Thursday, 4 January 2018

The False Choice Between Ownership and Membership. True Coops Need Both.

Ownership/Membership? Which is the Most Important in Coops?
A weird shift to emphasise member ownership and governance, and a downplaying of the importance of cooperative membership, seems to be abroad at present.  Especially amongst some US proponents of worker coops and platform coops. History tells us this is a dangerous trend that often results in the loss of cooperative capital.

Jam Today
 The highly successful Scottish Agricultural Organisation Society is a classic example of how prioritising cooperation can cooperativise even the most fiercely independent people, Scottish farmers. If it works there, it works anywhere. But as SAOS say, you have to hold the principles and the long term determination to stick with them when the dominant ideology rubbishes and ridicules those principles and encourages private, individualistic ownership.  Which in agricultural coops as anywhere, more often than not,  results in demutualisation, a curse for most farmers coops and most 'consortium' coops of small business people (eg InterFlora). When a sufficiently large cohort reach retirement age, they want the money for themselves regardless of the loss of collective benefit that ensues. 

Eternal Paradox
The struggle is always between individual benefit now and deferred collective benefit. The eternal unresolved and unresolvable human dilemma. We just have to hold the paradox unresolved and keep the balance actively and dynamically. Opting for one or the other destroys the whole. The paradox is the organisation!

More Jam Today
If the emphasis is on ownership alone, there is no loyalty and therefore no long term sustainability.  In the UK in the 19th century, producer coops (early versions of worker coops) either failed commercially or were privatised, hundreds of them, leaving a mere handful to stagger into the 20th century. The members had no collective loyalty when an investor came along offering money for their shares, picking them off one by one.

The 19th century worker investor built and owned cotton mills of Oldham, Lancashire, (which weren't cooperative societies but used the little known One Shareholder One Vote variant of a company. Still exists I'm told but no one uses it.) with individual worker ownership of shares (and fierce fighting over dividends), were lost in wholesale mass panic recession sell outs to private investors, and the entire worker owned sector disappeared in a very short time.

The same with the spun out local council bus companies of the 1980s, when Thatcher forced British councils to sell their buses and many Labour authorities sold them at big discounts to union sponsored Employee Owned companies.  In every single case staff sold their shares to investors.  The same happened in every formerly state owned business in the former USSR, countless thousands of them, where ownership shares were given to the workers. They all sold, from the Baltic to the Balkans.

None of these emphasised membership or democratic participation and often, bizarrely, barred worker owners from the board (19th century producer cooperative societies) for reasons long forgotten. But they did emphasise  and celebrate 'employee ownership' at congresses etc.

EBTs, a Sort of Solution
The buses and Baltic examples prompted Job Ownership Ltd., which became the Employee Ownership Association, to invent the Employee Benefit Trust owned company. This trust structure (copied I think from John Lewis Partnership) is controlled by external trustees and prevents the employee 'owners' selling their 'birthright' for a 'mess of pottage'. But it institutes a paternalistic culture in which the 'owners' can't be trusted and have to have the 'great and the good' trustees controlling them.

Quite at odds with cooperative self help principles and more akin to charity culture (the rich doing things to the poor). The EOA and employee ownership sector talk about employee 'voice', rather than membership rights and responsibilities as we do in worker coops.  Studies have shown this type of EO does result in significant business improvements (compared to investor ownership) but the improvements stall a few years after the Employee Buy Out. 

Cooperative Collectives
Our concept of a worker owned and controlled cooperative is quite different. And more in keeping with 21st century platform and network cooperatives.  In most of our British worker coops, we talk about worker members, not employees (which suggests a subservient role). Our members are at the same time - workers, employees (legally), managers, directors (often) and owners (much as the members of an internet based platform coop must be). 

People are Adults; Trust Them
A common criticism is 'How do you juggle all those hats? Surely its simpler to just do one or two of those roles?' but that idea comes from the dominant systems ideology which says that workers in businesses should be treated as  chidren or dehumanised resources to slot into a pre-conceived (by the 'adult' executives) structure in simple, narrow and controllable job descriptions.  But in society outside of work, humans do juggle multiple roles quite well, eg in families, friendship groups, clubs etc. Humans, in general, and worker coop members know when to prioritise particular roles, and can do that much better if there is collective training, agreement and alignment on a membership agreement or member job description. It is not a coincidence that the 'stand out' high performing worker cooperatives invest time and money in membership discussion and development.

Deferred Gratification; How To Encourage It
The important point is that engaging with your work in this complex, multi-factorial (but natural) way creates emotional engagement and loyalty to the group (by the expenditure of a lot of emotional labour) and thereby encourages participants to go for the deferred collective benefit option rather than the selfish individualistic 'jam today' option.

It's a lot cheaper than expensive employee engagement programs too, and can yield astonishing productivity and wealth creation, enabling 'that's impossible' salaries and benefits. Performance which does not fade over time.

So 'ownership' may be an easy option but it has potentially self-defeating ramifications.

I'll finish with two examples that top the argument. Both emphasised ownership and deliberately underplayed a sense of membership, except perhaps, in the second in a perverted way, a club of pirates.    United Airlines, went from majority ESOP to alienated staff striking against their own management and bankruptcy in 5 years.  And Enron, which was a 70% employee owned business but zero employee control.

Wednesday, 20 December 2017

Zizek is Wrong

(written in response to a typically contrarian article by Slavoj Zizek in which he says the Left have lost the war against capitalism.)

Zizek is wrong that there is no alternative to neo liberal capitalism. And I am surprised that a self styled Marxist has such a poor understanding of the concept of revolution. When they are faced with seemingly insurmountable reactionary force, people, to obtain the needs for their existence do not lie down and die meekly. They find other ways to provide those needs outside of the established order.

The establishment attempts repeatedly to suppress those attempts until the revolutionaries find a method that bypasses the established order. When that method is found it self-reproduces exponentially, so that quantitative change flips into qualitative change, and a new economic epoch comes into existence.

As Paul Mason says. Capitalism has renewed itself as a result of the challenges of organised labour. To evade this defeat. But since the neo-liberals crushed the power of labour, technical development of capitalism has stagnated, especially in the most advanced capitalist nations. Labour productivity (the indicator of technical development) is stuck and even maybe decreasing in the UK. The first and most developed capitalist economy. Why automate when you can pay low wages to human robots?

But at the same time, the number of alternatives to capitalist organisation are proliferating. Sooner or late one of these (or more probably several will come together ) will strike it lucky.

The Rochdale Pioneers did not invent cooperatives anymore than the Douglas company invented aeroplanes. The Pioneers brought together the best ideas from previous failed coops just as the DC3 (the first modern aircraft) was an accumulation of the best bits of previous designs.

There are some truly amazing alternative solidarity economy projects developing. The entire 'underground economy' in Greece growing outside the normal fiscal economy and out of reach of the neo-liberal police of Brussels and international banking. Hundreds of youth kollectiven in Germany, unregistered collectives of young people evading bureaucratic control by the German state in their economic and social lives.

The most interesting is the Catalan Integral Cooperative and their Fair Coop projects. How to 'offgrid' your entire economic life! Something revolutionary is going to come out of these I reckon. for the original graphic.

Bullshit Jobs - Why Worker Coops are More Productive

David Graeber, the fascinating anarchist anthropologist, has described nearly 75% of jobs as 'Bullshit jobs'.   Jobs which create no value, no use and in an ideal world, wouldn't be allowed to exist. It's the 75% which is astonishing.

In a world where we are told that capitalist businesses efficiently compete with each other, cost cutting and price dropping to out compete each other, he says on the contrary, they are creating tens of millions of pointless jobs.  And the people who do them know that, because he asked them. He set up a gmail address and asked people to tell him if their job was, in their opinion, a pointless job. they did in their thousands.  Of course people do these jobs for the money but at what cost to their mental well being?  Psychologists say that for work to be engaging the worker has to have a sense of  Purpose.  Otherwise stress and depression follow. Its in the HSE management standards for work related stress as a primary cause.

Of course keeping people occupied in pointless labour stops them questioning the order of things but this isnt a Tory conspiracy as such, though some of it clearly is - drive people into work, any work at any price, even work that has to be topped up in benefits to make it survivable, is clearly what drives Ian Duncan Smith.

Graeber classified these bullshit jobs into 5 categories, all of which are a consequence of hierarchy.

Flunkies - make someone else look good, or increase their status or salary. Receptionists often no longer do any necessary work (with computerised ICT) but are deemed essential for the look of the office.   There are many other workers whose primary reason for employment is to increase the number of subordinates and thereby increase the status and salary of higher managers. 'Post' inflation (number of posts) is a recognised disease in all corporate organisations. Most of these jobs just pass information around.

Goons - are jobs only required because other people have them. Armies fall into this. Also corporate lawyers and most accountants. The arms race in marketing means that most marketing jobs are also Goon jobs.  If you don't have enough marketeers, the opposition may steal the business.

Duct Tapers - patch things up because they are broken and there is no desire to fix them.  Most HR falls into this group. If organisations really treated their workers properly then most HR would not be needed, HR as 'sweeping up' after managers have caused conflict due to uncaring behaviours.
Lots of examples of Duct Tapers just keeping broken systems going, eg IT as well as physical stuff and all sorts of broken production and administration processes.

Box Tickers - record things for higher ups because higher ups are separated from actual operations. Unnecessary reporting is endemic. Often box ticking takes up the time that could be spent doing the job properly in the first case!!  Huge elements of HR, quality control, Health and Safety, operational management and strategic management are unnecessary box ticking.  Avoiding doing the job, eg helping people work better, and more safely and effectively, but generating paperwork instead. Many strategy workers spend their entire careers knowing nothing they do will ever be enacted.
As the old farmer said 'The pig don't get any fatter by weighing it.'

Task Masters - middle managers who supervise people who dont need supervising and create new bullshit jobs to increase their own status (and that of their superiors).  e.g. a bank manager who was tasked with cutting costs and jobs but not one suggestion was enacted because that would mean a boss losing flunkies.

Worker Coops should have no Flunkies, no internally facing Goons, no Duct Tapers and no Task Masters but I've seen lots of Box Tickers!
No matter, worker coops should inherently be more productive compared to normal hierarchical organisations. If not what are you doing wrong? Why not ask Bob?

Monday, 3 August 2015

The European Project; Is it 'Game Over'?

The ideal governance structure is said to be separate but co-dependent institutions of legislature, executive (civil service) and judiciary. To prevent one or the other becoming too dominant and taking over the state or organisation in their own sectarian interest..

Two major institutions have all three functions inside themselves. The Chinese Communist Party and the European Commission. We know the CCP is above and outside the law but so, it appears, is the EC.

Despite decades long struggles, the European Parliament has been unable to wrest significant legislative authority from the executive of the EC. 

Legal disputes can take 15+ years to wind their way through the European Court of Justice. A challenge (on the grounds of illegal state aid) by private business representatives to a government coop support programme in Italy in the early 1990s was not resolved until 15 years later. In the meantime local and national governments took the position that favouring cooperative specific development support was probably illegal. 

While everyone was ignoring the tax billions being paid as 'in work benefits' to low paid employees of corporations because their wages were too low to exist on. Thus inflating those corporations profits. This is clearly illegal state aid to those corporations. In short the European Union legal system doesn't work. 

The powers of commissioners are quite extraordinary. They are 'little gods' acting outside any democratic control whatsoever. Handing down their decisions to us mortals. A Greek playwright should write a satire comparing them to the squabbling deities atop Mt. Olympus.

Records show that the commission has been largely captured by corporate capital lobbyists. They outnumber other lobbyists many times over in terms of numbers and contacts. So we get the probably illegal 'in secret' negotiations on the TTIP for example. Largely in the interest of corporate capital. Other interests, i.e. 'us', cannot win this battle. Corporate capital will have its way, one way or another. Because they have the resources to fight for as long as is necessary, and we do not. We may derail TTIP only to find the commission has agreed similar rules by another route.

Originally the European project was not meant to be like this. It was designed as a three legged stool with three social partners. Organised Business (as Employers), Organised Labour and Elected Governments. The original architects hoped that like the ideal governance structure ( They were European governance scholars) , these three social partners would be sufficiently independent but co-dependent to keep the stool upright. Of course this all depended on each partner playing the social democratic game i.e. not playing to win ( the UK/USA ideal) but playing to keep the game going for all (the European ideal).

Organised Business got its act together quickly and set up industrial scale lobbying, especially the members representing corporate interests ( small businesses and public sector employers got left behind).

ETUC the European Trades Union Confederation seems to have given up the fight. They act as if the social democratic model were still the bedrock of Europe. After the 1980s and 90s when basic employee rights were harmonised across the community, ETUC has not progressed. They have no more answer to the predation of corporate financial capital across Europe than Arthur Scargill had to the death of the British coal industry. Glorious flag waving defeat or dereliction of duty in the face of the enemy?

And elected government representatives across Europe have been taken over by (neo liberal) corporate interest lobbying. Or bullied into submission to those interests like Syriza.

So one leg has withered and the other two have effectively become one. How is this stool still upright?

The power of the Commission, made up of government ( neo liberals mainly) representatives is growing not declining. They no longer feel the need to abide by agreed treaties, whether negotiating trade treaties in secret (TTIP) or negotiating with member states.

Yanis Varoufakis says he questioned the legality of the Eurogroup which was officially negotiating with Greece but in reality was dictating terms at the whim of the chairman. Officials agreed with him. It was an informal gathering of various European bureaucrats and government representatives, with no legal basis nor any formal authority to dictate terms to a member state. Because it had no constitutional status, no minutes are taken, there are no rights to know what is discussed or who is present.  

They can act in defiance of European treaties or national constitutions, as they did in relation to Greece. And because most EU states (except perhaps Germany) are as, or even more indebted, than Greece (the total UK debt - private, business, government and financial is a greater % of GDP than Greece's equivalent), they can do it to any of the eurozone states at will.

As Varoufakis says, this Eurogroup holds the power to make life hell for millions of European citizens who have no comeback whatsoever, except to escape to an alternative economic space. Which is what many Greeks are busy doing.

Now that the neo-liberal and corporate capital capture of the EU has become so clear, the question is should we still support it? Have we lost the game? Should we, like the Greeks, be building escape routes from this fiscal and legal prison being prepared for us.

(4 Jan 2018 - how things have changed! Maybe the above explains Corbyn's reticence to defend the EU)

Sunday, 2 August 2015

Debt; The New Universal Weapon

Went to a very interesting talk by Spyros Marchetos a Greek professor today at Bradford's 1 in 12 club (30 years of anarchism and going strong, a brilliant institution).

The amount of debt in the world vastly exceeds the amount of real value ( as produced by the global GDP) by a huge factor.  This debt which exists as electronic information in between banks and other financial institutions can be used as a weapon against any country that steps out of line.   Because elected governments are now allowed to convert private debt ( especially losses made by banks) into public debt (which we the public have to repay).  How was this slight of hand allowed to become 'normal' practice?

Because every country is 'in debt' this can happen at any time anywhere.  The total UK debt if you total private domestic, business, financial services and government debt is far higher than Greece's debt. It could be 'called in' at any time eg when Jeremy Corbyn is elected as Prime Minister (I started watching A Very British Coup (1988) which hypothesises a Left Wing labour government winning an election in the 1990s, recently and couldn't continue, too raw to take.)

In Greece the constitution is clear that the loans imposed by the IMF are illegal and should not be repaid.  Much like Wonga were forced to write off their more irresponsible lending.  The UK has no constitution, there wouldn't even be a constitutional objection here.

Marchetos said the EU is now totally in the grip of the bankers and German bankers specifically who wield the debt weapon without any democratic control whatever.

Almost none of the 'loans' made to Greece by the IMF or Eurozone actually went to Greece. Most effectively never left Germany but Greeks are being told to pay them back.

I asked if the rise of alternative currencies and economies in Greece will be an effective defence against this debt/money weapon and he said they weren't significant. They might enable people to keep themselves alive but will not present an effective national alternative. On this I disagree because internet enabled economies are embryonic but showing great potential.

We cannot play in this capital debt game. The cards, the odds, the field is stacked against us. We have to play a different guerilla game where the B52s of the IMF and ECB cannot find us to bomb us back into submission.

Monday, 30 March 2015

The Future of HR: Human Relations not Human Resources

Those who know me know I have been saying for years that we have to get away from systems models of businesses and cooperatives and instead stress relationship building between the people that make up the cooperative.

In hierarchical society, systems make complete sense. businesses are machines (or biological or ICT equivalents) into which human resources are slotted and controlled by an elite of executives.  Who justify their privilege by the use of management practices that treat people like cogs or organs or algorithms.

Open any management textbook from Ansoff to Senge and you can see this model, sometimes naked as in Michael Porter's 'work' (Value Chain Analysis). Sometimes covered up by metaphysical  such as Pete Senge and his learning organisation ideas.  In all, the telling sign is that the organisation comes first and the people are slotted into preconceived roles. The boss is in total control (in theory).

Even the modern fad of 'engaged employees' assumes they should be engaged with their employer and not with each other. (as one cynical employee was quoted as saying "In the old days they only tried to control my body. Now they want my heart and soul as well!")

None of this works in a worker cooperative run as a flat hierarchy, equal status collective. Such as my coop Suma, Superbly successful as a business and pretty good as a democratic cooperative too. Without the authority of the hierarchy none of these systems based methods are suitable.

Having struggled to use them and gone looking for something else I discovered the alternative model of the firm. That organisations are merely the sum of all the communication relationships going on in them. This thinking goes by the cumbersome name of Complex Responsive Processes of Relating.

I sometimes simplify this to say that an organisation is merely a big conversation. A complex ever changing web of communications by speech, gesture, email, data, exchange, working arrangements etc.  It's a big intentional family in other words.

This model fits worker coops to a 'T'.  Because it says the better we communicate (relate) with each other the better our businesses will perform. Immediately all manner of improvements spring to mind, how to remove blocks to communication and how to improve our ability to communicate and relate to each other. One of the most powerful blocks is the ability of the powerful to block communication by the less powerful, of course.  An ability that is crumbling day by day as personal social media devices become more powerful and more discrete.

Blocking, restricting and controlling communication is exactly how the Coop Group executive elite operated.

So what does this Relationship model mean for HR? Simple - we replace the Resource with Relations. HRM becomes Human Relations Management. Because groups of people do need to be coordinated and facilitated to communicate otherwise a free for all ensues.  But this is not management leadership. It is facilitation of the wishes of the people who make up the group.

Interestingly some of the senior gurus of HR seem to be waking up to this revolution even if they don't necessarily understand the political significance of it.

Prof. Dave Ulrich has long been considered the foremost global HR theorist. He invented many of the concepts of modern HRM, all systems thinking. How to tinker to make the machine operate better. Recently he has been talking about Relations Management and referring to concepts from personal relationship studies particularly the work of John Gottman

1 Share a common purpose 
Partners in a relationship have different roles to play, but they succeed when they realise that they are stronger together than apart because they have binding goals such as raising children. In a business the challenge is to find a unifying purpose that brings together these different parts into a greater whole.
2 Respect differences
In couples therapy, each partner is encouraged to identify and appreciate the strengths of their partner. Couples succeed when they communicate more positively than negatively. Gottman found a 5:1 ratio of positive to negative comments in successful couples.  Couples succeed when they know and respond to what matters to their partner. 
3 Govern, accept, connect
A large part of relationship success comes from managing expectations. Researchers have found that 65-70 per cent of relationship problems are never “solved” but “managed”.  Most of the early problems in a relationship are worked around (for example, spending habits, raising children, doing household chores). It is important to solve the solvable problems and not obsess about those that seem to persist. 
Care for the other
In relationship therapy, the most important questions that solidify a relationship are: Can I rely on you? Are you safe? Will you be there for me when I need you? Without positive answers to these questions, relationships will crumble under pressure. With positive answers, partners build trust and celebrate others’ success. 
5 Share experiences together
In any relationship, things go wrong. Personal or professional disappointments or stresses that pull them apart. To build stronger personal relationships, partners are encouraged to turn to each other in times of difficulty, to yield to the influence of their partner, and to be emotionally vulnerable to share deeper feelings with each other. Spending time together and investing emotionally in each other strengthens relationships.
6 Grow together
Anyone in a successful relationship over five or 10 years can look back to see progress.   Relationships morph and each partner learns and grows. Some of this growth comes from constantly learning, from focusing on the future and what can be, from letting go of grievances, recognising vicious cycles and breaking them. Couples with positive relationships recognise growth and change.
1 Share a common purpose
2 Respect differences
3 Govern, accept, connect
4 Care for the other
5 Share experiences together
6 Grow together
These sound like pretty good guidelines for Human Relations Management to me!

Monday, 26 August 2013

Information Pollution in Financial Capitalism

Reading John Lanchester's book 'Whoops' about the international financial crisis whilst on holiday (its a laugh out loud read, not many books about financial capitalism you can say that about). He writes about how banksters invented derivatives to outwit the financial regulators and create the impression of low risk for loans based on junk mortgages which they sold to all and sundry.

A brilliant metaphor he makes,  comparing the regulators to lifeguards who weren't asleep but trying to cope with swimmers who were pouring blood into the water because they thought a few sharks would make it more exciting!

All the Collatoralised Debt Obligations and Credit Default Swaps and even CDOs 'squared' (read the book for an explanation and to realise how we were all conned by these legalised crooks) created such a fog and confusion,  the whole banking system blocked up.  Money ceased to be reliable.

It made me think, In the 19th century the same process happened with industrial capitalism. Mills and factories created such pollution that they could not operate.  Water was too dirty to be used to wash wool in Bradford for example.  The already rich industrialists had to bang factory owners' heads together to impose the first environmental protection laws to control pollution.

The same happened with public health because they were running out of labour due to the high death and disability rates caused to the working class. Free laissez faire enterprise had to be controlled to prevent a clogging up of free enterprise.

They used physical resources.  21st century financial capitalism uses information as a resource.  CDOs and CDSs pollute the pool of information.  But whereas all industrial capitalists wanted a low pollution environment,  financial capitalists actively try to pollute the information environment. It's the way they create the tiny differences between buying and selling prices they exploit to make their profits in huge computerised purchases and sales many times a second.

So the financial regulators have a much tougher job than the 19th century equivalents.

What's this to do with coops? Lanchester speculates about business that exists to serve need rather than just to make money by any means. He suggests those days are over.  He also says financial capitalism is a near dead duck. It is irrecoverably polluted.  But he doesn't mention coops once.  Coops exist and survive only so long as they serve their member's needs.  And can survive when capitalism is so polluted by financial dodgy dealings it is having another in its series of heart attacks.

People laugh at Marx's belief that capitalism is its own grave digger. He didnt just think this would happen when labour organised, as people commonly believe.  He also predicted the suicidal dynamics of financier capitalism. He may still be proved right.

But capitalism is a master at cliff edge thrillers so what will they do next to protect their right to our wealth? Are the shocks coming so hard and fast that the financial doctors cannot keep the raddled body alive?

A few years ago (before the financial crash) I was at a reception in the House of Lords and heard the Tory MP for the City of London, Mark Field, say the party was over. The 150 year reign of the joint stock company (the corporate legal person) was coming to an end. It was no longer fit for purpose in an age of international computerised finance. (No one was listening in his own party.)  His solution?  Mutuals and Cooperatives which exist to serve and provide needs directly and not as a by product of uncontrollable corporations.