I had the occasion to be driving in the Minneapolis/St. Paul metropolis this weekend. The warmer weather tends to spawn a desire to get out under the sunshine in whatever ways possible, and a road trip to the Twin Cities beckoned with success. In acknowledgement to the early arrival of Spring (I choose to believe that it is here now until the presence of its sister, Summer), I chose to drive our van, which is dormant for most of the winter months. I uncovered it, checked the oil and tires, made sure that the fuel tank was full and we embarked on a gorgeous Friday afternoon. But surprises are always in wait, and this one really caught me off guard.
We stayed the night at the home of one of our daughters. In the morning, we got up early to walk our dog at the brink of yet another beautiful day. But when we stepped outdoors, I noticed that one of the van’s tires looked a bit saggy, not enough to be flat, but deflated enough that it needed another infusion of air in its tube. I made a mental note of it, and we went about our sunrise walk.
After our walk and breakfast, I asked my son-in-law if there was a nearby service station where I could fill the sluggish tire, and his response shocked me. “Well, there are plenty of stations around,” he said, “but up here, most of them charge you for the air. I’m not sure where there’s free air around here.”
I was transfixed for the moment, not at all certain that I had heard him correctly. My wide open jaw must have conveyed my disbelief. “Yes, it’s true,” he said with a shake of his head. “They actually charge you for air. I’ve never experienced it before, but it’s pretty common here.”
Now, paying for something that has previously been free is nothing new. For example, when it comes to the airlines, it’s now the norm. I pay for my bags to be loaded onto the plane. I pay for any food I might wish to eat on board that plane. In fact, I’ve even had to pay a fee to assure myself of a seat on that plane, even though I’ve already purchased a ticket! I used to watch television for free, while I now have to pay a monthly fee to the cable company to bring the signal into my home. So the burden is nothing new. But air is the truest commodity, one which is actually needed by all of us for life itself, and the prospect of having to pay for it, even for my automobile tires, well, just jars me to the very core. Pay for it? Really?
By the time I wrapped myself around the incredible truth of it, my son-in-law did remember one station where the air is still free, and I carefully noted his directions to the station, as though successful arrival at its pumps and portals was a feat of momentous achievement. But as we drove to it, I reflected on this troubling trend of modern life. If air has to be purchased from a hose, how long before someone tries to control it outright? What might it mean to have to pay for air?
A song from the 60’s envisioned something like that in the tune, “Big Yellow Taxi,” by Joni Mitchell. One line of the song talks about taking “all the trees, put them in a tree museum, and they charged the people a dollar and a half just to seem ’em.” I remember thinking at the time that the likelihood of that seemed pretty far-fetched, but in these days, I’m not so sure. If the big oil companies, who already command profits from their ventures that are beyond imagination, are still seeking ways to further increase their revenues by selling air, then apparently anything is possible, and maybe even likely.
As I thought about the outrageous idea of paying for air (the oil companies would be far better off simply not offering the service rather than charging for it), it triggered some thoughts about similar outlandish realities faced by others. In Nicaragua, when a rural peasant farmer buys certain hybrid corn for planting, the corn plant bears ears of corn whose kernels are not plantable for the following season; they have been modified in such a way as to prevent their regeneration. In this way, the giant seed companies hold the farmers hostage year after year, forcing them to purchase new seed annually. In other cases, hybrid corn is sometimes planted in such a way that some migrates onto a neighboring farm by accident; the seed companies will sue the unsuspecting neighboring farmers for patent infringement, and even win the judgment. Imagine having to pay for someone else’s error and greed, when you are barely able to feed your family to begin with.
We live at a time when eighty-five of the world’s wealthiest individuals hold as much wealth as half the world’s entire population. It is apparently the case that those who command such wealth are not content with such disparity, and seek to control virtually all of the world’s substantial bounty. Including the air. While humans have always lived amidst great differences in wealth and resources, never have we seen inequalities as these.
There is no moral to this story or analogy to be made. It is simply a report of our further evolution as a species which appears to be intent upon playing the zero sum game of “last man standing.” For the few who play it, it must be exciting. But in the end, it will be the loneliest of all victories….
The urgent need to re-invent the “fair trade movement”
René Mendoza Vidaurre
The Fair Trade movement (FT) started in 1964 within the framework of the United Nations Conference on Trade and Development (UNCTAD). Since then a number of European countries promoted the UNCTAD stores, selling products from developing countries. Then the “solidarity store” chain got started. In 1973 FT coffee began with coffee from Guatemalan cooperatives under the brand “Indio Solidarity Coffee.” In the decade of the 1980s the volume of products increased, as well as their quality and design; the solidarity stores sold blended coffee, tea, honey, sugar, cocoa, nuts, bananas, flowers…In 1988 “Fair Trade Labelling” began in Holland, and in 1997 the International Fair Trade Organization was formed – FLO for its acronym in English. Since 2012 decisions in FLO are made with 50% of the votes of organizations from three continents (Latin American Coordinator of Fair Trade from Small Producers, Fair Trade Africa and the Network of Asian Producers) that represent 800 organizations and 1 million small producers from 60 countries in Africa, Asia and Latin America, and the remaining 50% of the votes from 21 national brands.
What has happened with this large FT movement? Here, focused on coffee for didactic reasons, we present its innovative character, its later deterioration, and a path to reinvent itself.
The novelty of fair trade
The biggest obstacle for getting out of poverty is the intermediation network that combines usury, low prices and deception in the weighing and quality control of the product, and the lack of organization of the producers. FT responds to this challenge with three elements (see Figure 1). First, the member families receive credit through their first and second tier cooperatives, capital that comes from the social banking sector (9% interest rate), and from FT organizations. A good part of them pre-finance 50% of the value of the product at 0% interest, so that the producers can avoid usury and ensure product. Secondly, FT sets a minimum price of US$1.40/lb when the international prices are less than $1.40/lb, provides an additional bonus of US$0.20/lb above the market price, and for organic coffee a premium of US$0.30/lb. Thirdly, compliance with the agreements and policies for organic coffee is assured by the certifiers: FLO does it for the bonus and good operations within the cooperatives, in both cases in situ, erecting long term relationships.
This combination of commerce, financing and multinational organization of counterparts leads to the families improving their production, their lives in the family and in the community, with the FT network being a space for learning and social, economic and environmental transformation.
The deterioration of fair trade
After a half century of FT, what has happened? First, the prices to the producer in terms of the final value of coffee in the decade of the 1930s was 33% (Wickizer, 1943, The world coffee economy), 27% in the decade of the 1970s (Clairmonte and Cavanagh, 1988, Merchants of Drink), 15-20% in the decade of the 1990s (Pelupessy, 1999, Coffee in Cote d’Dvoire and Costa Rica), 10% in 2001 (Mendoza y Bastiaensen, 2002, Fair trade and the coffee crisis in the Nicaraguan Segovias) and 12% in 2009 (Mendoza, 2012, Gatekeeping and the struggle over development in the Nicaraguan Segovias); in other words, it went from 33 to 12% over 8 decades. When we compare both chains, the prices to the producer in relative terms (%) is smaller in the FT chain than in the traditional chain, even though in absolute terms it is a little bigger; in other words, the FT coffee price to the consumer is higher, while its distribution through the chain is similar to the traditional chain. Secondly, credit gets to the member families in an unequal manner, some get nothing, no one gets it at an interest rate of 0%, others get some amount at interest rates between 12-18%. Third, the FT bonus gets to the families in an unequal manner, some get nothing, others get US$0.5/lb and others get a little more. Fourth, the complaint is that the yield (humidity and quality of the coffee) is worse than in the traditional buyers. Fifth, it is estimated that 30% of the total coffee that the members produce is sold through FT, while the export cooperatives are increasingly buying coffee from “third parties” (not members of the cooperative) who come in through the traditional commercialization network. From here, the challenge of ending usury, accessing markets and doing it through a multinational alliance is being rolled back.
The first two elements of FT were weakened, and the third is controlled by elites in the FT chain, attracted in turn by the logic of the market. FLO audits, and analysis of the social banking sector and verifications of the organic certifiers are reduced to formal elements (review of financial data, minute books and written records); in some cases without understanding that the social structures absorbed the FT chain, in other cases understanding these structures, but blocked from reporting and taking measures out of fear of financial losses, and in general keeping quiet when facts like the pre-financing that comes from the stores of Europe or the loans from the social banking sector do not get to the producers, yet they are the ones who have to pay them.
Figure 2 expresses the concentration of power (capital, positions, information and contacts) from where the entire chain is managed, and the privatization of the FT brand. Seen from the region, the second tier cooperatives concentrated investments based on a good part of the bonuses, premiums and earnings, and are the “door” to the certifications, the banks and the markets. The Delegates of the first tier cooperatives to the second tier cooperatives, as well as their board members, are eternal. The administrative personnel run the second tier cooperatives, and many of them are named by national and international organizations as the representatives of their cooperatives in their organizations. The rotation and renovation of the leaders is vetoed, because it would affect their financial income, the control of the administrative staff of the cooperatives, and the circuit of transnational power; and if that veto conflicts with the statutes of the cooperatives, the statutes are reformed.
As that power got consolidated, most of the first tier cooperatives hollowed out; they are not doing savings nor credit, some are not even collectors of coffee and their board members do not meet monthly, even though their “minutes” exist. Under these conditions these cooperatives cannot have an impact on the second tier cooperatives; if they try to, they face another wall: “FLO and the bank say that you cannot change me, because my signature is on the contracts”; if there is a change in management of someone who was a favorite of FT: “If you change the manager, we are not going to buy your coffee.” If a cooperative dares to save and manage itself: “you do not have the FT certification nor organic coffee certification and I am not going to give it to you, if you insist it will end up being very expensive financially.” If independent researchers seek information in FLO, “we only give information to the cooperative.” And, if in spite of these walls, there are first tier cooperatives that are able to get out of this power circle, their bonuses and premiums more frequently get to their members, and their credit to their members has lower interest rates.
The FT chain expresses the “law of oligarchy” that Michels in 1911 found in democratic organizations, and the logic of the markets (importers, roasters and distributors increase their control over the value of coffee, and the FT staff act out of financial interests – and over wanting to earn more Fair Trade USA and FLO separated), within a framework of mutual complicity and exclusive transnational legitimation. The paradox, a movement that got started to fight traditional commerce was absorbed by that very logic, even though in the name of the poor.
Toward the second generation of fair trade
Clark and Doersam (2000, open space community) say that organizations are born, grow, mature, decay and die or they change. Deterioration is the death of FT. To avoid death, we argue that FT should reinvent itself, responding to the producer and consumer families, expanding and strengthening the relationships and democratizing the FT chain. First, Solidarity Stores and first tier cooperatives should construct a space for direct communication (SS-C), including the possibility that one be a member of the other; SS-C be supported from studies coming from an alliance between a development studies institute in the north and another in the south; SS-C become a space for learning about prices, credit, distribution mechanisms for the bonus and the premium, the democratization of the FT chain…; SS-C, to the extent that it learns, influences FLO so it is transparent and shares with the public its audits and reports, transparent to businesses, certifiers, banks and cooperatives, getting beyond the myth that “the enemy will take advantage of our information”. Secondly, FLO and the certifiers respond to SS-C, their audits and verifications contribute to good practices within the FT organizations: e.g. veto the permanance of board members and delegates as leaders for more than two periods in the cooperatives and international organizations, regardless of the reformed statutes and tricks of the elites; the FT seal and organic coffee certification is only for the coffee of the members. That the FT and organic certification be for first tier cooperatives, and at prices agreed upon with SS-C to prevent the first tier cooperatives from being excluded. Third, that the first tier cooperatives develop savings and loan services, and decide about the use of 100% of the bonus and the premium, while the second tier cooperatives specialize in coffee processing, facilitate the connection of the first tier cooperatives to markets, and support groups of cooperatives to develop services depending on the opportunities around them and their capacities.
Based on these three elements, the model would be “I support you so that you might commercialize your excellent coffee”, instead of “I buy your coffee to sell it”; the producers would recover their faith and turn in 100% of their coffee to FT, and the consumers would appreciate that they are really drinking organic coffee and that the added price that they pay is working well; systematic corruption would be avoided that is impoverishing producer families; the social banking sector would recover their loans at less cost. This route could be a way of getting beyond Michels Law and building “societies with markets” instead of “market societies”, and with this the FT mechanism would really help people get out of poverty.
René Mendoza has a PhD in development studies, is a collaborator of the Wind of Peace Foundation (http://peacewinds.org/research/), an associate researcher for IOB-University of Antwerp (Belgium) and for the Nitlapan-UCA Research and Development Institute (Nicaragua). rmvidaurre@gmail.com
There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things.
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(Niccolo Machiavelli, 1532, The Prince)
Grameen Bank (“village bank”) emerged nearly four decades ago in Bangladesh. In 2006 its founder, Muhammad Yunus, received the Nobel Peace Prize “for his efforts in creating economic and social development from below”, achieving world recognition for microcredit. Apart from the criticisms that microcredit pacifies poor families so that they do not fight for their rights, and that the US$130 average amount is not enough to buy a cow, and much less a hectar of land, its achievements are impressive: 3,000 branches, 7 million borrowers (95% are women), and 3% arrears rate; nearly 100% of Grameen children that start their studies finish them; education, health, retirement and pension programs, and services of access to new technology – cell phones in more than 2,000 villages (Grameen Telecom), solar panels (Grameen Skakti) and internet in the villages (Grameen Communications). What made posslbe this change of the century in finances in favor of the poorest of the poor?
Distancing themselves from conventional finance
After years of war, Bangladesh achieved its independence in 1971, a year later Yunus returned to his country as a university professor, and in 1974 the country experienced a great famine. Yunus, his colleagues and students wanted to help, and went to live – and study – in the village of Jobra. There they found usury with interest rates of up to 10%/day, and their dependence on those loans made them live as semi-slaves. In Jobra they counted 42 people under these usurious conditions, and the total loan amount was only US$27. He lent them those US$27 at 0% interest, and to his surprise they paid him back; then he discovered that they were paying interest rates higher than 60%/year to the commercial banks. So he observed something contradictory in the banking system, they were there to give loans, and acted under the principle of “the more you have, the more you get”, but they were exclusive: “when you exclude people for no fault of their own, it is apartheid.” Without the first dollar they could not get the second one, this was the situation of the poor. From there emerged his vision: end poverty.
He requested a loan from the bank to provide “small loans for the poorest.” The banks rejected the request: the poor do not receive loans because they cannot repay them, they do not know how to fill out the forms, and they do not have material collateral. After six months, and after Yunus himself offered collateral, one bank lent him US$300. Yunus and his team organized the credit and recovered up to the very last cent. The manager of the bank attributed this to luck, and when that credit experience was replicated in five, ten and fifty villages, that manager did not change, “because people can make mistakes, but the banking system does not.”
The more he lent, the more they saw the need to found an organization: Grameen Bank (1983) (GB), in order to place the first dollar in the hands of the poorest. What was the motivation for the people to pay and improve their lives?
Microcredit in groups and the social movement
GB followed a path opposed to the logic of the banks and what economics teaches. The bank waits for the client in their offices, requires material collateral, and provides individual loans, high loan amounts, and to people with more resources; it is a system built on the basis of prejudices; “Those who have more resources pay.” GB started microcredit (small amounts), without material collateral, with groups of five people as the basis to build a culture of credit, members with different businesses that mutually support one another, if one member does not pay the rest do not get a loan; the groups meet weekly to pay, save and renew their commitments to 16 norms (have a small family, build latrines, send their children to school, stop the practice of dowries, drink water from healthy sources or boil their water, grow vegetables, vote in elections…); they were mostly women because they were the poorest and those most affected by the purdah norms (conceal women from men who are not direct relatives), because they made better use of the loans and they paid on time. The GB officials stay out in the villages, explaining the microloans and accompanying those that have been disbursed, and because of the role of the groups, the credit and the savings in good measure are administered by the people themselves; the transactions are done in front of everyone. The basis is trust; without lawyers, nor taking people to court for lack of payment.
The novelty is in the learning capacity of GB and in its social movement nature. Yunus and his team immersed themselves from the beginning in order to understand the reality; so they understood the bottleneck of usury, discerned their vision and maintained it. Then they experimented, it if did not work out, they would study the banks to do “just the reverse”; trial and error forming groups with women. These circles remind us of the microfinance institution known as Bora founded by Munro and 50 beggars in Kiberia (Kenya) (“small loans, big changes”), Toyota (“if one worker makes a mistake another worker corrects him”), and Wikipedia (“one writes and others anonymously correct, improve and edit the text”). The key: combining decentralization (circles) and centralization (GB), economics (credit) and social-cultural movement (freeing women from the conservatism of Islam), and personal and social change.
Erosion of microcredit and the imperative to recover its novelty
Thousands of NGOs and microfinance institutions got involved in microcredit since 1980, they even adopted the circles called “solidarity group lending” (SGL). Most of them fell by the wayside, or turned into conventional banks, brandishing the prejudices that GB fought against: “the poor do not pay”, “credit only with material collateral”, “arrears are recovered by lawyers”, “credit is done by people who have studied it”, and “SGL only for recovering the loans.” In spite of the path shown by GB, those who followed, took it and added the microcredit discourse and SGL in the old form of making credit exclusive, and have been “scaling up” to social groups with more resources. Albert Einstein said it well that “it is easier to split an atom than it is to break a prejudice.”
How can this innovation of the century be recovered? Following the path of Yunus and his colleagues, doing immersion and creating conditions for experimenting. Recognizing that in our countries upward of 70% of the population continues to be excluded from credit, and that they constitute an enormous sector to innovate (e.g. with larger amounts for family agriculture). Rethink SGL as “pressure among themselves to pay”, to believe in themselves, improve their businesses, take on norms like erradicating domestic violence and having sustainable practices. Understanding credit (from the Latin credititus, “having trust”) as the “door” for a strategic alliance between SGL with the poorest organized into associative forms, groups with more resources and better organized, and financial institutions, around financing and social change, and scaling up in that alliance, combining technical assistance and commerce.
Even though the government of Bangladesh has been working to take over GB since 2013, and there are growing criticisms that GB is being dragged along by the market, GB has shown that is can change the world with $27 dollars, and do it bringing the people from the base of the pyramid to a financial system open to learning and to alliances with the poorest of the poor. This can be an initiative that begins “a new order of things”.
* I thank F. Huybrechs and J. Bastiaensen for their comments on the draft of this article.
René Mendoza has a PhD in development studies, is a collaborator of the Wind of Peace Foundation (http://peacewinds.org/research/), an associate researcher for IOB-University of Antwerp (Belgium) and for the Nitlapan-UCA Research and Development Institute (Nicaragua). rmvidaurre@gmail.com
Internal governance and the role of cooperatives in Central American rural society
René Mendoza V., E. Fernández, K. Kuhnekath, J. Bastiaensen, and A.J. García[1]
Thanks to Picketty (2014) the topic of inequality became an issue again in our days. Nevertheless, markets, technology, skills and social relations are formed and decided in institutions and organizations that are “social machines” of inequality. This article is about a part of these “machines”, the cooperatives and the chain of organizations connected to them.
There are 800 million cooperative members in the world (International Cooperative Alliance); in Latin America there are between 30,000 and 50,000 cooperatives with between 17-23 million members (Coque, 2002, based on Buendía, 2001); in Central America there are 8,282 cooperatives, of which 3,410 (41%) are legally registered in Nicaragua with 188,000 members (Mendoza, 2012). In Latin America the food production and the mitigation of climate change depend to a large extent on the small producers; in both cases, the cooperatives are fundamental. Nevertheless, market forces and their influence on States, instead of strengthening the cooperative movement, are affecting it in a negative way.
Committed to the importance of the cooperative movement, we ask ourselves how the member families are managing their cooperatives. Historically and within the current context of neoliberalism, the members have managed their cooperatives from within, be they as part of economic or political chains, or part of their extended families and networks of their communities. The cooperatives are struggling in so far as they are glocal spaces – each organization and their economies are local spaces and at the same time express global forces, expressed in networks, policies and ideas (Hart, 2006). In this work we analyze how the cooperatives are trapped in the “iron law of oligarchy” proposed by Michels, and how they get around and beat this “law”, and under what circumstances they do one or the other. Supported by Polanyi, we ask ourselves how the cooperatives are expressing tolerance for the “movement” (neoliberalism and its different variations), what sensitivities do the “counter-movement” processes have, and thinking about how to carry out “transformative research”, we also reflect on a normative question, how should the member families be managing their cooperatives.
It is a text based on a bibliographical review and practical experience in which the authors are involved, believing that the theory and practice are connected and that social science contributes to social transformation.
1. About the research question
How are the member families managing their cooperatives? The question assumes that the members manage their cooperatives, how do we know that they are managing them? Most of the current studies refer to cooperative enterprises for taking advantage of market advantages, the advantages that they have “for achieving greater economies of scale, adopting new technologies, obtaining information on the market, or expanding the scope of operations in another way, not achievable by a company on its own” (Henehan, et al, 2011[2]).) Along these lines, Hueth and Reynolds (2011) think that, instead of the traditional “representation processes from the bottom up”, the key for cooperatives is an Administrative Council with business knowledge and the capacity for communicating with its members about the positive impact of the cooperatives in the market in favor of the people[3]; and along with the Council, a “well qualified team of organizational, legal and accounting advisors can be beneficial for the success of the cooperative development ” (Henehan, et al, 2011). The question for researchers and also for members of the cooperatives is: How do you manage your organization? The leaders and managers of Cooperatives from different countries agree that cooperatives are managed by their laws, voting and by the assemblies[4], but in the end they think that their cooperatives are governed by their board of directors (“…governs all the positions of the cooperative”, see footnote, page 4). This has the cooperatives based on a formal procedure, through which the Administrative Council leads a cooperative, in particular having an understanding of business.
If the cooperatives as economic organizations are part of value chains, where the governance is agreed upon among the connected (trans)national enterprises, based on their procedures, “coordination through governance mechanisms” and “configuration and/or application of parameters throughout the chain” (Humphrey and Schmitz, 2002:9), the cooperatives move within organizations promoted by the market, like any business. In this framework, the role of “governance” of the member families involves doing out what corresponds to them: delivering to their cooperatives more or less products that respond to what is required, and paying, or paying less, for the services that the cooperatives in the chains provide them. From here, the market, through the chain of companies, drives norms, products, services and social relationships, and gives shape to the way in which the cooperatives organize themselves internally, and in relationship to others (for example, it pressures the members to specialize in one crop, discourages a cooperative from connecting with another in their communities).
Our research question allows us to place it within a political context. If they choose their presidents, they are part of a “chain of managers”, at the same time the members still have “governance function”, for example they can turn in (sell) less coffee, and sell the rest fo other buyers. When we look at the roots of the cooperative movement, elections are a political action which is not the only governance role of the members; when cooperatives respond to their adapted Rochdale principles (voluntary and open entry, democratic management, economic participation, autonomy and independence, education, cooperation among cooperatives, commitment to the community), they are governed by all the members. Nevertheless, when these principles are expressed in laws and supervised by States, at least in Central America, the States tend to control the cooperatives along the lines of their political interests; therefore, the members apparently have less – while the states have more – “governance role” in the cooperatives. As an hypothesis, we would say, when the cooperatives respond less to their adapted Rochdale principles, and are more dependent on the market and the state, they are more trapped in the “iron law of oligarchy”.
The Central American cooperatives are “political arenas”: “places of concrete confrontation between social actors that are interacting on common issues” (Bierschenk and Olivier de Sardan, 1998: 240), where the interests, policies and ideas of different trans-local actors are expressed (see Figure 1). These conflicts means that there are different paths, and that the members are also actors. It seems that this has been the historic case of the agrarian cooperatives; their appearance is due to the state, donors and the Catholic Church, and in general as an expression of the resistance of the families to the dispossession led by intermediaries and userers.[5]. For the members, that struggle has meant the diversification of products, markets and network strategies, as well as the way they assess their cooperatives depending on specific circumstances.
For the purposes of this article, we understand governance in the cooperatives within a broad and multiple perspective. The cooperatives as organizations are global “political arenas” in which the forces of society, the market and the state participate in various chains of actors, and where there is conflict and coincidence of interests, ideas and norms, as well as competitiveness and cooperation. There are two central lines that cross one another in this: resources that come in from the top down, expressed as procedures, prices, costs or donations; and knowledge that comes from bottom up. The small producers are struggling within this framework with votes, product delivery, cost reduction, payment for services, negotiation, learning…
This article is a basis for us to study 25 cooperatives as organizations between 2014 and 2016, in their internal aspects, and as part of the transnational chain of actors, looking for how, within the context of neoliberalism, they express tolerance toward the “movement” (market and state imposition), and sensitivity to the processes of the “counter-movement.” The specific research questions are: What have been the structural mechanisms for controling the cooperatives and making them instruments of the elites or for becoming autonomous and responsible organizations? Under what circumstances have they emerged, evolved, and how can they be transformed?
2. Cooperatives as organizations
A dozen people come together and form a cooperative, and so the “collective” and the “social” appear. A cooperative is a legal organization, under which there are agreements with goals, procedures and members. Later the importance of control mechanisms appears, because there are resources to administer, as well as claims for their redistribution. And that organization is part of a chain of organizations, be that with other cooperatives that form a second and third tier organization, be that with market organizations (e.g. fair trade, Ritter cacao company, Eskimo and Parmalat in milk), or with state institutions and organizations at the community level (see Figure 1).
Generally the cooperatives are taken for granted. In Latin America the Social Economy approach (see Guerra, 2012), that emerged from the decade of the 1980s, reflects the appearance of organizations (ethical banks, fair trade organizations, small farmer networks, self governed workshops, religious base communities, and poor communities in the urban peripheries) in reaction to the institutional crisis created by the neoliberal policies. In the decade of the 1990s solidarity economies emerged, new cooperatives and associations with popular and solidarity groups, and informal collectives (bartering clubs, revolving funds, communal banks, family cooperative and collective networks), all of them were added to the traditional cooperatives, mutual benefit societies and associations, forming the solidarity economy movement. Reflecting this, the social economy approach reconceptualizes the companies and the economy as “forms of economic organizations – production, commercialization, finance and consumption – that have as it basis associated work, self governance, the collective ownership of the means of production, cooperation and solidarity[6].” In this framework, the cooperatives are seen as part of a larger family of organizations, and to a certain extent, the reconceptualization of the company and the economy is close to the Rochdale principles. Nevertheless, based on our understanding of the cooperatives in Central America, this type of cooperative is like an ideal; it is assumed in the social economy that the cooperatives have internally harmonious social relations, that conflict only happens with the private and public sector, and consequently the internal situations of the organizations are not studied.
We want to study the cooperatives as they are and observe the process by which the cooperatives change or can change. In what follows we summarize Michels (1962; first publication in 1911) in terms of his theory of the “iron law of oligarchy.” Then we present Lipzet et al (1956), who, without denying Michel´s theory show that there is another route to “the law”[7]. In both cases we are going to look at the internal part of the organization, and then we will contextualize it within a broader organizational framework.
2.1 The path of the oligarchy and the way to avoid it
When an individual person cannot solve a problem, he or she can resolve it through an organization. Cooperatives have emerged to resolve commerce and the concentration of credit, to learn about agricultural technology and to grow as leaders, to defend their land and their perspective on environmental issues. Organization is a means for carrying out collective action. In theory, the organization is what emancipates people and helps small farmers be viable in economic, social and environmental terms. Nevertheless, cooperatives, according to our preliminary observations, have become more politically centralized and economically concentrated in fewer hands, which could be affecting small farmers and maybe slowly dispossessing them of their organizations; even though the small producers as actors are certainly resisting in different ways.
We are facing events with “unexpected consequences” (Merton). The values system of the cooperatives (the adapted Rochdale principles) illustrate that the practical results of this political and economic process are not necessarily identical with the Rochdale principles. The social relationships themselves that make possible the production of the values system of the Rochdale principles give birth to and observe “their own laws” that can change the “intentional meaning” of the values system behind the individual participants in a new “sense.” In other words, the conditions that give rise to a collective value system are not in every case identical to the conditions for their implementation. For the implementation of the cooperativist ideas on the level of their social relationships, it is not enough that those ideas of values enter into the identity of the cooperative as a social group; suitable structural conditions would have to exist, whose “laws” would not hamper, but rather facilitate the transformation from one state to the preferred state. The role of the structural conditions on the implementation of collective values has been discussed within the context of the democracy problem, and now in the conext of the values system of the cooperatives. Democratic norms require that the decisions about collective goals and actions not be done through imposed applications, but through consensus under the possibility that all the participants can have an impact.
It is difficult and problematic to carry out this democratic postulate if the magnitud of the group or the problems that they have to solve requires a delegation of tasks and an organization of decision making through a division of labor. In this case the possibility of democracy depends on the fact that the different policy functions (horizontal differentiation) not become the starting point for a vertical differentiation with a division of different and unequal powers. The German-Italian sociologist R. Michels (1876-1936) belongs to that group that believes that democracy is an illusory program that assaults and rejects fundamental social laws. In the beginning of his professional life Michels belonged to an anarchical trade union movement, and later got close to the fascism of Mussolini. He discovered, within the context of his research on the structure of the organization of the German worker movement, a structural mechanism that he himself called the “iron law of the oligarchy”. This principle means that every attempt to achieve collective goals and interests leads to an unequal distribution of power among the participants. According to Michels it has to do with a structural mechanism whose effect is completely independent of the values system ideas of the affected social group.
Michels (1962:365) said that “it is the organization that gives rise to the dominion of the elected over the voters, of the leaders over the constituents…the one who says organization, says oligarchy.” This result is due to the modernization of organizations that requires competent leadership, centralized authority, and a division of tasks within a bureaucracy. Within this framework, the leaders increase their power in proportion to the growth of the organization; more organization less democracy; more extended and branches to the organization, less control of the members; the more developed an organization is, the more complex is the administration, the more specialized are its obligations, and the greater the differentiation of functions. He stated that representative democracy in place of an elite government was not possible, that it was only a facade to legitimize oligarchical rule. A quote that summarizes his theory is:
… society cannot exist without a “dominant” or “political” class, and that the dominant class, while its members are subject to frequent partial renovation, constitute, nevertheless, the only sufficiently lasting factor of effectiveness in the history of human development. From this point of view, the government…, the state, cannot be anything else than the organization of a minority. It is the objective of this minority to impose on the rest of society a “legal system”… The majority is, then, permanently incapable of self governing. Even when the discontent of the masses culminates in a successful attempt to deprive the bourgeiose from power…always and necessarily a new organized minority sprouts from the masses, that is elevated to the rank of a governing class. So, the majority of human beings, in a condition of eternal guardianship, are predestined by tragic necessity to submit themselves to the dominion of a small minority… (Michels, 1962: 353-354).
So the oligarchy is constituted following what the organization requires, the docility of its members, the conversion of the leaders into men abandoning their ideals, and into the bureaucratic apparatus of the organizations that become more and more hierarchical.
It is not surprising that Michel´s thesis, that in a simple and grandiose way declares that democracy is impossible, continues provoking debate today. The book of Lipset, Coleman and Trow (1956) is an important reference for our study on cooperatives. They differ from other contributions on the problem formulated by Michels. Lipset et al do not discuss the “iron law of the oligarchy” of Michels on the level of general theoretical speculation, but with the support of empirical analysis try to reduce and limit the claim of validity of Michels´”iron law” to specific structural conditions to define ex negativo the social premises of democracy. Lipset et al, through observation and case study, proved that the political process was getting off the course proposed by Michels. How was it possible to escape from the authority and validity of the “iron law”, characterized by differentiation of status, power formation and change of interests? How can the formation of a cartel of officials with monopoly control over political and organizational capacities be prevented in an organization? The authors found that the key factor is the central axis of a system of organization of values which prevents the formation of a cartel of officials, that it is the competition for leadership anchored in the statutes of the union and in the daily work of the organization.
Lipset et al explained the exceptionality for building democracy was due to the coherence between individual conduct, the quality of the local environment, the leaders and the identification with the industry; through these factors, an underlying idea is the social basis as central for political life. First of all, the union was founded by a local group that valued its autonomy, located in a place with a strong history of local organizations, that was reinforced by the printing industry that operated in the local and regional markets. Secondly, the economic situation of the members was pretty homogeneous, all of them belonged generally to the middle class, with relative equality in terms of income, status and communications skills, all of which motivated them to have democratic decision making processes. Thirdly, they kept the competition between two different groups in the elections, which kept the leaders from falling into corruption, and the existence of this competition allowed them to play a counterweight to the leaders in order to avoid oligarchical practices. And fourthly, the identification of the members with the industry, which related to the local economy strengthened by the industry that operated in the local and regional market, without much competition.
2.2 Broadening and specifying the study on cooperatives
Lipset et al include the (local) context that is missing in Michels´study. Both studies are based on empirical research, Michels writes based on his participation in organizations, while Lipset finds in the Union a divergent path from Michels´theory, first as part of his university work, and then applying a survey to the Union itself. Michels and Lipset et al were based on urban organizations and industrial workers, while our concern is with farming families. They focused on the internal world of organizations, which is also our interest, particularly the first tier cooperatives, but contextualized within a broader panorama. Then, these cooperatives, in most of the cases, belong to a second tier of cooperatives, an interrelation that has to do with our study. Then, most of the second tier cooperatives are part of third tier cooperatives. A common pattern between the three tiers of cooperatives is that each “higher” tier tries to concentrate the principal functions and resources from the “lower” tier of the cooperatives, while at the same time adding new functions; the principal investments are concentrated in the second tier cooperatives (e.g. processing industry), as well as resources and services (commerce, credit, technical assistance).
Now our unit of analysis are the first tier cooperatives. We see them as global arenas, in which different organizations (cooperatives, fair trade companies, state and organizations) and local networks have an impact. By way of hypothesis, if the first tier cooperatives change (improve), all the cooperative movement can be improved, and the relationships with the different actors, including markets, can change. Inspired in Michels and Lipset et al, we think that the cooperatives tend to fall into the “law of oligarchy” and at the same time their members develop cooperatives as their means for their own viability. It is a process where the key resources (prices, product quality, credit, knowledge, meaning) are fought over, mediated by multiple and different rules, with the intervention of multiple actors committed to their interests, strategies and ideas. All this above all in the last 30 years. (See Figure 2).
2.3 The context that affects the cooperative organization
What does (glocal) context mean? Marx refers us to the circumstances in which people make their history. We think that part of those circumstances in Central America refer to the rural zones where there is no longer space for extensive agriculture (increasing production with more area), based on the old knowledge of slash and burn. Covey (2012:xiii) states that “we are in the midst of one of the most profound changes in the history of humanity, where the principal work of humanity is moving from the industrial era of “control” to that of the knowledge worker. From this angle, the rural zones of Central America are moving from extensive agriculture to a more diversified economy, where knowledge is what is most important.
Let us illustrate this moment with the words of a producer, words that are shared also in other parts of Central America:
“In the last 10 years agriculture has been getting complicated. We used to plant, weed, and harvest, when things went bad, we would use new areas; but now the plants are weak, there are more insects and diseases, more sellers of inputs, the rainfall varies more, there are no more areas …” (Member of the José Alfredo Zeledón Cooperative, Nicaragua; March 2013).
This small farmer was refering to the agrarian situation, to maintaining the production level of previous decades; the change is even more profound when prices are added in, as well as costs of inputs, terms of exchange, productivity, product quality…Our hypothesis is that, even though the rural context is changing, the structures of organizations that collaborate to benefit small farmers remain the same, while the large organizations that affect small farmers are progressing rapidly, like the business circuit of companies (market, finance, research and development approaches like “payment for environmental services” and “payment for results”), the reorganization of value chains and the use of stagnant local organizations.
This means that the old patron-client relationship prevails in the region, which affects the way in which the cooperatives are organized; and from the side of the cooperatives and the organizations that work with cooperatives, the “leader-follower” approach persists. Marquet (2012) maintains that the leader-follower approach assumes that the world is divided between a minority of leaders and the large mass of followers. This approach has developed over a long period when progress depended on physical work, where the skill of the leaders was needed to mobilze the masses with physical work. This also has been the situation for centuries in Central America: a deep connection between the patron-client relations, the leader-follower approach, and extensive agriculture (and extractive economy).
The current context, nevertheless, depends more on cognitive work. In Nicaragua the end of the agricultural frontier and extensive agriculture, that requires more physical labor, is just around the corner, because the agricultural frontier has reached the ocean, challenges are increasing because of climate change and the instability of agricultural markets. There is an urgent need for an agriculture that makes intensive use of the land, provides more added value to products and natural resources, and an improvement in the lives of the people. All this means that we are living in a more complex world where the actors need more knowledge. So the agrarian context is changing, while the organizational structure of the small farmers and organizations that work with them apparently remains fixed. Consequently, there is an urgent need for their transformation.
Covey (2012) argued that the present context has to do with the “knowledge worker”. For the purpose of responding to this context, Marquet (2012) introduced the leader-leaders approach, where all can be leaders and use their leadership skills in every aspect of life; that according to him three elements make this possible: that you have authority (decision making and interaction for solving problems in each area of the organization without passing through vertical procedures); competencies (specific knowledge, deliberated thought before acting, and learning instead of being trained); and clarity (know the purpose of the organization and the criteria for decision making[8]). This perspective could be coherent with the Rochdale cooperative principles in the sense that it includes formation (education), cooperation (transformation of the organization), participatory decision making, transparency…
The glocal context in which the cooperatives move is changing, from a world based on physical work to a world in which the principal challenge is learning, and the organization of agriculture for producing more in the same zone, with better quality, and environmentally, economically and socially sustainable. This challenge pressures organizations to be transformed, to overcome the patron-client relations and the leader-follower approach. Therefore, we propose two hypotheses: 1) the longer the transformation of the organizations takes, the more dispossession will happen; 2) the 1st tier cooperatives are key because the knowledge of their territories has become the fundamental crossing point between the flow of resources (“services”) that come from the top-down and the flow of knowledge that goes from the bottom-up for the control and orientation of the resources (“services”). Figure 3 summarizes our renovated framework.
3. Market forces
We began asking our research question, about how the members manage their cooperatives. We reviewed the studies of Michels, and Lipset et al in order to read the cooperatives as organizations on the oligarchy route (sometimes called “patron-client” or “leader-follower” relations), and as a space where the members transform their organizations. In focusing our unit of analysis on the 1st tier cooperatives, we place them in their larger context, including other groups of cooperatives, fair trade organizations and the state (even though without more discussion). Lastly we mentioned the challenge of learning and organizing agriculture in the current agrarian situation of Central America, which requires the transformation of the cooperatives and the organizations connected to them. But we have not discussed the more important factor of our time, the markets, that have a huge affect on the cooperatives. This section will now deal with that.
3.1 The Neo-liberal market “movement”
The agrarian cooperatives have risen as a reaction to the despotic and oligarchical organization of the elites who dispossessed the population of their land, capital, labor and /or product markets. Nevertheless, we see that the cooperatives over time tend to become something contrary to their purposes, into something oligarchical and anti-democratic, reduced to the economic aspect. What is the magnetic force that draws them away from their purposes and their cooperative principles? Stiglitz (2001:vii), in the prologue to Polanyi´s book said:
… Polanyi, who described the great transformation of European Civilization from the pre-industrial world to the era of industrialization, and the changes in ideas, ideologies and social and economic policies that accompanied it. Due to the fact that the transformation of European civilization is analagous to the transformation that the developing countries throughout the world are facing today, frequently it seems like Polanyi was talking directly about the current situation.
What did Stiglitz mean? Polanyi (2001, published originally in 1944), described the situation of Europe before the Second World War. He understood society to be in transition to the market economy. In the non-capitalist economy or the “society of markets”, people organized their economies under the logic of reciprocity and redistribution, the markets had limited functions with trade mediated over large distances. In the capitalist society or the “market society”, people tended to sell in an extended way and maximize their profits, and consequently the social order eroded. The factors of production, like land, labor and capital were no longer defined more by criteria of tradition, reciprocity or redistribution, but by the markets as “ficticious merchandise”. Society subordinated to the market, and as a self regulated market separating society into economic and political spheres. This image of Europe before the Second World War is what Stiglitz says is what the current situation of developing countries is like.
Polanyi suggests that the liberal radicalization through the “market society” led toward fascism as an authoritarian –corporativist way of re-establishing the control of society over the market, the eroder of social relations. The lessons were learned, and Europe, after the Second World War, created its welfare states with a fundamental role for the states, in general terms on the basis of the ideas of Keynes. They experienced what was called “embedded liberalism”: a relationship between the economy and the social system where the economy is embedded into society (Ruggie, 1997, 1982). Nevertheless, this system was contested, with the increase of greater predominance of liberal thought from the time of the 1973 oil crisis and the debt crisis of the Latin American governments in the decade of the 1970s, and consequently, the prevalence of neoliberal policies since 1980.
Probably the most inspiring source of neoliberalism, at least for our topic, is F. A. Hayek from the Austrian School of Economics, who delved into the old liberal ideas of the market economy, smaller role of the state for maintaining the rule of law (Hayek 1944); and proposed the free price system for sharing and synchronizing personal and local knowledge, which would allow the members of society to promote different and complicated purposes through the principle of “spontaneous self organization”. Hayek (1944) argued that you have to let the market do everything, that the function of the State is to protect the market, that the free price system was like language, the result of human action but not designed by humans. “Self organization” seems equivalent to “spontaneous order”, understood as free networks and not created nor controlled by anyone, while the organizations are supposedly hierarchical networks, created and controlled by humans.
Whether the State is democratic or not is not the principal concern of Hayek, because even though in the long term he was against dictatorships, as a transitional phase he prefered “liberal dictatorships to non liberal democratic governments” (Farrant, McPhail and Berger, 2012: 513) in reference to the Pinochet dictatorship in Chile. The fear exists that people could get involved through the state (for example, through elections), due to the risk of the interruption of the common good which is the market (Boudon, 1981). It is not whether the majority should prevail, but the efficiency and automatic optimization of the interests of all through the market. Hayek (1979, 1982) maintains that power should be in the hands of an elite that protects the market from any type of intervention, which is why the degree of democratization should be limited. More economy means less democracy – something contradictory in Hayek, because that coincides in large measure with Michels´law, which in theory was rejected by Hayek.
In this way, under the influence of Hayek and others, neoliberalism as a political project for the expansion of spaces for the free market through a reduced, but many times strong, state has been the agenda since 1980. The developing countries had to accept the Washington Consensus (privatization, governments out of the economy, liberalization policies), the European welfare states began to be affected, the markets directing society (Ruggie, 1997), precisely what Polanyi observed in Europe before the Second World War.
Let us note that the market appears to be supposedly free, but it responds to the hidden interests of large economic clusters. Polanyi refered to it in his time with the expression of “always embedded”, because the free market does not exist, it is a market deliberately constructed to promote certain interests, it is not the theoretical free market of Hayek without political control that is in play, it is not a conflict between “market” and “society”, but between a specific political project of “individual markets” and societies that should adapt to them, and another political project where the mutual adaptation market-society is different. It is the case of post Second World War Europe, the control of society over the market did not keep it from being a capitalist market (mitigated, but capitalist).
In this process, going back to Hayek, we highlight the growing centralization of the modern State, which has become more distant from society and from the political and economic systems. It is said, for example, in the case of Europe, the European Commission is more and more powerful, that the European Parlament is less strong, as well as the growing subordination of the states to the European Central Bank. Likewise, in the “socialist countries”, China since Xiaoping with the “socialist market economy” and politically centralized; or Cuba in the last 5 years. It would seem that the fear of the masses is something that has become “globalized”, like the belief in more economy and less democracy.
What does all this have to do with cooperatives? We began this section describing how the cooperatives have evolved toward non-democratic and economicist organizations. In addition to what was seen in previous sections, now we run into another part of the magnetic forces, the markets. Correspondingly, the developing countries are seen in a transition to the “market society”, self-organization guided by the market, “fictitious goods”, centralization (state controlled by a minority), market protection, exclusion of the masses. It can be understood from this angle why the donors and states are trying to turn the cooperatives into enterprises, private organizations with “fictitious goods” seeing the cooperatives as “gatherers of products” and their members only as “producers”; the centralization of decisions and information, absence of spaces for democratic processes; concentration of wealth in the second tier cooperatives controlled by a minority; prevalence of managers of cooperatives in the decisions about cooperatives and in leadership posts in international cooperative organizations…Literally, under this angle, the cooperatives are useful for contributing to the transition processes toward “market societies”.
3.2 “Counter-movement” processes
The perspective of the previous section is pessimistic. Are the cooperatives mere instruments (“movement”) of the neoliberal market? If we make the connection between this situation and the state of extensive agriculture, the situation is seen to be even more difficult. Nevertheless, we also observe resistance on the part of the cooperative members. There are cooperatives that have built their autonomy since their founding on the increase of their capital based on the economic resources of their members, in order to administer their own credit; cooperatives that challenge their perpetual leaders and managers; cooperatives that combine the perspective of their farms and that of environmental sustainability; cooperatives that export directly, and not through second tier cooperatives; women organized into cooperatives. There are also some lessons that combine market and organizational transformation; for example, basic grain or ranching cooperatives are no longer seen, the cooperatives are into differentiated products, in other words, the greater the differentiation of products the more necessary the cooperatives seem to be; consequently, there are organic coffee cooperative, milk product cooperatives, sesame seed, cacao cooperatives… Secondly, the greater majority of the members turn over part of their produce to the cooperatives, but never turn over 100%, it does not matter how great the fair trade premium and the projects may seem, an action that from the angle of the “market society” is seen as a deviation (“disloyalty”); the small farmers, regardless of the pressure to specialize, continue diversifying their products, networks and markets. Thirdly, some (even though very few) international organizations also understand these processes and are working accordingly.
Polanyi (2001) saw that society reacted to the “movement” (“the market society”), people sought their own protection and they resisted (“double movement”). Our purpose is to study how the cooperatives are doing, how they can be transformed, and how that process is fundamental for the democratization of “societies with markets”. For this reason we quote what Marx said in 1852 in the Eighteenth Brumaire of Louis Bonaparte:
“Men make their own history, but they do not do it on a whim; they do not do it in self-selected circumstances, but in already existing circumstances, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brain of the living. And just as they appear to be busy with themselves and to revolutionize things, the creation of something that did not exist previously, precisely in such times of revolutionary crisis that fervently evoke the spirits of the past to their service, the borrowing of names, battle crys, and clothing for the purpose of presenting this new scenario of world history within the concealment of long tradition and borrowed language.”
‘Counter-movement’ is a process that is carried out within the situations of the “movement”. The circumstances are not under our control, we do not choose them, but without a doubt the key issue is the relationship between the actors and the circumstances (structures). So, we should study how this “movement” and “counter-movement” is constructed in the cooperatives. On this basis, see Figure 4 and Table 1.
5. Final observations
The cooperatives in Central America are fundamental for the economy and democracy, for the mitigation of climate change and the production of food, and above all so the rural families can improve their lives. Nevertheless, at the same time that there are great opportunities, the cooperatives are also at risk of being politically co-opted and economically subsumed. Thus the importance of understanding the “movement” in order to understand the processes of the “counter-movement”.
This article summarizes the conceptual framework for studying cooperatives in Central America, seeking to combine traditional research and something new. We have begun studying 25 cooperatives, accompanying their experiments on innovation, and systematizing their processes jointly with the cooperatives. This process is about the transformation of the cooperatives, being careful about the limited role that we might have from the social sciences. We are working on this with a network of researchers that includes cooperative leaders, even all their members, also researchers from various universities. An implicit purpose is building bridges between the “university” and the small producer cooperatives, in this way also contributing to the democratization of research.
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[1] This text is based on the work on cooperatives of a team composed of Mendoza, Fernández and García supported by the Winds of Peace Foundation (see: http://peacewinds.org/research/). This text benefitted from the support of the Institute for Development Studies (IOB) of the University of Antwerp (Belgium) where Mendoza had six week to review bibliography on the topic. J. Bastiaensen is a professor in the IOB-UA and K. Kuhnekath is an associate researcher of the Central American University (UCA) in Nicaragua. Contact: rmvidaurre@gmail.com
[2] These authors, connected to the perspective of “market driven” cooperatives, write on the basis of a “panel of cooperative leaders, USDA specialists and academic experts.”
[3] The power of the market that the farmers face as individuals provides a strong motivation for collective action. Acting together, farmers can improve the results of their participation in the market, and generate the redistribution of the economic surplus of the input supply and the intermediation sectors with the farming sector” (Hueth and Reynolds, 2011).”
[4] ANASCOOP, a savings and loan cooperative in Puerto Rico, states that their members goven their cooperative by their vote…They choose a Board of Directors…That board is responsible for governing all the positions of the cooperative.”). Mondragón, a cooperative in Spain, states that a member “governs through the delegation of the cooperative congress.”
[5] This is also the case of the US farmers evaluated by Taylor (1953), where for the farming sector, the history of three centuries has been about prices and the power of markets and credit.
[6] Quote from the conference given by Dr. Valmor Schiochet, in the international seminar on cooperativism. Habana, November 2, 2012.
[7]One was written a century ago and the other half a century ago. With this we are not assuming that there are no current theorists for studying cooperatives. But, so far we are not familiar with any study on the internal aspects of organizations. Some authors are useful, like the approach focused on actors of Long, Lewis et al (2003) that proposes a three notion framework (practice, power and meaning), identifying subcultures within (and among) organizations; and Wade (1997) studying the enviromental department in the World Bank on the basis of anthropological methods of being immersed in that department for 9 months.
[8] Marquet has developed this approach while experimenting in a nuclear submarine. Some could argue that a submarine has nothing to do with agriculture and cooperatives; I prefer to think that if it was possible to have success with the leader-leader approach in a nuclear submarine with military verticalness and isolated at sea, it would have to be less difficult to do it in cooperatives and organizations that work with them. For more on this approach in the context of Nicaragua, see Mendoza (2014, soon to be published).
I wonder whether this could be the year wherein the Synergy Center notion crystalizes in the strategic thinking of an educational institution and we find a partner to take on the asset.
I wonder if the Indigenous communities with whom we have worked will discover during 2015 that their patrimony continues to be slowly eroded away by some of their elected leaders, and that true community must be transparent in order to be strong.
I wonder if this is the year in which I finally become facile enough with the Spanish language to converse with more than simply, “buenas dias.” I wonder if working on development issues in a Spanish-speaking country without an ability to speak directly with partners conveys a sign of disrespect.
I wonder if there is an effective way to help cooperatives embrace the very essence of cooperativism; that is, collective, collaborative, participative, informed engagement. Are cultural, social and historical factors too much to allow for such embrace?
I wonder if the second-poorest country in the Western Hemisphere can really undertake the largest, most expensive engineering and construction project in history, and what the ramifications of that will be, whether it’s ever completed or not.
I wonder if the relations between the United States and Nicaragua will ever be friendly, or whether friendships will only exist among individuals of those two countries. And if the latter is true, I wonder what that says about the institutions of government.
I wonder how I would survive on $2.00 per day.
I wonder why greater progress hasn’t happened in Nicaragua, given the amount and form of economic aid that has been made available there. Where does it go?
I wonder if it’s possible any longer to actually know the truth about nearly anything, or whether institutional “spin” determines that. I wonder if there really is truth about anything.
I wonder whether my curiosities are well-founded or simply the product of narrow, North American hubris.
The gathering was in recognition of The Minnesota Chapter of the ESOP Association. The chapter is one of 22 chapters nationally, in the association which represents the 15,000 employee-owned companies across the country. Minnesota has been a particularly strong chapter in the network and over its 25 years has been a strong contributor to the employee ownership movement.
Parties are normally fun and friendly occasions, I suppose, but this event contained a special air of zealotry. The 75-80 folks who attended are among the most enthusiastic supporters of the shared capitalism idea, and they are never bashful about displaying such passion. These were the people who have either led the chapter or been especially active in its work; they are champions of the cause and the effects of employee-ownership. I had not seen many of these people for nearly ten years, since I retired from the employee-owned Foldcraft Co. in 2005, so the gathering had the feel of a grand reunion.
All of that context provided more than enough reason for a stellar evening, and indeed, the laughter and the hugs were genuine all through our time together. But there was something else in the air. There was a tangible feeling that this group of ownership advocates exuded an intensity of knowledge, some sort of awareness that other organizations don’t necessarily experience among their members. That perception, merely felt by some but outwardly acknowledged by others, recognized the immense power of their shared sense of ownership .
Let me be clear on one major point: not every member of every employee-owned entity demonstrates a deeply-felt sense of commitment, empowerment and liberation. But those who are able to envision their own development within an ownership mindset have often defied the odds in creating opportunities and experiences for themselves and their enterprises.
But I know this much: if we get the right people on the bus, the right people in the right seats, and the wrong people off the bus, then we’ll figure out how to take it someplace great.”
On Thursday evening, the ballroom was filled with the right people. They have been and continue to be consistent champions of encouragement and commitment for everyday workers to access equity ownership. They know that such an opportunity is actually a component of our holistic health.
It’s a universal need. We want to claim a deep and rich ownership of our lives, and the places where we work constitute a major portion of our time. We long to be integral parts of our labors rather than simply renting out our time and skills. We need to know what is happening in our vocational lives, what is impacting us, what we can do about it, how we can do better. Where we have come together in our work organizations, we sense that it could be possible to truly belong to an endeavor bigger than ourselves, in some cases maybe even more important than ourselves.
Some of the best-managed companies around the world have recognized this truth. The most stable and productive governments have operated under principles of democratization, which are still the envy of people in non-democratic societies. Employee-owned enterprises often “get it,” as reflected in annual workplace survey data. And in addition to data, I suspect that we recognize intuitively that fully collaborative efforts will almost always outperform individual ones; “none of us is as smart as all of us.”
It’s a truth that Winds of Peace is working very hard to teach this reality to rural cooperatives in Nicaragua, as well. It may run counter to the model the government uses. It may fly in the face of the big company executives there who have copied the traditional corporate models from the U.S. It even challenges the cultural and historical patterns that shape societal behaviors. But it’s a lesson worth teaching, and one definitely worth learning.
It’s an advantage that we celebrated last week. It doesn’t represent the easiest manner in which to organize and operate. But it’s certainly the best….