7 Law & Pol'y 45 (1985)
Organizing Worker Cooperatives

handle is hein.journals/lawpol7 and id is 55 raw text is: Organizing Worker Cooperatives

PETER PITEGOFF
As an attorney at the Industrial Cooperative Association (ICA), I organize
worker cooperatives for a living. A legal practice, yes-but combined with
teaching, writing, and organizing. Working closely with business analysts,
economists, educators, and organizers, I integrate law with other disci-
plines and practice corporate law from a labor perspective.
The ICA, based in Somerville, Massachusetts, is structured as a worker
cooperative, a corporation controlled democratically by its workforce. Fif-
teen core staff are members-each with one vote in electing the board of
directors and an equal voice in governance of the enterprise. Often in
teams, we assist other worker cooperatives throughout the United States.
The ICA's primary purpose is to develop worker-owned businesses in a
way that empowers people in low-income, minority, and blue-collar com-
munities. The short-term strategy is essentially crisis response, often in
bankruptcies and plant closings. The longer-term strategy is to build a sec-
tor of healthy worker cooperatives with an infrastructure of supportive
institutions.
Such a democratic economy already exists in the Basque region of Spain,
based in Mondragon. At the core are 85 industrial co-ops with roughly
20,000 worker-members. The integrated strength of the Mondragon com-
plex lies in the second-tier cooperatives-a social security and medical care
system, a technical college and research institute, and a central bank, the
Caja Laboral Popular. Along with a banking division of 120 branch offices.
the Caja has an Empresarial Division that provides intensive technical
assistance to existing worker cooperatives and to organizers of new worker
co-ops.
This institutionalization of entrepreneurship enables small groups to tap
technical and business resources far beyond their individual reach. In the
nascent worker cooperative movement in the United States, the ICA is
beginning to mirror (on a smaller scale) the role of the Caja Laboral Popu-
lar.
An impressive lesson of Mondragon is its democratic structure. Each of
the worker cooperatives is controlled democratically by its workforce. The
central bank is governed by a Board of Directors, consisting of representa-
tives of its staff and of the cooperatives it serves. Mondragon presents a
unique model. It is neither worker capitalism nor state socialism but rather
a third way-a democratic economy of worker cooperatives, federated and
supported by a second tier of accountable institutions.
LAW & POLICY. Vol. 7 No. 1. January 1985
©D 1985 Basil Blackwell                         ISSN 0265-8241 $3.(X)

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