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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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