles as the society may determine … for the employment … members as may be without employment, or who may be suffering in consequence of repeated reduction in their wages.

The society shall purchase or rent … land which shall be cultivated by the members who may be out of employment, or whose labor may be badly remunerated.

As soon as practicable, this society shall … arrange the powers of production, distribution, education and government, or in other words … establish a self-supporting colony of united interest, and assist other societies in establishing such colonies.

In 1854, the Rochdale Pioneers also founded a cooperative cotton mill with 100 workers putting up most of the capital. The mill was so successful that the Pioneers decided to expand it. They built a new, larger factory in 1859. To obtain the necessary capital, they sold 1000 shares. Many were bought by outsiders, who soon held a majority. The interests of the outside shareholders and the mill worker-owners were in conflict, however, and within three years the outsiders, intent on profiting from their investment, transformed the business into a capitalist company.

Cooperative Principles

Here I will discuss briefly some major cooperative principles with illustrations from the Rochdale Pioneers as well as from contemporary worker co-ops. The Rochdale mill was vulnerable to takeover by capitalists when it violated the bedrock cooperative principle of democratic control; to avoid this, Ellerman (1990) suggests worker co-ops separate personal rights such as the right to elect Directors and set policy, from property rights such as the right to receive a return on share capital invested and to receive a share of the profits. Each worker has one vote as part of their membership. This vote is a personal right that cannot be given or sold to outsiders. Under certain conditions, members can sell their shares, usually only back to the co-op. But they can never sell their voting rights, just as U.S. citizens cannot sell their right to participate in elections to foreigners. (This differs sharply from capitalist corporations where stockholders' influence is generally proportional to the money they invested — the more money, the greater their voting power.) In addition to the one member, one vote rule, worker cooperatives differ in several other crucial respects from capitalist corporations. I list these here, with the reminder that this is an ideal-typical description not necessarily reflected in all details by all worker-cooperatives.

1. Co-ops Embody Diverse Social Goals Beyond Mere Profit.

Worker co-ops balance profit with an emphasis on worker and community welfare and economic sustainability. They seek to:

a. generate community employment, maintain existing jobs and create good new jobs;

b. provide high quality services and safe, durable and healthy products without harm to workers or the environment;

c. empower worker-members by encouraging their education, personal growth, and their learning new skills; and

d. maximize member participation in the organizational decision making process.

2. Co-ops Avoid Hiring Non-Member Labor.

Co-ops avoid employing non-members, though they may hire temporaries to meet unexpected or seasonal demand. Without such a rule, co-ops degenerate into workers' capitalist organizations where a privileged group of worker-owners profits from the labor of hired-help.

3. Co-ops Provide Equitable Compensation & Job Security.

Worker co-ops strive to offer members adequate pay and benefits, as well as steady, interesting and challenging work. When business is slow, hours of work are reduced for all instead of laying off some. Co-ops usually maintain only modest pay differentials between managers and others. The Israeli kibbutzim do not pay their worker-members any wages; all jobs are equally valued, and all members entitled to the same benefits. In the Mondragon network, the highest paid get no more than six times the earnings of the lowest paid worker.

4. Co-op Profits Belong To Their Worker-Members.

In worker co-ops, profits are shared by worker-members equally or in proportion to hours worked. The Mondragon co-ops, for example, allocate 10% of their profits to education, 20% is reinvested in the business, and the rest kept in the form of internal capital accounts held for each worker-member. These accounts which can grow to $50,000 or more, are refunded to members as an extra bonus on retirement.

5. Co-ops Are Democratically Managed.

Worker co-ops do need coordinators or manager; missing are the middle managers and foremen whose job it is to make sure employees are not goofing off or stealing from the company. In worker co-ops, managers are responsible to a democratically elected Board, and ultimately to the membership. The relationship between workers and managers is based upon mutual respect and trust. Worker-members or their elected delegates have a say at all levels of the organization, from the work group level all the way up to the Board of Directors. To handle the inevitable disagreements between managers and workers, many co-ops have special grievance committees.

6. Co-ops Generally Limit Their Size.

Though some have as many as 1000 members, many worker co-ops remain small by choice. Most of the northern Italian co-ops have fewer than 50 members, for example. An optimum size limit is probably closer to 200, because organizations under that size are better able to provide for maximum member participation in decision-making.

Next, I will turn to three contemporary networks of consumer and worker cooperatives that embody the principles discussed above: the Mondragon co-ops in Spain, the Seikatsu clubs of Japan, and the Co-op Atlantic in Canada

Three Contemporary Co-op Networks

The Mondragon Co-ops

The Mondragon cooperative network is an impressive social achievement. It accounts for a considerable slice of production and distribution in the Spanish Basque provinces. Its sales exceed $5 billion a year and its associated co-ops provide jobs for about 30,000 members. The Mondragon co-ops are collectively owned, and based on cooperative principles. The size and scale of this cooperative system that we can begin to talk about its becoming a credible challenge to capitalist institutions. From a modest beginning of one stove factory begun in the 1950s by several graduates of a technical school founded by local priest Jose Arizmendi, the network has expanded to dozens of industrial co-ops and a growing chain of consumer markets. It also embraces numerous second order co-ops including educational institutions, its own social security and health system, and its own bank. The bank and its entrepreneurial department have played a crucial role in coordination and in pro-active planning for the development of new cooperatives (see Whyte and Whyte 1988; and Morrison 1991).

In the early 1990s, the network reorganized itself as the Mondragon Cooperative Corporation (MCC) with three broad divisions: an industrial group, a financial group, and a distribution group. The industrial group includes the flagship FAGOR enterprises which produce everything from auto parts and refrigerators to machine tools and robots. The financial group is led by the cooperative bank, the Caja Laboral Popular. The mainstay of the distribution group is Eroski, a growing chain of consumer co-ops.

The recent growth of Eroski is impressive. Retailing is the fastest growing part of the MCC. With the help of investment funds from the Caja, the distribution group has been expanding each year, setting up more and more supermarkets including the giant size ones or hypermarkets. Hundreds of co-op markets now provide employment for some 10,000 persons (Ormaechea et al. 1995).

The MCC seems to have successfully met the challenge of the integration of Spain into the European Common Market, but there are signs it is wavering from its cooperative principles. The investments of the Caja no longer exclusively promote cooperative development. Moreover, as the retain network continues its breakneck expansion, its democratic features are in danger of being watered down. One issue is the hiring of non-member workers, whose numbers appear to be growing. Another relates to annual membership meetings. Because of the large numbers involved, MCC members do not meet together in a general assembly of the whole. Rather, they meet in different geographical regions to choose delegates who in turn elect the Board of Directors.

The Seikatsu Anti-Consumerist Buying Clubs

A contracting model is provided by the Seikatsu buying clubs in Japan. These democratically organized clubs strive to provide high quality food at reasonable prices through advance orders. They avoid unnecessary product proliferation. Instead of carrying dozens of types of rice, soy sauce, etc., they offer only one or two of each. Products detrimental to the environment are not sold. Membership in the clubs represents more than a commitment to obtain healthy food at reasonable prices; it signifies adherence to a lifestyle and philosophy that opposes consumerism and supports the movement to build a sustainable economy based on ecological values. Beginning with one local group organized in Tokyo in 1965 to provide quality milk for their children,Seikatsu has grown t 1/4 million member families that together purchase about $1 billion annually. The clubs began to forge links with producers early in their development:

They realized that the big dairy companies were not to be trusted and they began their own line of natural milk. Making direct links to small dairies, they contracted to purchase projected amounts of quality products at stabilized prices: an alternative marketing system emerged. That same system has been extended to all foods necessary for a healthy life -- rice, eggs, vegetables, fish -- and to non-agricultural products, e.g. appliances, clothes, books, and even concert tickets. Seikatsu has its own product line of about 60 items, owns two dairies and a beef ranch, and contracts for some 30% of its produce from organic farmers. In 1985, one Seikatsu branch began its own soap factory, rejecting chemical detergents in favor of environmentally friendly ingredients such as recycled cooking oil (Matsuoksa, Stone and Krimerman 1994).

Seikatsu has initiated the development of new worker co-ops to provide various goods and services including food products, home health care for the aged and infirm, lunch services and retail stores. By 1994 there were 161 affiliated worker cooperatives which provided employment for over 4000 members.

The basis for the Seikatsu clubs are local "hans," groups of 8-10 families whose housewife-representatives meet monthly to order food as well as to discuss issues of common concern. The clubs also produce for their own guaranteed market those products they cannot obtain from commercial sources.

Each of the more than 26,000 hans elects a representative to their local branch. The branches in turn elect regional representatives to the General Assembly which chooses the overall Board of Directors. The Seikatsu clubs have sponsored various campaigns to promote ecologically sound public policies, such as the one which persuaded the Tokyo city government to reject the use of rain forest for municipal public works. By 1993, some 75 Seikatsu sponsored candidates had been elected to local government seats.

Co-op Atlantic

A final example of a large-scale cooperative network is Co-op Atlantic in Canada, which combines some features of both Mondragon and Seikatsu (Morrison 1994-5). Co-op Atlantic is an umbrella organization governed by representative with management training, planning assistance and coordination. Its members include 88 retail cooperatives -- which account for a fifth of all food sales in the Atlantic provinces -- as well as housing, agricultural, fishing and production co-ops membership includes about 170,000 families. Co-op Atlantic is continuing to plan and implement integrated, community based cooperative development on an economy-wide scale for this poor and underdeveloped region (Stone 1995).

These examples demonstrate the benefits of size and scale that facilitate networking to form local and regional development associations of worker and consumer cooperatives. Networking helps create jobs, promotes organizational stability, combines buying power, and maximizes the group's influence on the rest of society. Another feature of these models is their vertical integration -- the use of collective buying power to encourage the development of cooperatively run businesses that supply them with items the members want, at the same time helping to create local jobs.

The experience of Mondragon shows that the establishment of second order cooperatives -- organizations that provide services to member co-ops, especially educational, management and financial services -- is crucial for the growth of the cooperative sector. Much of the dynamism of the Mondragon system resulted from the role of the Caja Laboral Popular in attracting savings deposits, lending money to its member cooperatives, and providing them with entrepreneurial services. It will be important for the U.S. cooperative movement to create nurture numerous community development financial institutions that can perform a similar function.

Local Exchange Systems and Barter Networks

Another aspect of cooperativism is the money-less exchange system, based on mutual aid and barter (Cahn and Rowe 1992; Greco 1994; Offe and Heinze 1992). Like the consumer cooperatives, such exchanges were also promoted by the visionary writings of Robert Owen. Exchange systems flourished in the U.S. as part of the self help movement during the depression of the 1930s (Offe and Heinze ch.5). Barter networks are based on the fact that many unemployed, retired and poor persons lack money to buy even essentials but have time, skills, goods and services they are able and willing to trade with others.

Community barter networks promote local trade without the exchange of official currency or checks. The exchanges are based on agreement by local community residents and businesses to accept payment for goods or services in the form of promises such as IOUs, scrip, or credits entered on a computer. These systems go well beyond two person barter and may involve networks of hundreds or thousands of community members.

The barter works like this: Amy washes laundry for Bob, in exchange for some cash and some scrip. Bob fixes Carl's car; he receives money for the parts and scrip for his labor. Carl pays for meals at Daphne's restaurant with Scrip. The restaurant pays waitress Ellen partly in cash, partly in scrip, etc. Most networks periodically publish directories that list services or goods offered. The most successful networks include local businesses that agree to accept at least part of their customers' payments through some form of barter exchange.

Such exchange networks have many benefits. They promote community cohesion and local development. They provide some needed goods and services -- such as day-care and elder care -- to those who do not have enough money to buy them. Local businesses can increase the number of their customers and the amount purchased by each; governments can stretch the use of scarce tax dollars as volunteers perform services that might otherwise have to be paid out of public funds. (A major objection to service credit systems is that they may encourage governments to further skimp on welfare services). Unemployed and retired participants can gain a sense of empowerment by participating in barter networks. Moreover, locally traded credits keep resources circulating within the community, encouraging people to patronize local sources rather than buying from outside the community.

Three general forms of barter networks have emerged: service credit systems, local currency or scrip systems, and local exchange trading systems. In service credit systems participants perform services for other network members, such as home care, chauffeuring, or tutoring, expecting that other network participants will provide services for them when they themselves need help. Service credit networks, including the time dollar systems inspired by Edgar Cahn, have been organized in dozens of U.S. localities, primarily as a way to provide services to the elderly. Volunteers provide care in return for credits they can redeem in future or donate to a nonprofit group or to a relative for their use. Each hour volunteered earns the same credit, regardless of the expertise or skill used in that hour, and credits are generally redeemable only within a defined local community.

In local currency systems, participants exchange goods and services with each other, paying with scrip. One of the most advanced is Ithaca Hours which began in 1991. The non0-profit group distributes and maintains a local currency called Ithaca Hours. Each Hour note is considered the equivalent of about $10 in official U.S. currency. The free bimonthly newspaper, Ithaca Money, is distributed locally. Those who list their services in it and agree to accept partial or full payment in the alternative currency receive two Hour notes for the first ad; if the ad is repeated four times they receive two additional Hours. The group donates 10% of its Hours to local nonprofit organizations chosen at its meetings. As of 1996, Ithaca Hours has been able to attract about 80 retailers and over 160 other local businesses and professional services as members. The local credit union accepts the payment of loan fees in Ithaca Hours and some restaurants accept 100% payment in the local currency. Some employees have also agreed to accept part of their wages in the form of Ithaca Hours. As of 1996, the cumulative volume of trade in Ithaca Hours exceeded $500,000. The idea has been copied in dozens of other U.S. communities.

Local exchange trading systems (LETS) are similar to alternative currency systems but don't use cash or scrip. Instead they maintain a computerized accounting of the flow of the alternative debits and credits -- the amounts of services and goods purchased by members from others in the network and the amounts paid to the others in the form of goods and services provided to them. In contrast to service credit systems where all volunteer hours count equally, alternative currency and LETS networks accept exchanges where more highly skilled persons receive a greater number of credits per hour than less skilled ones. In principle, both scrip systems and LETS could use locally accepted credit cards to further stimulate trade among members. LETS have spread in Canada, Australia, New Zealand, and England. The largest LETS in Auckland, New Zealand, reached 2,000 members by 1996.

Service credit systems and alternative currencies by themselves will not, of course, replace the corporate capitalist system. Nevertheless, they can help build the economic strength of local communities, empower local residents, and mitigate some of the consequences of poverty and unemployment. Such barter exchange networks are one of the ingredients that can be used to build the cooperative commonwealth.

**Political Neutrality: A Questionable Principle

One vexing issue for the cooperative movement is that of political neutrality. Despite their origin as a working class organization directly opposed to capitalism, the Rochdale Pioneers adopted a rule of political neutrality. The cooperatives that followed in their footsteps embraced that principle, but I believe that has been a mistake. Neutrality makes sense if your goal is to go after the greatest possible number of customers to increase sales, but detracts from building a self-conscious cooperative movement. Cooperatives would do better to pursue what Charles Hampden-Turner termed political marketing, attracting and keeping customers loyal to the cooperative ideal even if they have to pay a penny or two more for some products. Cooperatives are based on a participatory ethos and a democratic value system that runs counter to the capitalist principles of hierarchy and control by the wealthy. Worker and consumer cooperatives represent an alternative to corporate capitalism As potential agents of social transformation, cooperatives are political in their very existence. They embody the kind of participatory democratic structures that would predominate in a cooperatively organized world, countering the worker alienation characteristic of both corporate capitalist and state socialist systems. At the same time, the struggle to establish cooperatives and broaden them into mutually supporting networks is in itself part of the process of building that cooperative world. As networks of cooperatives and democratically managed organizations proliferate, they may reach enough of a critical mass to transform the entire society into the cooperative commonwealth foreseen by the Rochdale Pioneers. This brings us to the matter of building a cooperative system within existing capitalist societies.

Building a Cooperative Commonwealth

The cooperative movement needs to move forward on two feet. One foot consists of alternative economic institutions -- worker and consumer co-ops, community development financial institutions and barter networks. The movements needs to forge linages between these organizations to form second order co-ops and federations. The other foot consists of a broad scale coalition of anti-corporate people's political organizations. {Editorial note: peoples' ?} Such a political thrust is needed to challenge the entrenched power of the transnational corporations and open them up to democratic control by their employees, as well as to modify the legal and tax framework to make it more friendly to cooperatives. This might be done by taking over one of the existing political parties but it is much more likely that we will need to develop a new movement outside the existing major party framework, building a progressive third party or coalition. The seeds of such a political development are now beginning to sprout -- as in the Green Party, the Alliance, the New Party and the Labor Party. To become more effective, these groups will need to work together. The opposition to corporate capitalist dominance cannot afford the internecine squabbles that split the socialist and other left movements over most of their history. That political opposition must also be based on interracial coalitions. The 19th century Populist movement began to unite black and white farmers and workers and posed a strong challenge to the then existing establishment (Goodwyn 1976); that challenge was defused and splintered by a number of factors, one of which was racism encouraged and funded by the capitalists and wealthy landowners.

There is not necessarily any one best version of a cooperative economy, nor any one best path to get there, so what follows should be seen as a general vision rather than a blueprint. Such a social economy would be a mixed system where worker-owned and controlled cooperatives predominate but where there are also small private enterprises as well as public services provided by local or regional governments in such fields as education, transportation, communication, energy production, education, day care, and health care. The cooperative economy would consist mainly of small and medium size worker co-ops, typically with less than 50 workers, though there might also be some much larger ones. These co-ops would joint together to create an array of second order cooperatives and federations to provide various types of business services including banking, managerial training, health care, etc.

Some financial alternatives already exist; the Cooperative Bank, community development credit unions, micro-enterprise funds, and community development loan funds in the U.S., and the Canadian labor investment funds. A major cornerstone would be educational institutions that promote cooperativism and provide training for co-op managers. It will take a major educational effort to crack the hegemony of capitalist ideas, spreading an alternative cooperative ideology.

One role that humanist sociology can play is taking part in this educational effort. Working with the cooperative movement, we can initiate participatory and applied sociological research projects around building cooperative alternatives. We can organize technical assistance programs and take pro-active roles in promoting worker ownership and control, as the Ohio Employee Ownership Center has been doing. We can work with progressive political coalitions and parties to help develop policy initiatives, strategies for sharing the wealth, and strategies for gaining more access for cooperative ideologies and ant-corporate programs to TV and other mass media.

A cooperative economy would be based on a foundation of local production for local and regional consumption, especially for such basic needs as food and shelter, though there would also be some trade with other regions and countries. The tax structure would give preferential treatment to cooperative businesses as well as to pension plans and venture funds that invest in a diversified portfolio of cooperative businesses, and would reward ecologically friendly and sustainable business practiced. The legal structure would allow the charter or continuation of corporations only if they provided for substantial employee ownership and control.

The cooperative commonwealth will be enhanced by the organization of local barter and volunteer networks to enable those with more time than money to obtain necessary services and products through exchange with other community residents. It will be greatly enhanced by the provision of government social welfare benefits such as regional or national health insurance and a guaranteed minimum income combined with a progressive tax system that transfers income from wealthy families and corporations to those less fortunate. Such a tax system could favor corporations that embrace genuine worker ownership and control and democratic management systems, and impose heavy taxes on those that do not implement such measures. This could further be supplemented by a tax on wealth and on the movement of capital to other countries.


The cooperative commonwealth is a desirable and feasible alternative to corporate capitalism and state socialism. The cooperative networks mentioned above, Mondragon, Seikatsu, and Co-op Atlantic, point the way. We need to emulate such examples in the U.S., though I don not have any blueprint for how that will happen. To accomplish the goal of building a cooperative economy will require economic initiatives as well as a political movement.' On the economic side, the challenge will be to build numerous regionally based clusters of worker co0-ops and second order cooperative institutions. This means supporting the development of schools and colleges that spread cooperative ideas and practices, and offer cooperative education and training for prospective co-op managers. It will include the gradual conversion of existing companies to employee ownership, as well as the startup of new cooperative enterprises. And it will involve the strengthening of existing community development financial institutions and the formation of new ones to provide venture and loan capital to worker cooperatives.

On the political side, we need a people's movement to democratize the economy, like that of the Populists of the 1890s (Goodwyn 1976). Such a movement would push for reforms to limit the power and privileges of the transnational corporations, and link up with similar movements throughout the globe. It might seek a constitutional amendment to keep corporations from claiming rights guaranteed to material persons, and an absolute ban on corporate contributions to political parties, political action committees, and candidates. Such a movement would also strive for new and additional tax incentives to promote employee ownership and control, heavier progressive corporate taxes and taxes on wealthy individuals and foundations, and use of public funds to strengthen community-based intermediary and technical assistance organizations.

Through a combination of local economic initiatives to build co-ops and the support of a broad based anti-corporate political movement, we could indeed transform the U.S. into a cooperative commonwealth where the extremes of wealth and poverty have been abolished and where local economic resources are used to benefit all.


1 Presidential Address delivered at the November 1996 meetings of the Association for Humanist Sociology, Hartford, CT.


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