Workers should have a right to co-operate

If we're going to have an economy that puts people and planet before profit, we need it to be made up of organisations which do just that: we need to give workers a right to turn their firms into co-operatives.

Amelia Womack
10 October 2014
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“People and planet before profit”. It's a simple little idea, and it's one which has driven huge numbers to join the Green Party in recent months. But how, in practice, can it be delivered? Of course, there are whole manifestos of policies outlining the complex answer to that question. But here's the thing. None of the ideas in them are worth anything unless you fix the core of the system.

At the moment, we have governments across the world which have been caught in the headlights of corporate power. When voters seriously consider radical alternatives, the markets bully them back into their place – as we've seen in both Greece and Scotland in recent months. Big businesses are legally required to maximise short term profit at any cost, and that's exactly what they do – driving down wages of the many whilst owners and bosses do better than ever, plundering the planet, and kicking any politicians who get in their way.

If we're going to build a just and sustainable society, we can't just introduce a few regulations and hope that these will tie companies into putting people and planet before profit. As long as our society is so dominated by organisations designed only to increase profit, they will keep pulling at the leash until they once more find themselves free to plunder the earth – bullying governments into letting them do what they want again.

This means that we need a radical shift in the sorts of organisations which dominate our economy, and that's more true in the UK than almost anywhere else because, in many Western countries, co-operatives already have a much larger market share than they do here.

Co-operatives are vital to building an economy that puts people and planet before profit, because the people who make the decisions in them are, largely, the people effected by those decisions. It's not a surprise that workers' co-ops don't tend to have outrageous pay disparity between the top and the bottom, because the person at the bottom gets a say in the pay of the person at the top. But there are some benefits to the broader community of having many many more co-ops which are a little more surprising.

American Academic David Erdal looked at communities with more co-ops and those with fewer. He found:

“On fifteen of seventeen quality of life measures, the community with high employee ownership is a better place to live than the one with least employee ownership. Residents of the community with employee ownership are less likely to be victims of crime, more likely to have a feeling of confidence in public authorities, more likely to have a feeling of security, less likely to be involved with domestic violence, more likely to stay in school, more likely to have training after school,

more likely to enjoy better physical and emotional health, more likely to have a network of friends they can rely on in times of trouble, and even more likely to give blood.”

Is this causal? I think so. It's no surprise that the more a community is geared up to co-operate rather than compete, the less stressed people will be, and the better off everyone will be.

In fact, it's not even very controversial. Pretty much everyone, across the political spectrum, likes co-operatives. And there is a simple reason for that. As far as the current system is concerned, co-ops are benign. They pose no threat to it at all. The fact that they don't come with an intrinsic desire to expand is in itself one of the reasons they are vital to the future of our economy, but it also means that, as things stand, they have little chance of replacing their more aggressive competitors.

If we want more of our economy to be co-operatively managed, therefore, the government will have to take action. Of course, there are various ways that they could: public procurement rules could prioritise co-ops, the government could set up a bank providing favourable loans for co-operatives, and so on. But all of these have the same problem – they don't allow co-ops to replace corporations.

Because of this, the Green Party of England and Wales proposes a new workers' right: the right to co-operate. If this law were passed, any group of workers could get together, buy their firm off their employers, and turn it into a co-op.

Any company is the product of capital and labour. As things stand, the government declares it will protect the right of only one of these groups to continue owning a company in pretty much any circumstances - the people who provide the capital. Of course, for these people, their main interest is increasing the capital – ie, generating profit. If they want to asset strip it and sack all the workers who actually built the thing up? Fine. If they want to trash the planet? Fine. If they want to cut wages so they get a bigger share of the pie? Fine.

The philosopher John Locke argued that property rights stem from labour – ie, the people who the government should recognise as the owners of something are the people who put the work into building it. People apply this logic most frequently to land – to homesteads – but in the modern economy, why not extend it to those whose ideas and interactions are what grows the value of a firm?

I'm not suggesting we just go all the way, and declare that workers now own their companies, without any compensation for those who risked their savings to invest in it. I'm saying that employees should have the right, if they wish, to buy what they have built and re-built every day of their working lives.

Of course, in many cases, I suspect workers wouldn't bother. Running a company is a faff, and if you're happy with the way you are being treated, you'd likely leave things as they are. But the existence of the option would mean that when workers were being treated badly by a company, when they feel that a company is polluting their local area too much, when they, the people on the front line, felt they could do a better job, then they'd have the right to take over ownership – and the people they took it off would be richly compensated.

To give one example of how this might work in practice, such a right would have meant that Jim Ratcliffe wouldn't have been able to bully the workers at Grangemouth this time last year – when he threatened to sack them all, they could simply have raised a loan (from a government bank established for the purpose, perhaps) and bought the company off him.

If we're going to build an economy that puts people and planet before profit, we're going to need some serious restructuring – and, almost by definition, we're going to have to have many, many fewer firms whose sole motive is profit. It only seems fair that, as we go through this transition, we properly compensate the people who invested in the old system, whilst we replace it. That's what these proposals do. We need a much more democratic, co-operative economy – and that means that we need to give workers a right to co-operate.

This article is part of the Modernise: de-privatise series.

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