Economics 397EC
THE ECONOMICS OF COOPERATIVE ENTERPRISES
Spring 2011
Professor Friedman
Professor Friedman’s office is 1002 Thompson
office hours: MW 10:30- 12:00 and by appointment.
EMail: gfriedma@econs.umass.edu
Matthew Denny is the course TA. He will be holding office hours (time and place TBA) and is available
by email at matthewjdenny@gmail.com.
Economics 397 introduces the economic analysis of cooperative management. This course syllabus was
designed by the University of Massachusetts Cooperative Enterprise Collaborative, including members of
the Valley Alliance of Worker Cooperatives (VAWC) as well as faculty and graduate students from the
Economics Department and elsewhere in the University of Massachusetts. We are also in the process of
developing a related internship program and Applied Economic Research Certificate which students
completing this course, as well as other requirements, will be eligible to participate in.
The course is organized around four central questions that should also inform the final project—a
business plan for a cooperative enterprise:
1. How do cooperatives and worker-owned businesses challenge or complement the
capitalist system?
2. Can cooperatives and worker-owned businesses produce better outcomes for workers,
consumers, the environment, and society as a whole?
3. Can cooperatives and worker-owned businesses successfully compete with capitalist
firms?
4. Will cooperation replace capitalism?
Grading:
20% of grade: Weekly short responses (beginning with the 2nd week) to the readings online via SPARK
plus comments on at least one other person’s responses. (You can skip one week without penalty.) Your
comments, two paragraphs, about 100-200 words, should be posted by Wednesday with responses by
Friday. These will be graded on a pass-fail basis. Questions will be posted on the SPARK site as starting
points for your comments.
10% of grade: Two brief presentations to the class (no more than five minutes) on a supplemental reading,
video or audio presentation. The supplemental materials are listed on the syllabus after the required
readings and presentations should generally be made on those marked with a star *. You may work with a
partner on these presentations. Your grade will be based on the presentation and on your written notes –
either in text or powerpoint. We will begin scheduling these immediately.
40% of grade: 4 quizzes (10% each). Two will be in class, no more than 25 minutes each with short
responses to questions drawn from the readings and relevant to the five questions outlined above. The
other two will be take-home with longer essay questions also drawn from the readings.
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30% of grade: A final project, consisting of a detailed business plan for a cooperative enterprise. You
should be able to draw from your weekly shortly responses and quizzes in completing this final project.
5% will be based on a first presentation, the rest (25%) on your final presentation and plan.
You may work collaboratively on this final project with as many as two other students, or you may work
on your own.
Required readings are available on SPARK except:
Erbin Crowell. “The Valley Alliance of Worker Co-operatives: Exploring the Potential of Co-op Led
Development.” Masters Thesis. St. Mary’s University, 2010. Pages 1-80. [80 pp]
You should purchase a copy of this at Collective Copies, a worker-owned cooperative located at 71 South Pleasant
Street in downtown Amherst.
John Restakis, Humanizing the Economy: Co-Operatives in the Age of Capital.
Available from Food for Thought Books, in at 106 North Pleasant Street downtown Amherst MA.
Dow, Gregory. Governing the Firm: Workers’ Control in Theory and Practice . Cambridge, UK:
Cambridge University Press, 2003
Available as an EBook from the UMass library.
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Web resources:
http://www.extension.org/pages/Cooperatives_Today
http://www.uwcc.wisc.edu/info/i_pages/work.html
http://businessmatters.net/2010/01/worker-owned-cooperatives/
http://www.creative-i.info/2010/03/09/the-emilia-romagna-coops-a-market-without-capitalists-by-frances-moorelappe/
http://www.mondragon-corporation.com/language/en-US/ENG.aspx
http://democracysedge.org/italycoops.pdf
http://www.geo.coop/
http://www.mondragon-corporation.com/LinkClick.aspx?fileticket=WRApdbHGB2U%3d&tabid=406
http://cultivate.coop/wiki/Main_Page
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WEEK 1. Introduction to the Course
January 19: Class-go-round and discussion of work experiences. Discussion of question: is democracy
possible?
Monday January 24: Lecture and discussion; student presentations on supplemental readings.
Required Readings:
Video clips describing new Cleveland cooperatives and Mondragon
Video: “The Mondragon Cooperative.” Short introductory video.
Part I [6 min] - http://www.youtube.com/watch?v=NORmQ8zaL1c
Part II [8 min] - http://www.youtube.com/watch?v=TpdoNzXGmxM&feature=related
Video: “Evergreen Cooperatives Introductory Video.” The promotional video for Evergreen Cooperatives
in Cleveland, Ohio. http://www.blip.tv/file/2749165/ [6 min]
Dow, Gregory. Governing the Firm: Workers’ Control in Theory and Practice . Cambridge, UK:
Cambridge University Press, 2003, chs. 1-2.
Supplemental Readings:
*Roderick Hill. "The Case of the Missing Organizations: Co-operatives and the Textbooks." The Journal
of Economic Education V 31, N 3 (2000): 173-95. [22 pp]
*Ethan Miller et al. "Other Economies Are Possible.” In Dollars and Sense, Grassroots Economic
Organizing Special Edition, July/August, 2006.
*Community Economies Collective. “Imagining and Enacting Noncapitalist Futures.” Socialist Review, V
28, N 3, 4 (2001): 93-135. [32 pp]
*Harry Braverman, Labor and Monopoly Capital, ch 2 (pp. 59-69).
Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Times. Chs. 11-18
(pp. 136-230).
Kimberly Zeuli and Robert Cropp. Cooperatives: Principles and Practices in the 21st Century. Fourth
revision of Marvin A. Shaars, Cooperatives Principles and Practices. Madison: University of Wisconsin
Extension. Publication A1457, 1980. Pages 1 – 49. [48 pp]
Neva Goodwin, Julie A. Nelson, Frank Ackerman, and Thomas Weisskopf. “The Business Sphere: ForProfit Firms.” Chapter 16 in Microeconomics in Context, 370-393. M.E. Sharpe, Inc., 2008. [24 pp]
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WEEK 2. History of Cooperatives: Origins of cooperation in the republican
revolution
Wednesday January 26: Brief lecture and student presentations on supplemental readings, and
discussion.
Monday January 31: Lecture, student presentations on supplemental readings, and discussion.
Presentation by Adam Trott and/or other representatives of Valley Alliance of Worker Cooperatives.
Wednesday February 2: Lecture, student presentations on supplemental readings, and discussion.
Presentation by Katya Hahn D’Errico and representatives from student-run businesses.
Required Readings:
John Restakis, Humanizing the Economy, chs 1-2 (pp 7-54).
Gerald Friedman, Reigniting the Labor Movement: Restoring means to ends in a democratic labor
movement, ch. 1 (pp 1-7) and ch. 3 (pp. 31-54).
David J. Thompson. “Revolution Comes to Rochdale” and “Robert Owen Sets the Stage for
Cooperation.” Chapters 1 and 2 of Weavers of Dreams, 1-17. Center for Cooperatives, University of
California, 2004. [17 pp]
David Ellerman. “The Labor Theory of Property” Chapter 1 in The Democratic Worker-Owned Firm.
Winchester, Ma: Unwin Hyman Inc, 1990. [25 pp]
Robert Dahl, A Preface to Economic Democracy, ch. 4 (pp. 111-135).
Supplemental Readings:
*David Montgomery, Citizen Worker, ch. 2 (“Policing People for the Free Market”).
*Eric Foner, Free Soil, Free Labor, Free Men, ch. 1 (pp. 11-39).
*Jessica Gordon Nembhard. “Cooperative Ownership in the Struggle for African American Economic
Empowerment.” Humanity and Society, Vol. 28, No. 3, August 2004.
www.federationsoutherncoop.com/coopinfo/H&S%20AA%20coop%20strategy%20Nembhard.pdf
*J. Birchall. “The Origins of Co-operation” [12 pp] and “The Philosophy of Co-operation” [17 pp] in Coop: the People’s Business. Manchester: Manchester University Press, 1994.
Charles Fourier. "Work and the Economy." Chapter 3 in Harmonian Man: Selected Writings of Charles
Fourier, edited by M. Poster. Garden City: Anchor Books, 1971. [31 pp]
John Curl. Introduction [11 pp] and Chapters 1 [13pp], 5 [25 pp], and 9 [28 pp] in For All the People:
Uncovering the Hidden History of Cooperation, Cooperative Movements, and Communalism in America.
Oakland: PM Press, 2009.
United States Department of Agriculture Rural Business– Cooperative Service. “Black Farmers in
America, 1865-2000: The Pursuit of Independent Farming and the Role of Cooperatives.” USDA Rural
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Business– Cooperative Service RBS Research Report 194, 2003. [23 pp]
www.rurdev.usda.gov/rbs/pub/rr194.pdf
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WEEK 3. The Lived Experience of Work
Monday, February 7: Brief lecture. Presentation by Janelle Cornwall and discussion. Student
presentations on supplemental readings.
Wednesday, February 9: Lecture and student presentations on supplemental readings.
Required Readings:
Video: “Democracy in the Workplace.” Highlights Rainbow, Inkworks, Cheeseboard and Arizmendi
cooperatives. http://video.google.com/videoplay?docid=4765137760763676264&q=democracy+in+the+workplace&total=14&start=0&num=10&so=0&type=sea
rch&plindex=1# [30 min]
John Restakis, Humanizing the Economy, ch 9 (pp 191-218).
J. K. Gibson-Graham. “A Diverse Economy: Rethinking Economy and Economic Representation.”
http://www.communityeconomies.org/Home/Key-Ideas Accessed 2010. [8 pp]
Adam Trott. “The Story of Collective Copies: growing a transformative business.” In Solidarity
Economy: Building Alternatives for People and Planet Papers and Reports from the 2007 US Social
Forum, edited by Jenna Allard, Carl Davidson, and Julie Matthaei, 224-27. Chicago, Illinois: Change
Maker Publications, 2008. [3 pp]
Richard Sennett and Jonathan Cobb, The Hidden Injuries of Class, chs 4-5.
Supplemental Readings and Video:
*Studs Terkel, Working: People Talk About What they Do All Day and How They Feel About What They
Do. Selections by Mike Lefevre, Phil Stallings, Nancy Rogers, and Therese Carter.
*Eric Fromm, The Sane Society, ch. 8 (pp. 236-306).
*Robert Blauner, Alienation and Freedom, chs. 2 and 3 (pp. 15-35 and 166-190).
*Richard Layard. Chapters 4, 5, 9, 10, 14, in Happiness: Lessons from a New Science. New York:
Penguin Press, 2005 [36 pp].
Herb Gutman, Work, Culture, and Society in Industrializing America, ch. 1, pp. 3-118.
Luis J. Coraggio and S. Arroyo. “A path to the social economy in Argentina: worker takeovers of
bankrupt companies.” In The Social Economy International Perspectives on Economic Solidarity, edited
by Amin Ash, 139-55. London: Zed Books, 2009. [16 pp]
Anne McShiras. “Extending the Bottom Line: What Worker Coops in Argentina Can Teach Us About
Sustainability.” Chapter 21 in Solidarity Economy I: Building Alternatives for People and Planet, edited
by Emily Kawano, Thomas Neal Masterson, Jonathan Teller-Elsberg. Amherst, MA: Center for Popular
Economics, 2010. [8 pp]
Video: “The Take.” Documentary on the Worker Takeovers in Post-Crisis Argentina. [85 min]
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WEEK 4. Management in capitalism and cooperation
Monday February 14: Brief lecture. Presentation by Amato Zinno (U.Mass graduate and former
People’s Market manager) and discussion. Student presentations on supplemental readings.
Wednesday February 16: Lecture and student presentations on supplemental readings.
Required material:
Dow, Gregory. Governing the Firm: Workers’ Control in Theory and Practice. Cambridge, UK:
Cambridge University Press, 2003, ch. 5.
Amato Zinno, “The Story of People’s Market” Senior Thesis, History Department, University of
Massachusetts, 2009.
Harry Braverman, Labor and Monopoly Capital, ch 4 (pp. 85-124).
Video: “The Mondragon Experiment.” Feature length BBC documentary of Mondragon.
Part I [54 min] - http://video.google.com/videoplay?docid=4765137760763676264&q=democracy+in+the+workplace&total=14&start=0&num=10&so=0&type=sea
rch&plindex=1#docid=7565584850785786404
Part II [13 min] - http://video.google.com/videoplay?docid=4765137760763676264&q=democracy+in+the+workplace&total=14&start=0&num=10&so=0&type=sea
rch&plindex=1#docid=-7725698018832368909
Supplemental Readings and Video:
*Michael Johnson. “Our Fifth Element: the Generator for Developing Cooperative Cultures.” [12 pp]
*David Ellerman. “Democratic Theory” and “The Democratic Firm.” Chapters 2 and 3 in The Democratic
Worker-Owned Firm. Winchester, Ma: Unwin Hyman Inc, 1990. [25 pp]
*George Benello. “Economic Democracy and the Future” and “The Challenge of Mondragon.” In From
the Ground Up Essays in Workplace Democracy, edited by Len Krimerman, F. Lindenfeld, K. Korty, K,
and G. Benello, 81-100. Boston, MA: South End Press, 1992. [19 pp]
Erbin Crowell. “Making the Case for a Uniquely Co-operative Form of Management: History, Structure
and Principles,” Unpublished Manuscript, 2005. Pages 1-17. [17 pp]
Melissa Hoover. “Another Workplace is Possible: Co-ops and Workplace Democracy.” In Solidarity
Economy: Building Alternatives for People and Planet Papers and Reports from the 2007 US Social
Forum, edited by J. Allard, C. Davidson, and J. Matthaei. Pages 239-53. Chicago, Illinois: Change Maker
Publications, 2008. [13 pp]
Robert Jackall and Joyce Crain. “Paradoxes of Collective Work: A Study of the Cheeseboard, Berkeley,
California.” In Worker Cooperatives in America, edited by R. Jackall, and H. Levin, 109-135. Berkeley:
University of California Press, 1984. [26 pp]
Janis Mara. “Worker-Owned Co-ops Growing.” Oakland Tribune, Jan 2, 2007. Business Writer, Bay
Area-ANG Newspapers. [2 pp]
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David Ellerman. “Translatio versus Consessio: Retrieving the Debate about Contracts of Alienation with
Application to Today’s Employment Contract.” Politics and Society V 33, N 3. (2005): 449-476. [28 pp]
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WEEK 5. Measuring success?
Tuesday February 22: Quiz on material covered to date; lecture and discussion; student presentations
on supplemental readings.
Wednesday Febuary 23: Brief lecture. Presentation by Michael Johnson, community activist and
member of VAWC and discussion. Student presentations on supplemental readings.
Required Readings:
Video: Little glimpse into Union Cab in Madison. http://www.youtube.com/watch?v=TFYdVfp9Nj0 [3
min] Clip from Michael Moore’s “Capitalism: A Love Story.”
Jessica Gordon Nembhard. “Non-Traditional Analyses of Cooperative Economic Impacts.” Review of
International Cooperation 97, no. 1 (2004): 6-21. www.ica.coop/publications/review/2004-issue1.pdf.
[15 pp]
Kimberly Zeuli and Jamie Radel. “Cooperatives as a Community Development Strategy: Linking Theory
and Practice. 35(1): 43-54. http://www.jrap-journal.org/pastvolumes/2000/v35/index351.html. [12 pp]
Laurie Mook, Betty Jane Richmond, and Jack Quarter. “Social Accounting for Social Economy
Organizations.” Research Bulletin. Center for Urban and Community Studies, University of Toronto
(Based on a chapter in What Counts: Social Accounting for Nonprofits and Cooperatives (Prentice Hall,
2003), available at
http://www.urbancentre.utoronto.ca/pdfs/researchbulletins/CUCS_RB_27_Mook_et_al_S.pdf[6 pp]
Supplemental Readings:
*Charles Turner. “Worker Cooperatives and Community Development.” Chapter 4 in Beyond the Market
and the State, edited by Severyn T. Bruhn and James Meehan, 64-78. Temple University Press,
Philadelphia: 1987. [15 pp]
*Wilson Majee. “Cooperatives, the Brewing Pots for Social Capital! An Exploration of Social Capital
Creation in a Worker-owned Homecare Cooperative.” http://www.communitywealth.org/articles/coops.html. [33 pp]
*John de Graaf. “What’s Productivity For?” Chapter 12 in Solidarity Economy I: Building Alternatives
for People and Planet, edited by Emily Kawano, Thomas Neal Masterson, Jonathan Teller-Elsberg.
Amherst, MA: Center for Popular Economics, 2010. [4 pp]
*New Economics Foundation. “How the efficiency agenda erodes local public services and a new public
benefit model to restore them,” New Economics Foundation website.
http://www.neweconomics.org/publications/unintended-consequences. [20 pp]
New Economics Foundation. “Tools for You,” 12-14. New Economics Foundation website.
http://www.neweconomics.org/publications/tools-you. [3 pp]
Steven Deller, Ann Hoyt, Brent Hueth, and Reka Sundaram-Stukel. “Research on the Economic Impact of
Cooperatives.” Madison, WI: University of Wisconsin Center for Cooperatives, March 2009.
http://www.community-wealth.org/articles/coops.html. [76 pp]
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Cooperatives UK. “Cooperative, Environmental and Social Performance Indicators Guidance.”
Cooperatives UK website. http://www.uk.coop/resources/documents/co-operative-environmental-andsocial-performance-indicators-guidance. [35 pp]
The International Organisation of Industrial, Artisanal and Service Producers’ Co-operatives (CICOPA).
“Impact of the crisis on workers and social cooperatives.” CICOPA website.
http://www.cicopa.coop/Effects-of-the-crisis-on.html. [5 pp]
Supplemental Audio:
*Radio Interview: “Worker-Owned Cooperatives: The Work We Do is the Solution.” Interviews by Rose
Aguilar (Truthout.org) with worker owners from Arizmendi and Box Dog Bikes prior to the USFWC
2010 conference. Long but for those interested might be fun background listening.
http://www.truth-out.org/worker-owned-cooperatives-the-work-we-dosolution62172?utm_source=twitterfeed&utm_medium=twitter
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Week 6: Student presentations of drafts of final projects
Monday February 28
Wendesday March 2
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WEEK 7. Competitive Pressures
Monday, March 7: Lecture and discussion; student presentations on supplemental readings. .
Wednesday, March 9: Lecture, discussion and student presentations on supplemental readings. Quiz 2
(take-home) handed out.
Required Readings:
David I. Levine and Laura D'Andrea Tyson. “Participation, Productivity, and the Firm’s Environment.” In
Paying for Productivity: A Look at the Evidence, edited by Alan Blinder. Washington, D.C.: Brookings
Institution, 1990. [53 pp]
Dow, Gregory. Governing the Firm: Workers’ Control in Theory and Practice . Cambridge, UK:
Cambridge University Press, 2003, ch 6.
Supplemental Readings:
*Johnston Birchall. "Co-operatives in the Twenty First Century." Journal of Co-operative Studies 33 no.
3 (2000): 217-227. [10 pp]
*Joyce Rothschild and J. Allen Witt. “Cooperatives in the Late Twentieth Century: The Democratic
Impulse and the Challenge of Oligarchy.” In The Cooperative Workplace. Cambridge: Cambridge
University Press (1986), pp. 7-24. [17 pp].
*Matt Hancock. “Competing By Cooperating in Italy: The Cooperative District of Imola.” Chapter 13 in
Solidarity Economy I: Building Alternatives for People and Planet, edited by Emily Kawano, Thomas
Neal Masterson, Jonathan Teller-Elsberg. Amherst, MA: Center for Popular Economics, 2010. [12 pp]
*Ran Abramitzky, “The Limits of Equality: Insights from the Israeli Kibbutz” (December 2005 ms.)
http://www.aeaweb.org/annual_mtg_papers/2006/0108_1300_0703.pdf
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WEEK 8. Productivity, Efficiency, Theory of the Firm
Monday, March 21: Lecture and discussion; student presentations on reading. Guest lecture by Michael
Burkart.
Wednesday, March 23: Lecture and discussion; student presentations on reading.
Required Readings:
Dow, Governing the Firm, chs. 7-9.
Elinor Ostrom. "Collective Action and the Evolution of Social Norms." The Journal of Economic
Perspectives, Vol. 14, No. 3 (Summer, 2000): 137-158. [22 pp]
Anita Williams Woolley, et al., “Evidence for a Collective Intelligence Factor in the Performance of
Human Groups,” Science 330 (29 October 2010), 686-9.
Supplemental Readings:
*Virginie Perotin. "Entry, Exit, and the Business Cycle: Are Cooperatives Different?" Journal of
Comparative Economics 34, no. 2 (2006): 295-316. [21 pp]
*Douglas L. Kruse, Joseph R. Blasi, & Rhokeun Park. “Shared Capitalism in the US Economy:
Prevalence, Characteristics, and Employee Views of Financial Participation in Enterprises.” Chapter 1 in
Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock
Options. Chicago: University of Chicago Press, 2010, 41-75. [35 pp]
*Richard B. Freeman, Richard B., Douglas L. Kruse, & Joseph R. Blasi. “Worker Responses to Shirking
under Shared Capitalism.” Chapter 2 in Shared Capitalism at Work: Employee Ownership, Profit and
Gain Sharing, and Broad-based Stock Options. Chicago: University of Chicago Press, 2010, 77–103. [27
pp]
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WEEK 9. Comparative Performance of Cooperative Firms: Empirical
Evidence
Monday, March 28: Lecture and discussion.
Wednesday, March 30: Lecture. Brief quiz covering material since second quiz.
Special Event: Talk by Tom Webb of students the University of St. Mary’s in Halifax Nova Scotia,
Masters’ Program on Managing Cooperative Enterprises. Details TBA.
Required Readings:
Avner Ben-Ner, Tzu-Shian Han and Derek C. Jones, “The Productivity Effects of Employee Participation
in Control and in Economic Returns”
http://docs.google.com/viewer?a=v&q=cache:jAamnNX1aD0J:www.crcnetbase.com/doi/pdf/10.4324/97802030114
16.pt3+%22Employee+participation%22+productivity+%22Douglas+Kruse%22&hl=en&gl=us&pid=bl&srcid=AD
GEESidDfJQSDruuWjo4wMvpzFFHSd71LFibvbsdkjgvimnV6u2JHxJiO21TBo628jPlRCgv3TfO866QIpYxAj2BO
2jhPsKgYec4bvoef1vCx7XEwwEjce3DBZ3iZLuO6f2xQp4Fh8&sig=AHIEtbRK80_TLemNsNUjxJDxyhGJDD6h
ug
Restakis, Humanizing, ch. 10.
John Logue and Jacquelyn Yates. “Productivity in Cooperatives and Worker-Owned Enterprises:
Ownership and Participation Make a Difference!” Background paper for the International Labor Office’s
World Employment Report 2004-2005. [60 pp]
Richard B. Freeman, Joseph R. Blasi, and Douglas L. Kruse. Introduction to Shared Capitalism at Work:
Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options. Chicago: University of
Chicago Press, 2010, 1-37. [37 pp]
Daniel H. Pink. Drive, the Surprising Truth About What Motivates Us. New York, New York: Riverhead
Books, 2009. Pages 1-60. [60 pp]
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WEEK 10. Cooperation among Cooperatives
Monday, April 4: Lecture, student presentations on supplemental readings.
Wednesday April 6: Brief lecture. Presentation by Olivia Geiger, discussion; student presentations on
supplemental readings.
Required Readings:
John Restakis, Humanizing the Economy, chs. 3-4 (pp 55-86).
John Logue. “Economics, Cooperation, and Employee Ownership: The Emilia Romagna Model.” Kent,
Ohio: Ohio Employee Ownership Center, 2006. http://www.community-wealth.org/articles/outsideus.html. [15 pp]
Supplemental readings:
*Joseph Cortright. “Making Sense of Clusters: Regional Competitiveness and Economic Development.”
Washington, DC: Brookings Institution Metropolitan Policy Program, 2006. [55 pp]
*Charles Sabel and Jonathan Zeitlin, "Historical Alternatives to Mass Production: Politics, Markets and
Technology in Nineteenth-Century Industrialization," P&P no. 108 (Aug. 1985), pp. 133-76. [44pp]
*Michael J. Piore and Charles F. Sabel. “History, Practice, and National Strategies.” Chapter 9 in The
Second Industrial Divide: Possibilities for Prosperity. Basic Books: 1984. [31 pp]
*Ethan Miller. “Solidarity Economy: Key Concepts and Issues.” Chapter 2 in Solidarity Economy I:
Building Alternatives for People and Planet, edited by Emily Kawano, Thomas Neal Masterson, Jonathan
Teller-Elsberg. Amherst, MA: Center for Popular Economics, 2010 [18 pp]
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WEEK 11. Cooperative Development
Monday, April 11: Lecture; student presentations on supplemental readings.
Wednesday, April 13: Quiz covering material since second quiz; student presentations on supplemental
readings.
Required readings:
Erbin Crowell. “The Valley Alliance of Worker Co-operatives: Exploring the Potential of Co-op Led
Development.” Masters Thesis. St. Mary’s University, 2010. Pages 1-80. [80 pp]
John Restakis, Humanizing the Economy, chs. 5-7 (pp. 87-160).
Supplemental Readings:
*J.K. Gibson-Graham. “Surplus Possibilities: The Intentional Economy of Mondragon.” Chapter 5 in A
Postcapitalist Politics. University of Minnesota Press. 2006. [26 pp]
*Patrick Develtere. “Co-operatives and Development: Towards a Social Movement Perspective.” Centre
for the Study of Co-operatives University of Saskatchewan: 1992.
http://www.usaskstudies.coop/publications/electronic_format/ [121 pp]
*Yvon Poirier. “Labour Unions and the Solidarity Economy: The Quebec Experience.” Chapter 7 in
Solidarity Economy I: Building Alternatives for People and Planet, edited by Emily Kawano, Thomas
Neal Masterson, Jonathan Teller-Elsberg. Amherst, MA: 2010, 99 – 113. [15 pp]
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Week 12. Legal Aspects and Financing
Wednesday, April 20: Brief lecture. Guest presentation by Nancy Folbre; student presentations on
supplemental readings.
Required Readings:
John Restakis, Humanizing the Economy, chs. 8-9 (pp. 161-218).
University of Wisconsin’s Research on the Economic Impact of Cooperatives. [11 pp]
Henry Hansmann. “Cooperative Firms in Theory and Practice.” LTA April 1999, 387-403. [17 pp]
Christopher Gunn. “Co-op Success and Failure: Finance Remains an Issue.” Paper prepared for the 2004
Conference of the International Association For the Economics of Participation Saint Mary’s University
Halifax, Nova Scotia July 8 – 10, 2004. [24 pp]
Video: “Alternative Financing Example: Black Star Coop.”
http://www.youtube.com/watch?v=5RylATdL564 [4 min]
Video: “Black Star Founders Interview.” http://www.youtube.com/watch?v=QUGJb4kUZZM [10 min]
Supplemental Readings:
*Michael A. Conte and Jan Svejnar. “The Performance Effects of Employee Ownership Plans.” In Paying
for Productivity: A Look at the Evidence, edited by Alan Blinder. Washington, D.C.: Brookings
Institution, 1990. [39 pp]
*2009 Year-End Statistics for Federally Insured Credit Unions. Read pages 1-11 in the report (section is
titled "Financial Trends in Federally Insured Credit Unions").
http://www.ncua.gov/Resources/Reports/statistics/Yearend2009.pdf
*David Ellerman. "Theory of Legal Structure: Worker Cooperatives." Journal of Economic Issues 18 no.
3 (1984): 861-891. [30 pp]
*Robert C. Hockett. “What Kinds of Stock Ownership Plans Should There Be? Of ESOPs, SOPs, and
‘Ownership Societies.’” Cornell Law Faculty Working Papers, 2006. Pages 1-109.
http://scholarship.law.cornell.edu/clsops papers/19. [109 pp]
Marguerite Mendell and Nancy Neamtan. “The Social Economy in Quebec: Towards a New Political
Economy.”
http://www.ssc.wisc.edu/~wright/Social%20Economy%20PDFs/Quebec%20Social%20Economy/Mendel
l%20Neamtan%202008.pdf [16 pp]
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WEEK 13. Paths Forward
Monday April 25: Presentation by Katya Hahn D’Errico on student-run businesses. Lecture; student
presentations on supplemental readings.
Wednesday, April 27: Lecture; student presentations on supplemental readings. Fourth quiz (takehome) handed out. Guest presentation by Mary Hoyer (Co-op Fund of New England).
Monday, May 2: Brief lecture; student presentations on supplemental readings.
Required Readings:
John Restakis, Humanizing the Economy, ch. 11 (pp. 241-266).
Gregory Dow. “Towards a Synthesis.” Chapter 11 in Governing the Firm: Workers’ Control in Theory
and Practice, 234-259. Cambridge, UK: Cambridge University Press, 2003. [26 pp]
Gregory Dow. “Getting There From Here.” Chapter 12 in Governing the Firm: Workers’ Control in
Theory and Practice, 260-289. Cambridge, UK: Cambridge University Press, 2003. [30 pp]
Supplemental Readings:
*John Curl. “Worker Coops Descend on Berkeley.” Grassroots Economic Organizing,
http://www.geo.coop/node/486. [2 pp]
*Andre Gorz, Strategy for Labor: A Radical Proposal, chs. 2-3.
*Carl Davidson. “’One Worker, One Vote:’ US Steelworkers to Experiment with Factory Ownership,
Mondragon Style.” Chapter 9 in Solidarity Economy I: Building Alternatives for People and Planet,
edited by Emily Kawano, Thomas Neal Masterson, Jonathan Teller-Elsberg. Amherst, MA: Center for
Popular Economics, 2010, 125-130. [6 pp]
*Gar Alperovitz, Ted Howard, and Thad Williamson. “The Cleveland Model.” The Nation (March 2010).
http://www.community-wealth.org/articles/coops.html. [2 pp]
*Bob Eckhardt. “Revitalizing Communities through Employee Ownership: A Unique Venture in
Cleveland.” Keynote Address, 2009 Ohio Employee Ownership Annual Conference, Kent, OH. Owners
at Work, Volume XXI No. 1 (Summer 2009): 14-15. http://www.communitywealth.org/articles/coops.html. [2 pp]
*Erik Olin Wright. “Social Empowerment and the Economy.” Chapter 7 in Envisioning Real Utopias.
New York, New York: Verso Books, 2010. [82 pp]
Nancy Neamtan. “The Solidarity Economy, State Organization, and Political Power.” Chapter 27 in
Solidarity Economy I: Building Alternatives for People and Planet, edited by Emily Kawano, Thomas
Neal Masterson, Jonathan Teller-Elsberg. Amherst, MA: 2010, 341-349. [9 pp]
Peter Hough. “Succession Planning Using the Worker Co-op Option.” Ottawa, ON: Canadian Worker
Co-op Federation, March 2005. http://www.community-wealth.org/articles/coops.html. [44 pp]
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Scheduled Exam Period (date and time to be determined)
THIS TIME PERIOD WILL BE RESERVED FOR 10-MINUTE PRESENTATIONS OF FINAL
PROJECTS.
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Discussion questions:
WEEK 2. History of Cooperatives: Origins of cooperation in the republican
revolution
What was the “Age of Revolt”? What is the association between movements to expand democracy and worker
cooperatives?
Why did campaigns for cooperation arise in the early 19 th century rather than in earlier times, or later?
How does the movement for cooperation (consumer and worker) challenge free market economics?
WEEK 3. The Lived Experience of Work
What do Sennett and Cobb mean when they say that work under capitalism creates a “divided self”? Does capitalist
work undermine workers’ dignity? Does it promote defensive schizophrenia?
WEEK 4. Management in capitalism and cooperation
What is a “firm”? How is it different to organize production in a firm than to use a market? What is the authority
held by management? What are the constraints on that authority under capitalism? What are the constraints under a
form of labor management?
WEEK 5. Measuring success?
How do capitalist firms measure success? When will they value the welfare of their host communities? How do
labor managed firms measure success? When will they value the welfare of their host communities?
WEEK 7. Competitive Pressures
What does Dow mean by the “symmetry” and “replication” principles? Why does he think that these might help to
explain the distribution of labor managed firms? What social conditions does he assume? What does he omit? Can
we assume that society’s institutions are efficient?
WEEK 8. Productivity, Efficiency, Theory of the Firm
Do capital managed firms maximize profits? What would a labor managed firm maximize? What should be
maximized?
WEEK 9. Comparative Performance of Cooperative Firms: Empirical
Evidence
How do capitalist firms maintain work discipline? What advantages and disadvantages might a labor-managed firm
have in getting workers to work and to be creative?
WEEK 10. Cooperation among Cooperatives
Why are there “industrial districts”? What are some of the “economies of agglomeration” from being located near
other firms? How would capitalist firms reap these economies? How might cooperative firms?
WEEK 11. Cooperative Development
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How do capitalist economies become more productive? Would an economy dominated by worker cooperatives
stagnate economically?
Week 12. Legal Aspects and Financing
How might consumers promote worker cooperatives? Would their interests necessarily coincide with those of the
producers?
WEEK 13. Paths Forward
How could we change the world?
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Model for presentations of final projects
For your first presentation, you should know what product you want to produce and have a basic idea of
how you will organize your business. You should have prepared 5 powerpoint slides:
Slide 1: your product or service and how you will meet a market need.
Slide 2: scale and basic organization of business. How large to be competitive? About how much
investment funding will you need to get going?
Slide 3: estimate of revenues and costs and net “surplus.” How long before you become profitable?
Slide 4: governance issues—decision-making specifics including how workers become owners and what
happens if worker/owners want to leave.
Slide 5: potential to network with and strengthen other cooperative businesses and the broader
community.
Your first presentation should be no more than 5 minutes so you will quickly go through these slides.
Your final presentation should follow the same basic model but with much greater detail and analysis. It
might include, for example, engineering studies or market surveys, and a full financial plan that will
integrate both the need for finance and your plan to maintain worker control.
Examples of good coop-business plans will be provided.
Peter Ranis, “Factories without Bosses: Argentina’s Experience with Worker-Run Enterprises,” Labor:
Studies in Working-Class History of the Americas 3:1 (2006), 11-23.
Marcela Valente, “Worker-Run Factories in Argentina Continue to Thrive: Boosting the Economy and
Influencing Workers in Other Countries,” http://www.solidarityeconomy.net/2010/11/13/why-worker-factorytakeovers-are-good-for-us/
Ana C. Dinerstein, “Workers’ Factory Takeovers and the Programme for Self-Managed Work: Towards an
‘Institutionalization’ of Radical Forms of Non-Governmental Public Action in Argentina,” NGPA Working Paper
Series, 8, 31 January 2008. www.lse.ac.uk/ngpa/publications.
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More on Argentina worker takeovers:
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