Carl Rowlands asks why do worker co-operatives matter, and what can a future Labour government do to support them.

Why do worker co-operatives matter?

After all, there are relatively few members of worker co-operatives in the UK right now. Whilst other co-operative forms of organisation have seen an uptick in the last few years, there’s little sign of worker co-operatives becoming the important part of the economy that Labour Party policy anticipated in the 1970s and 1980s. Partly this may reflect a UK economy which has become focused on service industries. As manufacturing has declined in general, the economy has become polarised between those in positions of ownership and control, and an increasingly casualised overall workforce.

Yet we’re now approaching a turning point. The weight of the ongoing financial collapse and resulting depression has been largely borne by government, resulting in the decimation of the public sector, rendering stable employment a diminishing prospect for many parts of the UK. Only now are responses from civil society beginning to emerge, with trades union protests, and the Occupy and anti-cuts movements indicating a search for an economy which is run in the interest of wider society, rather than a lucky few.

Not only is stable, decent employment harder to find, the nature of work itself is arguably becoming less amenable to individual decision-making, as decisions are increasingly based on complex mathematical factoring and automation. If the economy plays even a minor part in determining the shape of society, politics and culture, maybe we ought to be worried. For the economy which is emerging, is one in which our labour has been effectively devalued, and where decision-making is centralised. The education system, itself increasingly based on a pay-as-you-go system, increasingly provided by private operators, produces graduates with an excess of knowledge, given the actual requirements of most private-sector employers. Already in Europe, right-wing governments are increasingly rationalising access to higher forms of education. Put bluntly, it is in excess of employer requirements.

In such an environment, worker co-operatives matter greatly. The functioning of a large worker co-op sector is perhaps the biggest single antidote to the casualised, alienated workplace experienced by so many employees. We can identify two strong reasons for backing worker co-operatives. Firstly, we are all in a time of transition. We don’t know if the current financial and economic system is sustainable in the long term. By supporting and developing worker co-operatives we can engender a ‘real-world’ existing alternative to the work being offered by a dumbed-down economy, and work to make these co-operatives sustainable in both a financial and environmental context by providing a structural, community-based approach to finance and development. In other words, worker co-ops offer radical possibilities at a time when these possibilities are in short supply. Secondly, if the economic situation merely stagnates, rather than worsens, these worker co-operatives stand to be exemplars of a new kind of business based on social responsibility and economic democracy. In this sense, it is simply the existence of a strong worker co-operative sector which will change the wider business environment. It would mean a cultural shift away from the ‘strongman’ entrepreneur, in favour of a considered approach to conflict management and the practical application of ethical considerations.

How to translate this into policy for future Labour/Co-op administrations? There are, possibly, some insights to be gained from looking at the experience of France. In 2000, the French socialist government changed the legal status of worker co-operatives, to make them easier to form, and more economically viable. This co-incided with a renewed emphasis on worker co-operatives as a vital part of regeneration, as part of a social economy based around localities (or communes). The results of these changes, and the accompanying governmental support, have been remarkable. In the last 10 years, the number of people employed by worker co-ops in France has risen from around 14,000 people to around 40,000, with particular representation in the engineering and construction sectors.

The practices of these worker co-ops might vary, yet they are, by their nature, offering a very real, and professional, economic alternative. Rather than thrown in with a ‘one-size-fits-all’ business support approach, these have sectoral-based support mechanisms, which acknowledge both their professional skills and their employee owned-and-operated status. Particularly notable are the number of co-ops which have emerged when owners  bequeath their companies to their employees, upon retirement. With the necessary financial support structures, it is possible for state-backed institutions to enable and facilitate such transfers of ownership, ensuring that viable and profitable businesses are able to become co-ops and build upon existing successes.

These approaches can be connected to the formation of a National Investment Bank by a future incoming Labour administration. With a government procurement policy that both encourages open source and co-operatives, the kernel of a new worker co-operative sector could emerge. Were economic and social circumstances to further deteriorate into chaos and unemployment, this sector could eventually become crucially significant, signposting a better way of doing things in the future.