"Yes, But..."

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This document has been made available in electronic format
     by the International Co-operative Alliance ICA
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                     January 1996


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                      "Yes, But..."
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Comments on Benito Benati's article on Employee Ownership and Participation:

In the most recent issue of the Review of International Cooperation (Vol.
88, No. 2) Mary Treacy, communications director at ICA headquarters in
Geneva, refers to two "slightly controversial" articles contained in it.

I.   Mary describes the first one as "thought-provoking" - a term in line
with prevailing trends of thinking within the ICA (emphasis on "service"
co-operatives the members of which join together to obtain a service,
housing, consumer goods credit, etc.).

     "Workers' ownership and participation rather than members' ownership
and participation". Anything thought-provoking in Benito Benati's article
certainly does not lie in this statement; for in production co-operatives
there is no incompatibility between employee and membership status,
precisely because the members are the worker-producers in the enterprise
(be it of an agricultural, industrial, handicraft or service nature).

     In our view this fundamental identity between co-operator-members and
worker-producers within production co-operatives is a central element in a
form of co-operative doctrine and practice which is developing rapidly in
all parts of the world.

     While we respect the "other" traditional pattern (especially in the
consumer co-operation field), our desire is that the leaders of that great
family constituted by the ICA should not only accept our basic schema but
also recognise its increasing relevance in all developing as well as
developed countries.

II. In our view the mistake made by Benito Benati (the famous manager of
the industrial co-operatives of Imola, in Italy) in his remarkable article
is to have recommended financial participation of the ESOP type (which he
describes and advocates in exemplary fashion) without specifying the
ultimate objective, namely the attainment of the democratic ESOP (a form
already attained by over 10% of American ESOPs) - that is to say, the
genuine production co-operative in which the "capitalist" logic of "one
share, one vote" has been superseded by the democratic and co-operative
logic of "one person, one vote".

     We have been studying ESOPs in the USA since 1988; we have given them
the floor at all the congresses or general assemblies of CICOPA; we are
convinced that, together with their twin organization the SAL in Spain,
they can offer a major road towards the true objective - that of
co-operative democracy; and we warmly welcome the very fine appeal for new
legislation and experiments launched by Benito Benati.

     Provided that he goes one step further and clearly states that the
final objective is still the attainment of genuinely co-operative
production, making adjustments to allow access to necessary external
capital (a beginning  which has been made in a number of countries) and
never resigning oneself to accept restriction to the under-capitalized or
marginalized sectors.

     Let me frankly ask whether any one of these formulas could not be
applied to any limited company - or even to any company - in the economic
world of today ?




     Certainly, after the spectacular failure of State capitalism (often
referred to as socialism), and in a genuinely market-economy context,
co-operation can offer a real alternative to triumphant capitalism reigning
alone.

     But seen in the light of its essential "dichotomy", capitalism, in any
productive enterprise (in services, distribution, agriculture, industry or
handicrafts), places power in the hands of capital, which hires labour as
necessary.

     But in those same enterprises democratic co-operation will place the
real power in the hands of the "forces of labour, of innovation, of
creativity" - of "the human factor" (which hires capital as necessary).

     This, then, is the ultimate objective - although in individual cases
an intermediate stage, involving financial participation only, may be
valuable, since without affecting the underlying logic of the process as a
whole it can prepare the way for a gradual mutation.

     In this connection the new example of shareholders' co-operatives,
which are mushrooming in China, is an extremely interesting one. It brings
together under one roof both capital contributions (internal and external)
and the universally applicable rule of all democratic economic entities -
one person, one vote. At the same time, co-operative enterprises of this
new type are - or at least appear to be - completely autonomous vis-a-vis
the public authorities.

Comments on Hans-Detlef Wulker's article on The Social Economy and
Co-operatives:

I do not propose to enter into the discussion launched by Hans Wulker on
the subject of the "Brussels bureaucrats" (anybody who does not apply "my"
policies is a "bureaucrat" or a "politician") or of the French
social-economy Utopians.

If one ignores all the trumped-up charges and theoretical anathemas (for
instance, accusations of collectivism - by whom ? to what end ?), it is
clearly in the interest of all of us that a minimum corpus of common
European legislation covering co-operatives, associative mutual-benefit
societies and "management" associations should be developed.

It remains to be seen whether they should be linked, coordinated or merely
juxtaposed.

I am far more concerned with the definition of co-operation in general
offered in this contribution by the representative of the renowned
Raiffeisen group, reading as follows (p. 134):

-"Co-operatives are supported by individuals who pursue private interests and
    aims;

-"Co-operatives pursue the economic aims of their members;

-"Co-operatives are private and economic enterprises;

-"Co-operatives practise solidarity with their members for the benefit of
both  sides".


We are faced here, not only with a watering-down of co-operation by means
of various practices derived from practice and custom in the dominant
economic environment, but also of a watering-down of the very definition of
co-operation.

I wish to state here (and here I am currently in disagreement with many of
my co-operator friends throughout the world, and particularly in India)
that I can see no objection to designating co-operatives as private
economic enterprises. But they are more than just that.

They are economic enterprises inasmuch as they accept the logic (and the
sanctions) of the market economy, even if their aims lie elsewhere.


They are private enterprises (i.e., acting in the primary interests of
their members); they are not public enterprises (which are directed in
priority to the service of the general interest - the "public service").

But they are private economic enterprises of a special type -

(a)  on account of their democratic structure (the members hold the power
as citizens of the enterprise with one vote for each member rather than as
subscribers of capital (which can be borrowed if necessary);

(b)  on account of their end-purpose of inter-co-operative solidarity and
community responsibility (cf. Munkner on p. 20 of the same issue). That
responsibility may relate to ecological, social or educational matters and
be accepted to a greater or lesser degree according to the country, the
sector and the co-operative concerned; but it is always affirmed as a
fundamental characteristic of the co-operative movement.

The discussions currently under way and confined to the European (one might
even say Franco-German) context have got away to a bad start; they should
not lead us to lose sight of our realities and our specific and essential
co-operative aims.

We must be clear about these aims and insist that (as Professor Munkner of
Marburg University puts it very pertinently on page 30 of the same issue):
"The essential differences between co-operatives and other organizational
forms must be emphasized rather than concealed".

Yves Regis
CGSCOP France