Collectives and Worker Co-ops in Europe (1994)

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

                   June 1994

          Collectives and Worker Co-operatives in Europe

                    by Jean-Louis Laville*

The Resurgence of Worker Co-operatives

The workers' co-operative movement saw something of a
resurgence in several European countries during the 1970s and
1980s. In some instances this interest was no more than a
passing fad, whilst in others it represented a more
significant redefining of the movement in modern terms. This
study seeks to analyse this revival, illustrating the trend
towards the current diversification of the social economy.

Following on from Vienney's research (1980), we shall try to
determine whether this evolution has influenced the three
relationships between activities and actors that he identified
as characterising workers' co-operatives:

-    a relationship between the qualification of workers and   
  the amount of capital per worker, favouring qualification;

-    a relationship between the conditions of production and   
  the conditions of marketing the goods, favouring production;

-    a relationship between investment in production and
professional promotion by the producers, favouring promotion
through the reinvestment of profits.

His hypothesis is this: there have been two waves of
co-operative formations. The first was the work of voluntary
collectives equating to homogeneous groups  - groups in which
all members share a common bond arising from practising the
same trade. The second was the work of enforced collectives
equating to divided groups - groups in which the plurality of
socio-professional allegiances creates differences between the
members. In a homogeneous group, whilst all members may not be
equally involved in its creation, individual responsibilities
nevertheless emerge within a collective where all members have
equal rights and duties and share the same objectives; the
group reveals the leader and vice versa.

In divided groups the dynamics are quite different. The
instigators of the plan persuade the others to form a
co-operative backed by the force of their own credibility,
based on competence and a prominent position within the
hierarchy (Laville, Mahiou, 1984).

With reference to the characteristic features that have been
described, voluntary collectives are introducing activities
that differ from the traditional activities of co-operatives,
intellectual services featuring predominantly here. In terms
of the qualification of members, however, the historical
relation to the activity identified by Vienney still holds
good. The change in activities over time confirms the
consistency of the common professional reference.

By contrast, enforced collectives demonstrate a
diversification of actors, activities and the links between
actors and activities which emerges in the methods of
formation and is perpetuated in the structure and development
of the group. 

This diversification leads us to explore its effects on
coherence both in individual co-operatives and in the movement
as a whole. This study is therefore divided into three

-    the first focuses on voluntary collectives. A summary of 
the numbers concerned and the activities in which they are
involved is followed by an exploration of the internal
dynamics they generate;

-     the second section looks at enforced collectives, taking 
the same approach: quantification of numbers and details of
activities are followed by a study of the internal dynamics;

-    finally, part three draws on the changes identified in
the first two sections to reevaluate the research problems
associated with workers' co-operatives, before concluding with
an assessment of the place of these co-operatives within the
production system. 

Voluntary Collectives
The renewal of interest in workers' collectives in the late
1960s and the 1970s began among the intellectual classes as a
reaction against the values embodied by both the market
economy and non-market economy. These groups of militant
professionals devoted themselves to creating new services
within the context of an alternative economy.

Some of the businesses that were formed in this way were able
to establish themselves in niche markets on the basis of the
influence exerted by their members within political and social
networks. This ideologically-motivated volunteer force
provided the businesses with enough capital to become
established; subsequently they became increasingly
independent. This was the process by which print co-operatives
and organic food co-operatives were set up in Great Britain.

Apart from these particular cases where the production of
goods and services was conceived as a response to specific
demands, the alternative movement was primarily the basis for
new methods of working associated with the service sector.
Therefore, in a number of countries the workers' co-operative
movement began to explore the provision of intellectual and
cultural services. In 1985 those co-operatives appearing in
the service industry accounted for 45% of co-operatives and
32% of jobs in Great Britain and 18.1% of co-operatives and
32% of jobs in France. In other countries, such as Italy, this
sizeable movement was concentrated in the fields of education,
counselling, technical training, media, arts and leisure.
These small groups of young graduates, many of whom had
already worked for a period in business and therefore had
experience of customer relations, helped to swell the numbers
of co-operatives being formed and to lower their average size.

The growth of the co-operative movement in the service
industry was coupled with a gradual transition from
alternativism to innovation. The origins of these ideas are
linked to criticisms of hierarchical organisations and to a
desire to act as a voice for new social demands. As such they
could be classed as "interventionist collectives" (Corpet,
1982; Laville, 1984; Corpet, Hersent, Laville, 1986) because
they advocated a change in working relations and set as their
horizon the sharing of knowledge, encouraging ways of
collectively reappropriating social knowledge to allow
"society to produce itself" (Touraine, 1973). These
collectives were the subject of a functional adjustment during
the course of which they created forms of intellectual work
which were novel but were divorced from their original
ideology. The earlier will to fight against social divisions
both inside and outside the business was gradually replaced by
endeavours to increase the responsibility of workers both on a
management level and within a work context.

Conceived as "imaginary designs for alternative societies"
(Desroche, 1976) and encapsulating an "associationist"
ideology that had rediscovered the aspirations put forward in
the previous century by Owen, Saint-Simon and Fourier, the aim
of these alternative businesses was to prepare the way by
example for an alternative economy "reuniting what
contemporary society divides" (Vienney, 1980). They often
chose co-operative status because it was "suited to the
formation and management of businesses by those who work
within the socio-economic system to which they belong". In
this, the collectivist entrepreneurs who first started the
workers' co-operatives presaged a return to favour for small
businesses in the 1970s, and this was reinforced during the
following decade. At the same time, however, they were forced
to renounce their plans for social change by abandoning their
economic initiatives or by resorting to innovative business
plans. The regulations governing co-operative status meant
that it is only appropriate for particular actors developing
particular activities.

These voluntary workers' collectives were succeeded by
enforced collectives which came to the fore in the early 1980s
to such an extent that their predecessors were forgotten. Here
priority was given not to "working differently" but to "saving
jobs". Rising unemployment and economic restructuring form the
backdrop to these co-operative buy outs.

Enforced Collectives

If the first resurgence in the co-operative movement came from
voluntary initiatives, the workers' co-operative movement was
profoundly influenced by a second wave of co-operatives,
formed not of choice but of necessity: company buy outs. In
Italy, although the statistics are not particularly accurate,
approximately 1,000 companies were bought out in the period
1975 to 1985. Mostly located in the north of the country,
these represented the textiles and clothing sectors, printing,
machine tools, woodworking and transport, and employed on
average between 30 and 100 workers. In Spain these were not
always co-operative buy outs; some took the form of
workers' limited companies where employees had a share-holding
in the majority capital. While precise numbers are not known,
there were at least 1,300 such buy outs, accounting for 50,000

In France between 1978 and 1983, a period of unequal growth in
the movement, buy outs represented between 37 and 61% -
depending on the year - of all new co-operative jobs. These
countries have been most affected by this phenomenon. In the
UK and Germany buy outs have been on a much smaller scale; in
1986 the total number of buy outs in these two countries was
90 and 13 respectively.

The threat of closure or unemployment does not automatically
lead to a co-operative buy out of a company. This option is
often discounted or not even  considered. Moreover, the
situation differs greatly from one country to another, a fact
which requires further explanation.

There are clearly other factors involved, one of these being
the existence of support structures. Attempted buy outs are
not simply a spontaneous initiative on the part of the

An attempted buy out is much more likely to occur when the
concept of buy outs is familiar to workers and appears
credible. It is a response to the threat of closure which may,
depending on circumstances, be encouraged or opposed, either
explicitly or tacitly. Hence the stance adopted by local and
national governments, by trade unions and co-operative groups
and by the various sympathetic professional bodies, is very
important. What is more, the attitudes of these various bodies
are not shaped in isolation. They influence and strengthen one
another. Success breeds success. One successful buy out will
encourage others, just as the failure of a buy out or an
absence of buy outs for a certain period of time or in a
related sector may mean that this option is discounted. At the
same time, the success of a buy out gives legitimacy to the
support provided by the co-operative movement, the trade
unions and governments or their agencies. The more widespread
and established this support is, the greater the chance of
success and the greater the chance of survival of those that
do succeed. Buy outs may strengthen those sectors which
already have workers' co-operatives, and these then become
more able to support other buy outs. The lessons learnt from
failure or success change the probabilities of company buy
outs appearing as co-operatives. The distribution of buy outs
or attempted buy outs over the past ten years does not simply
reflect the distribution of industries undergoing
restructuring or of unemployment rates. Certain concentrations
can be seen within regions and in particular localities. These
include the north of Italy and part of Spain. What is perhaps
more striking is that almost one-third of buy outs in the FRG
in the first half of the 1982 took place in Bremen, where a
support network comprising alternative groups, workers'
associations and government agencies has grown up. Similar
networks and concentrations of buy outs have built up in the
UK - in Scotland, Yorkshire and London.

The presence - or quasi-absence - of buy outs also seems to
reflect broader institutional and cultural traditions. For
example, there are large concentrations of buy outs in
Andalusia, Catalonia and Emilia-Romagna - all regions with a
strong tradition of mutual support and self-help evidenced by
the powerful anarchist movements that emerged there at the
start of this century. Within this perspective, the relative
importance of company buy outs correlates to the kind of
institutional compromises that have been agreed to
historically by the labour movement in each country. Germany
and Italy demonstrate two opposing historical solutions to the
labour movement's quest for greater economic security that
reflect and reinforce the national cultures: strong welfare
state and entrepreneurial individualism in Germany, but a more
collective entrepreneurial class in Italy, where solidarity is
expressed through the market and not merely in opposition to
it. In Italy, company buy outs can be viewed in the context of
a classic compromise between market principles and principles
of solidarity. In Great Britain they tend to be solutions of
last resort, in Germany they are a type of industrial
deviancy, whilst in France in the early 1980s the not
insignificant growth in buy outs led to ideological
extrapolations that did not live up to their promises.

Response to Unemployment

The co-operative upsurge and the current interest being shown
in the movement - which was largely overlooked during its
period of growth - has in several countries been a response to
a whole series of transformations. Nowhere, though, has the
movement become established as a third sector of the economy
(except in Italy, where this is explained by its earlier
strength). Efforts by the state or by trade unions to use
workers' co-operatives as a means of saving jobs on a large
scale were cut short, in France by the left-wing coalition, in
England by the minister, Tony Benn. Nevertheless, once these
obstacles had been removed, relations between public
collectives, trade unions and co-operatives formed the subject
of agreements that were less voluntary in nature and more
detailed. High unemployment rates over extended periods of
time resulted in a whole series of government initiatives.
Some of these were introduced nationally: changes in social
security rules and unemployment benefit intended to encourage
the unemployed to set up new businesses, the Enterprise
Allowance Scheme in the UK and legislation in France and Spain
affecting the setting up of new businesses by the unemployed,
the details of which encouraged company buy outs. Local and
regional governments also tended to intervene more readily in
the economy to support local initiatives. For example, French
decentralisation put an end to these restrictions, whilst in
the UK the regional development boards continued to grow at a
time of general budgetary cutbacks. Support for co-operatives
also came from autonomous bodies dedicated to small
businesses, the best known of these being the Greater London
Enterprise Board, or by independent co-operative development
agencies set up in conjunction with representatives from
co-operatives. In 1986 around 80 support organisations
received local government aid, particularly from labour
authorities where policies encouraging workers' co-operatives
and community enterprise had gone some way to replacing the
belief in the nationalisation of industry.

Furthermore, "ideological" disillusionment was followed by the
discovery of the range of situations leading to company buy
outs, resulting in a discrepancy in the unions between
principles at a central level that were marked by scepticism,
and a more open-minded approach at a local level, where they
were directly confronted by the problems faced by their
members, as in France in the CFDT and in the UK. Discussions
at grass-roots level often fed through to central debates and
changed earlier options, as in the FRG, in the sense of a
greater openness. In some cases the trade unions ended up
redefining their relations with the co-operative movement.

In Italy, the key trade unions, which were already linked to
various co-operative federations according to their political
leanings, adopted a more prominent stance in 1985 by signing
an agreement with the co-operative federations on the nature
and level of public support required by the co-operatives and
the joint initiatives needed to secure this.

The changing nature of the relations between the public
authorities and the unions underlines the links between the
creation or support of businesses and institutional change.
The various faces of the collective entrepreneur manifested in
particular by the formation of co-operatives have brought
about institutional change which in itself acts as a support
mechanism. By their concrete and defined contribution, these
successive interactions contrast with the failure of
centralised policies that seek to draw on the co-operatives
that came before them. In France and the UK at least, they
indicate a rejection of once cherished ambitions to build an
industrial sector from company buy outs.

In any case, the new waves of workers' collectives are very
much a product of their time. Their significance thus seems to
be attributable to a particular economic climate and hence
they are a passing phenomenon. Whist their size may depend on
national institutional and cultural considerations, voluntary
collectives are closely linked to the crisis in values
affecting the synergy between state and market, while enforced
collectives are a consequence of the economic crisis that
followed it. Workers' collectives thus illustrate the two
phases of the crisis affecting the synergy of state and market
(J. L. Laville, 1994).

The Problems of Research

These new modes of communal working, most of them taking the
form of co-operatives, need to be placed in perspective with
regard to earlier generations of workers' co-operatives.
Recent trends in the evolution of workers' co-operatives
extends and renews the focus of earlier studies.

In terms of their creation, the new co-operatives, which have
proved their ability to perpetuate themselves, underline the
importance of the workers being professionally qualified, even
if the professions in question have shifted towards new
information technologies or towards the provision of
intellectual services. By contrast, earlier research showed
that workers' co-operatives were formed by homogeneous groups.
Involvement in the group was certainly not on a wholly equal
basis; rather, it took the form of shared and individual
responsibility within a close-knit collective founded on a
sense of community. If this is so in voluntary co-operatives,
the flood of company buy outs onto the co-operative landscape
has opened up opportunities to other groups organised on the
basis of self-sufficiency, albeit with different dynamics.

Worker Involvement

If the eventual disappearance of direct democracy thus seems
to be written into the legal status of the co-operative,
representative democracy may, according to circumstances, be
either real or formal. The possibility of retaining
specifically co-operative regulatory mechanisms in the
long-term seems to assume that the workers will be rewarded as
compensation for this standardisation manifested by the
abandonment of the homogeneous group or as compensation for
the justification of the differences in status in the original
group. The existence of a lively co-operative democracy does
not proscribe economic success, provided that this is
accompanied by a recognition on the part of the management of
the rights of the other workers.

A study of participation in co-operatives shows us that their
members feel a duel allegiance: to an association (membership)
and to a business (work) (Houssin, Laville, 1989). The process
of involvement is analysed not as a dimension of social
functioning but as a product of both external and internal
contingencies. The environment in which it operates forces the
co-operative to adjust its activities. The process of
accepting this imperative starts with the work itself by
changing the way in which the wage-earners are involved in the
business and in the membership, by changing the way in which
it is conducted and the way in which workers are represented
within the group. Adjustment is achieved by means of an
institutional acceptance of changes among the wage-earners and
in the membership; this adjustment is conditioned by a
cohesion between the measures taken among the wage-earners and
the membership and it alters the conditions in which the
co-operative takes on board the imperatives brought about by
the environment in which it is operating.

Present and Future Trends

Our final theme arising from the formation of co-operatives
during the 1970s and 1980s is that the revival of co-operative
movements in industrialised countries coincided with the rapid
spread of worker participation companies. In the USA, with the
development of ESOPs (Employee Stock Ownership Plans), it is
estimated that in 1990 some 30% of American wage-earners will
be employed in companies where they own at least 15% of the
capital. This figure should be compared with that for trade
union membership, which is at 18% and falling. Whilst the
figures in Europe are less striking, the trend is the same.
Furthermore, debates in France about the "social economy", the
"third sector" in Italy, "new social movements" in Germany,
which touch on the role of co-operation and decentralised
forms of social ownership in the modern economy, are symptoms
of a search for coherence made all the more pressing by
current uncertainties.

We can identify two possible alternatives for co-operatives:

-    they will either be able to collaborate and strive
     towards a dynamic reflection of co-operative identity,
     which supposes that they will move beyond simple
     doctrinal reference to find their own place in the
     economy and consolidate their original support mechanisms
     as a means of democratising society;

-    or, influenced by the spread of forms of participation  
     and direct expression in other companies, on the one    
     hand, and by the tightening of legal requirements    
     pertaining to co-operatives on the other, the    
     co-operative movement will gradually be diluted and merge
     with other forms of worker activism.

The collectivist business community has energised initiatives
to create and support businesses at a time of economic
restructuring. It has been based on self-organisation by
homogeneous groups of projects drawing their strength from
cultural and professional resources. It has also meant that
the act of enterprise has become accessible to actors for whom
it could not have been accessible on an individual basis.
Initiatives have been launched by leaders bringing other
actors in their wake, and these alliances have borne fruit in
the long term when professional identities forged in earlier
undertakings were strong enough to support the reorganisation
of social relations inherent in a buy out. This is why, by
expanding the ways by which co-operatives are formed, workers'
collectives are playing their part in the diversification of
the social economy that is a phenomenon of our times.

* Mr Laville works with the Centre for Research and
Information on Democracy and Autonomy in Paris. Particular
emphasis is placed upon educating the women residents and
helping the children.