It’s hard to imagine a time when wage labor was not the way work was arranged in the United States, but there was a time when it wasn’t. In the 17th and 18th centuries, what is now the United States could be described as having a “householding economy” where farmers and craftsmen relied heavily on family members to pitch in with the work. Of course, there were instances when family didn’t cut it. In those times, farmers and craftsmen in need of help turned mostly to apprentices, indentured servants, and slaves. Free laborers existed, but the easy availability of land put them in short supply.
Beginning in the early 19th century came the slow transition to the wage labor system we all exist in, more or less, today. The wage labor system, as a new invention wound up in the creation of factories and the removal of work from the home, was a site of conflict and pain, as bosses and employees adapted and adjusted to very new circumstances and more distant relationships surrounding production. It’s hard to believe, but wage labor as it emerged may have actually weakened social bonds between those who labored and those who owned. The early history of industrialism in the United States was one of violent clash between capital and labor.
As Josiah Bartlett Lambert discusses in his incredible “If the Workers Took a Notion,” labor leaders and other social reformers were highly critical of the emerging wage labor system. They had a different idea. Instead of wage labor, many advocated the creation of a “cooperative commonwealth” to involve electoral democracy, labor union control of industry, and workers getting equal shares of profits rather than wages. In various places, reformers established communes inspired by the “cooperative commonwealth” idea, including a short-lived one founded by famed American socialist Eugene Debs.
For complex reasons, the cooperative commonwealth never gained traction in the United States, yet cooperativism was center stage in the national conversation about how to grapple with injustices related to wage labor. And now, once again, we find ourselves in a moment of economic change, accompanied by voices urging that we revisit the cooperative idea in the United States. Proponents point to the example of the Mondragon Corporation in the Basque region of Spain as evidence that an economy based on cooperative businesses can be taken to scale. Mondragon involves about 145 worker-owned businesses (plus additional traditional ones) and is the seventh largest corporation in Spain. As owners, workers are involved in corporate governance, and the corporate philosophy values wage equality (the average top to bottom wage in the company is 5:1), job security (though employee transfers rather than layoffs), and import substitution including independent control of banking.
Mondragon is the inspiration for the Evergreen Cooperatives in Cleveland, a much-celebrated community development project that, in turn, is inspiring countless other advocates in communities across the US. Evergreen posits worker cooperatives supplying environmentally sustainable goods or services to “anchor institutions” like hospitals, museums, and universities as a means of community wealth building. To date, the Evergreen Cooperatives operate three businesses, including a commercial laundry, energy company, and a greenhouse. The cooperative functions similarly to an ESOP (Employee Stock Ownership Plan), and a portion of profits are distributed to savings accounts made available to worker-owners at retirement or upon leaving employment. The cooperative economy envisioned by the Evergreen Cooperatives is certainly different than the cooperative commonwealth envisioned by the 19th century reformers. It will be interesting to watch it grow, and unfold in other communities, and perhaps lead to alternative visions of what it means to have a cooperative economy alongside the regular market.
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