Wednesday, January 30, 2013

ECONOMIES...Co-ops....correct way #1

FROM  THE  BOOK  "MORE  GOOD  NEWS" by David Suzuki and Holly Dressel

Barry Ford, recently retired as Collins Pine's head forester at their Almanor Forest, was in charge of making sure the forest was healthy, which, to any well-trained forester, should mean that it's absolutely bursting with diverse plant and animal species. Ford rejoiced in thefact that "We have the great gray owl feeding in our meadows. There are only a hundred pairs left in California; we're the southern end of their range, and because of that, the regulations stipulate that we have to leave a 600-foot-wide strip of trees around all the meadows." He also was proud that this economic disincentive for the company did not require him to abandon his values as a forest professional. "In order to have those trees available for our use, I could have said there were no owls, and frankly I haven't seen any. But I know that's the right habitat, so I've said yes.because they could be there now, or if we save the place, they could be coming." There's a moral component to green jobs that researchers have discovered means as much to people as profits. Vice-president Wade Mosby says, "I'll be sixty-two next fall, but I don't want to retire. The satisfaction of knowing you've improved things is really important. I saw my dad clear-cutting these forests, destroying the places he loved, that he depended on for a future. [That's why] I waited for years for a chance to work at Collins Pine. That's typical of many of the people who work here."
Such economic disincentives would cripple a publicly traded company in Collins Pine's situation. Its entire 298,000-acre holdings take a hit from government regulators for the very reason that its practices are so good and its forests are more ecologically rich. "Because we're good managers and have more species, we get more stringent regulations on our lands to protect the fish and game species we've managed to bring back. You'd think that kind of practice would earn a company tax rebates or some other kind of encouragement, but it's just the opposite. You have to shoulder economic and regulatory liabilities if you also want to protect the resource for the future!" And yet, like organic farming—despite no advantages and considerable disadvantages—Collins Pine still remains the most economically viable lumber company in its part of the country. One can only imagine what would happen if more businesses were encouraged to operate the same way.


As a co-op developer, making the pilgrimage to Mondragon was like I had died and gone to co-op heaven. 
Margaret Bau, visitor from Cleveland, Ohio 6
We are not angels and this is not paradise.
Mikel Lezamiz, Otalora, Mondragon training cooperative7

.....Most green business ventures are created by inspired individuals like Judy Wicks or Truman Collins; but to realize their goals, their work has to shift to the cooperative and collective level. Individual green activists like Maude Barlow and Paul Watson have certainly taken personal responsibility for the Earth, but they have also built huge, international cooperative organizations to turn their personal commitment into on-the-ground-, collective reality. Like most environmental ngos operating today, the Council of Canadians and the Sea Shepherd Conservation Society rely on a mixture of grassroots democratic and top-down corporate management. But there's another business model, besides the top-down or the bottom-up ones of corporations and ngos, that's much more common than we realize: the cooperative. In North America, we mostly think of co-ops as small nonprofits that might provide organic food or run a used clothing store. But the co-op model can work for any kind of business imaginable, from construction and fisheries to laundry services and banking. Today the biggest ones have turned much of northern Spain and northern Italy, not to mention nearly all of South America, into showcases for what can be achieved with cooperative, worker-owned, and worker-managed business, and what directions truly green business finance might take.
The Mondragon Cooperative Corporation in the Basque Country of northern Spain is certainly the largest and most successful of cooperative business models. The region of its birth was part of the anarchist movement in Spain that was brutally suppressed by Francisco Franco in the Spanish Civil War and also by the Communists, who resented the fact that they couldn't control it. A young priest named Jose Maria Arizmendiarrieta arrived in 1941 and decided that economic development would be his contribution to the war-torn local society. The Basques had a long tradition of self-help and cooperative work, and after starting with the student-managed Polytechnic School to train the workers, Arizmendiarrieta set up the regions first co-ops to manufacture heaters and cooking appliances. Cooperatives, like all alternative management methods, are not easily recognized by banks and other conventional financial systems, which are still set up to serve nineteenth-century oligarchies and corporations. So a co-op's biggest problem is usually getting initial capital and subsequent financial services. Mondragon had to create its own credit union in 1959 to allow its members to access finances and provide start-up funds for new ventures. Today over 100,000 people are directly employed in 160 large cooperatives, doing mostly manufacturing work. Eroski, the largest Spanish-owned retail food chain, is a Mondragon cooperative. Statistics show that these businesses are twice as profitable as the average corporation in Spain, with employee productivity surpassing any other company in the country.8
Mondragon turns over in excess of $5 billion a year-through electronics and linen companies, auto parts, and appliances; it runs a bank, research institute, entrepreneurial division, insurance and social security divisions, several schools and Mondragon University, and health maintenance and health insurance cooperatives, all "dedicated to the common good." It has enshrined some solid social values, donating 10 percent of profits to charities, with 40 percent retained to provide an account for members. The 50 percent remaining profits are open for use by owner-employees, who pay interest rates only a point or two above what the account earns. Individuals may not start a Mondragon business; several friends are what's preferred, since the "natural bonds of friendship" are considered to be a better foundation for long-term success.

Despite Mondragon's bedrock ideals, in which "people are given priority over capital," it is probably
the most business-oriented cooperative venture in the world.9 When faced with globalization and the new environment of the European Union in the late 1980s and early '90s, Mondragon chose to compete directly with conventional multinationals, joining the economic system of ever-growing profits, a decision that has resulted in many paradoxes. As it expanded its businesses beyond the borders of the Basque Country, only a third of its employees have remained worker-owners. A somewhat snide article in The Economist in March 2009 assessing the co-op model's ability to cope with recessions pointed out that, "People have been hired in far-flung places, from America to China; [Mondragon] now has more subsidiary companies than co-operatives... when recession bites, non-member employees suffer most... Like capitalist bosses, the Mondragon co-operativists must, indeed, occasionally handle strikes and trade-union trouble."10 The Mondragon website claims such imbalances will be seriously addressed by 2010, when it hopes to bring co-op membership back up to 75 percent.11 

As Mondragon's story illustrates, cooperatives can descend from heaven to hell—or at least to purgatory. If co-ops get too big and powerful, they tend to lose their democratic character. Like big labor unions, "Large co-ops become unaccountable to a disorganized, complacent membership, moving away from worker control toward conventional capitalist practices." Mondragon's difficulties show that even with an improved business model, there is no sustainability so long as your goal is constant growth. Trying to fit into an endless growth model that does not reflect natural system capacities always brings with it a loss of local contacts, both with people and ecosystems. Mondragon has tried to address this problem by setting up "cooperative congresses" to figure out how to deal with the massive challenge of globalization; however, its key competitors in its production of machine tools, car parts, and appliances are multinationals, and Mondragon couldn't see how to get into other businesses fast enough without competing with these companies head-on. This means that it's made the fundamental error of adapting the multinationals' unsustainable model. As its local supply chain extends to Thailand and other poor countries, Mondragon is losing its ability to demand the same values from its suppliers, values that are central to greening any corporation. Its story illustrates that as long as they don't address the goal of "endless growth," industrial co-ops can also only go so far in creating truly green jobs.12

What this and other examples teach us is that regardless of a business's legal structure, it has to stay small and local, at least in terms of management, in order to hold on to any values it may have, whether they're social, environmental, or even religious. It's important to note the one big advantage of the cooperative model, which is that, unlike conventional corporations, it can set up business requirements that are based on values other than profits. In the case of Mondragon, the values were social equity and job security, but they could just as well be keeping a small carbon footprint and helping maintain natural systems. By supporting and paying attention to all the new approaches people are using to green their industries, their jobs and their cities, we can learn to recognize who is really operating, and cooperating, sustainably—and heading toward truly desirable goals.

To be continued

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