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Europe’s co-op boom

In some parts of Europe, workers' co-operatives are well-established parts of the economy

June 16, 2010
4 min read

More than 140 million people are members of co-ops of all kinds in Europe. Some 10 per cent of France’s employees work in the co-operative sector – consumer as well as workers’ co-ops – while the continent in general is having a worker co-op boom. There are now 83,000 such enterprises in 42 countries, employing 1.3 million people, well over double the number in 1982. There are some regions, however, that have a particularly strong history of co-operativism.

Emilia Romagna

In Emilia Romagna in northern Italy, networking by thousands of small co-operatives has produced a regional economy that is the 10th richest in Europe. Emilia Romagna has the lowest unemployment rate in Italy and the highest GDP per capita. Just under half of the region’s inhabitants are members of at least one co-operative. With more than a century of co-operative history, the region now boasts more than 8,000 co-operatives. But it hasn’t always been this good and building this vast network has been a real struggle.

In 1926 the fascist movement, through the National Fascist Board of Co-operation, took over all the co-operatives and removed their autonomy. For two decades they fought hard to retain any independence, with members killed or imprisoned for resisting fascist control.

When fascism was defeated the movement began to rebuild, forming three national co-operative movements. The ‘Lega’ group represents the political left, ‘Confco-op’ represents the Catholic centre-right, and the ‘Associazione’ represents the centre-left, with a large number of unaffiliated co-operatives operating outside these three groupings. The legislative and local government environment is favourable towards co-operatives, with tax benefits and other supportive legislation in place.

Perhaps the most interesting aspect in relation to the UK today is the use of co-ops in social care. In Italy there are now over 3,000 social care co-operatives, employing nearly 60,000 people, many of whom are handicapped or were formerly marginalised from mainstream society. In Emilia most of these are workers co-ops. They range in size from 10 or 12 members to over 500 in the case of CADIAI, which provides a range of health services and elderly care.

First organised in the early 1970s, social care co-ops were formed by care-givers and families to provide services to the disabled that were not available from the state. Today, their turnover is over 1.3 billion euros, amounting to 13 per cent of Italian expenditure for social services. In Bologna, over 85 per cent of the city’s social services are provided through social care co-ops.

In a recent study of elderly care in Emilia Romagna, it was shown that social co-ops provided a superior service at 50 per cent of the cost of state programmes. This can be traced to a number of factors, including more flexible working conditions, lower labour costs and greater commitment among workers resulting.

The Basque Country and Mondragón

The first workers’ co-op in the Basque region was set up in the early 1950s with a handful of members. The Mondragón network started in 1956 with a small stove factory built by five former students of a priest named José María Arizmendiarrieta. A focus on domestic appliances and machine tools for the protected Spanish market allowed the network to expand.

Today Mondragón has more than 66,000 employees operating over 160 co-ops, of which 135 are industrial, six financial and 14 involved in distribution. The three sectors are backed by the Caja (bank), and by housing, schools, health clinics, training co-ops and even a university founded in 1997. Mondragón is the Basque country’s largest business corporation and the seventh largest business group in Spain.

At the time that Mondragón was started, Franco was in power and trade unions were banned. But agricultural co-op laws allowed workers to own their workplaces and the co-ops provided protection for workers who were otherwise easily exploited. However, debates rage over how radical this sprawling business group really is today.

This debate intensified after 1991 when over 100 co-ops, previously organised by geographic regions and linked through the Caja, reorganised in three business sectors as Mondragón Co-operative Corporation. This allowed speedy, centralised decision making but opened them up to the criticism that they had lost their internal democracy and adopted too similar a form to the corporate sector. There are now large pay differentials between workers, although the ‘salary’ is based on a democratically agreed job rating index. Share capital also still only carries one vote per person and with no non-worker owners, co-ops remain in the hands of their active workforces.

In her book The Myth of Mondragón, Sharryn Kasmir discusses a number of problems, from working conditions under ‘just in time’ production methods to lack of union representation and a depoliticisation and loss of solidarity amongst workers. She argues that these issues are cemented by commentators from abroad eulogising the model without any critical engagement, limiting the possibility of the co-ops developing on more progressive lines.

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