The Strategic Role of Worker Cooperatives

The idea that worker-owned enterprises can strategically support electoral work, union drives, or other socialist campaigns is not much discussed by leftists today. But it wasn’t always this way.

The American Populist Party of the 1890s was “prefigured” by the 334 worker-owned cooperatives established in the United States during the previous decade by the Grange and the Knights of Labor. Trade unions like the International Ladies’ Garment Workers’ Union (ILGWU), as Sara Horowitz has written, expanded through mutual aid among their members, particularly in their early years.

In Europe, the mass parties of Social Democracy, from the Labour Party to the Scandinavian Social Democrats, built upon the solidaristic ties established through the economic cooperation of their members. And the Italian Communist Party was later able to extend and consolidate its hegemony in Emilia-Romagna by supporting cooperatives.

We see this kind of complementarity between cooperatives and left-wing politics in many places today. We cannot understand South America’s Pink Tide during the 1990s without appreciating the growth of the solidarity economy in the region for decades prior. Brazil’s Luiz Inácio Lula da Silva certainly appreciated this: he established the National Secretariat of the Solidarity Economy shortly after his first election as president, in 2003. More recently, Barcelona’s radical Barcelona en Comú party and the Labour government of Preston, England, achieved victory through similar ties with the solidarity economy, and similarly rewarded it through public policies.

The solidarity economy powers such political successes, in part, through the economic benefits it provides to the electorate. Cooperatives, for example, typically offer longer-term jobs with higher pay for workers and higher-quality goods and lower prices for consumers than their conventional counterparts. And they do so, moreover, under far more democratic and equitable conditions than conventional privately owned firms. In this way, as Ethan Miller has written, cooperatives demonstrate that “it is possible to build real livelihoods while also building another paradigm of social values.” This ability to provide “real livelihoods” for poor and working people is difficult for other left strategies to replicate and is key to the distinctive value the solidarity economy adds to the Left’s strategic repertoire.

Providing for voter livelihoods, in turn, provides the Left with political leverage. Partly this occurs by making workers receptive to the material benefits of democratic ownership and the policies (and parties) that might advance them. But it can also give the Left fiscal leverage — and hence political leverage — within communities as a whole.

As instruments of community economic development, for example, cooperatives can provide quality employment and tax revenue to struggling cities; indeed, they are often superior to the private sector at doing so. Insofar as securing economic development is a key issue for winning and keeping office, supporting cooperatives is of political advantage to left-wing politicians and parties. And by shifting their economic “base” to the solidarity economy, left administrations can become less vulnerable to business opposition and disinvestment.

The revenues raised by flourishing cooperative enterprises may also augment the financial strength of unions. For example, the Amalgamated Clothing Workers of America and the International Ladies’ Garment Workers’ Union were able to build up revenue and loyalty during the 1920s and ’30s in part by providing their members with services ranging from health care and housing to banking.

Labor looks poised to reap similar benefits from cooperatives and other solidaristic enterprises today. SEIU-UHW, a union of 100,000 health care workers in California, recently established a unionized health care cooperative providing both services to clients and meaningful employment to workers. Unionized lobstermen with the International Association of Machinists–affiliated Lobster 207 in Maine have formed a marketing cooperative to help members collectively sell their catch, allowing them to increase their income by cutting out middlemen. These kinds of mutualistic practices can bolster both the numbers and financial assets of unions — and, by extension, their political power.

Finally, the struggle for worker or community-owned firms itself provides a potent means of rallying workers and the electorate. Lack of local control over economic decisions helped radicalize many black Americans during the 1960s, and their struggles for “community control” over land and housing strengthened the broader campaign for racial equality during the decade. As the economist Barry Bluestone wrote in the Review of Radical Economics in 1969, “the act of striving toward a [community-owned] economy yield[s] a powerful tool for organizing the black community into a coherent political force capable of extracting concessions on jobs, housing, income, and dignity from the government and from the corporate establishment.” This same principle applies equally to workers and other oppressed people today.

A Practical Proposal

But how practical is it to start building a new economy in the shell of the old? Doesn’t supporting co-ops and similar enterprises take away from supporting other struggles?

Not necessarily. The idea that activism is a zero-sum game cuts against the experience of “big tent” organizations like the Democratic Socialists of America (DSA), which has long seen different movement tactics — like electoral work, union drives, and supporting protests for racial justice and against war — as more than the sum of their parts. Adding solidarity-based enterprises to this strategic mix can only benefit the greater whole.

Indeed, DSA’s experience with a variety of tactics and strategic approaches can make it a good place to experiment with incorporating cooperatives with more traditional left strategies: Evan Casper-Futterman, senior director of planning for the Bronx Cooperative Development Initiative, suggests that DSA already has the “organizational infrastructure” needed to begin building solidarity enterprises in their districts.

Arguments that supporting these enterprises require more time and energy than other strategies are similarly misguided, according to former DSA National Political Committee member Brandon Payton-Carrillo. Supporting such enterprises can be as simple as deciding where to put our spending money, our savings, and even (if we are so lucky) our retirement accounts. And getting public funding for such enterprises is also easier than it might seem, less a matter of furnishing new spending than one of redirecting existing subsidies and contracts to new players. We’ve seen this work in Preston and more recently in Colombia, which has recently agreed to shift 30 percent of all state contracts to cooperatives.

Above all, we need to compare the costs of building up the solidarity economy with the costs of more “mainstream” left tactics. Payton-Carrillo notes that if it is hard to sustain the energy for running mutualistic enterprises, it is equally hard to sustain the energy for, say, tenant organizing campaigns for lower rents over long periods of time. The difference is that where the latter is primarily “defensive” in nature, the former is an “offensive” maneuver that can build durable livelihoods while expanding our political imagination.

This is not to argue that tenant organizing or other sorts of campaigns are any less strategically important than building outposts of an alternative economy. It is just to say that we need to recognize how tenant organizing, union drives, and electoral campaigns can be complemented by the solidarity economy.

Rebuilding Solidarity

There’s another benefit to building up the cooperative economy: it is a proven way to combat the atomization of modern society which, many of us now recognize, has made it harder for the Left to win elections and union drives. Without a sense that our well-being depends on the well-being of others, not only is it harder to mobilize the votes needed for left candidates to win — it is harder to convince voters that left policies are even desirable. As Gabriel Winant has lamented, “Eugene Debs could rise from the dead and would get little traction.”

But to build the solidarity we need to win, we must identify the strongest materials for generating it: not bowling leagues or debating clubs, but the material benefits of cooperation.

Economic practices, after all, undergirded the growth of civil society in the first place. Medieval communes, black churches, the innumerable benefit societies that Robert Putnam idolizes — all were originally built around practices of mutual aid within their membership and communities. During the mid–nineteenth century, worker-owned cooperatives demonstrated how economic practices could be directly “embedded” within the values of solidarity. And these practices of economic cooperation, in turn, helped support the growth of unions and socialist political parties in the modern era.

Seen from this perspective, modern society’s fragmentation isn’t just due to “neoliberalism” or the internet — it is because socializing institutions no longer provide the economic benefits that make them worth joining. This process has been centuries in the making, from the early modern state taking over the political functions of free communes, to capitalist firms taking over the economic functions of guilds, to elite nonprofits (funded by donations from the wealthy) taking over the social welfare functions of local benefit societies.

The result is where we are now: a hollow, desiccated civil society that serves little economic or material function for most people — and certainly not in ways that reinforce solidarity.

Yet we are now seeing the emergence of potentially powerful new sources of solidarity rooted in practices of economic democracy. We’ve seen it in the flourishing of mutual aid since COVID-19, in the revival of mutualistic practices among trade unions, and in the expansion of the social and solidarity economy (SSE) across the world. Worker cooperatives are growing fastest, moreover, among some of the groups the Left most needs to reach, such as service employees, immigrants, and non-white workers. And we know that such enterprises are remarkably successful in helping build social capital: a recent large study found that participation in worker cooperatives promoted higher rates of civic engagement among members — including those less ideologically inclined — than workers in conventional firms.

Cooperatives and Left-Wing Strategy

So far, however, the organized left has not effectively leveraged the solidarity economy’s advantages. There are exceptions: some DSA chapters have mutual-aid or solidarity economy working groups, for instance. But for the most part, socialists have not made cooperatives or other mutualist enterprises a central part of their strategy, or have failed to make use of them at all.

What might a strategy that makes use of the solidarity economy look like? We could, on the one hand, try to formally incorporate solidarity economy initiatives within existing left-wing organizations like DSA. But I’d also recommend drawing from the wisdom of the Second International: that “trade unions, cooperative societies, and the socialist party . . . while preserving each its own unity and autonomy, should enter into relations more and more intimate with one another” (emphasis added). Each part of the movement can pursue its separate efforts with an eye toward what the others are doing — and what they can make politically possible for the others.

In the case of the solidarity economy, the electoral and union-minded left should consider what kind of economic organizations, benefitting what constituencies, would help them build the kind of leverage required to win elections and expand their power. And solidarity economy practitioners should consider what kind of left political and social movements can help pass the kind of policies, such as community wealth building initiatives, that can benefit their firms. Each “side” can support the other for their own benefit, and to build collective hegemony.

Precisely what kinds of alliances might come out of these discussions, or what opportunities they might make available, can’t be settled in advance. But like socialists and left-wing labor organizers who came before us, we would do well to recognize the potential strategic value of worker co-ops and similar projects.