Archive for category: Solidarity Economy
Millions of US workers dream of “being their own boss.” But that kind of autonomy is impossible for the vast majority of the population under capitalism. Under democratic socialism, things could be different.
We can transition to a society where people collectively control their destiny. (Maskot / Getty Images)
Do a YouTube search for “be your own boss,” and the results seem to go on forever.
“HOW TO BE YOUR OWN BOSS IN 2021 (MUST WATCH)”
“20 BUSINESS IDEAS FOR 2020 T0 FINALLY BE YOUR OWN BOSS”
“BE YOUR OWN BOSS! How we escaped the 9-5 ft. Chris Hau”
“MAKING $2,000 IN ONE DAY!”
Most people who try to follow through on this dream fail. Even if they scrape together the starter capital for their own business, 70 percent of businesses go belly up within their first decade of operation. And most that do make it don’t net their founders “$2,000 IN ONE DAY!”
But one interesting thing about this genre of videos is that relatively few of them are really about getting rich. Most people who dream of being their own boss are imagining starting the smallest of businesses — ones where they would still be doing most of the work. The dream, after all, is to be your own boss, not to simply be “the boss.” The focus is often less on money than autonomy.
A video collecting “be your own boss” tips from Canadian businessman Kevin O’Leary starts with O’Leary telling a story about his “first real job.”
I was working once in an ice cream parlor when I was about fifteen years old . . . and on the second day I was asked to scrape the gum off between the Mexican tiles on the floor, and I said to the woman who owned the store . . . “you didn’t hire me to scrape gum, you hired me to scoop ice cream.” . . . And she said, “What are you talking about? I own this store, I’ll do anything I want with you, get down on your knees and scrape that gum.”
O’Leary refuses to scrap the gum, and he gets fired. It was the last job he ever had. “I don’t like to work for other people,” he tells his audience of would-be entrepreneurs. “I hope many of you here inherit that.” While he assures them that there’s nothing wrong with being a worker, “If you want to control your own destiny, you work for yourself.”
That’s inspiring — but the problem is that, under capitalism, it’s impossible almost by definition. If the ice cream parlor was an ice cream stand on a street corner, it might be a one-person operation, but by the time it expanded to having even one employee, one of the two people scooping ice cream would no longer be living O’Leary’s dream. The owner could use their economic power to make the other get down on their knees to scrape gum.
In an 1861 speech, Abraham Lincoln argued that there was “no such thing as a free man fixed for life in the condition of a hired laborer.” Lincoln wasn’t a socialist. His vision was limited to replacing slave labor in the South with capitalist wage labor. But he was uncomfortable with the idea that some people could spend their entire lives in such a subordinate position. He thought wage labor was compatible with real freedom not because the wage laborer was a fully free person in charge of their own destiny, but because someone could work for wages “awhile” and then “save the surplus to buy tools or land for himself.”
The idea that everyone could eventually be an independent farmer or small businessman was already becoming a bit anachronistic in Lincoln’s day. But today, the idea is manifestly absurd. It would be structurally impossible to maintain a modern economy with a labor force that consisted entirely of future independent proprietors working a few years at a time before striking out on their own.
That leaves us with a stark choice: either we have a society where, as even capitalism’s most ardent defenders like Kevin O’Leary admit, the vast majority of people are powerless employees who don’t “control [their] own destiny,” or we can transition to a society where people collectively control their destiny.
We can see what the second vision looks like in the few islands of workplace democracy that exist within capitalism, like the worker-owned Mondragon Corporation in Spain or the worker co-ops in Italy’s Emilia-Romagna. In these enterprises, workers democratically decide on pay scales, elect managers, and vote on operating agreements — the equivalent of a union contract but without a separate owner on the other side of a negotiating table. If someone has to scrape gum off the floor, everyone at least has some democratic input about who will be asked to perform which kind of tasks, when, and under what circumstances. There isn’t a separate owner whose word is law.
Under capitalism, businesses organized this way are a relative rarity, and they face structural disadvantages when competing against traditional firms. Look, for example, at Baltimore, where even as the restaurant industry as a whole was pushing to reopen well before the vaccine rollout, worker-owned Red Emma’s Bookstore and Coffeehouse was stubbornly closed for indoor dining. When the owner of a restaurant can simply tell their workers what the owner of the ice cream parlor told Kevin O’Leary — “I own this store, I’ll do anything I want with you” — those workers are far more likely to see their health and safety sacrificed to the firm’s bottom line than they would if they had a voice and a vote in the matter.
Creating a society where workers’ control is the economic norm therefore requires political action. A future socialist government could do things like bring banks under public ownership and direct these nationalized banks to only give out grants to new businesses that were organized as worker co-ops.
Libertarians and conservatives would naturally scream their heads off that such a government was making us all less free. But as the thriving genre of self-help videos about becoming your own boss vividly demonstrates, the opposite is true.
Under capitalism, most of us don’t get to control our own fate. Realistically, the only way we can all achieve a greater degree of freedom is to collectively be our own bosses by transitioning to democratic socialism.
May 20, 2021, 4:27 pm
With customers staying at home during the pandemic, large numbers of businesses have shuttered permanently, unable to cover their payroll and rent. Emergency governmental assistance has sustained some businesses during this period of economic uncertainty, but the crisis has also stoked interest in a private sector remedy: cooperatives.
As Congress deliberates how to safeguard the country from future crises, policymakers should consider recent research that shows how so-called alternative enterprises can make local economies more resilient. Sociologist Marc Schneiberg finds that counties with more cooperatives, credit unions, community banks, nonprofit organizations, and universities experienced fewer job losses during the Great Recession and greater job growth in its aftermath. This path-breaking finding suggests that such organizations are better able than their shareholder-owned counterparts to retain workforces when the economy falters—and more willing to invest in their communities when markets pick up again.
It’s becoming something of a well-worn joke amongst those of us thinking and writing about so-called ‘new municipalism’ (I can’t speak for those actually making it happen) that it so often gets conflated with ‘progressive politics happening in cities’ – or, worse, progressive policies enacted…
The post The uses and abuses of municipalism on the British Left appeared first on Minim.
By Trebor Scholz, Doug O’Brien, and Jason Spicer
For anyone who could, work has moved to digital platforms over the past twelve months. But it’s not all Zoom and doom. In fact, U.S. President Joe Biden promised to become “the most pro-union president you’ve ever seen.”
It’s a moment of transformation; with hopes for the revision of broken U.S. Labor Law, which, over the past fifty years, has not meaningfully supported workers, should be high on the agenda of the incoming administration. That’s why we welcome the Clean Slate Project, co-directed by Professor Benjamin Sachs at Harvard University and Sharon Block who has just joined the Biden-Harris Administration. In 2020, the Project’s co-directors published the report “Clean Slate for Worker Power: Building a Just Economy and Democracy.”
It’s much needed: The pandemic is hurting people working in tourism, healthcare, and the service industry; it harms incarcerated people and those with disabilities. Millions are unemployed. A year into the pandemic, many people are struggling with childcare, and 28 million Americans are facing evictions. Twenty-two percent of small businesses in the U.S. are devastated. Forty-one percent of African American businesses closed in the first few months of the pandemic alone. Meanwhile, some of the digital platforms which have enabled work to continue through the pandemic (“pandelivery”) have only served to exacerbate precarity and the long-running decline in worker power against capital.
Frequently, experts point to U.S. history, identifying unions and government as the two key countervailing forces to capital by asking: “What else has ever changed anything on a large scale?” In his book Beaten Down, Worked Up, for instance, veteran New York Times journalist Steven Greenhouse celebrates union successes: “In the late 1940s and the 1950s, through landmark contracts with General Motors, Ford, and other industrial giants, unions played a decisive role in building the biggest, richest middle class the world had ever seen.” The Clean Slate for Worker Power report echoes the understanding as the main force for good, pointing out that “We know from history that when workers come together and collectively build organizations that are capable of countervailing the power of the wealthy and the power of corporations, the outcomes are profound.”
Thus, while it is true that unions and government can claim major successes in the fight to advance worker power, are these the only options? The Clean Slate report has drawn on dozens of experts for their opinions, but only one co-op expert was consulted and cooperatives do not appear at all in the report.
This is not a one-time oversight. Policymakers, union advocates, and professors in the halls of esteemed American universities, systematically ignore cooperatives in the discussion about worker power.
Skeptics cite a lack of funding, an inability to scale up, and inefficient governance as insurmountable obstacles. Worker co-ops, in particular, are portrayed as idealistic aberrations of little consequence. In the U.S. context, with its individualistic culture and particularly virulent strain of capitalism, cooperatives are assumed to be an unrealistic option. But as the pandemic deepens the troubling consolidation of economic power among a small number of venture-capital backed digital platforms, the promise of platform co-operatives to act as an innovative and countervailing force in directly advancing worker power warrants a second look.
In his popular book Platform Capitalism, the British scholar Nick Srnicek argues that fighting monopolistic trends by building up platform co-ops faces all the “traditional problems of co-ops (e.g., the necessity of self-exploitation under capitalist social relations) which are made even worse by the monopolistic nature of platforms, the dominance of network effects, and the vast resources behind these companies. Even if all its software were made open-source, a platform like Facebook would still have the weight of its existing data, network effects, and financial resources to fight off any coop rival.”
Yet platform co-ops, as an example of digital cooperative ownership, can scale their operations and governance at a lower cost than brick-and-mortar cooperatives with the help of blockchain, other distributed ledgers, smart contracts, and data trusts. They benefit from the fact that cooperative ownership of companies is more easily scaled online than offline; a long tail of federated, small producers can act as one large entity, thereby competing in the marketplace. In fact, as the economy continues to be transformed by digital platforms, the cooperative model offers the potential to meet the moment, directly reversing the decline in worker power through the creation of democratically governed alternatives to the likes of Amazon. This countervailing potential of cooperatives was noted long ago by the Canadian-American Harvard economist Galbraith himself, in his original work which developed and made famous the idea of ‘countervailance’ to advance worker power against capital.
There is a long list of often-rehearsed claims that put the effectiveness of co-ops in question, some of them going back to the comments Rosa Luxemburg made in 1900. Skeptics argue that co-ops only serve the members of the co-op which limits the impact of the model significantly. They may not have learned about multi-stakeholder co-ops, in which workers can be one class of owner-members alongside consumers, producers, and socially-minded investors. Worker co-ops too can empower workers. Their membership includes 62.5 percent women and 58.8 percent people of color. They are businesses that are owned and controlled by the people who work at or depend on a given business. These businesses can also be unionized, adding further protections for workers.
Another claim suggests that platform co-ops when scaled internationally through digital platforms can no longer guarantee the trust of members. Consider a co-op with tens of thousands of members, distributed all over the planet. The effective connection and trust of local co-op members could be lost with a global platform co-op.
While this is an understandable concern, one of the cooperative movement’s central scaling innovations, the formation of cooperatives-of-cooperatives, offers a possible solution and the potential of the best of both worlds: scale and trust. In such structures, local or regional co-ops can act to maintain local trust among members. In turn, these local or regional co-ops can federate, and be joint co-owners of related “upstream” businesses. Variations on this well-known cooperative federating structure, which are effectively a reverse franchise model, can be seen around the world in large worker and multi-stakeholder cooperatives. While Mondragon of Spain is of course the most high-profile example, there are many others around the world, and today, platform cooperatives build on this long legacy of cooperative innovation to achieve scale in an ever-changing economy. At Harvard University, Professor Richard Freeman goes so far as to suggest that worker ownership of robots is the only way to build ethical Artificial Intelligence.
An additional critique of co-ops, especially worker cooperatives, is their rarity and lack of scale, particularly in the U.S. There are a mere 465 known worker cooperatives in the U.S. It’s a tiny sector. But there are, nonetheless, successful worker cooperatives in the United States, in multiple industries: the largest, with a few thousand worker-owners, is New York-based CHCA, a women-of-color-led, unionized home health care cooperative, but others of substantial size include Wisconsin-based Isthmus Engineering and California-based Arizmendi. And it is the promise of worker platform co-ops to scale this model up and wide.
What’s more, the overall co-op movement is hidden in plain sight; its size is significant. The cooperative blind spot ignores that more than one third of all Americans—120 million people—are members of cooperatives. There are over 65,000 co-op establishments in the U.S. and 3 million co-ops globally. U.S. co-ops employ 2.1 million people, provide more than $74 billion in annual wages, and earn a revenue of $650 billion. These establishments exist in energy, consumer finance, childcare, food distribution, health care, insurance, agriculture, telecommunications, and other industries. Roughly 1.5 million out of the 2.2 million farmers in the United States belong to a co-op, accounting for 55% of total U.S. agriculture sales. Nearly 80% of all milk production is touched by cooperatives at some point. When one looks at sectors that have gone to scale in the U.S.—agriculture, rural electricity, and credit unions—one finds the same story at work, again and again: People come together around a common problem; they create cooperative businesses to solve the problem, and they also work to change government policy to enable the creation of the cooperatives. For example, at the beginning of the 1930s, for example, only 10 percent of rural people in the U.S. had access to electricity, while 90 percent of urban households were already electrified. President Franklin D. Roosevelt created grant, loan, and technical assistance programs to solve this problem, but investor-owned utilities chose not to participate as the projects were not profitable enough. Meanwhile, farmers who had already been using cooperatives for decades in agriculture decided to form consumer utility cooperatives to access the government programs and to work to improve the enabling policy for cooperatives. Within a generation, 90 percent of rural households had access to electricity. Today, rural electric cooperatives serve 20 million businesses, homes, and schools in 48 states reaching well over 40 million people.
Concrete Policy Actions That Federal and Local Actors Can Take
Given this legacy of success in the U.S.—and around the world—the Clean Slate report’s exclusion and implicit dismissal of cooperatives is unfortunate. Just as any business model requires appropriate policy treatment to enable its widespread use, so do worker, platform, and multi-stakeholder cooperatives. In 2020, the Urban Institute released a report outlining actions that could be taken by policy makers to support people seeking to use cooperatives, including better enabling legislation, financing tools, technical assistance, and preferences in contracts and procurement. But there is still much that needs to be done to improve cooperative policy frameworks to enhance worker power in the U.S..
Nationally, the Biden-Harris administration could seek to finally implement the Main Street Employee Ownership Act. Passed in 2018, this legislation empowered the Small Business Administration (SBA) to include employee and worker ownership models, like cooperatives, across its various lending and technical assistance activities. The SBA, which in 2020 alone guaranteed nearly $30B in loans through its 7(a) program, has long performed a critical role in the development of new businesses. Beyond the 7(a) program, its Small Business Development Center program provides assistance to entrepreneurs around the U.S., and its Small Business Investment Company fund-of-funds program provides additional capital. Historically, co-ops were often either excluded or not clearly eligible for these programs. The Trump administration failed to implement this legislation. Nominated SBA administrator Guzman, from California, however, has some familiarity with these models, and we hope under her leadership, the SBA moves to fully include worker and multi-stakeholder cooperatives, including platform cooperatives, as eligible for lending and technical assistance services across the Agency’s portfolio.
COVID-19 economic recovery efforts also create an opportunity to advance worker power, by creating dedicated funds and technical assistance for businesses which might transition to worker-ownership as part of the recovery. As it was, in the pandemic “before-times,” a wave of healthy, Baby Boomer-owned small businesses were at risk of closure simply because they could not find a buyer. With the effects of the pandemic on small businesses, this problem—and the appeal of worker ownership as a solution—has only become more appealing. A host of groups, like Project Equity, PCC, and the Main Street Phoenix Project, among others, are already getting traction on this front. How much more broadly could this scale, with the kind of policy frameworks that policy makers chose to create to enable people in the U.S. to establish rural electrical cooperatives, agriculture cooperatives, and credit unions?
Beyond the SBA and COVID-19 recovery actions, more generally, the Biden Administration could consider re-animating the Obama-era Inter-agency Working Group on Cooperative Development (IWGCD) and prioritizing employee and cooperative ownership to examine ways to improve cooperatives’ access to and inclusion in programs across Federal government agencies.
Historically, U.S. federal policy action has often followed experimentation and organizing at the local scale. Around the U.S. today, cities and states have been experimenting with a range of policy actions to support worker and community ownership, including cooperatives, by removing barriers to their eligibility and inclusion in existing urban economic development programs, improving provision of technical assistance and education to new entrepreneurs about cooperative models, and incenting cooperatives’ use in existing government procurement/purchasing programs and direct lending programs. States are undertaking similar actions and have also moved to update the laws governing cooperatives’ incorporation, many of which were woefully out of date. As a sense of the best practices across cities and states emerge, we suspect they might inform the development of other federal policy recommendations. This might also help harmonize the treatment of cooperatives across states, which is a particularly critical issue for digital and platform co-ops, which often seek to work across state lines.
But for any of these recommendations to have a chance of succeeding and to gain a place at the policy table, however, they need widespread backing, including from the broader movement for worker power. If the American movement supporting Democratic Socialism gets traction, centrist Democrats are likely to push for cooperatives as a way to temper the severity of American capitalism. To that end, efforts like The Clean Slate for Worker Power project would do well to consider the potential of platform cooperatives and lend their active support to the cooperative movement and its policy goals.
Today I’d like to call attention to a fantastic collection of 29 original essays, The New Systems Reader: Alternatives to a Failed Economy, edited by James Gustave Speth and Kathleen Courrier and published by Routledge.
Mon, 01/04/2021 – 13:54
December 31, 2020, 7:16 pm
If the Erreka Group operated like most businesses, the pandemic would have delivered a traumatic blow to its workers.
Based in the rugged Basque region of Spain, the company produces a variety of goods, including sliding doors, plastic parts used in cars and medical devices sold around the world. As the coronavirus ravaged Europe in late March, the Spanish government ordered the company to shut two of its three local factories, threatening the livelihoods of the 210 workers there.
But the Erreka Group averted layoffs by temporarily trimming wages by 5 percent. It continued to pay workers stuck at home in exchange for the promise that they would make up some of their hours when better days returned.
This flexible approach was possible because the company is part of a vast collection of cooperative enterprises, centered in the town of Mondragón. Most of its workers are partners, meaning they own the company.
Ken Lewis grew up on the island of Grenada, and witnessed the progressive aftermath of its 1979 revolution. “I remember the power of cooperatives, people getting land, turning places that were barren into productive places,” he says. That image stayed with him after he moved to New York City for grad school and started driving a taxi on the side. Now, several decades later, Lewis is finally getting a chance to put the power of cooperatives into practice, in service of the drivers he worked with for so long.
He is one of three cofounders of The Drivers Cooperative (TDC), which aims to realize a long-held dream of socially conscious New Yorkers in a hurry: a ridesharing app that you can feel good about. When it rolls out to the public early next year, TDC will become New York City’s first worker-owned ridesharing platform—owned by the drivers themselves, rather than by big investors and executives. Its founders’ brazen idea is that TDC can actually gain a competitive advantage over Uber and Lyft—saving money and funneling those savings back to drivers—by doing away with the most exploitative practices of that dominant duopoly. “The way the [Uber] model is organized is extractive. It takes out the money and doesn’t give back much. Imagine a company that doesn’t have any profits, but has created billionaires,” Lewis says. “That money comes from drivers.”
Erik Forman, a veteran labor activist and organizer, became intimately acquainted with the dark side of that extractive model when he was working as a staff member at the Independent Drivers Guild, a union-affiliated group that organizes rideshare drivers in New York. Companies that operate in the industry regularly push much of the risk of employment onto the drivers by classifying them as “independent contractors” rather than employees. But they also push the costs of the job onto the workers, forcing them to pay for their own car and maintenance (not to mention things like healthcare benefits). Instead of being paid to work, in other words, ridesharing apps—like other “gig economy” companies—make people pay in order to work. When Uber launched in New York City in 2011, it was an attractive alternative for many who had previously been taxi drivers, with decent pay and little regulation. But in subsequent years, Uber cut pay rates while the number of drivers rose, leaving many who had taken out loans to buy cars for their job struggling to meet their debt obligations and earn a living.
Forman, who has been through bitter union battles with big companies, realized that for the same amount of effort, workers could probably start their own venture—leading him to help cofound the ridesharing coop. “The industry seems uniquely in need of a system change based on worker ownership,” he says. “[TDC] is not another company trying to get money out of drivers. It’s the opposite.”
In fact, the lack of exploitation is also The Drivers Cooperative’s financial advantage. For one thing, the billions of dollars that Uber has spent on marketing the concept of ridesharing mean that TDC has little need for big ad budgets. Their plan is to grow by building a network of drivers, using press and word of mouth. And while Uber and Lyft take around a quarter of the money from each trip (some of it to pay for all that marketing), the coop plans to take only 15%. By combining the purchasing power of all the members, they hope to lower expenses on costs like gas and insurance—expenses that Uber and Lyft drivers must handle on their own. They project that this should all add up to 8-10% higher earnings for drivers on every ride, even while being able to beat their competitors on fare prices. And if the coop has any profits left at the end of the year, they will be paid out to drivers as dividends.
Nobody understands the fundamental contrast with Uber’s business model better than the third cofounder, Alissa Orlando—because she used to work for Uber. Her stint as the head of Uber’s operations in East Africa left her disillusioned with the company’s predatory control over its drivers, embodied in the way it unilaterally cut earnings, deactivated drivers altogether, or saddled them with unsustainable car loans, all while claiming they were working together. “We called drivers partners to the extent that it helped us” maintain favorable regulatory status, Orlando says, “but they were never partners.”
Now she is using her experience in venture capital and platform-based businesses on behalf of TDC, a scrappier job that allows her to sleep better at night. Meeting with New York City drivers to recruit them into the coop, she’s heard countless stories of the impossible choices that drivers are forced to make—like the woman who said that a half dozen passengers get into her car without a mask every week, but if she objects, they give her a low rating. “She has to make this choice between ensuring that she’s safe, and the potential threat of deactivation,” Orlando says.
Mohammad Hossen, a rideshare driver who serves on the coop’s advisory board, says that the pandemic has acted as an accelerant for the urgency of the new project. His income from driving has fallen by two-thirds, to just $100 a day, and costs for disinfectant and other safety measures—paid out of his own pocket—have gone up. The shared predicament has allowed him to successfully recruit other drivers, while they wait for hours at the airport to get a fare. “At the end of the day, you have no life, no security, no future,” Hossen says. “We realize that, and we suffer.”
That could change when drivers are also the company’s owners. The Drivers Cooperative is starting a pilot project this month giving rides to workers for the Bronx-based Cooperative Home Care Associates, an example of cross-coop cooperation. Founders hope to eventually recruit several thousand drivers in the city, and say recruitment is going well. They aim to roll out their own app and open for business in the first quarter of 2021. Their eventual goal, they say, is 10% of the $5 billion New York City rideshare market, and expansion into other cities. For now, though, they will be satisfied with making a good idea a reality.