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Who’s Afraid of Workplace Democracy?

Research indicates cooperatives manage resources just as efficiently

For a year, from 1934-35, Simone Weil, the French philosopher and activist, worked at a factory as a manual laborer to deepen her understanding of the working class. In the aftermath of this experience, she wrote in her biography, “That contact with affliction had killed my youth.” Weil found that the tragedy of the worker was that she is treated as means to an end. Not only is the worker is humiliated, shamed and generally dehumanized; the worker is an object of the oppression that is to be found in the way production is organized. The very process that underpins making of goods and services, as it does the whole economy, is perpetuating a disenfranchised working class.

What is so remarkable when it comes to Weil’s notion of oppression is that she insists that oppression is inherent to managerial practice. Her work offers an ethical basis for the critical analysis of management, science, and expertise. One of her famous quotes reads, “When someone exposes himself as a slave in the market place, what wonder if he finds a master?”

Weil’s contemplation of labor struggles is easily applicable to the modern workplace. The self is treated as means to career progression, human being as a project to be managed. The struggle of the employee is an attempt to exert control over one’s professional life by, at the same time, giving that control away. The role of an employee remains merely instrumental in nature, regardless of the sophistication the modern workplace has achieved.

The workplace, where adults spend most of their waking hours, is an autocratic establishment. Most employees have no say in important decision-making processes, hierarchy is strict, and there are a number of formal and informal rules to be followed. There is a clear division between one’s “office persona” and “private persona.” The “office persona” doesn’t express feelings, it’s competitive, hardworking, and money-driven. The “office persona” does not have human attributes, it’s a representative, if you will, of a human being. The “office persona” ultimately doesn’t have any control over her job, meaning she has no control over her life. Her healthcare, mortgage, education, family planning and so forth — all of these important aspects of one’s life — depend on a job. Yet, every time she walks into the office, she remembers to suffocate all of these existential fears and put a smile on her face. They like it at the office when everyone looks happy.

If workplaces were to have a human-centered design, a genuine respect for the human beings that make up the workplace would certainly be a starting point. After all, jobs and profits should serve humans, not the other way around. Workplaces should be organized so that everyone can fulfill their fundamental human need to belong to a community. These are some of the tenets cooperatives are built upon. According to the International Cooperative Alliance, a cooperative is an “autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.” Cooperatives are owned and governed by their employees. All worker cooperatives have two common characteristics: 1) member-owners invest in and own the business together, and share the enterprise’s profits, and 2) decision-making is democratic, with each member having one vote.

In addition to democratic leadership and economic equity, cooperatives promote environmental sustainability and communal health. Cooperatives have a completely flat structure, and they are scalable: any business can be organized as a cooperative. It sounds like such a great idea, yet it’s generally considered to be an archaic, utopian socialist concept.

Among arguments against cooperatives as an organizational model, probably the most dangerous is the one that assumes that a group of human beings can thrive in an enterprise only if there is another, much smaller group of people telling them what to do. Elinor Ostrom, Nobel Laureate in Economic Sciences, focused a lot of her work on dismantling ideas that common-pool resources (CPRs) cannot be successfully collectively managed without external regulation. Ostrom observed policy work in this area and found that most of it was based on metaphors. Yes, metaphors, like “the tragedy of the commons” which implies that whenever humans are left to organize the use of their own resources, they will eventually destroy those resources. Another is the prisoner’s dilemma, which tells us that all humans will, eventually, betray one another (and that they can, for the sake of policy, be equated with frightened prisoners). The idea is that humans are too self-interested to pursue collective goals.

Ostrom carefully exposes the harmful policies that have been pursued following these almost trivial ideas, and offers an immense body of research of thriving collectively-managed CPRs around the world, and the dangers of external administration (whether public or private) of formerly communal resources. This is revolutionary research in that that it sheds light on an important fact: there are really no resources that a group of human beings can’t collectively manage for the sake of collective wellbeing, and successfully. This applies equally to goods and services as it does to mountain meadows, forests and fisheries.

Some of the biggest companies in the U.S. are organized as cooperatives (e.g. Associated Wholesale Grocers, Dairy Farmers of America, Ocean Spray, Blue Diamond Growers, Great River Energy, Organic Valley, Bob’s Red Mill and so forth), yet this is hardly a well-known fact. It’s almost as if it’s a secret that humans can be trusted to act sensibly without external supervision.

Cooperatives are examples of economic democracy that people can actually see and experience. That can be crucial to developing healthy political views. In the wake of economic collapse, people are more likely to listen to dictatorial appeals, more likely to listen to men who are going to tell them what to do because that’s how we operate on other societal levels, notably organizationally. Many alternatives to traditional hierarchy in management have occurred in recent years. Doug Kirkpatrick, author of Beyond Empowerment: The age of the self-managed organization, points out that it’s common sense to expect from employees to manage themselves. After all, they travel, build their houses, manage their finances, volunteer, parent, create, manage their private lives in entirety, without being instructed by an authority. That’s a lot to manage, yet it’s done all the time. It turns out, leadership is not the quality of a few; leadership abounds.

Peter Koestenbaum, co-author with Peter Block of Freedom and Accountability at Work, makes a crucial point when he states, “for the most part, we have not organized our institutions around the existential viewpoint that freedom is a fact of our existence or that accountability stems from the acknowledgment of that freedom.” This statement not only criticizes managerialism, it jettisons the whole idea of management as we know it. Koestenbaum notes that we all agree that what makes us human is having free will, but we’ve done everything we can to organize our institutions as if we don’t. Hierarchical structures deny our ability to act at our own discretion.

Weil’s argument about the instrumental nature of human labor also follows this train of thought. Management, or rather managerialism, is an anti-social establishment. It’s not surprising that research on human resources continuously illustrates how miserable the workforce is, yet this fact is falsely taken as an inevitability.

Despite the ongoing critique of hierarchic management structures, and alternatives offered, it seems like we’re still afraid of letting it go. Existential philosophy explains why. Delegating responsibility to another, or deciding not to trust our own inner guidance, gives an illusion of safety. And indeed, as Kafka noted, “It is often safer to be in chains than to be free.” Making decisions means taking risks and accepting consequences. Mutatis mutandis, when an employee becomes an owner, she is in control not only of the enterprise, but also her own personal life. There’s no other way to build self-confidence, yet an enormous amount of the workforce doubts their ability to be in control of their own jobs.

We live at the time of great economic disparity and income inequality. Management is rewarded generously. Typically, in addition to multimillion dollar salaries, CEOs are paid bonuses that represent a percentage of stakeholders’ equity. According to the salary data from Securities and Exchange Commission filings, the CEO of Discovery Communications, for example, made $156.1 million in 2014, nearly 1,951 times the firm’s median salary.

Meanwhile, there is more than enough evidence that cooperatively-managed enterprises work as efficiently, if not more efficiently, than traditional enterprises. Virginie Perotin, Professor of Economics at Leeds University Business School, looked at two decades’ worth of international data on cooperatives and found that “worker cooperatives are more productive than conventional businesses, with staff working ‘better and smarter’ and production organized more efficiently.”

Cooperatives make profits but they also create hope and inspiration. While being accountable to oneself and others, in a cooperative, the individual is still not alone. One is not led to “dare to be great” and then left in an existential abyss of risk and fear of failure.

Historically, the power of cooperatives to effect social change has been grossly underestimated, even by the members of the cooperative movement themselves. In socio-political terms, there has never been a better time for the cooperative to emerge as the most rational, and only human-centered, way to organize our economy.

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Katarina Spasic

  • michael

    So, where is the research that demonstrates how efficient cooperatives are? The books cited here are hardly serious, let alone credible. Anyone familiar with the abundant research on co-ops knows that the problem is not any objection or resistance to them; on the contrary, there are no political or regulatory obstacles worth worrying about. The difficulties are inherent to co-ops themselves.

    Moreover, while existing co-ops are reasonably efficient, this efficiency must be contextualized. First, these are precisely the organizations that have managed to thrive, and thus do not represent the possible universe of co-ops. And second, management decisions are driven in large part by market conditions, so that in practice successful co-ops resemble privately owned enterprises in most relevant respects. In other words, they do not in most cases represent a substantive improvement over private ownership—except, of course, for the owners themselves.

    If we are to have a substantive argument in favor of shifting to a set of policies that deliberately favor the co-op model over private ownership, we’re going to need much more in the way of actual evidence than is offered here.

    • COINTELPRO_MKULTRA

      Is collective ownership, democratic decision making, self-management. and profit-sharing on behalf of workers not incentive enough?

      Speaking about existing sucessful and efficient cooperatives as “organizations that managed to survive, and thus do not represent the possible universe of coops” isn’t saying anything substantive. It could be said of any business operating in a under free market conditions. Private businesses fail and come into bro all the time. No business, hierarchical (“private”) or cooperative perpetuates itself without being sufficiently efficient and bending to market conditions.

      Cooperatives do currently have a disadvantage because the “private” owners have more incentive to suppress wages of workers than would a worker cooperative, where workers would have incentive to not only perpetuate their business but sustain their livelihoods.

      In what “relevant respects” does class based ownership resemble cooperatives in practice? What abundance of research are you referring to, as opposed to these “hardly serious” or “credible” books?

      • COINTELPRO_MKULTRA

        Edit: *come into being

      • michael

        Self-management may be sufficient incentive, but it is not sufficient to warrant a systematic preference for co-operative ownership and management. The question is whether a shift to the co-op model 1) offers tangible improvements *for society as a whole* over private and/or state control, and 2) does so more effectively than other sorts of transformations.

        The notion that private firms have greater incentives to suppress wages is nonsensical; co-ops face precisely the same incentives under competitive market conditions. No co-op pays workers/owners more than the market rate; in fact, the opposite is true:
        https://www.econstor.eu/bitstream/10419/33810/1/514361417.pdf

        It does appear that the compensation structure tends to be flatter in co-ops, which is a good thing:
        https://www.researchgate.net/profile/William_Bartlett/publication/5119092_Labor-Managed_Cooperatives_and_Private_Firms_in_North_Central_Italy_An_Empirical_Comparison/links/00b7d52bdb2b999ce7000000.pdf

        But overall productivity is roughly indistinguishable from privately held firms:
        https://books.google.com/books?id=SASGAwAAQBAJ&pg=PA111&dq=pencavel+worker+participation&hl=en&sa=X&ved=0ahUKEwiU98CSh9HRAhUj2oMKHWEaCuIQ6AEIGjAA#v=onepage&q&f=false

        This is just a quick sample of the vast literature, most of which indicates that the structure of ownership is a relatively minor factor. If we wish to improve the lives of workers while maintaining a relatively high standard of living, there are lots of other strategies available that would likely make a more substantive difference—up to replacing capitalism altogether.

        But the reason we have relatively few co-ops has never been any sort of opposition to them. They are simply not worth the bother in most cases.

        Here is a classic on the subject from the analytical Marxist philosopher Jon Elster:
        https://www.cambridge.org/core/journals/social-philosophy-and-policy/article/from-here-to-there-or-if-cooperative-ownership-is-so-desirable-why-are-there-so-few-cooperatives/AA48E19124C4C97655993B3981BEEDAB

        • COINTELPRO_MKULTRA

          Thank you for your response and for the links provided. I appreciate it.

          My current understanding is that

          (1) Private firms do not have more incentive to suppress wages than would a worker cooperative under competitive market conditions. You pointed this out. The question is about democratic control over profit earned and the distribution of wages. (What agents are making these decisions and how are their private interests affecting those decisions? Is a wage disparity between managers or ‘bosses’ and workers justified? Why not let *everyone* decide instead of a few?)

          (2) If the productivity of cooperatives is roughly indistinguishable from private firms, and the compensation structure is generally flatter, I don’t consider this a strike against favoring cooperatives.

          (3) There are more issues at hand than compensation, such as direct control over one’s schedule, one’s workplace experience and workplace environment. The workplace is where most people currently spend most of their time throughout their entire lives, so I don’t know why this is discounted from one’s quality of life or standard of living.

          (4) Replacing capitalism altogether is not currently a viable option and is even more unimaginable than transitioning to worker cooperatives. I imagine that transitioning to worker cooperatives would foster a culture of workplace and economic democracy, chip away at social class relations, as well as providing workers with decision-making and self-management experience over the long run. This would make replacing capitalism a little more viable.

          At the moment I’m convinced that the only people that do not want work towards a transition to economic democracy are people who wish to perpetuate authoritarian and class based hierarchical structures in our society at my expense (such as the private firm). I see NO argument *against* worker cooperatives other than aversion to workers taking matters into their own hands or “its not enough because it doesn’t solve all our problems”.

          The phrase “tangible improvement” is open to interpretation. Not to say that it is irrelevant, but if I have more tangible things but no freedom or control over my life and work, is that improvement? Are these questions even bound to the internal structure of a firm? (I’m asking myself!). If we currently lived in a society of worker cooperatives and no private firms we’d be asking the same question about tangible improvement and increasing our living standards but in a much different way.

          • michael

            Flatness and increased autonomy are good things, and I said so. But apart from the fact that more and more firms (in the US at least) already offer considerable autonomy to their workers, none of what I said is offered as an argument *against* co-ops. My point is simply that this post is facile and disingenuous. It cites clumsy, silly books when serious research is abundant. And it claims that there is resistance to co-ops when there is not. What this does is obscure quite real and important *internal* limitations to co-ops, as well as ample evidence that, on the whole, they represent at best a marginal improvement (if any) over the status quo. It is simply not a very productive investment of political energy to focus on shifting to co-ops. There is nothing *wrong* with it; there are just more efficacious opportunities that we should not sacrifice on this altar, especially under false premises or pretenses.

          • COINTELPRO_MKULTRA

            Please cite the line where she claims that there is resistance to worker cooperatives.

            There is only ignorance and lack of education regarding the existence of worker cooperatives as an option. For working class people it’s systematic and starts when you’re shoved into public school and taught to be a good worker to replace your miserable and subservient parent. We are ingrained with the belief that we need a small group of people to direct and manage us from the time we are born.

            I agree it’s not immediately practicable and short term results shouldnt be conflated , but I disagree that it shouldn’t be admitted into our area of focus of political energy. Ideally, I’d aim for a world where we already have autonomy and don’t need to be “granted” autonomy.

          • michael

            Well, there is the title of the post! and this:
            “Among arguments against cooperatives as an organizational model, probably the most dangerous is the one that assumes that a group of human beings can thrive in an enterprise only if there is another, much smaller group of people telling them what to do.”

            Except that no one is actually making such arguments. And if someone is, you wouldn’t know who it is from the post. She cites Elinor Ostrom (an erstwhile colleague of mine), who did not actually study cooperatives, but ignores the actual debates. Heck, she could have cited J.K. Gibson-Graham at least!

            As for autonomy, you don’t need to be granted it. By all means, start a co-op. I’m a member of three myself. Just recognize that replacing every firm with which you interact with a co-op will not solve most of the serious problems endemic to a complex market economy. And it won’t even solve most of the problems with wage labor, since co-op workers will also have to deal with division of labor, the challenges of decision-making, and yes, workforce management.

          • COINTELPRO_MKULTRA

            Who is no one? Educated academics writing for journals directed at other academics who know better? It’s pretty much the ingrained cultural attitude of workers towards themselves, along with hopelessness. I suppose it took on a different meaning for me. I don’t like pretending this is common knowledge for the people it actually affects.

            I’m fully cognizant that worker cooperatives will not solve problems endemic to a market economy and aren’t free of internal problems. (I’m not *that* naive!) I just view it as one strategy to change attitudes, give more strength to worker movements, allow workers more freedom to educate themselves, and perhaps put workers in a better position to address those problems than they are currently.

            Congratulations on being part of three worker cooperatives. And thanks again for taking time to respond.

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