Right Democrat: A Mainstream Populist Voice

Spain's Mondragon Cooperative is owned by the approximately 89,000 employees and serves as a worldwide model for worker-owned cooperatives.

Reporting at La Prensa San Diego, Mark Day takes a look at the viability of worker-owned cooperatives as a viable economic model. Such cooperatives can vary in size from a few employees to the large Mondragon Cooperative.

Day writes:

The worker-owned cooperative, an economic workplace model that has been around for decades is making a comeback. In some parts of the U.S. new coops are sprouting up, cutting unemployment rates and revitalizing economically depressed communities.

La Prensa San Diego recently toured several cooperatives in Oakland and Berkeley and spoke with people whose lives have been transformed by the cooperative experience.

Sandra Martinez, a worker at A Taste of Denmark bakery in Oakland, recently told her story. In mid-2010, Neldam’s, the original bakery, suddenly went out of business after 81 years. The building’s owners, Kevin and Sukhee Yoo, faced with an empty property, formed a coop with 12 workers, including Martinez, re-naming it A Taste of Denmark.

“I didn’t know what a cooperative was,” said Martinez, seated at a table near the baked goods displays. “We weren’t asked for money. They wanted our experience.”

Martinez said that for the workers, the bakery’s morale changed for the better. “Before, the bosses yelled at each other and at us,” she said. “Things are less stressful now. We have a better sense of what we are doing. Besides, my pay has improved and I am guaranteed my 40 hours a week.”

Another side effect, say the bakery workers, is that A Taste of Denmark is now expanding its menu to cater to the Latino and Asian markets and has a website featuring specials and new products.

The worldwide gold standard for cooperatives is the Mondragon Cooperative Corporation, based in the Basque country of northern Spain. In the aftermath of the Spanish Civil War, Father Jose Maria Arizmendiarriata, a former political prisoner of Gen. Francisco Franco, organized impoverished Basque peasants into a coop that manufactured paraffin stoves.

More importantly, the priest established a set of principles to guide the cooperatives: among them are open admission to all workers regardless of race, politics or religion; participatory democracy in management (one worker one vote); sovereignty of labor, wage solidarity, social transformation, and education.

Mondragon’s worker-owned cooperatives now include 120 workplaces, 87 of which are industrial factories that manufacture kitchen appliances, housewares, auto parts and machine tools. One is a large bank, another chain of supermarkets and still another is a university with 3,600 students.

One of the largest factories is called Fagor. Managers tout its rigid safety standards and quality control. All machines are carefully tested for safe operation and workers keep careful records of any accidents.

All of Mondragon’s workplaces have management selected by workers and yearly assemblies where workers set policies and elect their governing boards.

Mondragon executives and organizers regularly mentor worker co-ops throughout the world. Last year, Gayle McLaughlin, the mayor of Richmond, Calif., spent a week in Mondragon and shared her findings with her constituents. Discussions are now underway in Richmond to establish a coop bike shop, a natural foods café and a chain of urban gardens.

Another Mondragon-mentored project is the Evergreen Cooperative Laundry, established in 2009 in a depressed inner city Cleveland Ohio neighborhood where industrial flight has taken place in recent years. Superior technology, and better than average wages, have made the laundry a highly coveted workplace for those seeking employment in Cleveland.

Another Cleveland cooperative venture is the Green City Growers, which operates a hydroponic food production greenhouse in the midst of the city’s blighted areas. The project receives funds from the White House Office of Urban Affairs, H.U.D. and several foundations.

Back in Oakland, Quentin Sankofa, one of seven young African-American worker-owners at the Mandela Food Cooperative, spoke of the difficulties in establishing a coop in a low-income community.

The Mandela coop, located near the West Oakland BART station, provides fresh fruit and vegetables delivered daily by youths to small grocery and liquor stores in the area.

“It is not an easy thing for low income people of color to start a business, let alone a cooperative,” said Sankofa. “No banks or credit unions wanted to lend us money. But after receiving funding and other support from the nonprofit Mandela Marketplace, the food coop began to stand on its own feet,” he said.

“We received training in retail methods, the basics of nutrition and how to work together cooperatively. And we were also able to tap into redevelopment funds. Our short term goals are simply to survive these tough economic times, but long term we want to expand to a bigger space.”

The last stops on the coop tour: The Cheese Board in Berkeley and Emeryville’s Arizmendi Bakery. The Cheese Board, begun in 1967, is arguably the bay area’s most successful worker-owned cooperative. It operates a large cheese shop on Shattuck Ave. with an adjoining pizza restaurant where a jazz band plays twice daily.

Cheese Board worker owners receive $21 per hour plus coop dividends, full health care, dental and a retirement savings plan. The coop attempts to pay fair wages to its workers, a fair price to its suppliers and fair prices to its customers.

The Arizmendi Bakery in Emeryville is a spinoff from the Cheese Board, which helped set up the chain of five bakeries and lent them its recipes. Named after the Basque priest who founded the Mondragon cooperative, Arizmendi is governed by policy council, with two elected members from each bakery.

“Our idea is to replicate this model, to saturate the bay are with new coops,” said Jabari Jones, one of the Arizmendi bakers. “We need to educate the public, to convert more jobs and industries into co-operatives, to create a critical mass.”

Although there are only about 1,500 members in Northern California cooperatives, tough economic times and high success rates are spurring their rapid growth. “We are no longer considered just another alternative,” said Melissa Hoover, executive director of the San Francisco-based U.S. Federation of Worker Cooperatives. “We are now part of the mainstream economy—and we are growing.”

http://laprensa-sandiego.org/featured/can-worker-owned-cooperatives-offer-a-solution-to-our-economic-woes/

Richard Aleman notes at The Distributist Review:

To the casual reader co-ops may seem a European phenomenon. However, we can look to our own shores for evidence that there is a rich history of cooperative ownership rooted in our nation. Not only do tens of thousands of co-ops operate in every sector, from fishing to agriculture, but the first cooperative, Philadelphia Contributionship for the Insurance of Houses from Losses by Fire, was established in 1752 by none other than Benjamin Franklin.

Cooperative businesses have a proven track record in the marketplace, whether in agriculture, health care, quality control, legal services, banking, utilities, technical training, and market research, to name a few. Worker-owners manufacture medical equipment, provide medical services, form local construction companies, and operate cafes and movie theaters.

The cooperative business is not only an attractive alternative for large-scale manufacturing. It is also beneficial for those wishing to start small businesses yet lacking in capital investment.

Like any other business, cooperatives set their rules and regulations, establish their articles, and vote democratically under the principle of one person, one vote. They may, if they so choose, establish managerial boards, issue target and goal requirements, and compensate worker-owners based on their investment.

While most large-scale industries reduce the level of ownership in our society and treat labor as a cost instead of a partner in the production process, cooperatives are the Distributist answer to increase widespread ownership of the means of production. Cooperatives can restore the “Made in the USA” label, are the answer to the damage wrought by the North American Free Trade Agreement, and will mobilize workers whose jobs have been shipped overseas, raising American domestic production from the ashes.

Cooperatives are not just fascinating because they serve as the Distributist approach to medium and large-scale industry. They, like G.K. Chesterton, rekindle the imagination

http://distributistreview.com/mag/2011/02/industry-a-distributist-solution-part-ii/

Philip Dorling reports at The Age:

High ranking Chinese officials have declared that there can be no limit to the expansion of Beijing's nuclear arsenal, amid growing regional fears that it will eventually equal that of the United States, with profound consequences for the strategic balance in Asia.

Records of secret defence consultations between the US and China reveal that US diplomats have repeatedly failed to persuade the rising superpower to be more transparent about its nuclear forces and that Chinese officials privately admit that a desire for military advantage underpins continuing secrecy.

According to US diplomatic cables obtained by WikiLeaks and provided exclusively to The Age, the deputy chief of China's People's Liberation Army General Staff, Ma Xiaotian, told US Defence and State Department officials in June 2008 that the growth of China's nuclear forces was an ''imperative reality'' and there could be "no limit on technical progress''.

Advertisement: Story continues below Rejecting American calls for China to reveal the size of its nuclear capabilities, Lieutenant-General Ma bluntly declared: ''It is impossible for [China] to change its decades-old way of doing business to become transparent using the US model.''

While claiming in a further July 2009 discussion that Beijing's nuclear posture has "always been defensive'' and that China would "never enter into a nuclear arms race", General Ma acknowledged that, "frankly speaking, there are areas of China's nuclear program that are not very transparent''.

China's assistant foreign minister He Yafei similarly told US officials in June 2008 that there will be an ''inevitable and natural extension'' of Chinese military power and that China ''cannot accept others setting limits on our capabilities''.

Other leaked US cables reveal Japan fears China's nuclear arsenal will grow to equal that of the US, and Tokyo has urged Washington to retain strong nuclear capabilities to deter an "increasingly bold" China from ''doing something stupid".

In top-level nuclear policy consultations in June 2009, senior Japanese Defence Ministry officials told US representatives that Tokyo's assessment was that "China is rapidly upgrading its nuclear capability beyond its relatively insignificant levels from the 1980s and the 1990s, and is trying to reach parity with Russia and the US''.

"China is displaying newfound confidence in its military capabilities and is visibly showing its strength in the region, particularly with respect to the [Japanese] Senkakus [island group],'' Japan-US Defence Co-operation director Kiyoshi Serizawa told US diplomats.

A senior Japanese Foreign Ministry official also warned that China's "troubling" nuclear build-up had to be viewed in the context of its other activities, including its 2007 anti-satellite test, cyber-attacks and growing naval capabilities.

"If China perceives the United States having difficulty accessing the region, it is more likely to do something stupid,'' said Japan-US Security Treaty Division senior co-ordinator Yusuke Arai.

In a separate discussion with US envoys, Japanese Defence Ministry officials expressed concern the Obama administration's plan to negotiate a cut in nuclear forces with Russia would encourage China's nuclear build-up. A senior Japanese official said that while China had declared a ''no first-use'' nuclear weapons posture, "no nuclear expert believes this is true''.

US and Japanese officials agreed that the opaque nature of China's nuclear build-up was troubling, and the Japanese stressed that close co-ordination was "critical" before any US decisions on "deep cuts" in nuclear weapons talks with Russia.

But after the release of the Obama administration's Nuclear Posture Review in early 2010, the US and Russia signed a new Strategic Arms Limitation Treaty on April 8 to halve their nuclear arsenals to 1550 strategic weapons over the next seven years.

The International Institute for Strategic Studies estimates China has up to 90 intercontinental ballistic missiles (66 land-based and 24 submarine-launched) and more than 400 intermediate range missiles targeting Taiwan and Japan. The US intelligence community predicts that by the mid-2020s, China could double the number of warheads on missiles capable of threatening the US.

http://www.theage.com.au/world/no-nuclear-limit-china-20110227-1ba0l.html

Writing at The Huffington Post, Ian Fletcher makes the case for a flat tariff on all U.S. imports:

I advocate protectionism. But one standard criticism is that this would just result in politically connected industries getting tariffs raised on the products they produce. This would corrupt our economy, force consumers to pay higher prices, and serve no legitimate economic logic.

Sounds logical enough. As the 19th-century American radical economist Henry George put it, "introducing a tariff bill into a congress or parliament is like throwing a banana into a cage of monkeys."

So let's just cut that Gordian knot right now: what America needs isn't some complicated system of tariffs, but a flat tariff, the same on every imported good and service.

The exact level at which to set the tariff is an open question. For the sake of argument, we can take 30% as a hypothetical figure, because it is in the historic range of U.S. tariffs and is close to the net pressure on America's trade balance due to foreign nations' VAT or value-added taxes. The right level will not be something trivial, like 2%, or prohibitive, like 150%. But there is no reason it shouldn't be 25 or 35%, and this flexibility will provide wiggle room for the compromises needed to get a tariff through Congress.

A flat tariff would be imperfect, but it would be infinitely better than free trade and relatively politics-proof. Above all, it is a policy people are unlikely to support for the wrong reasons (AKA producer special interests) because it does not single out any specific industries for protection. It would thus maximize the incentive for voters and Congress to evaluate protectionism in terms of whether it would benefit the country as a whole--which is precisely the question they should be asking.

A flat tariff would also create the right balance of special-interest pressures: some interests would favor a higher tariff, others a lower one. This is a prerequisite for fruitful debate, as it means both views will find institutional homes and political patrons.

A flat tariff's uniformity across industries would avoid the problems that occur when upstream but not downstream industries get tariff protection. For example, if steel-consuming industries do not get a tariff when steel gets one, they will become disadvantaged relative to their foreign competitors by the higher cost of American-made steel. And why should steelworkers be protected from foreign competition at the price of forcing everyone else to pay more for goods containing steel? The only reasonable solution is that steelworkers should pay a tariff-protected price for the goods they buy, too. This logic ultimately means that all goods should be subject to the same tariff.

A flat tariff would have other benefits, too. For one thing, it would avoid the danger of getting stuck with a tariff policy that made sense when it was adopted but gradually became an outdated captive of special interests over time, always a risk with tariffs. Although it is a fixed policy, it would not be fixed in its effects, but would automatically adapt to the evolution of industries over time. In 1900, it would have protected the American garment industry from foreign (then mostly European) competition. It wouldn't do that today. As which industries are good industries changes over time, which industries it protects will change accordingly.

A flat tariff would trigger the relocation back to the U.S. of the right industries. For example, a 30% tariff would not cause the relocation of the apparel industry back to the U.S. from abroad. The difference between domestic and foreign labor costs is simply too large for a 30% premium to tip the balance in America's favor in an industry based on semi-skilled labor. But a 30% tariff quite likely would cause the relocation of high-tech manufacturing like semiconductors. This is key, as these industries are precisely the ones we should want to relocate. These capital-intensive, knowledge-intensive industries support high wages and have bright technological futures.

Another objection to a tariff is that if any industry is granted protection, it will just slumber behind it. Some industries indeed long to shut out foreign competition, reach a lazy detente with domestic rivals, then coast along with high profitability and low innovation. But a flat tariff resists this danger because it does not hand out a blank check of protection: it gives a certain percentage and no more. Any industry that cannot get its costs within striking distance of its foreign competitors will not be saved by it. This discipline, although unpleasant for the losers, is the price we must pay for having a tariff that actually works, rather than one which eliminates the discipline of foreign competition entirely and protects all industries indiscriminately.

The political bickering that a tariff varying by industry would cause also militates in favor of a flat tariff. The inability of different industries to coalesce around a common tariff proposal sabotaged efforts to achieve a tariff in 1972-74, but this is a policy around which the greatest possible number of industries can unite.

A flat tariff is also more ideologically palatable than most other tariff solutions. Above all, it respects the free market by leaving all specific decisions about which industries a tariff will favor up to the marketplace. It will thus be considerably easier for ideological devotees of free markets to swallow than some scheme in which tariffs are set by a federal agency, leading to that nightmare of free-marketeers: government picking winners. In the real world, zero government intervention in the economy is impossible, so the issue for believers in economic freedom and small government is to design policies that work through the smallest possible, carefully chosen interventions. This is precisely what the natural strategic tariff offers because it operates at the periphery of our economy, leaving most of its internal mechanisms untouched. In fact, the more wisely we control our economic border, the less we will probably need to control the inside of our economy.

(One final note: a flat tariff would need to include a rebate on reexported goods in order to avoid handicapping American exporters. This would include both goods that are transshipped without modification and goods that are exported after value-added processing. The latter includes everything from chocolate made from imported cocoa to computers made from imported chips. This is implied by its intrinsic logic as a tax on domestic consumption. Other nations follow the same logic in rebating VAT to their exporters.)

http://www.huffingtonpost.com/ian-fletcher/why-a-flat-tariff-on-all_b_828692.html

Milwaukee Archbishop Jerome E. Listecki has issued the following statement in support of Wisconsin's union workers rallying in opposition to legislation which would take away collective bargaining rights:

The Church is well aware that difficult economic times call for hard choices and financial responsibility to further the common good. Our own dioceses and parishes have not been immune to the effects of the current economic difficulties. But hard times do not nullify the moral obligation each of us has to respect the legitimate rights of workers. As Pope Benedict wrote in his 2009 encyclical, Caritas in veritate:

Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labor unions. Hence traditional networks of solidarity have more and more obstacles to overcome. The repeated calls issued within the Church's social doctrine, beginning with Rerum Novarum [60], for the promotion of workers' associations that can defend their rights must therefore be honored today even more than in the past, as a prompt and far-sighted response to the urgent need for new forms of cooperation at the international level, as well as the local level. [#25]

It does not follow from this that every claim made by workers or their representatives is valid. Every union, like every other economic actor, is called to work for the common good, to make sacrifices when required, and to adjust to new economic realities.

However, it is equally a mistake to marginalize or dismiss unions as impediments to economic growth. As Pope John Paul II wrote in 1981, “[a] union remains a constructive factor of social order and solidarity, and it is impossible to ignore it.” (Laborem exercens #20, emphasis in original)

It is especially in times of crisis that “new forms of cooperation” and open communication become essential. We request that lawmakers carefully consider the implications of this proposal and evaluate it in terms of its impact on the common good. We also appeal to everyone –lawmakers, citizens, workers, and labor unions – to move beyond divisive words and actions and work together, so that Wisconsin can recover in a humane way from the current fiscal crisis.

From The Catholic Labor Network

Well over a century ago, with the rise of industrial capitalism, Pope Leo XIII issued his encyclical Rerum Novarum.

Reflecting on how the modern economy too often offered the rich and powerful an opportunity to exploit working people, he took consolation in the multiplication of "workingmen's unions" that helped ameliorate the condition of labor. "There are not a few associations of this nature," the Holy Father observed, "but it were greatly to be desired that they should become more numerous and more efficient."

Catholic social teaching on the right of workers to organize has been consistent over the century since Leo XIII wrote. While there are those who argue that unions are a relic of the industrial revolution, neither Pope John Paul II nor Benedict XVI may be counted among them. John Paul II observed in his 1981 encyclical Laborem Exercens that labor unions are "indeed a mouthpiece for the struggle for social justice" and in fact "an indispensable element of social life." In his 2009 encyclical letter Caritas in Veritate, Benedict was categorical:

"The repeated calls issued within the Church's social doctrine, beginning with Rerum Novarum, for the promotion of workers' associations that can defend their rights must therefore be honored today even more than in the past."

While we do not minimize the depth of the current economic crisis, we must conclude that any measure that attempts to resolve them by depriving workers of the right to organize and collectively bargain stands in direct conflict with the teaching of the Catholic Church.

As brothers and sisters in the faith we urge our fellow Catholic legislators to seek remedies for Wisconsin's economic challenges that respects our Catholic magisterial tradition, and honor the rights of Wisconsin's workers, both public and private, to join labor unions. In addition, we invite all Wisconsin's legislators to reflect on how to best protect the values of human dignity, freedom of association, and the right of collective bargaining that are developed in Catholic Social teaching.


Info: Catholic Labor Network http://www.catholiclabor.org