According to a recent press release, the United Steelworkers Union is partnering with the Mondragon corporation of Spain to investigate the possibility of starting Mondragon-style manufacturing cooperatives in the United States.
For those who are unfamiliar with Mondragon, it is a network of employee-owned cooperative companies that was started in a poor region of Spain in 1956. The profits were reinvested into starting more cooperative enterprises, and the network gradually expanded over the course of the last fifty years to the point where it reported 16 billion Euros in sales in 2008. As a result of its corporate structure, it is owned by its employees who elect the directors on a one-member one-vote basis, and profits not reinvested in the enterprise go to the employee owners. Otherwise, it functions as any private company, competing in the marketplace for business against all comers.
As such, news of a USW-Mondragon partnership should be particularly heartening for those of a libertarian bent. For most of the 20th century, the main-line labor movement has been a driving force behind increasing government intervention in the economy, whether through pushing for protectionist trade measures or bailouts for the faltering American auto industry. However, despite the enormous amount of power these unions wield in many industries, they lack the sense of responsibility and husbandry that comes with the ownership of an enterprise. As long as people other than the employees own a company, the workers are incentivized to wring as much as they can from it on a short-term basis. Things are fine and dandy for them until the company suddenly goes belly up or moves over-seas, at which point the goose that lays the golden eggs is cooked.
In order to prevent that end-game, it is in the best interest of both the owners and the union to go hat in hand to the State looking for a bailout and/or a pseudo-monopoly. However, with an employee-owned company the employees directly benefit (income-wise) if the company is profitable and are hurt if it loses money (no dividends that year), so they are incentivized to think of the enterprise’s long-term prospects. The whole “wages vs. profits” struggle of a privately held company is a moot point in an employee-owned cooperative since the profits go to the employees anyway. Furthermore, the company cannot be off-shored since only employees can hold equity in the company; as such, moving a steel plant to Mexico would simply not make sense.
The success of such an enterprise could transform the nature of the main-line unions from organizations that function in a certain state of denial about the functions of the market into organizations promoting the development of a less speculative, more productive economic system. One in which the creative power of the free market is combined with the many benefits of universal ownership to bring prosperity to every corner of the globe. To see unions in such a dynamic, creative role would be a breath of fresh air after fifty years of vision-less accommodation to the corporate-welfare state status quo.
November 3, 2009
Bank Failure Timeline Graphic
Check out this well-done spatial timeline of recent bank failures; it give a geographic specificity that’s lacking in pure statistics. 140 and counting since 2008…
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