Can the ‘new economy’ and labor movements come together again?

Advocates for worker cooperatives celebrate outside City Hall in Oakland after the city council passed a resolution supporting the development of democratic and equitable workplaces on September 8, 2015. (Sustainable Economies Law Center)

Advocates for worker cooperatives celebrate outside City Hall in Oakland after the city council passed a resolution supporting the development of democratic and equitable workplaces on September 8, 2015. (Sustainable Economies Law Center)

Activists in Oakland have been campaigning for new city policies that would assist worker cooperative development. After successfully winning passage of a city resolution in support of cooperatives last fall, they are now pushing for a new law, the Oakland Worker Cooperative Incentives for Growth Ordinance. Supporters will speak in support at the upcoming hearing at City Hall on September 27, and the ordinance is likely to pass in October. It would grant a variety of benefits for registered worker cooperatives including procurement preferences, development funding, tax incentives, streamlined permitting and promotion of business conversion to cooperatives. The Sustainable Economies Law Center, one of the key promoters of the ordinance, says that it will be the first of its kind to offer this level of assistance for cooperatives.

This campaign is one part of a vibrant, growing movement advancing community-oriented, alternative ways of economic development. This includes cooperatives and credit unions, community land trusts, municipal participatory budgeting, local renewable energy and various community organizing initiatives to build local power, all within a grassroots, intersectional and anti-oppression political framework. This kind of work is often referred to as the “new economy” or “solidarity economy.”

The New Economy Coalition, or NEC, is a network of about 160 organizations that is developing the capacity to coordinate this work and share information and best practices. Its recent “CommonBound” conference in Buffalo, New York drew nearly 1,000 activists and organizers, demonstrating the growing energy and momentum of this movement.

The coalition’s key movement goals include building cooperative and community-rooted enterprises, democratizing finance, and experimenting with new forms of governance and culture. Not everyone in the new economy movement favors a post-capitalist system, but at its most ambitious, this is a great example of what’s often called the “prefigurative” strategy from the anarchist tradition. Those following this approach believe a new world can be created through experimenting with alternative ways of working and living as the current capitalist system fails to meet people’s needs. As these projects develop, the expectation is that more people will be drawn to these alternatives until most of the economy becomes in a sense post-capitalist. An NEC member, the Next System Project, is currently publishing think-pieces on various aspects of how this transition can be made.

We can think of the economy as operating in five spheres, as Emily Kawano of the Solidarity Economy Network has suggested, and new economy projects offer alternatives for each, including: worker cooperatives for production; time banking, fair trade and basic income for distribution; housing and food cooperatives, and community land trusts for consumption; credit unions, public banking and alternative currencies for finance; and participatory budgeting, commons ownership and restorative justice for governance.

The overall goal would be to build and link together projects like these that strengthen our collective capacity to engage in these areas in a democratic, participatory way for a post-capitalist future. If we want to eventually have social ownership and democratic planning of the economy, we need to engage in these practices and create more institutions that enable them.

Participants at the CommonBound conference in Buffalo in July 2016. (Flickr/New Economy Coalition)

Participants at the CommonBound conference in Buffalo in July 2016. (Flickr/New Economy Coalition)

A great example of participatory community development is the work of the highly-regarded People United for Sustainable Housing Buffalo, which presented their work at the CommonBound conference. PUSH Buffalo’s West Side “Green Development Zone” has projects in affordable housing construction, weatherization, community gardens, neighborhood park renovations, and greenhouses to grow plants for storm water retention, all as part of sustainable and democratic local economic development for the creation of living wage jobs for the community.

Where is labor?

However, conspicuously missing in this space is the labor movement. Indeed, there appeared to be a general lack of discussion at the CommonBound conference on traditional workplace organizing, with topics more oriented toward community organizing projects. Moreover, since many members in the NEC operate within a worker cooperative political perspective, this is at odds with mainstream labor goals, which seek to bargain with private and public sector employers for better conditions for workers. Even for the left-wing of labor, the political framework tends to be less prefigurative and more doctrinally socialist and oriented toward organizing workers into militant unions and left parties that can vie for state power or conduct general strikes to stop capitalist production. Indeed the traditional labor critique of new economy work would be that these are small scale efforts that capitalism can easily accommodate. It certainly remains to be seen if these projects can develop into a significant challenge or alternative to the system.

Ironically, the new economy framework was fairly mainstream thinking in the labor movement of the 19th century. The Knights of Labor of the 1870s focused heavily on cooperative formation as a key union strategy and had a radical vision for a “cooperative commonwealth” where workers would run the economy. However, the movement of unions in a different direction can be traced to the subsequent formation of the more conservative American Federation of Labor. In the face of massive state repression of unions, it turned away from the cooperative commonwealth concept to focus on securing the rights of workers to organize and bargain union contracts. John Curl, in his excellent book “For All the People: Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America,” describes how unions came to associate cooperatives with risky, utopian radicalism. They also worried that cooperatives obscured the roles of employer and worker, thus complicating the union’s identity as the bargaining agent for a contract.

Union organizing and bargaining rights were won at the federal level in 1935 with the National Labor Relations Act. This was a major achievement that shouldn’t be dismissed, but this contractual focus, and the McCarthy-era purging of left-wing union members and leaders, foreclosed for many years much of the radical rethinking of the economy within the labor movement.

Among labor leaders these days, there is little interest in pursuing alternative economic arrangements, and these ideas exist largely within pockets of the union rank-and-file, and perhaps, union staff book clubs. This shouldn’t be surprising as unions, like many institutions, have pressing day-to-day concerns about representing their membership and are largely focused on survival during a decades-long decline. Furthermore, with rare exceptions, unions are fully enmeshed in the current system, with extensive political and contractual relationships and significant assets that few leaders would be willing to risk. The alternative “workers center” movement may be ideologically more amenable to new economy work, but these groups survive largely on foundation funding which makes a political break with the system challenging.

Coming together

At the CommonBound conference, many attendees acknowledged the need to form alliances with labor, yet seemed to have little or no interaction with it. However, one promising development in recent years is the formation of “union cooperatives” where worker-owners of a business are also union members, as some unions seek to reenter the cooperative world they left over a hundred years ago. This trend is being coordinated by several NEC member groups such as 1worker1vote, and the union cooperative committee of the U.S. Federation of Worker Cooperatives, and has been reinvigorated by the “Union Coop Model” created by the recent partnership between the United Steelworkers union and the Spanish cooperative giant Mondragon.

Furthermore, there is certainly tremendous potential for union pension funds to invest in worker cooperative development. If even a tiny fraction of the nearly $2 trillion in these funds could be directed toward cooperative formation, it would significantly grow the new economy movement and help revive this old current within labor. The AFL-CIO Housing Investment Trust is an example of what’s possible, as it has funded a number of renovations of affordable housing and cooperative housing projects.

Much has been written over the years about the need for U.S. labor to restore its radical imagination and embrace a more socialist economics. As capitalism continues to undergo economic and environmental crises, more common projects between the new economy and labor movements may lead to a revival within mainstream labor of the old cooperative commonwealth concept.

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