The Cooperative Manifesto

Democracy at Work in Maine

by Chris Busby

“Let’s get together, get some land / Raise our food like The Man / Save our money like the mob / Put up a factory, own the job.”

— James Brown, “Funky President (People It’s Bad),” 1974

When the worst boss in America becomes the boss of America, the choice for American workers becomes clear: keep getting stepped on and screwed over, or step up, team up and take over.

A new American revolution, the Cooperative Revolution, is at hand. The time has come to apply what we boastfully call “American values” — independence, equality and democracy — to a place in our society from which those values have been stripped: the workplace. It won’t be the first time we’ve freed ourselves from a tyrant with terrible hair, but it should be the last.

Like serfdom and slavery before it, the predominate labor arrangement of the past 150 years, wage servitude, is being challenged on moral grounds. And with each decade’s greed-induced financial crisis, every year of stagnant incomes and rising costs, every new corporate scandal or swindle exposed in the daily paper, the ethical case against the current economic system grows stronger and the need for fundamental change becomes more obvious and urgent.

The most recent financial catastrophe — the subprime mortgage crisis of 2007 and the bailout and recession that followed — imposed such a heavy burden on so many people that it cracked capitalism itself. In 2011, the Occupy Wall Street protests made income inequality an issue everyone could understand and no politician could ignore. Americans started searching for answers outside the tiny box of options framed by mainstream media and the two major political parties. Surprising and inspiring things began to happen.

In 2014, the English translation of a brainy 700-page book about how capitalism causes inequality (Capital in the Twenty-First Century), by an obscure French economist named Thomas Piketty, became a bestseller. The next year, Vermont Sen. Bernie Sanders, a self-described “democratic socialist,” launched his campaign for the presidency, attracting enormous crowds of enthusiastic supporters across the country and a record number of small contributions. Had Sanders’ campaign not been largely ignored by the corporate press corps and undermined by unelected Democratic “superdelegates,” it’s entirely possible this socialist would be sleeping in the White House tonight.

Donald Trump won the Electoral College tally by stoking the same populist angst against economic elites that Sanders did. Trump’s contention that collusion between Wall Street and Washington had created a system “rigged” against the interests of common people was one of the few consistent and cogent points of his erratic, fact-phobic campaign.

Trump’s victory has kicked the proverbial hornets’ nest, sending swarms of angry Americans onto the streets in protest. There will be battles ahead over a host of issues — health care, civil rights, immigration, the next military invasion — and citizens of good conscience may win some of those fights, but the Wall Street/Washington establishment can easily survive a few stings.

The far greater threat President Trump poses to the established socioeconomic order is the possibility his uniquely obnoxious brand of oligarchy will disrupt the hive mind. To stretch this analogy further, the workers and drones begin to question why they spend their entire lives in service to a single queen. They wonder why every young bee can’t be fed royal jelly and develop into an apian aristocrat. Hornets begin to question their warlike ways and see the benefits of honey production. The wasps wake up and realize the nest they thought was so strong is just a paper-thin shell of masticated wood and spit.

The Cooperative Revolution progresses as more people begin to question and challenge the hierarchies of economic power, starting with the most basic relationships: those between workers and owners, and buyers and sellers. The most compelling new models are those in which the workers become the owners and democratically determine how their business is run and what to do with their profits.

Worker ownership is not some hippie pipe dream. It’s a powerful opportunity for Americans to form what Ralph Nader calls a “left-right alliance.” Employee-owned enterprises embody and encourage many bedrock principles of conservatism: hard work, personal responsibility, accountability and entrepreneurship. To quote from the 2016 GOP Platform: “Republicans believe that the employer-employee relationship of the future will be built upon employee empowerment and workplace flexibility. We therefore endorse employee stock ownership plans that enable workers to become capitalists, expand the realm of private property, and energize a free enterprise economy.”

Here in Maine, this new labor movement is well underway and gathering strength by the day. Lobstermen, farmers, insurance agents, auto mechanics, engineers, chemical manufacturers, graphic designers and coffee roasters are among the thousands of workers in this state engaged in formal labor arrangements that involve cooperative ownership, profit-sharing, and democratic decision-making on the job. This year’s edition of Mainebiz’s annual Book of Lists includes a new category: Maine’s largest employee-owned businesses. The top three companies are all construction firms: Cianbro (the largest, with 869 workers), Sargent Corp., and Reed & Reed Inc. All three are also 100-percent employee-owned.

Despite its blue-collar cred, most working-class Mainers aren’t aware of this movement. They don’t read Mainebiz or flip/scroll past the Sports section to find the briefs buried on the Business page. The opening of another new restaurant catering to the bourgeoisie attracts far more attention on social media than news that another local employer is now owned by its employees — though it seems both types of stories appear with about equal frequency these days.

Most politicians in Maine, even in the “progressive” city of Portland, lack the knowledge or courage to voice the principles of worker ownership, to say nothing of championing the cause. Meanwhile, labor unions and other organizations that advocate for the working poor struggle just to maintain their current foothold at the bottom of the economic ladder against an endless barrage of budget cuts, pay cuts, benefit cuts and job cuts. The reforms promoted by Democrats and other liberal political groups don’t address the fundamental structure and functioning of corporate capitalism, which continually launches these economic assaults by its own logic and design.

This “manifesto” is the opening salvo in a series of articles The Bollard is publishing this year to bring more attention to the movement for economic cooperation among workers, consumers and independent producers. We’ll explain and explore the concepts and debunk some common misconceptions about collective ownership, trying to paint the big picture of what’s happening and what’s possible in our economy.

Though this series, titled Bee the Boss, can be fairly characterized as advocacy for the cause, we will be honest and clear-eyed about the challenges and drawbacks of a system where the workers are in control. And, this being The Bollard, we’ll try to have some laughs along the way and keep things interesting — maybe even spark a controversy or two — because one of the barriers to economic change is the inherent boredom of the subject, a quality that the more conspiracy-minded among us suspect is intentional.

Welcome to the Cooperative Revolution, comrade!

The “C” Word

“I paid the cost to be the boss.”

— James Brown, “The Boss,” 1973

Let’s address one potential misconception right away: the fundamental economic change under discussion here is not communism as that term has been commonly understood and applied in the past. We’re not talking about the abolition of private property, state planning of production and markets, or guys with bushy eyebrows in gray suits telling everyone what they can and cannot do.

That said, the seed of this idea was planted, in the modern era, by the work of Karl Marx and his collaborator, Frederick Engels. It’s a Marxist idea. If that word makes you uncomfortable, good. It should be unsettling, because the goal here is to shake shit up.

The social and economic conditions that prompted Marx and Engels to pen the Manifesto of the Communist Party 170 years ago are basically the same conditions fueling discontent in America today: income inequality, job insecurity caused by mechanization and global trade, the cooption of politics by monied elites, and the deeply personal dissatisfaction that inevitably results when people are treated like cogs in a machine and thus prevented from realizing their full potential as free human beings.

As critic and essayist Louis Menand noted in The New Yorker last fall (“He’s Back: Karl Marx, yesterday and today”), “Marx had very little to say about how the business of life would be conducted in a communist society, and this turned out to be a serious problem for regimes trying to put communism into practice.”

Economics professor Richard Wolff points out that the Communist regimes of the Soviet Union and The People’s Republic of China replaced private capitalism with what he calls “state capitalism,” a system in which the exploitative practices of corporate boards became the policies of government functionaries. State capitalism failed to fundamentally change the worker/owner relationship within businesses, which was the nub of what Marx and Engels advocated. Those who controlled all the capital (the cash, the property, the factories and machines) in Communist countries still made all the rules and divided all the profits while exploiting those who did all the hard work.

The failure of this empty and repressive form of communism has unjustly discredited all of Marx’s ideas in our public discourse today, depriving those who strive to subvert the dominant corporate-capitalist paradigm of the theoretical firepower needed to win the argument. “Serious critics of capitalism need to present and champion the goal of a new economic system different from and beyond both private and state capitalism if we are to inspire and build the social movement now needed,” Wolff wrote in his influential 2012 book, Democracy at Work: A Cure for Capitalism. “It requires a genuinely different organization of productive enterprises: workers’ self-directed enterprises.”

In a workers’ self-directed enterprise, or worker co-op, the workers own and operate the business and democratically decide how the enterprise is run — including, crucially, what to do with the surplus capital (profits) that remains after all the expenses have been paid. It’s the hoarding and misuse of this surplus capital that causes so much mischief and misery these days.

Regarding hoarding, consider that American corporations have stashed an estimated $2.5 trillion overseas to avoid paying U.S. taxes on those profits. The big debate these days in Washington is about how big a tax break those corporations should be given to encourage them to “repatriate” that surplus capital. There is no debate about the wisdom of the arrangement that allows a relative handful of executives and corporate boards to take all that money — cash that we, the workers, earned for them and gave to them in exchange for goods and services — out of circulation and out of our communities, where its productive use would benefit everyone.

As for misuse, the surplus capital stashed in American banks is the money Wall Street plutocrats gamble with in the gilded offices of casino capitalism. It’s the money corporations use to pay lawyers and lobbyists to write laws, and to pay off politicians to pass those laws. In other words, it’s the money that routinely crashes our economy and distorts what’s left of democracy in the United States.

The Cooperative Revolution proposes that worker-owners would use their surplus capital more wisely, fairly and responsibly. For example, they won’t collectively decide to outsource their own jobs overseas or run their factories in ways that pollute their own backyards. Worker-owners won’t vote to pay top executives hundreds of times what the rest of them make, or pay female workers less than male workers performing the same tasks. Decisions about paid family leave and sick days, health benefits and retirement plans will be made by workers with their own best interests in mind, not just the interest of owners or investors whose sole interest is making more money off the labor of others.

It must be stressed that none of this changes the underlying dynamics of a market economy. Worker-owned enterprises must still compete with other businesses and make the choices necessary to generate surplus profits in the first place. The “bottom line” doesn’t go away. What changes is that workers shoulder more of the responsibility to ensure that bottom line is met and profits are generated above it. They have to learn and understand more about aspects of the business that most are not directly involved in, like management and accounting, and take an active role in decisions that were formerly the exclusive duty (or burden) of the boss.

Worker ownership doesn’t mean that everyone has the same level of responsibility and compensation. It’s common for worker co-ops to maintain management structures similar or identical to investor-owned businesses, and investors can invest in worker co-ops just as they would seek to profit from any other type of business. The founders and employees who’ve been with the worker-owned company longer typically receive a larger cut of the cake than newer hires; workers who don’t pull their weight still get fired; and ownership is not mandatory. If, say, you’re a college student working a summer job, it’s perfectly fine to punch in and out and earn an hourly wage without having to sit through lengthy worker-ownership meetings. The one non-negotiable rule is that each worker-owner has an equal say, one vote, in how the enterprise is run and how profits are distributed.

Sounds fair and reasonable, right? Sen. Sanders thinks so. “The economic establishment tells us that there is no alternative to the type of rapacious, cutthroat capitalism, that this is how the system and globalization works, and there’s no turning back,” he wrote in last year’s Our Revolution. “They are dead wrong.

“The truth is that we can and must develop new economic models to create jobs and increase wages and productivity,” Sanders continued. “Instead of giving huge tax breaks to corporations that ship our jobs to China … we need to provide assistance to workers who want to purchase their own business by establishing worker-owned cooperatives and majority-owned employee stock ownership plans (ESOPS).”

Well, you knew a self-proclaimed “socialist” would spout some commie crap like that, so let’s hear from a pro-business Republican icon who fought communism like it was his job, because it was his job: Ronald Reagan. In 1987, then-President Reagan declared, “I can’t help but believe that in the future we will see in the United States and throughout the Western world an increasing trend toward the next logical step: employee ownership. It is a path that befits a free people.”

The next logical step along a path that befits a free people. Well, Mr. Wall Street, pack that in your gold-plated bong and take a pull.

The Path

“I don’t want nobody to give me nothing / Open up the door, I’ll get it myself.”

— James Brown, “”I Don’t Want Nobody to Give Me Nothing (Open Up the Door, I’ll Get It Myself),” 1969

The Cooperative Revolution is not an armed insurrection or a political campaign, neither of which is a winning strategy anyway. The lack of political angles may be one reason politicians have shown so little interest in advancing worker ownership: there’s no glory in it for them.

There are specific measures government can and should take to encourage the formation of worker co-ops, like the tax breaks and financing incentives passed during the Reagan years, some of which are still on the books. At a minimum, worker co-ops should have the same tax and financial benefits bestowed upon privately owned and investor-owned businesses, to help level the playing field. But there’s no need to wait for that to happen.

This is a radical movement advanced by mundane daily decisions (e.g., what to buy, where to buy it) and workaday conversations around the water cooler about the best way to get stuff done. It’s also gonna take awhile to reach critical mass, likely a generation, so don’t quit your day job just yet or gang up on the boss and demand the keys. The owners of small and mid-sized businesses are crucial allies in the Cooperative Revolution.

The most active organization promoting democratic worker ownership in New England is the Cooperative Development Institute (CDI). Founded in 1994 and based in Northampton, Massachusetts, CDI has a renewed sense of purpose these days and the resources to move the movement forward in Maine. That’s due in large part to its role facilitating the conversion of privately owned mobile-home parks to resident-owned communities, or ROCs (a subject we’ll tackle in a future installment). Revenue from that activity — especially in New Hampshire, where ROCs have become a major segment of the affordable housing market — has helped CDI grow its annual budget from $200,000 to $1.6 million, and increase its staff from a team of five to 19, according to executive director Noémi Giszpenc.

Last October, CDI released a major report titled “Cooperatives Build a Better Maine: New Ideas for Economic and Community Development.” The report (available via the organization’s website, cdi.coop) provides an informative and inspiring overview of the current state of cooperative development in Maine, its history and its future.

Among the most significant findings in the report is the enormous potential in Maine for small, privately owned businesses to become worker-owned over the next dozen years, as members of the Baby Boom generation retire en masse. The so-called Silver Tsunami of retiring Boomers can be a huge boon to the state if they get the guidance and resources necessary to transfer ownership to their employees, rather than shutter the business or sell it to an entity outside the community (which is not an option for most modest-sized rural business in Maine, observed Rob Brown, the former executive director of Opportunity Maine who now serves as CDI’s cooperative development specialist and co-authored the report).

There are about 32,000 small businesses with employees in Maine, which combined account for over half the state’s workforce. “Research shows that 75-80 percent of these business owners will want to retire in the near future, but only 20 percent of them have a concrete succession plan,” the report found. Owners who sell their business to their employees get tax advantages, as well as less tangible, yet meaningful benefits like the preservation of their legacy and the satisfaction of knowing they are continuing to contribute to the community that supported their enterprise.

Seasoned workers in Maine partnering with their retirement-age bosses will do much to move this movement forward, and young adults entering the workforce can carry the Cooperative Revolution to victory.

There’s strong evidence that the millennial generation is ready and eager to follow a different path. Sanders’ overwhelming support among young voters was one indication. Another is an oft-cited Harvard University study from last year in which over half the respondents between the ages of 18 and 29 said they do not support capitalism, at least as they understand the term. Last April, the Washington Post reported that follow-up surveys found capitalism only attains majority support among Americans over 50 years old.

Of course, if people don’t know what cooperatives are, if they don’t realize how many kinds of co-ops are already doing business and how successful and satisfying they can be, they won’t form or join or support them. The media plays a key role in this effort to enlighten the public. So, in answer to the nagging question on so many minds since Trump assumed power, that’s exactly what the fuck we’re gonna do now.