Thursday, January 12, 2012



There are basically two types of cooperatives, consumer and producer. The former is a mutual aid society of purchasers banded together to get the best possible value for their dollar by cutting out the capitalist middleman. By banding together the members of such co-ops not only avoid value draining intermediaries but also get the advantage of size and bulk purchasing power, something beyond the capacity of singular households. The most visible consumer co-ops in Canada are the gasoline co-ops active in most provinces, but this option is hardly restricted to the automobile. There are such things as food co-ops, hardware co-ops, health care co-ops and even "funeral co-ops" across the country. Our credit unions are essentially consumer co-ops, and the recent spate of financial crises has demonstrated at least one way in which such local, member controlled, institutions are better and more stable than the banks.

Cooperation, however, is not restricted to consumption. Across the world people are setting up producer co-ops, also known as worker co-ops. In this case the members are the workers of a business who own and control their workplace. In a Canadian context a good source of information about this matter is the website of the Canadian Worker Co-op Federation. In many ways this enterprise model is a living example of a model of what anarcho-syndicalists have advocated for over a century. That is that a workplace should be the property of and be controlled by those who work in said location. What is different from the traditional view of the syndicalists is that worker co-ops that are set up today have to operate within a market economy. This goes against the grain of the traditional syndicalist view which is anti-market. How to reconcile these two viewpoints is a discussion for another time.

What is important here is to note that the worker/producer cooperative model of business has been gaining more and more attraction and implementation in the last few decades. Many studies have demonstrated that worker co-ops are more efficient than a traditional business model where management either bullies, bribes or bullshits workers to produce more more efficiently. In a producers' co-op the workers are the owners and direct beneficiaries of the success of the business. They have a natural incentive to be both more efficient and more productive.

The existence of this option which is actually a real and immediate way of freeing oneself from authority has always been a matter of debate in libertarian socialist circles. What is interesting is just how attractive this model has become outside of the anarchist ghetto. Here, for example, is a recent article from the Vancouver Province about the co-op option.

Consider worker co-operatives
By Benjamin Gillies

As Canadians got back to the old grind last week, the Canadian Centre for Policy Alternatives had a rather intriguing statistic for them.

By mid-afternoon on that day, our country's top 100 CEOs had already made over $44,300, what it takes the average citizen an entire year to earn.

In fact, the policy centre notes, these elite men and women took home an average $8.4 million in 2010, 189 times more than our mean national income.

Dialogue over this type of economic disparity has been ongoing for thousands of years - from Plato, who believed the income of the highest paid in a society should never be more than five times that of the lowest paid, to last year's Occupy movement.

Most recently, the major proposal for curbing inequality among many progressive politicians is for the government to raise taxes on wealthy citizens and corporations.

Those on the right of the political spectrum vehemently oppose such an approach, however, arguing that to bur-den the companies we look to for job creation is a short-sighted strategy that can only leave us worse off as businesses head to lower-tax jurisdictions.

Undoubtedly, conservatives have a point that we rely on companies to generate employment. Yet, they overlook the fact that while corporations do provide jobs for Canadians, this is not actually their main objective. Their goal is profit maximization, and stockholders can even sue managers for making decisions that hurt the bottom line.

Directors are therefore forced to do whatever is necessary to increase returns, even when their actions are detrimental to workers. Over the past 30 years, for example, executives have used the threat of outsourcing to squeeze major concessions out of employees.

Improving the financial position of the majority will always remain problematic when we acquiesce to the need for profit above all else. It is time Canadians adopted a more holistic perspective on economic inequality, and examined the potential of an alternative business model - the worker co-operative.

Though worker co-operatives are relatively well-developed elsewhere (Spain's famous Mondragon Cooperative has been rated by Forbes magazine as one of the 10 best places to work in Europe), they remain marginal here, in no small part because they do not mesh well with North American corporate law.

Nevertheless, in today's economic climate they offer a number of enticing benefits. Like conventional corporations, co-operatives are private, for-profit enterprises.

What sets them apart is workers, not outside investors, fully own the company. These owner/employees keep all profits, instead of seeing them distributed to stockholders who often have little connection to the business other than their initial investment.

Through a one-worker, one-vote system, members are responsible for steering the company, either directly through general assembly votes or, more commonly, by electing a board of directors.

Because members have a vested interest in the success of the business, studies show they work harder and require less supervision, leading to better productivity and long-term survival rates above those of conventional companies. Co-operatives operate within the market, while providing greater worker empowerment and a more equitable distribution of revenue without government intervention - which ought to appeal to those on both the political left and right.

Read more:


But what really is a worker co-op ? Here straight from the horse's mouth is the definition that the Canadian Worker Co-op Federation applies.

What is a Worker Co-op?
Worker co-operatives are businesses that are owned and democratically controlled by the members. The main purpose of a worker co-operative is to provide employment for its members through operating an enterprise that follows the Co-operative Principles and Values. When new employees join the business, after a successful probationary period they are encouraged to apply for membership. The worker co-op is, in principle, designed to provide benefits not just to the founding members but also to all future employee/members.

To create their worker co-op, members combine their skills, interests and experiences to achieve mutual goals such as creating jobs for themselves, providing a community service and increasing democracy in the workplace. The variety of enterprises operating as worker co-ops is very broad. Virtually any enterprise can be organized as a worker co-operative. The worker co-op idea can work for you if you have a marketable product, start-up capital and a plan for organization and growth.

Each member pays a membership fee, or purchases a membership share, and has one vote no matter how many shares they own. Through the democratic governance of the co-op, all members have equal opportunity to affect the way the business is run and to offer input on the decisions affecting their everyday work lives. Because they develop the policies that determine the co-operative’s daily and long term operation, trust, communication and co-operation are vital to the co-op’s success. The co-op’s assets are collectively owned and surplus earnings are allocated to the workers according to the bylaws and policies established by the co-op,often in proportion to hours worked by members and with limited return on shares and member loans.

­­­­­­­­­­­­­­Worker co-ops differ substantially from conventional businesses. Conventional businesses’ primary aim is to make profit for the owners who may be - but in many cases are not - employed by the business. Such an owner’s voting control and share of profit is based on the amount of money invested, not for any services that they provide the business. This is a fundamental difference, as in conventional businesses the ultimate authority rests with a single individual, or with a small group,and the business decisions are based upon maximizing their benefit as owners. Any profit sharing with the workers or with the broader community is at the owner’s sole discretion.

In summary, worker co-operatives are a radical break from conventional businesses. The worker co-op’s primary goal in operating an enterprise is for service to its employees and its community rather than in service to the owners of capital. The goal is to provide the best possible employment conditions for the members and to provide the customers and community with a service or product at a fair price that meets their needs and leads to a sustainable community.


One of the advantages of the worker coop model is that it is an open option at any time. During revolutions it becomes almost a necessity as worker councils keep production happening despite the absence of the old bosses. It is also an option in decidedly non-revolutionary situations and in all the stages between these extremes. Rather than being a "plan z" when an enterprise is shutting down it should be a predetermined goal of the labour movement. In relation to that it is heartening to see the present collaboration of the Spanish Mondragon co-ops and the North American United Steel Workers.

In certain situations that are short of "revolution" the movement of workers to occupy and take over a business abandoned by an owner is not as difficult as trying to salvage a business that is insolvent in an otherwise healthy economy. The following article from the Upside Down World website discusses what happened in Argentina during its economic crisis in 2001.

Occupy, Resist, Produce: Worker Cooperatives in Argentina

Written by Benjamin Dangl
During the economic crisis of 2001, when politicians and banks failed, many Argentines took matters into their own hands. Poverty, homelessness and unemployment were countered with barter systems and grassroots, micro-credit lending programs. Community groups were created to provide solidarity, food and support in neighborhoods across the country.

Perhaps the most well known of these initiatives was the recuperation of bankrupt factories and businesses which were occupied by workers and run cooperatively. There are roughly two hundred worker-run factories and businesses in Argentina, most of which started in the midst of the 2001 crisis. 15,000 people work in these cooperatives and the businesses range from car part producers to rubber balloon factories. Two recuperated businesses with stories that are representative of this movement are Hotel Bauen and the Chilavert book publishing factory.

Hotel Bauen

Hotel Bauen first opened during the military dictatorship in 1978 when Buenos Aires hosted the World Cup. From that time onward, the hotel was a meeting place for big businesses owners, people connected to the dictatorship, and politicians such as former Argentine President Carlos Menem. Ironically, since the worker takeover in 2003, Hotel Bauen has been a meeting place for left-leaning activists groups and union members. Recently, the city's subway workers went on strike and much of their decision making and organizing was coordinated from the hotel.

Marcelo Iurcovich ran the hotel for years until 1997 when he sold it to Solari, a Chilean company. In 2001 the hotel went bankrupt and on December 21st, Solaris fired all of its workers. The majority of the ninety employees went without work for twelve to fourteen months. "Our decision to take over the hotel wasn't capricious," explained Horacio Lalli, a member of the hotel's cooperative. "A lot of the people here were fathers and mothers of families. There was no work. We had to do something, so after a lot of meetings we decided to take the hotel back."

On March 21, 2003 after a meeting in Chilavert, one of the first worker-run factories in the city, Hotel Bauen's workers gathered at night at the intersection of the streets Corrientes and Calloa in downtown Buenos Aires. They walked the short distance to the hotel and entered the building. Cheers filled the air. The lights were switched on. Workers hugged each other and wept. They had succeeded in the first step of the recuperation process: occupation.

Yet the hotel was far from being in working condition. A lot of the material and equipment had been sold by the previous owners or stolen. The workers still faced months of cleaning and repairing in order to get the hotel back on its feet. "Throughout this time businesses and students in Buenos Aires helped us out by gathering money for us so we could eat," Lalli explained. "Yet we were afraid the hotel bosses would come back and kick us out. This period of time was full of fear."

It took the workers until August of 2004 to reopen the hotel. To this day, a verdict has not been reached and the fate of the hotel remains in the hands of the judge. According to Lalli, the judge will probably decide that the workers need to pay rent or buy the business from the previous owner.

In the meantime, the hotel is back in business. Though it is still not entirely in working order, it is a bustling center for political and cultural events and generates enough profit to keep the operation going. The workers are running their business as a cooperative. Not everyone receives the same salary, but all major decisions are made in assemblies attended by all the hotel's workers.

Fabio Resino has been working at the hotel since it was taken over by the workers in 2003. "If the hotel had been run as a cooperative for all these years it would not have closed," he explained. "There was a lot of corruption and bad management with the previous owner. You could ask all ninety people that work here today and they'd all respond that they prefer this system to working for one boss. It takes more time this way, you have to work for more hours with fewer resources, but it's worth it."

"Before, we worked for a boss," he continued. "Now we work for ourselves. And when it is a cooperative you want to work better because it is your business, your own process. Before workers were numbers. Now we are people."


The Chilavert book publishing factory is located outside the center of Buenos Aires in a quiet neighborhood. On the front of the building is a colorful mural which contains the slogan of the recuperated business movement: "Occupy, Resist, Produce."

The factory itself is divided into offices, a kitchen, a cultural center and a large area full of printing and book binding machines. The machines vary in age; some of them are from the 1950's, and the newer ones are from the 1970's. When I visited, people of all ages were in the factory, either working or helping to organize community events. One woman was working in the cultural center on the second floor; another was sorting articles for a journal Chilavert produces. A musician stopped by to use the computer to print a flier for one of his concerts. Teenagers who worked in the factory as interns listened as another worker explained the intricacies of book layout and design. Towards the end of the day, dozens of people showed up for salsa classes in the cultural center. The factory had a festive, communal feel to it, but work was still going on and the machines were printing away. While I was there, a book of poetry and a science text book were being published.

When the factory was started in 1923 it was called Gaglianone, after the family who ran the business for decades before the worker takeover. After the takeover, the workers renamed their factory Chilavert, after the street it is on. Gaglianone was well known in Buenos Aires as a producer of high quality art books and materials for the major theaters in the city. However, in the 1990's the business had less work and a lot of the equipment was sold off, salaries were lowered and people were fired. In April of 2002, the factory closed its doors.

Out of necessity and a desire to keep their place of work functioning, the workers decided to occupy the factory. At the beginning of the occupation, they clandestinely produced books, (as illegal occupants of the building, it was against the law to do so). After producing them, they snuck the books through a hole in the factory's wall and into the neighbor's house. Though the hole has since been repaired, Chilavert workers have proudly placed a frame around this exposed brick section of the wall.

A climactic moment came on May 24th 2002 when eight police patrol cars, dozens of policemen, eight assault vehicles, two ambulances and one fire truck showed up at Chilavert to kick the workers out. Though there were only eight workers occupying the building they were accompanied by nearly three hundred other people, including neighbors, students and workers from other cooperatives who were there to help defend the factory. The massive group intimidated the police and when it became clear that blood was about to flow from both sides, the police retreated. The workers had won.

Occupy, Resist, Produce

Candido Gonzalez worked at Chilavert for forty two years before participating in the worker takeover. After a recent heart attack he attributes to stress and overwork, he said he plans to take it easy. That didn't stop him from recently attending the fifth annual World Social Forum in Brazil and participating in a recent city-wide subway strike. Throughout my visit, he joked with many workers in the building and seemed perfectly capable of talking forever. Our interview lasted a couple of hours and though he focused on Chilavert, he touched upon everything from earthquakes to whiskey.

"Occupy, resist and produce. This is the synthesis of what we are doing," Candido said, as he passed me a glass of iced tea. "And it is the community as a whole that makes this possible. When we were defending this place there were eight assault vehicles and thirty policemen that came here to kick us out. But we, along with other members of the community, stayed here and defended the factory."

He recalls this fight with tears in his eyes, "It is normal for you to fight for yourself, but when others fight for your cause it is very emotional."

Part of the local economy in the neighborhood depends on Chilavert for business. "We get our transportation, ink, food, coffee and paper - there is a paper factory fifteen blocks from here - all in this neighborhood. Chilavert helps the economy and if this factory closes, the neighborhood suffers."

Twelve people work at the factory and unlike other cooperatives in the city, everyone has the same salary. Major decisions are made in assemblies and community based activities play an important role in the weekly agenda. On the second level of the building there is a cultural center which is used for dance classes, movie screenings, discussions, poetry readings, parties and art exhibits.

Since the worker takeover, Chilavert has produced numerous books on social and political themes, with titles such as "The Unemployed Workers Movement," "What are Popular Assemblies?" and "Piquetera (Argentine activist group) Dignity."

"Every decision, every assembly, every book published, has something to do with politics," Chilavert worker, Julieta Galera explained. "The idea is to make books and works of art that have something to do with our political vision. There is a lot of prejudice against recuperated factories in Buenos Aires. People think we don't work hard enough. But Chilavert does some of the best work in the business."

Though Chilavert is one of the most famous of the recuperated businesses, its story is still unknown most Argentines. "We almost don't exist in the newspapers or the TV programs because we aren't with the government," Candido explained. "There are some two hundred recuperated, cooperative businesses in Argentina. That's not a lot compared to all the others that are not run this way."

Candido didn't think much of current president Nestor Kirchner, and didn't attribute Chilavert's success to any politician. "We didn't put a political party banner in the factory because we are the ones that took the factory. All kinds of politicians have come here asking for our support. Yet when the unions failed, when the state failed, the workers began a different kind of fight…If you want to take power and you can't take over the state, you have to at least take over the means of production."

Candido pointed across the room to a giant safe in the corner. Across the top of the safe was the name, Gaglianone. He laughed and shook his head. Perhaps that's where the old boss horded all of his money. "Now," Candido explained, pulling out a bottle, "this is where we keep the whiskey."


Summing up it can be said that the producer co-op model is almost everywhere and always an option for labour. It should not be reduced to a salvage operation when a business is in trouble. In better times it should become a long range project of progressive unions. Rather than simply reacting to what the boss is doing unions should be active in gradually increasing their control of an enterprise. Pension funds are one source of the funds needed to do this. So are voluntary subscriptions and a dedicated portion of union dues. With labour at the table management would actually be far more reasonable in the wages and benefits area than they are in this age of cutbacks.

1 comment:

Kimberly said...

Hey, I did not know that part of the story of the Bauen Hotel. When I travelled to Argentina, I stayed in a buenos aires apartment that was very near it. I saw it everyday and wondered what its story was. I know that the dictatorship affected many hotels at the time. It´s good that they recovered so well!