OURbiz

CO-OP DEVELOPMENT IN THE THE POOR BARRIOS OF NICARAGUA

Note:  I have followed the work of the Jubilee House Community in the poor barrios of Nicaragua, one of the poorest and least stable economies in the world. Early on these folks focused much of their work on economic development, the engine of which has been the worker-owned business. In this article Michael Woodard summarizes their work in co-op development.  dg

For over ten years the Jubilee House (JHC) has worked in Nicaragua in sustainable development.  JHC has focused on five general areas of development:  sustainable agriculture, appropriate technology, sustainable economic development, health and education.  As the Nicaraguan economy continued to decline throughout the 90’s and into the 21st. century, the work of the JHC has focused more and more on providing alternatives to the role given to Nicaragua in the neo-liberal global economy.

As a result JHC is working with five worker-owned cooperatives to provide employment and worker control of the workplace.

The Women’s Sewing Cooperative, one of the industrial cooperatives, specializes in clothing made from certified organic cotton. While the other co-ops make products for sale in the local market, the Women’s Sewing Co-op, due to the lack of Nicaragua market for organic goods, is focused on export production.  In April 2004 the women’s sewing co-op registered to become the world’s first worker-owned free trade zone, allowing it to compete on an equal footing with traditional “sweatshops†while providing just pay, fair working conditions, and worker control of the workplace. Here’s a link to the  Free Trade Zone . Click on Women's Sewing Cooperative.

The agricultural cooperative is actually eleven production cooperatives and a second-tier, marketing cooperative. The agricultural co-op is working with approximately 2,000 subsistence farmers to produce a variety of organically certified products.  Unfortunately, due to Nicaragua’s dismal economic situation, there is also no internal market for organic products.  Therefore, 99% of the organic products produced by the production cooperatives are exported to the US and Europe.

The service co-op is a security collective.  Due to the high rate of petty crime in Nicaragua it is imperative to have security guards.  Both JHC and the co-ops were employing a security company to provide those services. Forming a cooperative of security workers has enabled the former employees to control their working conditions and almost doubled their annual income.

The remaining industrial cooperatives are: a construction materials co-op, producing block, paving stones, and prefab posts and slabs; a ceramics co-op making cheap, effective ceramic water filters.

To assure adequate financing for the cooperatives, JHC operates a revolving loan fund that makes capital available to the co-ops at interest rates one sixth the market rate (6% vs. 36%).  In the case of the construction materials co-op and the ceramic co-op, the revolving fund assures credit for raw materials and for capital improvements.  Providing funding for timely capital improvements is essential in a country where the norm is to allow equipment to completely deteriorate before replacing it, causing lost productivity and a decline in product quality.

With the Women’s Sewing Cooperative, available credit has allowed the members to change from a cut and sew operation, which provides almost no profit margin, to a full package provider.  A full package provider offers not only its services of cutting and sewing, but a finished product for which a client is willing to pay a much higher premium.  Offering full package service also attracts many more clients.

Accompanying worker-owned cooperatives is not easy work.  There are many obstacles both internal and external to the co-op.  However, it does provide a truly viable alternate to the neo-liberal model of labor as just another commodity.

Michael Woodard is a founding member of Jubilee House Community and it’s Center for Development in Central America. Reach Mike at jhc@jhc-cdcd.org.

A Market Without Capitalists

When we in the United States think of a market, the word may carry the restricted notion of a farmer's market, or of a demographic market to which a person may offer a special product or service, or even a market as seen from the eyes of the CEO of a sprawling multinational corporation.

Seldom, if ever these days, do we think of a market in term a cluster of self-sustaining businesses providing jobs, provisions for local and worldwide consumption, in one sense, a local, independent and free-standing regional market economy.

Here the world famous author, Frances Moore Lappe`, writes about just such a regionally integrated economy in Italy.  Reactions to her report follow.
-    Frank T. Adams

EMILIA ROMAGNA

By Frances Moore Lappe
A market economy and capitalism are synonymous—- or at least joined at the hip. That’s what most Americans grow up assuming. But it is not necessarily so. Capitalism—control by those supplying the capital in order to return wealth to shareholders—is only one way to drive a market.

Granted, it is hard to imagine another possibility for how an economy could work in the abstract. It helps to have a real-life example.
And now I do.

In May I spent five days in Emilia Romagna, a region of four million people in northern central Italy. There, over the last 150 years, a network of consumer, farmer and worker-driven cooperatives has come to generate 30 percent to 40 percent of the region’s GDP. Two of every three people in Emilia Romagna are members of co-ops.

The region, whose hub city is Bologna, is home to 8,000 co-ops, producing everything from ceramics to fashion to specialty cheese. Their industriousness is woven into networks based on what cooperative leaders like to call “reciprocity.†All co-ops return 3 percent of profits to a national fund for cooperative development, and the movement supports centers providing help in finance, marketing, research and technical expertise. The presumption is that by aiding each other, all gain. And they have. Per person income is 50 percent higher in Emilia Romagna than the national average.

The roots of Emilia Romagna’s co-op movement are deep—and varied. Here in the United States, many assume that Catholicism and socialism are irreconcilable. In Italy, it’s different. Socialist theorist Antonio Gramsci critiques of capitalism were a major influence on Italy’s post-war Left. Although he was imprisoned by Mussolini in 1926 and died still under guard 11 years later at age 46, Gramsci’s ideas took hold. Simultaneously, the Church came to appreciate the role of cooperatives in strengthening family and community—as spelled out by Pope John XXIII’s 1961 encyclical.

The shared values of the two traditions—honoring labor, fairness and cooperation—made them partners in standing up for co-op friendly public policies and in creating co-op support services.

Of the three main national cooperative alliances, the two largest in Emilia Romagna are the Left’s Legacoop, with a million members, and Confcooperative, the Catholic alliance with more than a quarter of a million members.

During the 1920s, the fascists destroyed both the cooperative and the union movements. But after World War II, the movements regrouped to rebuild war-torn Italy. Farmer and worker cooperatives put people back to work. Retail cooperatives helped consumers and housing co-ops build new dwellings. Since 1945, the housing cooperatives affiliated with Legacoop alone have built 50,000 units in Emilia Romagna.

Curious about the differences that remain between the two historical strains, I questioned Davide Pieri, the energetic thirtysomething who heads the agricultural section of Confcooperative.

His response? “Mainly the history and personalities at the top,†he said, grinning as we headed out to see a co-op in action.

It is 7 a.m. when Davide picks up my partner Richard Rowe and me at our hotel in Bologna for a quick trip to a creamery on the outskirts of town that makes Parmigiano-Reggiano—or Parmesan, to us. Almost 400 small cooperatives in Emilia Romagna make this specialty.

By 8 a.m. we’re watching the morning ritual at the Nuova Martignana co-op: intensely focused workers stirring the fermenting milk mixtures in a dozen hot tub-sized copper vats. They are waiting for just the right consistency before using giant cheese cloths to gather the embryonic cheese into rounds.

Davide is distressed by WTO rules seeking to standardize and de-localize such place-based specialties. As we stand watching the cheesemakers testing the mixture, he seems to rebut that approach: “Look!†he exclaims. “These are artists they are tasting with their hands!â€

In Bologna we also had the chance to sit down with the scholar of cooperation, professor Stefano Zamagni, whom Davide called “our prophet.†“Labor is an occasion for self-realization, not a mere factor of production,†Zamagni, an economist, writes. Cooperation offers a way beyond the dehumanization of capitalism that fully uses the advantages of the market.

Ten years ago he launched a graduate program in civil economies and cooperation within the University of Bologna’s economics department. So far it’s graduated 250 students.

Another surprising feature of the culture is that, beginning in 1991, responsibility for social services in Emilia Romagna and other regions was transferred almost entirely to “social cooperatives.†For those providing services such as job placement, 30 percent of the staff must come from the population served and, if possible, be members of the co-op. Certain tax benefits are provided to these “social co-ops.â€

The approach seemed another smart way to enhance human dignity, breaking down degrading divisions between the helper and the helped.

Because Davide exuded such passion for his work, I probed what had brought him to it. “Out of the university, I worked for a capitalist firm,†he said. “But it wasn’t for me. It was dog-eat-dog. So I tried working on my own, as a consultant. But after a year, I realized that wasn’t for me either. So I took this job with the cooperatives.
“This is the interpretation of life that I enjoy,†he said.

Frances Moore Lappé’s latest book is Democracy’s Edge: Choosing to Save Our Country By Bringing Democracy to Life. For more information click on the link in the sidebar under Helpful Books and More. For more information, visit smallplanetinstitute.org.

COOPERATION AROUND THE WORLD

John Logue Ohio Employee Ownership Center (see link in the sidebar under Support Organizations) has additional material on the Emilio Romagna cooperative economy.

Whether or not the stench of sulphur lingers in the halls of the United Nations, we thought you'd be interested in the extension of the cooperative economy in Venezuela in this article from Venezuela Analysis.

Even in South Africa the cooperative business movement is gaining ground as the government implements a major initiative to support and develop new companies. Check out this article from Business Day.

The cooperative movement in Canada publishes coopzone, a newsletter we thought you might like to see. The Canadian Worker Co-op Federation also maintains this website.

TALK ABOUT INTER-COOPERATIVE COOPERATION

Omar Freilla, founder of Green Co-operatives in New York City’s South Bronx, e-mailed the U.S. Federation’s Board of Directors August 8, or thereabout, asking if any of us know of any workers’ cooperatives in London, England, as a friend intends to visit that city.

By chance, I’ve been reading Robert Briscoe and Michael Ward’s book, Helping Ourselves: Success Stories in Co-operative Business and Social Enterprise to review for OURbiz.biz. [See review nearby, please.]  Robert Briscoe is a good friend of many years.  So I ask him by e-mail if he knew of workers’ cooperatives in London, giving him Omar’s e-mail address.

Almost too quick to believe, Robert responds.  Omar’s friend may be in London now making acquaintances with worker owners!

Meanwhile, Robert sends the following report on developments among cooperatives in London, as well as a CD on a conference on recent developments in the Mondragon Cooperative Group held at Mondragon University, June 28, 2005.  Copies of that CD may be obtained by e-mail informacion@eteo.mondragon.edu

Thank you Robert!  Thank you Omar!

Here’s the news from London:
Printed from the http://www.cooperatives-uk.coop/ site...

LAUNCH OF LONDON CO-OPERATIVE NETWORK

Co-operativesUK, working in partnership with Social Enterprise London, has announced the launch of the London Co-operative Network.

The new Network is set to become an important forum for London's co-operative enterprises and those agencies involved in co-operative development in the capital. Through regular meetings, it provides an opportunity for the exchange of ideas and best practice and gives its members the chance to contribute to matters, which directly affect them as co-operative enterprises in London.

A regional joint initiative between Co-operativesUK and Social Enterprise London, the London Co-operative Network builds upon the success of the London Social Enterprise Network (LSEN).

"This new forum provides an excellent opportunity for co-operatives in the London area to network, find out about issues which affect the wider co-operative movement and develop ideas and initiatives that can benefit other co-operative enterprises in the capital," says Dame Pauline Green, Chief Executive of Co-operativesUK.

All those involved in co-operative enterprise and development in London, whether members of Co-operativesUK or not, were invited to attend the inaugural meeting on 15 September, 2005. This launch event provided a significant opportunity for those who attend to help shape the direction of the new organisation.

Speakers included Dame Pauline Green, Chief Executive of Co-operativesUK, and Allison Ogden-Newton, Chief Executive of Social Enterprise London, who will set out their vision for the London Co-operative Network.

The launch event was free of charge for all London-based co-operative enterprises and agencies involved in co-operative development work. Future events will be free for members of both Co-operativesUK and the London Social Enterprise Network.

Economics and Cooperation, The Emilia Romagna Model

We are accustomed to looking to the Mondragon Cooperatives as a model for organizing worker cooperatives in North America. There are some difficulties trying to replicate the Mondragon structure in this country. The Mondragon anchor businesses are very large, based in manufacturing and have a long and successful history, in part due to the solidarity of the Basque people in the face of their social and political isolation within the larger Spanish society.

John Logue, director of the Ohio Ownership Center, presents in the article below, another European model from which North Americans could learn, the Emilia Romagna cooperative in Italy. Here’s John’s report. It's also available as a download. Click the download icon at the end of this section.

John Logue
There are at least two European models for employee ownership that demand American attention.  The one is the Mondragon cooperative group in the Basque region of Spain, which has been frequently discussed (see Owners at Work XII: 1 and XIII:1).  The other is the much less well-known complex of employee-owned companies in the Emilia Romagna region in Northern Italy around Bologna.

In some ways, Emilia Romagna and the Basque co-ops are very different.  In the Basque region, the Mondragon employee cooperatives grew out of Catholic social teaching and Basque nationalism in the 1950s and 1960s. In Emilia Romagna, by contrast, the co-ops grew up with the 19th century labor movement but split into three different partisan political federations -- Catholic, Socialist/Communist, and Social Democratic/Republican -- in the 20th century. They have no link to ethnic or linguistic minorities.

In other ways, they are very similar.  Both appear to owe their success today to a combination of small scale, flexible employee-owned firms which achieve economies of scale to compete globally through collaborative research and development strategies, cooperative export efforts, their own financial institutions, and other forms of collaboration and cooperation that are largely or completely missing in the employee-owned sector in the US.

There’s a great deal we can learn in Ohio from what this one small region in Northern Italy has achieved over the last fifty years.

Promotion of small business

Emilia Romagna is roughly comparable to Northeast Ohio in population: 3.9 million vs. 3.8 million. Unlike Northeast Ohio, it has its own regional government – one of 20 in Italy.

By Ohio standards, firms are very small scale.  Emilia Romagna has 420,000 firms – one for every 9 men, women and children -- vs. 110,000 in Northeastern Ohio.  More than half the population is co-op members. Coops -- including employee-owned businesses -- employ 10% of the workforce and generate about 30% of the GDP in the region and up to 60% of the GDP in some cities like Imola, according to University of Bologna economist Stefano Zamagni. Flavio del Bono, the regional finance minister, tells foreign visitors point blank that, “the massive presence of cooperative firms is a stabilizing factor in the regional economy.â€

“Emilia Romagna has 7% of the population of Italy,†says del Bono.  “But we account for 9% of the Italian GDP, 12% of Italy’s exports, and 30% of Italy’s patents.† Unemployment is an enviable 3%.

It wasn’t always this way. Emilia Romagna moved from among the poorest of Italy’s industrial regions in 1950 to the richest in 2005. Today it’s among the 10 richest of the European Union’s 122 regions.

After the war it became part of Italy’s so-called “Red Belt,†the part of Italy that was in the front line of the Cold War because the Communists and Socialists won the elections there. The CIA poured money into the region to split the labor and co-operative movements.  But lacking the large-scale industrial base of a Milan or a Turin, a funny thing happened: The left-wing government in Emilia Romagna embarked on a strategy of promoting small business for economic development.

At the core of the Emilian Romagna success story is the regional government’s focus on support small businesses – employee-owned and family-owned owned alike. Crucially it encouraged the development of cooperative institutions for all small businesses to achieve economies of scale through creating  “industrial sector service centers†that have supported small business clustering in the region.  They provide shared services in research and development, purchasing, education and training, workplace safety, technology transfer, marketing and distribution, exporting and more for scores or hundreds of small businesses in industrial sectors like ceramics, textiles, footwear, construction, and agricultural machinery.

These service centers combine the economies of scale with the advantages and flexibility of small business.  They have encouraged “flexible manufacturing†for which the region is famous in which small businesses in the same industry collaborate in joint bids for major contracts.  The region is home to some very high value-added producers, including companies widely known in the United States like Ferrari, Lamborghini, Maserati, and Ducati, which use networks of small businesses to supply their inputs.

This general framework of activist government support for small business forms the policy context for the employee ownership. Click on “Continue Reading†for a lot more. Here's the link to the whole document. 

WORKERS CHOOSE THEIR MANAGERS, INCREASE PRODUCTION

From time to time we have passed on word of the development of worker empowerment in Venezula. Here’s a report by Marta Harneker. She describes a different ownership model that has some congruence with our discssion in the last issue and with Tom Cobb's article (above). At the end she conducts an interview with two of the principals at Alcasa. Find that by clicking on Continue Reading at the end of this post

By Marta Harnecker

Mar 30, 2005, 03:43

Alcasa, a state-owned aluminum processing plant in the Southeastern state of Bolívar, has long been an important employer in a region where the lion's share of Venezuela's mining and processing plants are located.  Yet since the mid-1990s it has been plagued by inefficiency and corruption.  According to Trino Silva, Secretary General of the union, Alcasa's production has been in "the red" for that past 16 years.  Though the aluminum they produce is in high demand and despite considerable production increases over the past few years, the company has been unable to turn a profit.  Silva blames a corrupt factory management that used Alcasa as its piggy-bank throughout the 1990s, all the while holding the threat of privatization over workers' heads.  It was no idle threat.  A few miles down the road, one of Latin America's largest steel plants SIDOR, and long the pride of the state Venezuelan Corporation of Guyana (CVG), was privatized in 1997.  From a workforce approaching 20,000 full-time direct employees (with several thousand more contract and temporary workers) in the late 1980s, SIDOR now employs only 4,000 direct employees and approximately 6,000 contract workers.

Yet in recent years the political landscape in Bolívar has changed significantly.  Radical unionism, near-dormant throughout the 1990s, has been resurrected in a region with a tradition of radical syndicalism.  And for the first year of Trino Silva's term as Secretary-General of Alcasa's union, he has made the fight against corruption a cause celebre.

Last January, Silva caught a break: head of the newly created Ministry of Basic Industry Victor Alvarez shares his commitment to eradicating corruption and inefficiency at Alcasa.  To do so, Alvarez is relying on the workers themselves.  Alcasa is to be the region's guinea pig for the national government's strategy of state-worker co-management, a system of shared management between state representatives and workers.  On January 18, the government expropriated bankrupt paper company Venepal, reinvesting US$14 million to restart production at the factory under a system of co-management.  In a speech to the National Assembly where Venezuelan President Hugo Chávez announced the decision, he called for state control of all basic industry, and for the conversion of state run enterprises to co-management.  In the industrial state of Bolívar, Alcasa is the trail blazer, and in only a few months they are beginning to see results.

On March 22-23, I visited Alcasa and was moved by what I saw.  Silva was meeting with workers in the factory lobby explaining the trajectory of the business and speaking to them about Alcasa's responsibility to the community and to unemployed workers. Later, workers elected Gustavo Márquez-an electrical maintenance technician-as the new manager of Lamination (under the old system he would have been appointed by the factory President).  The next day, there was an inauguration of a cell repaired in record time by an enthusiastic group of workers. After exhibiting the newly functioning cell, the workers were hosted as guests of honor by the president of Alcasa, Carlos Lanz, in recognition of their effort.  After lunch, 59 students of the recently founded Institute for Endogenous Development, who strictly attended their third week of training 9-5 every day, were recognized for their eagerness to become promoters of the participatory process that is being encouraged by the new CVG leadership, presidedover by Minister Victor Ãlvarez.  Last, an act during which the managers, newly elected by the workers, assumed their responsibilities.

The following is a brief interview with the union General-Secretary, Trino Silva, and the new manager of Lamination, Gustavo Márquez. Click on "Continue Reading" below.

MORE FROM CENTRAL AND SOUTH AMERICA

We have from time to time published articles about the international cooperative movement, especially on the economic upheaval now emerging in South and Central American nations. Here’s a recent article  from Orion On Line for October and November concerning the restructuring of the Latin American economies.

UPDATE: WORKER MOVEMENTS IN SOUTH AMERICA

From time to time we have carried articles on worker movements in South America, mostly in Argentina. But this seems to be a continental movement. Here for your consideration is an article from Orion magazine presenting a wider picture. Another article from Dissident Voice provides additional information.

HAZEN ADDRESSES COPAC, INCLUDES WORKER CO-OPS

Paul Hazen, President and CEO of the National Cooperative Business Association recently addressed COPAC, the Committee for the Promotion and Advancement of Cooperatives. COPAC is an international consortium of national and international agencies supporting the development and support of the international cooperative movement. Among the notable things in his address is the considerable time he devoted to worker cooperatives. Read the text of Hazen's paper at this download.

Download hazen-ncba.pdf

ARGENTINE WORKERS THREATENED WITH REVERSION EFFORT

In mid-September we brought you news of the developing Recuperated Factory Workers and the Unemployed Workers movements in Argentina (archives: "Fire the Bosses In Your Hometown"). As Argentina's economy collapsed, numbers of business owners simply abandoned their facilities without notice, throwing many workers out of their jobs. Some of those worker's re-occupied the factories and other businesses and re-opened them under their own ownership and management.

Now some of the original owners are demanding those businesses back and the workers are resisting. Download this letter from one of those businesses, describing their circumstances and telling us how we can support their position.
Download hotel_2.pdf

MEIR: OWNERSHIP FROM A JEWISH PERSPECTIVE

Asher Meir explores the relation between Jewish faith and practice, and the principles embodied in the worker ownership movement. He is interested in how the boss/employee arrangement is regarded in Jewish history and theology. Meir writes for The Jerusalem Post and for The Jewish Ethicist and is on the staff or The Business Ethics Center of Jerusalem. This article concludes Meir’s three-part discussion. See the archives in the sidebar for copies of the earlier posts. Download this brief article below.

Download Meir3.doc

FIRE THE BOSSES IN YOUR HOME TOWN!

The collapse of the Argentine economy in 2001 resulted in the closure and abandonment (by their owners) of numerous businesses and a desperate situation for their workers. In an inspired moment, workers began to re-open their workplaces under their their own control. Needless to say, it has not been an easy road.

Now members of Argentina’s Recuperated Factories Movement and Unemployed Workers’ Movement (piqueteros) are planning a North American tour to meet with worker’s groups in the United States and Canada, and to exchange experiences with them. Tour sponsors are looking for host groups and sites.

For more information, download this article. It’s in both Spanish and English.

Download

MEIR CONTINUES: SHOULD WORKERS HAVE A SAY?

Asher Meir continues his discussion of ownership organizations with this review of the practice of worker-ownership and evaluation of the benefits and limitations of this business model. He also explores other kinds of ownership designs and concludes that, while they are useful intermediate steps, they fall short of the best features of ownership organizations. The article is available as a download below.

Meir writes for The Jerusalem Post and for The Jewish Ethicist and is on the staff or The Business Ethics Center of Jerusalem. His discussion will conclude in the next OURbiz issue.

Download

FEDERATION ACCEPTED AS CICOPA'S UNITED STATES REPRESENTATIVE

At its 2004 conference the National Federation of Worker Cooperatives decided to apply for membership in CICOPA which is the world organization of workers' co-operatives, one of the specialized organizations of ICA (International Co-operative Alliance) representing industrial, producer, artisan, service and social Co-operatives.

Recently CICOPA accepted the Federation as the United States representative to the world organization. A copy of the acceptance letter is attached.Download USFWCo050811.pdf

The main objective of CICOPA is to regionalize the workers’ co-operative organizations in the world and to develop and strengthen workers' co-operative organizations worldwide. Today there exist CECOP, CICOPA-Americas and CICOPA-Asia as regional organizations of CICOPA.

Contact president Marian Rybar
e-mail: president@szvd.skt or 15, Route des Morillons, 1218 Grand Saconnex, Geneva, Switzerland. Learn more about CICOPA by clicking on their website. You'll find it in the sidebar under International Co-op Movement.

ASHER MEIR PROPOSES URBAN KIBBUTZ AS A MODEL FOR ISRAEL

Asher Meir of the Business Ethics Center of Jerusalem writes for the Jerusalem Post and for The Jewish Ethicist, often about workers' cooperatives. In this article, he argues that, while the number of worker-owned businesses has diminished in Israel from their great popularity during the era of agricultural Kibbutz, the business model deserves renewed attention in today's Israel. Why? Chiefly because Israel is no longer an agrarian economy, but an economy fostering industrial growth. Read this engaging article. Mr Meir has also written two additional articles advocating for worker-ownership as a viable business option. We hope to carry those in future issues.

Argentine Workers Without Bosses

As Gar Alperovitz told East Coast worker owners at the close of the 2002 Eastern Conference at the University of Maryland campus, there are alternatives to the conventional way of organizing businesses going on worldwide. Worker cooperatives are in the forefront of this movement in the United States, but community development corporations, employee stock ownership plans (ESOPs), pension fund loans are other ways assets are solving serious civic and economic problems.

Among the most striking current examples are taking place in Argentina. The following is an account of why and how workers are taking factories and other businesses that their former bosses owned and operating them as cooperatives. Their efforts are attracting attention, including two first-run documentaries, and uncounted pages of print impounded with essays or reports on their accomplishments - and their problems such as the looming need for debt or equity lenders. Read this extensive article from Infoshop.  

MG Rover: On the Road To Nowhere for Workers?

George Monbiot, a British author whose work frequently appears in The Guardian, wrote a compelling attack on the widespread practice among capitalists of using the basic idea of worker-owned cooperatives to benefit managers and stockholders, but NOT the workers.

His essay was published in The Guardian on Tuesday, Aprill 12, 2005, two days before the MG Rover automobile manufacturing plant in Longbridge, England, was sold by BMW, the German automaker, to Phoenix Consortium, former chief executive officer, John Tower, and three members of the board of directors. They paid 10 pounds ($15.32) for the assets.

Some 6,000 jobs were at stake at the Longbridge plant where the classic MG is built, as is the popular Mini Cooper. Worldwide 50,000 jobs at suppliers or dealerships were also on the line. MG Rover has come to be called "The English Patient." BMW long lost  money at Rover, and the British government had invested millions of pounds. But nothing seemed to bring back to fiscal health:

"...it’s hard not to share the general outrage about what has happened at Rover. The four directors, who bought the company for ten pounds, are reported to have siphoned, quite legally, £40m out of the fuel tank. The taxpayer has had to throw exactly the same amount at Rover’s suppliers to prevent them from following it round the U-bend. And the money which could have funded generous redundancy payments and filled the hole in the pension fund has been frittered away.

The problem here is easily identified: there was a conflict between the interests of the men who ran the business and the interests of the people who worked for them. As long as the directors could escape with their huge pay packets, they had little incentive to ensure that their employees escaped with anything at all."

Read Monbiot's complete article.