Worker cooperative
Encyclopedia
A worker cooperative is a cooperative
Cooperative
A cooperative is a business organization owned and operated by a group of individuals for their mutual benefit...

 owned and democratically managed
Workers' self-management
Worker self-management is a form of workplace decision-making in which the workers themselves agree on choices instead of an owner or traditional supervisor telling workers what to do, how to do it and where to do it...

 by its worker-owners. This control may be exercised in a number of ways. A cooperative enterprise may mean a firm where every worker-owner participates in decision making
Decision making
Decision making can be regarded as the mental processes resulting in the selection of a course of action among several alternative scenarios. Every decision making process produces a final choice. The output can be an action or an opinion of choice.- Overview :Human performance in decision terms...

 in a democratic fashion, or it may refer to one in which managers and administration is elected by every worker-owner, and finally it can refer to a situation in which managers are considered, and treated as, workers of the firm. In traditional forms of worker cooperative, all shares are held by the workforce with no outside or consumer owners, and each member has one voting share. In practice, control by worker-owners may be exercised through individual, collective or majority ownership by the workforce, or the retention of individual, collective or majority voting rights (exercised on a one-member one-vote basis). A worker cooperative, therefore, has the characteristic that the majority of its workforce own shares, and the majority of shares are owned by the workforce.

Definition of worker cooperative

Many definitions exist as to what qualifies as a workers' cooperative. CICOPA
CICOPA
CICOPA is the branch of the International Co-operative Alliance that promotes worker cooperatives. Headquartered in Geneva, Switzerland, CICOPA has a membership of 57 national and regional cooperative federations in 39 countries...

, the International Organisation of Industrial, Artisanal and Service Producers’ Cooperatives, gives an 8-page definition in their World Declaration on Workers' Cooperatives, which was approved by the International Co-operative Alliance
International Co-operative Alliance
The International Co-operative Alliance is a non-governmental co-operative federation or, more precisely, a co-operative union representing co-operatives and the co-operative movement worldwide. It was founded in 1895. The ICA maintains the internationally recognised definition of a co-operative...

 General Assembly in September 2005. Below is the section on the basic characteristics of workers' cooperatives:
  1. They have the objective of creating and maintaining sustainable jobs and generating wealth, to improve the quality of life of the worker-members, dignify human work, allow workers’ democratic self-management and promote community and local development.
  2. The free and voluntary membership of their members, in order to contribute with their personal work and economic resources, is conditioned by the existence of workplaces.
  3. As a general rule, work shall be carried out by the members. This implies that the majority of the workers in a given worker cooperative enterprise are members and vice versa.
  4. The worker-members’ relation with their cooperative shall be considered as different to that of conventional wage-based labour and to that of autonomous individual work.
  5. Their internal regulation is formally defined by regimes that are democratically agreed upon and accepted by the worker-members.
  6. They shall be autonomous and independent, before the State and third parties, in their labour relations and management, and in the usage and management of the means of production.


Workers' cooperatives also follow the Rochdale Principles
Rochdale Principles
The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844, and have formed the basis for the principles on which co-operatives around the world operate to this day. The...

 and values, which are a set of core principles for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844 and have formed the basis for the principles on which co-operatives around the world operate to this day.

Even though there is no universally accepted definition of a workers' cooperative, they can be considered to be businesses that make a product, or offer a service, to sell for profit where the workers are members or worker-owners. Worker-owners work in the business, govern it and manage it. Unlike with conventional firms, ownership and decision-making power of a worker cooperative should be vested solely with the worker-owners and ultimate authority rests with the worker-owners as a whole. Worker-owners control the resources of the cooperative and the work process, such as wages or hours of work.

As mentioned above, the majority – if not all - of the workers in a given worker cooperative enterprise are worker-owners, although some casual or wage workers may be employed with whom profits and decision making are not necessarily shared equally. Workers also often undergo a trial or screening period (such as three or six months) before being allowed to have full voting rights.

Ideally, participation is based on one vote per worker-owner, regardless of the amount of shares or equity owned by each worker-owner. Voting rights are not tied to investment or patronage in the workers' co-operative, and only worker-owners can vote on decisions that affect them. In practice, worker co-operatives have to accommodate a range of interests to survive and have experimented with different voice and voting arrangements to accommodate the interests of trade unions, local authorities, those who have invested proportionately more labour, or through attempts to mix individual and collective forms of worker ownership and control.

As noted by theorists and practitioners alike, the importance of capital should be subordinated to labour in workers' cooperatives. Indeed, Adams et al. see workers' cooperatives as "labor-ist" rather than "capital-ist":

"Labor is the hiring factor, therefore the voting and property rights are assigned to the people who do the work and not to capital, even though the worker-members supply capital through membership fees and retained earnings...Any profit or loss after normal operating expenses is assigned to members on the basis of their labor contribution."

Nevertheless, recent developments in the co-operative movement have started to shift thinking more clearly towards multi-stakeholder perspectives. This has resulted in repeated attempts to develop model rules that differentiate control rights from investment and profit-sharing rights. Workers' co-operatives have often been seen as an alternative or "third way" to the domination of labour by either capital or the state (see below for a comparison).

In short, workers' co-operatives are organised to serve the needs of worker-owners by generating benefits (which may or may not be profits) for the worker owners rather than external investors. This worker-driven orientation makes them fundamentally different from other corporations. Additional cooperative structural characteristics and guiding principles further distinguish them from other business models. For example, worker-owners may not believe that profit maximisation is the best, or only, goal for their co-operative or they may follow the Rochdale Principles
Rochdale Principles
The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out by the Rochdale Society of Equitable Pioneers in Rochdale, England, in 1844, and have formed the basis for the principles on which co-operatives around the world operate to this day. The...

.

Profits (or losses) earned by the worker's cooperative are shared by worker owners. Salaries generally have a low ratio difference which ideally should be "guided by principles of proportionality, external solidarity and internal solidarity" (such as a two to one ratio between lowest and highest earner), and often are equal for all workers. Salaries can be calculated according to skill, seniority or time worked and can be raised or lowered in good times or bad to ensure job security.

Internal structure

Worker cooperatives have a wide variety of internal structures. Worker control can be exercised directly or indirectly by worker-owners. If exercised indirectly, members of representative decision-making bodies (e.g. a Board of Directors) must be elected by the worker-owners (who in turn hire the management) and be subject to removal by the worker-owners. This is a hierarchical structure similar to that of a conventional business, with a board of directors and various grades of manager, with the difference being that the board of directors is elected.

If exercised directly, all members meet regularly to make - and vote on - decisions on how the co-operative is run. Direct workers' cooperatives sometimes use consensus decision-making
Consensus decision-making
Consensus decision-making is a group decision making process that seeks the consent, not necessarily the agreement, of participants and the resolution of objections. Consensus is defined by Merriam-Webster as, first, general agreement, and second, group solidarity of belief or sentiment. It has its...

 to make decisions. Direct worker control ensures a formally flat management structure instead of a hierarchical one. This structure is influenced by activist collectives and civic organizations, with all members allowed and expected to play a managerial role. Such structures may be associated with more radical political aims such as anarchism
Anarchism
Anarchism is generally defined as the political philosophy which holds the state to be undesirable, unnecessary, and harmful, or alternatively as opposing authority in the conduct of human relations...

, libertarian socialism
Libertarian socialism
Libertarian socialism is a group of political philosophies that promote a non-hierarchical, non-bureaucratic, stateless society without private property in the means of production...

 and participatory economics
Participatory economics
Participatory economics, often abbreviated parecon, is an economic system proposed primarily by activist and political theorist Michael Albert and radical economist Robin Hahnel, among others. It uses participatory decision making as an economic mechanism to guide the production, consumption and...

.

Some workers' cooperatives also practice job rotation
Job rotation
-Introduction:Job rotation is a management technique that assigns trainees to various jobs and departments over a period of a few years. Surveys show that an increasing number of companies are using job rotation to train employees...

 or balanced job complex
Balanced job complex
A balanced job complex is a way of organizing a workplace or group that is both directly democratic and also creates relative equal empowerment among all people involved....

es to overcome inequalities of power
Political power
Political power is a type of power held by a group in a society which allows administration of some or all of public resources, including labour, and wealth. There are many ways to obtain possession of such power. At the nation-state level political legitimacy for political power is held by the...

 as well as to give workers a wider range of experiences and exposure to the different jobs in a work
place so that they are better able to make decisions about the whole workplace. The Mondragon Bookstore & Coffeehouse is a good example of a workplace that does this.

History of worker cooperatives

Historically, worker cooperatives rose to prominence during the industrial revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 as part of the labour movement
Labour movement
The term labour movement or labor movement is a broad term for the development of a collective organization of working people, to campaign in their own interest for better treatment from their employers and governments, in particular through the implementation of specific laws governing labour...

. As employment moved to industrial areas and job sectors declined, workers began organizing and controlling businesses for themselves. Workers cooperative were originally sparked by "critical reaction to industrial capitalism and the excesses of the industrial revolution." (Adams et al. 1993: 11) The formation of some workers cooperatives, such as those of the Knights of Labor
Knights of Labor
The Knights of Labor was the largest and one of the most important American labor organizations of the 1880s. Its most important leader was Terence Powderly...

 in 19th century America, were designed to "cope with the evils of unbridled capitalism and the insecurities of wage labor".

Most early worker co-ops did not adhere to clear cooperative structures or ideologies. Starting in the 1830s, worker cooperatives were formed by hat makers, bakers, and garment workers.

In the United States there is no coherent legislation regarding worker cooperatives nationally, much less Federal laws, so most worker cooperatives make use of traditional consumer cooperative law and try to fine-tune it for their purposes. In some cases the members (workers) of the cooperative in fact "own" the enterprise by buying a share that represents a fraction of the market value of the cooperative.

When the current cooperative movement resurfaced in the 1960s it developed mostly on a new system of "collective ownership" where par value shares were issued as symbolic of egalitarian voting rights. Typically, a member may only own one share to maintain the egalitarian ethos. Once brought in as a member, after a period of time on probation usually so the new candidate can be evaluated, he or she was given power to manage the coop, without "ownership" in the traditional sense. In the UK this system is known as common ownership
Common ownership
Common ownership is a principle according to which the assets of an enterprise or other organization are held indivisibly rather than in the names of the individual members or by a public institution such as a governmental body. It is therefore in contrast to public ownership...

.

Some of these early cooperatives still exist and most new worker cooperatives follow their lead and develop a relationship to capital that is more radical than the previous system of equity share ownership.

In Britain this type of cooperative was traditionally known as a producer cooperative, and, while it was overshadowed by the consumer and agricultural types, made up a small section of its own within the national apex body, the Cooperative Union. The 'new wave' of worker cooperatives that took off in Britain in the mid-1970s joined the Industrial Common Ownership Movement (ICOM) as a separate federation. Buoyed up by the alternative and ecological movements and by the political drive to create jobs, the sector peaked at around 2,000 enterprises. However the growth rate slowed, the sector contracted, and in 2001 ICOM merged with the Co-operative Union (which was the federal body for consumer cooperatives) to create Co-operatives UK, thus reunifying the cooperative sector.

In 2008 Co-operatives UK launched The Worker Co-operative Code of Governance. An attempt to implement the ICA approved World Declaration.

Political philosophy of workers' cooperatives

The advocacy of workplace democracy
Workplace democracy
Workplace democracy is the application of democracy in all its forms to the workplace....

, especially with the fullest expression of worker self-management, such as within workers' cooperatives, is rooted within several intellectual or political traditions:
  • The alleviation of alienation in the workplace
    Marx's theory of alienation
    Marx's theory of alienation , as expressed in the writings of the young Karl Marx , refers to the separation of things that naturally belong together, or to put antagonism between things that are properly in harmony...

    , especially in regard to Marxist thought
  • The encouragement of Participatory
    Participatory democracy
    Participatory Democracy, also known as Deliberative Democracy, Direct Democracy and Real Democracy , is a process where political decisions are made directly by regular people...

     or direct democracy
    Direct democracy
    Direct democracy is a form of government in which people vote on policy initiatives directly, as opposed to a representative democracy in which people vote for representatives who then vote on policy initiatives. Direct democracy is classically termed "pure democracy"...

  • Radical but popular-democratic strategies for the overthrow of capitalism
    Capitalism
    Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

    , for example, several strains of anarchist thought.
  • Autonomy and self control, especially within anarchist thought.
  • Cooperating with other Worker Cooperatives


Workers' cooperatives are also central to ideas of Autonomism
Autonomism
Autonomism refers to a set of left-wing political and social movements and theories close to the socialist movement. As an identifiable theoretical system it first emerged in Italy in the 1960s from workerist communism...

, Distributism
Distributism
Distributism is a third-way economic philosophy formulated by such Catholic thinkers as G. K...

, Mutualism
Mutualism (economic theory)
Mutualism is an anarchist school of thought that originates in the writings of Pierre-Joseph Proudhon, who envisioned a society where each person might possess a means of production, either individually or collectively, with trade representing equivalent amounts of labor in the free market...

, Syndicalism
Syndicalism
Syndicalism is a type of economic system proposed as a replacement for capitalism and an alternative to state socialism, which uses federations of collectivised trade unions or industrial unions...

, Participatory economics
Participatory economics
Participatory economics, often abbreviated parecon, is an economic system proposed primarily by activist and political theorist Michael Albert and radical economist Robin Hahnel, among others. It uses participatory decision making as an economic mechanism to guide the production, consumption and...

, Guild socialism
Guild socialism
Guild socialism is a political movement advocating workers' control of industry through the medium of trade-related guilds. It originated in the United Kingdom and was at its most influential in the first quarter of the 20th century. It was strongly associated with G. D. H...

, Libertarian socialism
Libertarian socialism
Libertarian socialism is a group of political philosophies that promote a non-hierarchical, non-bureaucratic, stateless society without private property in the means of production...

 as well as others.

An economic model: The labor-managed firm

Economists have modeled the worker cooperative as a firm in which labor hires capital, rather than capital hiring labor as in a conventional firm. The classic theoretical contributions of such a “labor managed firm” (LMF) model are due to Benjamin Ward and Jaroslav Vanek
Jaroslav Vanek
Jaroslav Vanek is an economist and Professor Emeritus of Cornell University known for his research on labour-managed firms , and also to the theory of international trade.-Career:...

.

In the neoclassical version, the objective of the LMF is to maximize not total profit, but rather income per worker. But such a scenario implies “perverse” behavior, such as laying off workers when output price rises so as to divide increased profits among fewer members. Evidence supporting such behavior is lacking however; a review of the empirical economics literature is found in Bonin, Jones, and Putterman But alternative behavioral models have been proposed. Peter Law examined LMFs that value employment as well as income. Nobel Laureate Amartya Sen
Amartya Sen
Amartya Sen, CH is an Indian economist who was awarded the 1998 Nobel Prize in Economic Sciences for his contributions to welfare economics and social choice theory, and for his interest in the problems of society's poorest members...

 examined pay according to work and according to need. Nobel Laureate James Meade
James Meade
James Edward Meade CB, FBA was a British economist and winner of the 1977 Nobel Memorial Prize in Economic Sciences jointly with the Swedish economist Bertil Ohlin for their "Pathbreaking contribution to the theory of international trade and international capital movements."Meade was born in...

 examined behavior of an “inegalitarian” LMF.

Generally, the evidence indicates that worker cooperatives have higher productivity than conventional companies although this difference may be modest in size. Economists have explained clustering of worker coops through leagues or “supporting structures” Regions where large clusters of worker cooperatives are found supported by leagues include Mondragón
Mondragón
Arrasate or Mondragón - is a town and municipality in Gipuzkoa province, Basque Country, Spain...

, in the Basque Region of Spain, home of Mondragón Cooperative Corporation
Mondragón Cooperative Corporation
The MONDRAGON Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. Founded in the town of Mondragón in 1956, its origin is linked to the activity of a modest technical college and a small workshop producing paraffin heaters...

 and in Italy, particularly Emilia-Romagna
Emilia-Romagna
Emilia–Romagna is an administrative region of Northern Italy comprising the two historic regions of Emilia and Romagna. The capital is Bologna; it has an area of and about 4.4 million inhabitants....

. Leagues provide various kinds of scale economies to make coops viable. But as leagues need coops to start them the result is a chicken or egg problem that helps explain why few coops get started.

Worker cooperatives in Europe

Worker co-operation is well established in most countries in Europe, with the largest movements being in Italy, Spain and France.

The European Cooperative Statute, which has been in force since 2006, permits worker cooperatives to be created by individuals or corporate bodies in different EU countries. It is a loose framework which devolves much detail to the national legislation of the country in which the European Cooperative Society (ECS) is registered. It permits a minority of shares to be held by 'investor members' which are not employees.

France

Workers' associations were legalised in 1848 and again in 1864. In 1871, during the Paris Commune
Paris Commune
The Paris Commune was a government that briefly ruled Paris from March 18 to May 28, 1871. It existed before the split between anarchists and Marxists had taken place, and it is hailed by both groups as the first assumption of power by the working class during the Industrial Revolution...

, workshops abandoned by their owners were taken over by their workers. In 1884 a chamber of workers' cooperatives was founded. By 1900 France had nearly 250 workers' cooperatives and by 1910 500. The movement was to rise and fall throughout the twentieth century, with growth in 1936, after the Second World War, between 1978 and 1982 and since 1995.

In 2004 France had 1700 workers' co-operatives, with 36,000 people working in them. The average size of a co-operative was 21 employees. More than 60% of co-operative employees were also members. French workers' co-operatives today include some large organisations such as Chèque Déjeuner and Acome. Other cooperatives whose names are generally known include the magazines Alternatives Economiques
Alternatives économiques
Alternatives économiques is a French magazine specializing in economic issues....

and Les Dernières Nouvelles d'Alsace
Les Dernières Nouvelles d'Alsace
Les Dernières Nouvelles d'Alsace, commonly known as DNA, is a regional daily French newspaper covering the Alsace region. It was created in November 1877 as by German Heinrich Ludwig Kayser....

, the driving school ECF CERCA and the toy manufacturer "Moulin Roty".

Italy

The cooperative movement in Emilia-Romagna
Emilia-Romagna
Emilia–Romagna is an administrative region of Northern Italy comprising the two historic regions of Emilia and Romagna. The capital is Bologna; it has an area of and about 4.4 million inhabitants....

, Italy successfully melds two divergent philosophical currents: Socialism and Catholicism. With more than a century of cooperative history, the region includes more than 8,000 cooperatives.

Norway

The best known example of a Norwegian
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...

 worker cooperative is the employee-owned IT company Kantega
Kantega
Kantega is a Norwegian software corporation founded in 2003 with headquarters in Oslo. Kantega primarily develops bespoke software based on Java and lightweight application frameworks, identity management and digital signature solutions based on PKI and Web Services technology.Kantega is a sponsor...

, which several times has been recognized as one of the 100 Best Workplaces in Europe
100 Best Workplaces in Europe
100 Best Workplaces in Europe is a ranking of the 100 workplaces in Europe performed each year Financial Times, in partnership with Great Place to Work. The list is based on employee surveys and a review of the company's culture. Two thirds of the total score is from employee responses to a 57...

.

Spain

One of the world's best known examples of worker cooperation is the Mondragón Cooperative Corporation
Mondragón Cooperative Corporation
The MONDRAGON Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. Founded in the town of Mondragón in 1956, its origin is linked to the activity of a modest technical college and a small workshop producing paraffin heaters...

 in the Basque Country
Basque Country (autonomous community)
The Basque Country is an autonomous community of northern Spain. It includes the Basque provinces of Álava, Biscay and Gipuzkoa, also called Historical Territories....

.

UK

In the United Kingdom, the Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...

's enthusiasm for worker cooperatives was at its highest in the 1970s and 1980s, with Tony Benn
Tony Benn
Anthony Neil Wedgwood "Tony" Benn, PC is a British Labour Party politician and a former MP and Cabinet Minister.His successful campaign to renounce his hereditary peerage was instrumental in the creation of the Peerage Act 1963...

 being a prominent advocate. A small number of such co-operatives were formed during the 1974 Labour Government as worker takeovers following the bankruptcy of a private firm in a desperate attempt to save the jobs at risk. However the change in ownership structure was usually unable to resist the underlying commercial failure. This was true in particular of the best known, the Meriden
Meriden, West Midlands
-External links:*****...

 motor-cycle cooperative in the West Midlands
West Midlands (county)
The West Midlands is a metropolitan county in western central England with a 2009 estimated population of 2,638,700. It came into existence as a metropolitan county in 1974 after the passage of the Local Government Act 1972, formed from parts of Staffordshire, Worcestershire and Warwickshire. The...

 which took over the assets of the ailing Triumph company, although there were instances of successful employee buy-outs of nationalised industries in the period, notably National Express
National Express
National Express Coaches, more commonly known as National Express, is a brand and company, owned by the National Express Group, under which the majority of long distance bus and coach services in Great Britain are operated,...

. Meanwhile many more worker co-operatives were founded as start-up businesses, and by the late 1980s there were some 2,000 in existence. Since then the number has declined considerably.

Under UK law there is no special legal structure for a "co-operative". Co-operatives are registered under either the Companies Act 2006
Companies Act 2006
The Companies Act 2006 is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. It had the distinction of being the longest in British Parliamentary history: with 1,300 sections and covering nearly 700 pages, and containing 16 schedules but it has since...

 or the Industrial and Provident Societies Act 1965 (IPS). A number of model rules have been devised to enable cooperatives to register under both acts; for workers' cooperatives, these rules restrict membership to those who are employed by the workplace. Most workers' co-operatives are incorporated bodies, which limits the liability if the co-operative fails and goes into liquidation.

The largest examples of a British worker cooperatives include Suma Wholefoods
Suma (co-operative)
Suma is the trading name of the Triangle Wholefoods Collective Ltd, a worker co-operative incorporated as an industrial and provident society. It was founded in Leeds in 1975 and is now based in Elland, West Yorkshire. It is the largest independent wholefood wholesaler in the United Kingdom...

, Bristol-based Essential Trading Co-operative and the retail giant John Lewis Partnership
John Lewis Partnership
The John Lewis Partnership is an employee-owned UK partnership which operates John Lewis department stores, Waitrose supermarkets and a number of other services...

 (although it only uses the term occasionally).

Greece

"The road" (Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...

: Ο δρόμος) established in 2009 under the law 1667/1986 is the legal form of a direct non-profit
Non-profit organization
Nonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...

 work(er) collective running a coffee house named "The bench" (Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...

: Το παγκάκι) in Athens. At this coffee shop, fair-trade
Fair trade
Fair trade is an organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as higher social and environmental standards...

 products from "The Seed" (Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...

: Ο Σπόρος) are being served and creative commons licenced
Creative Commons licenses
Creative Commons licenses are several copyright licenses that allow the distribution of copyrighted works. The licenses differ by several combinations that condition the terms of distribution. They were initially released on December 16, 2002 by Creative Commons, a U.S...

 / public domain
Public domain
Works are in the public domain if the intellectual property rights have expired, if the intellectual property rights are forfeited, or if they are not covered by intellectual property rights at all...

 music is beind heard.

Israel

In Israel worker cooperatives emerged in the early 20th century along side the Kibbutz
Kibbutz
A kibbutz is a collective community in Israel that was traditionally based on agriculture. Today, farming has been partly supplanted by other economic branches, including industrial plants and high-tech enterprises. Kibbutzim began as utopian communities, a combination of socialism and Zionism...

, the collective farming movement. The Kibbutz was, and is, a cooperative movement only for Jews. Arab citizens of Israel are not allowed to become members. By the 1970s, the Histadrut
Histadrut
HaHistadrut HaKlalit shel HaOvdim B'Eretz Yisrael , known as the Histadrut, is Israel's organization of trade unions. Established in December 1920 during the British Mandate for Palestine, it became one of the most powerful institutions of the State of Israel.-History:The Histadrut was founded in...

, Israel labour Federation, controlled a significant number of corporations, including Israel’s largest bank - Bank Hapoalim
Bank Hapoalim
Bank Hapoalim is Israel’s largest bank. As of 31 December 2008 it had total consolidated assets of NIS 306.85 billion. The Bank has a significant presence in global financial markets. In Israel, the Group has over 260 full-service branches, eight regional business centers, and industry desks...

 (literally the Worker’s Bank). By the 1990s the Histadrut
Histadrut
HaHistadrut HaKlalit shel HaOvdim B'Eretz Yisrael , known as the Histadrut, is Israel's organization of trade unions. Established in December 1920 during the British Mandate for Palestine, it became one of the most powerful institutions of the State of Israel.-History:The Histadrut was founded in...

, lost its power and influence and many worker cooperative corporations were sold or became public companies
Public company
This is not the same as a Government-owned corporation.A public company or publicly traded company is a limited liability company that offers its securities for sale to the general public, typically through a stock exchange, or through market makers operating in over the counter markets...

.
Israel’s biggest public transportation company, Egged - Israel Transport Cooperative Society, is still a workers cooperative. However Egged employs workers who are not cooperative members and are paid at a lower wage than worker-members.

USA

The United States Federation of Worker Cooperatives
United States Federation of Worker Cooperatives
The United States Federation of Worker Cooperatives is a federation of worker cooperatives in the United States. USFWC was founded at the U.S. Conference of Democratic Workplaces in Minneapolis, Minnesota in May 2004.....

 is the only organization in the U.S. representing worker cooperative interests nationally. There are local networks and federations throughout the U.S. in the San Francisco Bay area, Minnesota, Wisconsin, Oregon, the Boston, Massachusetts area, and western Massachusetts/southern Vermont.

Canada

Worker co-ops in Canada are represented by the Canadian Worker Co-op Federation(CWCF). Members of the CWCF are found throughout English Canada.

Ontario has its own federation with well-developed standards. Quebec has a distinct worker co-operative history, and is presently organised into a number of regional federations.

Venezuela

See also List of Venezuelan Cooperatives.

The Chávez
Hugo Chávez
Hugo Rafael Chávez Frías is the 56th and current President of Venezuela, having held that position since 1999. He was formerly the leader of the Fifth Republic Movement political party from its foundation in 1997 until 2007, when he became the leader of the United Socialist Party of Venezuela...

 government in Venezuela
Venezuela
Venezuela , officially called the Bolivarian Republic of Venezuela , is a tropical country on the northern coast of South America. It borders Colombia to the west, Guyana to the east, and Brazil to the south...

 has a policy of financing worker cooperatives, resulting in a growing number in that country.

Argentina

In response to the economic crisis in Argentina
Argentine economic crisis (1999-2002)
The Argentine economic crisis was a financial situation, tied to poilitical unrest, that affected Argentina's economy during the late 1990s and early 2000s...

, many Argentinian workers occupied the premises of bankrupt businesses and began to run them as worker-owned cooperatives. As of 2005, there were roughly 200 worker-owned businesses in Argentina, most of which were started in response to this crisis. The documentary film The Take is the best-known document in English about this phenomenon.

See also recovered factory.

India

India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...

ns own the largest worker cooperative in the world: Indian Coffee Houses.
The Indian Coffee Houses in India were started by the Coffee Board in early 1940s, during British rule. In the mid 1950s the Board closed down the Coffee Houses, due to a policy change. The thrown-out workers then took over the branches, under the leadership of A. K. Gopalan
A. K. Gopalan
Ayillyath Kuttiari Gopalan , 1 October 1904 to March 22, 1977, popularly known as A. K. Gopalan or AKG, was an Indian communist leader and first leader of opposition of India.- Early life and education :...

 and renamed the network as Indian Coffee House. This history is recorded in Coffee Housinte Katha, a book in Malayalam, the mother tongue of A. K. Gopalan. The author of the book is Nadakkal Parameswaran Pillai
Nadakkal parameswaran pillai
N. S. Parameswaran Pillai or Nadakkal Parameswaran Pillai is the founder of Indian Coffee Houses in Kerala with the late Communist Leader of Thrissur Advocate T. K. Krishnan....

 one of the leaders of the ICH movement. Another very large network of worker coops is Kerala
Kerala
or Keralam is an Indian state located on the Malabar coast of south-west India. It was created on 1 November 1956 by the States Reorganisation Act by combining various Malayalam speaking regions....

 Dinesh Beedi, originally started by exploited beedi rollers.

Comparison with other work organizations

There are significant differences between ends and means between firms where capital controls labour, or firms where the state controls both labour and capital. Worker-ownership has been described as "a Third Way (centrism)
Third way (centrism)
The Third Way refers to various political positions which try to reconcile right-wing and left-wing politics by advocating a varying synthesis of right-wing economic and left-wing social policies. Third Way approaches are commonly viewed from within the first- and second-way perspectives as...

." These distinctions are easily seen when measured by essential elements of commerce: purpose, organization, ownership, control, sources of capital, distribution of profits, dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

s, operational practices, and tax treatment. The following chart compares the commercial elements of capitalism, socialism, and cooperative worker-ownership. It is based on US rules and regulations.
Commercial Criteria Corporations  State-Owned Enterprises
State ownership
State ownership, also called public ownership, government ownership or state property, are property interests that are vested in the state, rather than an individual or communities....

 
Worker Cooperatives
Purpose a) To earn profit for owner, to increase value of shares. a) To provide goods and services for citizens. a) To maximize net and real worth of all owners.
Organization a) Organized and controlled by investors a) Organized and controlled by state a) Organized and controlled by worker-members
b) Incorporated under relevant incorporation laws - varies by country b) Chartered by relevant level of government b) Incorporated under relevant incorporation laws - varies by country
c) Except for closely held companies anyone may buy stock c) No stock c) Only worker-members may own stock, one share per member
d) Stock may be traded in the public market d) n/a d) No public sale of stock
Ownership a) Stockholders a) State a) Worker members
Control a) By Investors a) By state a) By worker members
b) Policies set by stockholders or board of directors. b) Policy set by government planners. b) Policy set by directors elected by worker-members, or by assembly of worker-members
c) Voting on basis of shares held c) n/a c) One person, one vote
d) Proxy voting permitted d) n/a d) Proxy votes seldom allowed
Sources of Capital a) Investors, banks, pension funds, the public a) The state a) By members or lenders who have no equity or vote
b) From profitable subsidiaries or by retaining all or part of the profits b) From net earnings, a portion of which are set aside for reinvestment
Distribution of Net Margin a) To stockholders on the basis of number of shares owned a) To the State a) To members after funds are set aside for reserves and allocated to a collective account
Capital Dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

s
a) No limit, amount set by owner or Board of Directors a) n/a a) Limited to an interest-like percentage set by policy
Operating Practices a) Owners or managers order production schedules and set wages and hours, sometimes with union participation a) Managers order production schedules and set wages and hours, sometimes with union participation a) Workers set production schedules either through elected boards and appointed managers or directly through assemblies
b) Working conditions determined by labour law and collective bargaining. b) Working conditions determined by labour law and collective bargaining. b) Working conditions determined by labour law and assembly of worker-members, or internal dialogue between members and managers.
Tax Treatment a) Subject to normal corporate taxes a) n/a a) Special tax treatment in some jurisdictions

See also

  • Employee-owned corporation
    Employee-owned corporation
    An employee share ownership plan is the practice of companies giving staff members shares in their company as part of their salary....

  • Industrial democracy
    Industrial democracy
    Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decision-making process, in organizations employing industrial...

  • Workers' control
    Workers' control
    Workers' control is a term meaning participation in the management of factories and other commercial enterprises by the people who work there. It has been variously advocated by anarchists, socialists, Communists, Social Democrats and Christian Democrats, and has been combined with various...

  • Workers' self-management
    Workers' self-management
    Worker self-management is a form of workplace decision-making in which the workers themselves agree on choices instead of an owner or traditional supervisor telling workers what to do, how to do it and where to do it...

  • Workplace democracy
    Workplace democracy
    Workplace democracy is the application of democracy in all its forms to the workplace....

  • Economic democracy
    Economic democracy
    Economic democracy is a socioeconomic philosophy that suggests a shift in decision-making power from a small minority of corporate shareholders to a larger majority of public stakeholders...

  • Economics of participation
    Economics of participation
    Economics of participation is an umbrella term spanning the economic analysis of worker cooperatives, labor managed firms, profit sharing, gain sharing, employee ownership, works councils, codetermination, and other programs and policies by which employees participate in decision making and or...

  • Voluntary association
    Voluntary association
    A voluntary association or union is a group of individuals who enter into an agreement as volunteers to form a body to accomplish a purpose.Strictly speaking, in many jurisdictions no formalities are necessary to start an association...

  • Collectives
  • Benefit Corporation
    Benefit corporation
    A Benefit Corporation, is a class of corporation required by law to create general benefit for society as well as for shareholders. Benefit Corporations must create a material positive impact on society, and consider how their decisions affect their employees, community, and the environment...


Workers' cooperative thinkers
  • Frank T. Adams
  • Michael Albert
    Michael Albert
    Michael Albert is an American activist, economist, speaker, and writer. He is co-editor of ZNet, and co-editor and co-founder of Z Magazine. He also co-founded South End Press and has written numerous books and articles...

  • Hilaire Belloc
    Hilaire Belloc
    Joseph Hilaire Pierre René Belloc was an Anglo-French writer and historian who became a naturalised British subject in 1902. He was one of the most prolific writers in England during the early twentieth century. He was known as a writer, orator, poet, satirist, man of letters and political activist...

  • Kevin Carson
  • Molly Scott Cato
    Molly Scott Cato
    Molly Scott Cato Ph.D. is green economist and prominent member of the Green Party of England and Wales. She is a Reader in Green Economics at the University of Wales Institute, Cardiff and Director of Cardiff Institute for Co-operative Studies Molly is the Green Party's Economics Spokesperson...

  • George Cheney
  • G. K. Chesterton
    G. K. Chesterton
    Gilbert Keith Chesterton, KC*SG was an English writer. His prolific and diverse output included philosophy, ontology, poetry, plays, journalism, public lectures and debates, literary and art criticism, biography, Christian apologetics, and fiction, including fantasy and detective fiction....

  • G.D.H. Cole
  • Chris Cornforth
  • Robert A. Dahl
    Robert A. Dahl
    Robert Alan Dahl , is the Sterling Professor emeritus of political science at Yale University, where he earned his Ph.D. in political science in 1940. He is past president of the American Political Science Association...

  • Sam Dolgoff
    Sam Dolgoff
    Sam Dolgoff was an American anarchist and anarcho-syndicalist.Dolgoff was born in the shtetl of Ostrovno in Vitebsk, Russia, moving as a child to New York City in 1905 or 1906, where he lived in the Bronx and in Manhattan's Lower East Side where he died...

  • David Ellerman
    David Ellerman
    David P. Ellerman is a philosopher and author who works in the fields of economics and political economy, social theory and philosophy, and in mathematics...

  • David Erdal (Dr)
  • Charles Gide
    Charles Gide
    Charles Gide was a leading French economist and historian of economic thought. He was a professor at the University of Bordeaux, at Montpellier, at Université de Paris and finally at Collège de France.- Academic work :...

  • Edward Greenberg
  • David Griffiths
    David Griffiths (co-operative economist)
    David Griffiths is a Co-operative economist, who has contributed a number of books and articles on the subject of unemployment, the history of Victoria's Co-operative movement, and 'social care co-operatives' amongst other subjects...

  • George Holyoake
    George Holyoake
    George Jacob Holyoake , English secularist and co-operator, was born in Birmingham, England. He coined the term "secularism" in 1851 and the term "jingoism" in 1878.-Owenism:...

  • Tim Huet
  • William King
    William King (doctor)
    Dr. William King was a British physician and philanthropist from Brighton. He is best known as an early supporter of the Cooperative Movement....

  • Naomi Klein
    Naomi Klein
    Naomi Klein is a Canadian author and social activist known for her political analyses and criticism of corporate globalization.-Family:...

  • James Meade
    James Meade
    James Edward Meade CB, FBA was a British economist and winner of the 1977 Nobel Memorial Prize in Economic Sciences jointly with the Swedish economist Bertil Ohlin for their "Pathbreaking contribution to the theory of international trade and international capital movements."Meade was born in...

  • Robert Oakeshott (academic)
  • Robert Owen
    Robert Owen
    Robert Owen was a Welsh social reformer and one of the founders of utopian socialism and the cooperative movement.Owen's philosophy was based on three intellectual pillars:...

  • Carole Pateman
    Carole Pateman
    Carole Pateman is a British feminist and political theorist. She earned a DPhil at the University of Oxford. Since 1990, Professor Pateman has taught in the Department of Political Science at the University of California at Los Angeles . In 2007, she was named a Fellow of the British Academy...

  • Robert Paton (Professor)
  • Friedrich Wilhelm Raiffeisen
    Friedrich Wilhelm Raiffeisen
    Friedrich Wilhelm Raiffeisen was a German mayor and cooperative pioneer. Several credit union systems and cooperative banks have been named after Raiffeisen, who pioneered rural credit unions.- Life :...

  • The Rochdale Pioneers
    Rochdale Pioneers
    The Rochdale Society of Equitable Pioneers, founded in 1844, was an early consumer co-operative, and the first to pay a patronage dividend, forming the basis for the modern co-operative movement....

  • David Schweickart
    David Schweickart
    David Schweickart is an American mathematician and philosopher. He holds a BS in Mathematics from University of Dayton, a PhD in Mathematics from University of Virginia, and a PhD in Philosophy from Ohio State University. He currently is Professor of Philosophy at Loyola University Chicago.He has...

  • E. F. Schumacher
    E. F. Schumacher
    Ernst Friedrich "Fritz" Schumacher was an internationally influential economic thinker, statistician and economist in Britain, serving as Chief Economic Advisor to the UK National Coal Board for two decades. His ideas became popularized in much of the English-speaking world during the 1970s...

  • Roger Spear
  • Leland Stanford
    Leland Stanford
    Amasa Leland Stanford was an American tycoon, industrialist, robber baron, politician and founder of Stanford University.-Early years:...

  • Jaroslav Vanek
    Jaroslav Vanek
    Jaroslav Vanek is an economist and Professor Emeritus of Cornell University known for his research on labour-managed firms , and also to the theory of international trade.-Career:...

  • Beatrice Webb
    Beatrice Webb
    Martha Beatrice Webb, Lady Passfield was an English sociologist, economist, socialist and social reformer. Although her husband became Baron Passfield in 1929, she refused to be known as Lady Passfield...

  • Sidney Webb
  • William Foote Whyte
    William Foote Whyte
    William Foote Whyte was a sociologist chiefly known for his ethnological study in urban sociology, Street Corner Society...


Videos about workers' cooperatives
  • Anarchism in America
    Anarchism in America (film)
    Anarchism in America is a 1983 documentary, directed by Steven Fischler and Joel Sucher, and produced by Pacific Street Films. It has been re-released by AK Press to DVD. The film begins by explaining the filmmakers' interest in anarchism based on their involvement in the group Transcendental...

  • Five Factories: Workers' Control in Venezuela - Directed by Dario Azzellini and Oliver Ressler
    Oliver Ressler
    Oliver Ressler lives and works in Vienna. He produces theme-specific exhibitions, projects in the public space and videos on issues such as global capitalism, forms of resistance, social alternatives, racism and global warming...

    .
  • The Take
  • Capitalism: A Love Story
    Capitalism: A Love Story
    Capitalism: A Love Story is a 2009 American documentary film directed, written by and starring Michael Moore. The film centers on the late-2000s financial crisis and the recovery stimulus, while putting forward an indictment of the current economic order in the United States and capitalism in general...


Further reading

  • For All The People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America, PM Press, by John Curl, 2009, ISBN 978-1-60486-072-6
  • Créer en Scop, le guide de l'entreprise participative, Ed Scop Edit 2005 (disponible gratuitement sur le site de la CG SCOP) (in French)
  • Histoire des Scop et de la coopération, Jean Gautier, Ed Scop Edit, 2006 (DVD) (in French)


External links


The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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