Local Cooperative Business Models For A Socially Just Society

 

 

This is the second entry to attend the Florens 2012 Cultural and Environmental Heritage Week in Florence, Italy.  The conference is being held from November 3rd to 11th, with the overall theme, ‘From the Grand Tour to the Global Tour’ and explores how economy relates to fields such as arts, cultures, technology and sustainability.  First arising in 2010 the conference has since risen in international fame.  The topics of the conference explore the interrelation between many fields of study and disciplines, touching on some groundbreaking ideas.  I urge you to explore the site and come November, keep up to date with their speakers and events.

 

There exists several models of successful social/business relationships that balance the needs of the community and individuals with the practices of the companies within them. The Emilia Romagna in Italy and the Mondragon Cooperative of the Basque Region of Spain are two of them.

 

The Mondragon Cooperative model has started to take hold in the United States in two particularly important instances. The first is the a partnership with the United Steel Workers of America, a 1.2 million member union. They have recently announced the release of a plan titled, 'Sustainable Jobs, Sustainable Communities: The Union Co-op Model', under the public domain, which is a template for worker owned business models in the United States . The second instance is the expansion of worker owned coops in Cleveland, Ohio based on the Mondragon model.

 

Mondragon has garnered increasing business and press coverage in recent years across the globe, particularly in the United States. This is due, in part to the unconventional (to the United States) model of worker participation in decision making in the business of the company, which seems quite foreign to many American business leaders. The tremendous financial and business success of this business model even in a time of economic down-turn in the global economy, not to mention Spain’s particularly painful economic problems has also sparked interest. What makes this strikingly different model so successful is something to take note of.


Equitable Societies Through Democratic Decision Making In Business

 

In fundamental priciple democratic rule exists to give any and all a say to the affairs of the world around them. This practiced is carried out, to varying degrees around the world in matters of state though rarely seen in the world of business and finance. Mondragon has shown that not only are these two worlds compatible, but highlight solutions and ways in which they promote and excel business, creativity, innovation and social good.


Usually there exists a disconnect between what is best for community and best for businesses within that community. When workers in the business who live in the community are given a say to help decide the practices of that company a more sustainable model for a relationship between the two is formed.

 

Within a more capitalist system decisions are made by a small number of high level management and majority stock holders.  These corporations have little exposure to the impact of their decision and businesses practices in the communities their companies operate wihtin.


Consensus based wage structuring is healthier for a society. It promotes group decision making on the value of work performed by an individual. Upward mobility is achievable and success is rewarded, though not at the sacrifice to the social fabric and it stability of that society. Mondragon allows it's members to vote on the pay for all the positions within the company. The average ration between top management to lowest worker pay in Mondragon is 6.5, where in the United States it is a contrasting 400 times the average workers salary.


A common theme in history is that socieites which promote and allow great disparities in wealth distribution see continual social unrest, economic instability and mistrust of perceived 'other classes'. These 'other classes' cease to have a common bond, theme or shared experience causing functional and perceptual rifts, as to the current state of affairs.


Conversely, societies which promote more egalitarian class structures and work together for the common good while adhering to 'the social contract' see a steady, secure and continual progress of growth and quality of life.

 

Healthier Societies Trough Sustainable Energies and Business Practices


There are several examples of community funded and owned renewable sources of energy. One of these is TROSEC through Transition Town Totnes.  There are many positive benefits for this model. Investing in a locally owned business promotes the creation of local jobs and reinforces the dedication of the company to the growth of the community.


Locally sourced renewable supplies of energy are beneficial to the health and security of the community and nearby region. The energy produced is less reliant on the complex and vulnerable international market. This creates a safe, clean and dependable source for energy.

 

Small to mid scale sustainable energy installations helps create a network of independent sources on a grid like system for maintaining regional energy supplies which are scalable and can sustain shocks to the entire system.


Community owned energy companies and cooperatives can help reinvest into the local community with the profits going to the members of the community. Profits can further be distributed and funneled into the community by reinvesting them into growing companies.

 

Local owned business which reinvest profit back into the community they operate, instead of foreign corporations and far flung stock holders help strengthen this economy.

 

Giving the workers votes in decision making allows the members of the company/community to decide the direction, values and practices of the company. Each worker in Mondragon is given one vote for the cooperative enterprise they are part of. Each year through a general assembly type election they decide on managing director and large scale decisions of how the company operates. Coop membership sits at around 85 percent of the entire workforce per sector giving the workers significant power to steer the enterprise in the direction they see fit.


Domecratization of the workforce can help limit exploitation of workers, protect the local environment and reinforce that business practices align with stated values of the company. When everyone has a voice it helps to promote a sustainable relationship between business and society.


Businesses that invest in local public education and universities help further educational access for all and create a educated local labor pool which will create new technologies and more efficient systems for increasing efficiency and innovation Mondragon Cooperatives have set up Mondragon University as well as 12 technology centers provide educational training, advance the spread of knowledge and create technological innovation in the communities they occupy.

 

After Thoughts

 

No system is perfect. What can be said, is that you can judge the health of a society by how it takes care of the most disadvantage and vulnerable of its members. Based on this and this standard measure alone, perhaps we can gauge the best system to invest in the future.

About Author

Post by Kurt Trumble
The Low Down:

Kurt grew up on Long Island in New York. He spends his time learning emerging open source technologies and social media. He runs Travel With Drupal, focused on Drupal webdesign and blogging. (http://www.travelwithdrupal.info). Beatnik literature and The Beatles top his list of interests when not backpacking around.