Can worker coops overcome capitalist overproduction?

On April 5, Southeast Michigan Jobs with Justice hosted the Detroit premier of a documentary film about worker cooperatives, “Shift Change.” This 2012 film presents several examples of worker cooperatives in the U.S. as well as the Mondragon cooperative establishment in the Basque region of the Spanish state. The “Shift Change” website says the film tells “the little known stories of employee-owned businesses that compete successfully in today’s economy while providing secure, dignified jobs in democratic workplaces.” (

The film relates how in 1941, when the Catholic priest Jose Maria Arizmendiarrieta arrived in Mondragon, the 7,000 residents were desperately poor. Two years later he founded a technical college to train managers, engineers and skilled trades workers for jobs with local companies. In 1956, with Arizmendiarrieta’s guidance, the Spanish state’s first industrial workers’ coop, Fagor, was founded by five of the school’s graduates.

A major appliance company that is 100 percent worker-owned and -managed with plants in several countries, Fagor used a portion of its revenue to start new cooperatives, including a coop bank, Caja Laboral. The Mondragon-based Eroski retail chain is one of the largest in Spain. The Mondragon Corp. now employs 84,000 and the area has the lowest unemployment in the country.

In the United States, worker coops, some of them consciously built on the Mondragon model, employ a much smaller number of workers. The U.S. Federation of Worker Coops estimates that in the whole country about 300 such companies have about 3,500 workers and $400 million in revenue.

The film portrays generally happy worker-owners driving cabs and building custom machinery in Madison, Wis., baking bread and pizza in San Francisco, installing solar panels and laundering hospital linens in Cleveland, selling fair trade coffee in Boston and cleaning houses in Redwood, Calif.

What is clear from the film is that the cooperative model, from the viewpoint of workers’ rights, is superior to the capitalist mode of production for private profit. These companies offer more stable employment, even if it means workers have to get by with less in lean times, as there is no incentive to reduce the number of workers to maximize return. Many of these companies also make an effort to be socially and environmentally responsible.

All the success stories, particularly the Mondragon enterprise, offer proof that the capitalist bosses are unnecessary for the sustenance of the working class — in fact, they are superfluous.

Going beyond capitalism and socialism?

The film also profiles the “Cleveland model” — Evergreen Cooperatives, which began with a green laundry and now includes a greenhouse and a solar panel installation/weatherization firm. “The model,” said Ted Howard, whose Democracy Collaborative was involved in setting up Evergreen, “takes us beyond both traditional capitalism and traditional socialism.”

In fact, the opposite is true. It is the competition, fluctuations and constraints of the capitalist market that limit the ability of the cooperative model to even approach the “traditional” socialist model.

Spain is in an economic slump. According to the film, no Mondragon workers have been laid off. But trying to exist in a capitalist environment, they have taken a 20 percent pay cut. To “compete successfully,” Fagor pays workers in plants in other countries less than workers in the Mondragon plant. Evergreen laundry workers make only $10.50 an hour; 50 cents of that is deducted so they can become co-owners in three years.

The funds to even start a coop have to come from somewhere — foundation grants, private lenders and/or the workers’ own pockets.

The film makes no mention of the many enterprises in Latin America formed when workers simply kicked out the bosses and took over. Even there, the new owners have to compete in the capitalist market.

Marx and Engels on utopian socialism

Marx and Engels saw the limitations of the utopian socialist thinkers of their day. In “Socialism: Utopian and Scientific,” Engels argued that establishing successful models — as English industrialist Robert Owen and others attempted — was not enough to transform society into one based on cooperation and meeting the needs of all. There had to be a proletarian revolution, he said, in which the working class “seizes the public power, and by means of this transforms the socialized means of production, slipping from the hands of the bourgeoisie, into public property.”

The vast majority of the world’s people are still under the yoke of capitalist wage slavery and are languishing under the worst crisis of overproduction since the Great Depression. Only by overturning capitalist property relations — what Engels called a “universal act of emancipation” — can we make the cooperative workplace and societal model accessible to the great mass of humanity.

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