A conversation with GAR ALPEROVITZ about the Cooperative Economy

Published on Orion, by Scott Gast, May/June & July/August 2014.

IN THE MID-1960s, when author, historian, and political economist Gar Alperovitz was working as legislative director for Senator Gaylord Nelson, change was in the air. Ink had dried on an early version of the Clean Air Act, the civil rights movement had won major victories, and the first Earth Day was in the works. The U.S. still faced plenty of serious challenges, but many Americans felt their country was capable of dealing with them successfully … //

… SCOTT GAST: You’ve been thinking, writing, and speaking about alternatives to capitalism for a long time. Where did your interest in cooperatives begin?

  • GAR ALPEROVITZ: My interest began back in 1977, when a big steel company, Youngstown Sheet and Tube, went out of business. Five thousand people in Youngstown, Ohio, lost their jobs in one day, which was disastrous. Layoffs of that size are common today—especially when multinational corporations shift capital around—but in 1977 that was front-page, national news. It was a big, big deal.
  • But the community leaders and steel workers in Youngstown decided that they didn’t have to go down without a fight. They got together and built a coalition to buy the steel mill back and run it themselves, under worker-community ownership. They began organizing locally and statewide, and soon the Carter administration agreed to provide funds to hire experts who could help them with the mill’s technical designs.
  • Things were looking up until the mid-term election of 1978, after which the Carter money disappeared and the project fell apart. It was a serious blow—but everybody involved in the coalition knew it might happen. They understood that part of their job was to educate people about this alternative form of ownership, because what happened in Youngstown was going to happen to other communities, and at some point, they might win the battle. So they launched an educational campaign throughout Ohio, and they began talking about worker and community ownership as a means of rescuing cities and towns from decay.
  • So even though the Youngstown experiment failed, it succeeded in a much larger sense: Some thirty-five years later, there are now a great many worker-owned businesses in the state of Ohio, and the support system for building them is one of the best in the nation. We don’t know the exact number, but very large numbers, per capita, in Ohio, are traceable to this education effort.

SCOTT: What exactly is a worker-owned company? What makes them different from conventional businesses?

  • GAR: A worker-owned company, or cooperative, is essentially a one-person one-vote, member-owned and -controlled economic institution or business. Included in the American cooperative experience are agricultural co-ops, insurance co-ops, food co-ops, housing co-ops, health-care co-ops, artist co-ops, electrical co-ops, credit unions, and many more. Large retail co-ops many Americans are familiar with include REI, the outdoor clothing and supply company, and ACE, the hardware-purchasing cooperative.
  • The modern cooperative form is often dated back to the Rochdale Society of Equitable Pioneers founded in England during the 1840s, although other cooperative economic arrangements have existed throughout human history. At roughly the same time, in the United States, cooperatives were being formed by both the National Trades’ Union and the associationist movement. And many farm co-ops date from the 1930s and the New Deal.
  • But aside from being owned by members rather than by shareholders or individuals, cooperatives differ from many traditional businesses in their values and motives. Also, they’re not required to grow, but they can and do, which is important in terms of designing an alternative to capitalism, because we need to get beyond the existing economy’s drive to use resources and produce waste, including carbon emissions, in ever-increasing quantities.

SCOTT: Does worker and community ownership exist in forms other than cooperatives?

  • GAR: Yes, these institutions come in several varieties—from employee stock ownership plans to municipal enterprises and community land trusts.
  • In employee stock ownership plans, voting rights are retained by a trust, not by the workers. These organizations commonly create worker ownership via special tax incentives given to the companies’ heads, who then decide to sell the company to their employees. These are by far the most prevalent form of worker ownership in the United States; there are now roughly eleven thousand of them. More than 10 million people are involved as owners in virtually every sector; some firms are very large and sophisticated, such as Publix Super Markets, while others are more modest in size.
  • Municipal enterprises—or businesses owned by local governments—are a larger-scale form of democratized ownership. Local governments often operate utility companies, help build telecommunications and internet infrastructure, and invest in mass transit. Increasingly, city governments have turned to these enterprises to promote local jobs and economic stability.
  • Land trusts are a third form. Essentially nonprofit corporations, they own housing and other property in ways that prevent destructive gentrification and support low-income housing. In 2012, 255 community land trusts were operating in forty-five states and the District of Columbia.

SCOTT: You mentioned earlier that, in the wake of the Youngstown Sheet and Tube collapse, there are a great many worker-owned companies in Ohio. Can you describe one of them? … //

… SCOTT: Is what you’re describing—the democratization of wealth, beginning at the community level—a kind of socialism? That word, of course, is so loaded these days.

  • GAR: Well, it certainly wouldn’t be accurate to say that co ops in their current form—democratically owned economic institutions—are socialist entities. But a municipal utility might be called “socialist.” A neighborhood land trust owned by the neighborhood or controlled by a city could be called “socialist.”
  • So, yes, that charge can be leveled, but the key difference between what I’m describing and what most people think of as socialism is that, with socialism, ownership of wealth and power is traditionally concentrated within the state and its national government. The vision that’s emerging in these experiments around the country is anathema to that. It begins in neighborhoods and communities, in cities and states. It’s about decentralizing power, changing the flow of power to localities rather than to the center.
  • But I think the old worries about socialist rhetoric come out of the Cold War. The people under thirty who are going to build the next politics over the next three decades are looking for answers; I don’t think they’re much concerned about that old rhetoric. What’s most important is that the answers be practical. That’s what we’re finding. For instance, in Cleveland, the worker-owned complex is giving people jobs and a stake in the future of their communities.
  • Even conservatives have turned out to be supportive of these local experiments. People forget this, but Ronald Reagan, for instance, was a great proponent of worker-owned companies and is publicly on the record as believing they’ll be an important part of our future.

SCOTT: In your writing and speaking you’ve used the term “evolutionary reconstruction” to describe the work of the next several decades. What do you mean?

  • GAR: What I’m talking about is the reconstruction of a culture of community in this country. Neither simple reform of old institutions nor “revolution.” And that’s a project that depends not only on local-level work, but also on institution building and long-term cultural change. It’s not just about climate change or any other issue; it’s about re-conceiving ourselves as people who care about the country and want to move it in a different direction. I think younger people get that and understand it instinctively.
  • Through all of this, we should remember to think of ourselves as historical actors. We are facing systemic problems, like climate change, that are historic in scale. And you don’t change systems without thinking in terms of decades. Remember, big shifts happen all the time in world history: the American Revolution, the French Revolution, even the modern environmental movement. But all of these things were thirty or forty years in development before they exploded. That’s true of the civil rights movement: there were people in the 1930s and ’40s whose names we’ve never heard of who were developing a long-term vision that made possible what happened in the 1960s. Without that kind of a vision, there is no base for a larger change.
  • Developing a democratically oriented alternative to capitalism can’t be done overnight. This work requires a different sense of time and a deep sense of commitment—the bargaining chips are decades of our lives. But the shifts are already happening in places like Cleveland and Boulder. What we’re seeing is the prehistory, possibly, of the next great change, in which a movement is built from the grassroots that becomes the foundation of a new era.

(full conversation).


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