Workplace Democracy: Equality Over Profit

Co-op.(Photo: I-5 Design & Manufacture)Operating a workplace as a democracy in the contemporary business world isn’t easy, Morgan says, but worker cooperatives are showing the way while thriving and multiplying.

Creating a new economy within the confines of predatory capitalism is an immense undertaking. The various oppressions that exist in society at large can insidiously take root in any new project if we don’t work to undo their influence. Cooperatives, the democratic businesses leading the way in the struggle for a new economy, are no exception, and can be a difficult undertaking, given the lack of democracy in our daily lives. Contrary to our national mythology, we practice democracy very infrequently. Almost every organization, institution, or site of human interaction is governed by hierarchical principles, founded on individualism, and driven by competition. Even many social justice organizations can mimic corporate structures and assume these traits.

By contrast, cooperative businesses are an experiment in everyday democracy, and worker-ownership is something that is unfamiliar and challenging, requiring deliberation, commitment, and patience. If being democratic were as easy as sitting around a table and agreeing to make democratic decisions, our lives would be much simpler. Of course, the reality is quite different; we can get lost in egotism and conflict, fall into a cult of personality, or confuse democracy as an event, not a process. There are also fundamental business concerns like accessing startup capital and simply paying the bills.

Trying to find money to start a business is difficult for most, whatever kind of business one is hoping to start. Co-ops face an even steeper climb given the lack of understanding about how they differ from other businesses. Many banks are tentative about loaning to worker co-ops, which tend to be less singularly focused on profit and are often balancing a whole host of goals defined by their membership. A traditional business may sell shares of the company to raise funds, but most worker co-ops are wary about selling stock to those who aren’t workers. Some worker co-ops do sell shares to raise money, but eliminate the shareholders’ voting power. Since most investors want a say in the direction of the company, co-ops have to prove they are making a difference and a profit in order to attract outside money.

If start-up money is acquired, then co-ops must chart their way of working in their bylaws, either creating their structure anew or adopting a model from a like-minded group. This foundational step looks dramatically different from incorporating a hierarchical business. Each person comes to the table with different material needs, and it is the group’s job to meet those so that the members can fully participate in the democratic process. Together, they decide not only the business’ priorities and operating procedures, but also how decisions are made. Many worker cooperatives operate by consensus – meaning that until all members agree, a proposal is subject to revision or can be blocked outright – and operate on a one-member-one-vote policy, but this format has to be decided upon by the members at the outset. Enterprises that require many operating decisions to be made in a high pressure timeframe must be clear about how these are to be delegated and disagreements expeditiously resolved. What’s more, co-ops grow and change, bring on new members, and with time, set new priorities. Consequently, their way of operating is dynamic, and needs to be adaptable to new circumstances.

It can be an arduous process to meet a variety of needs, both at the beginning while drafting bylaws, and on a daily basis. This careful balancing act hinges on how the co-op is governed. Each day, responsibilities are executed through the democratic decision-making process, which relies on trust and a sincere commitment to soliciting the input of others. It requires time to reach a decision democratically, and worker co-operatives grapple with prioritizing the process over the decision itself. When a high-stakes decision needs to be made, this can mean setting aside other tasks to focus the group’s attention on a single issue. Contentious subjects can take a long time to address and personal feelings can become entangled with group objectives. This is, of course, not unique to the co-op model, and these group dynamics will be familiar to most workplaces. What sets co-ops apart is their dedication to ironing out tensions, and prioritizing fairness at all stages of the decision-making process.

As such, worker cooperatives deal with conflict differently than other businesses. It can be even harder to overcome conflict in a co-op than in a traditional workplace; it is easier to complain to someone’s boss or union representative than to bring forth an issue directly to that person in a group setting. It can be especially difficult when dealing with larger oppressions, such as sexism and other marginalizing practices. These are often swept under the rug in a hierarchical workplace, but worker democracy gives workers space to deliberate on how these issues affect them and their work. While this process can be a strength for worker-coops, it requires a strong and supportive structure, so that the onus isn’t solely on the individual to be outspoken and address the issues. It’s also important that true whistleblowers feel they are respected and that their jobs aren’t endangered by speaking out.

It is frequently argued that making timely decisions and dealing with conflict are magnified as the size of the co-op increases. Some claim that worker democracy can only be effective on a quite small scale, and many co-ops struggle with growing pains. Founding members can hold tightly to the co-op’s initial priorities and processes, expecting new members to conform, rather than allow the co-op to change with time. In the nonprofit world, this is an oft-addressed problem known as founders’ syndrome. As co-ops grow, however, they need to remain subject to worker control, and develop systems for accountability and transparency. Two of the largest cooperative systems in the world, Mondragon and Emilia Romagna, have succeeded in adapting in these ways, and have grown to include millions of members, who each have a say in how the system operates.

The cooperative movement is still learning how to best address these issues. The co-op movement has developed structures for teaching about what democracy looks like in the workplace. Despite operating within a context that is by its nature competitive, self-serving, and undemocratic – namely, the contemporary business world – worker cooperatives are not merely surviving but are thriving and multiplying, forming a bedrock of community control and localizing the economy. For the cooperative movement to succeed on a larger scale, the focus needs to remain on creating structures and systems of fairness and equality over those of expedience and profit.