Worker Cooperatives are the Answer

There are many pathways on which we can pursue socialism but one that has had real success from Nicaragua to the Basque country and beyond is the idea of worker co-operatives. A worker co-operative is a business in which all the members have a stake in the business. From having an equal voice to having a fair share of the wealth. Co-ops are essentially a localised form of socialism and community empowerment. Across rural Ireland in places like Donegal the lack of infrastructure and government support has left many communities with little option other than emigration. There is very little community-built wealth in these towns and villages. Any small businesses that starts up must compete with large corporations who have branches and stores in the nearest urban centres. To combat this constant decline of rural Ireland we must think differently and think radical. And that’s where worker coop’s come in.

In the rural Basque town of Oñati worker coops are central to the local community wealth that exists in the area. ‘El Pais’ one of the biggest daily newspapers in Spain did a story on Oñati back in 2011. The newspaper found that town had an unemployment rate of 5.4%, the lowest of any town with a population just over 10,000 people in Spain or Spanish occupied areas. For context when the story was run in 2011 Europe was still in the middle of a deep economic recession. Oñati’s low unemployment was not a case of chance or good luck. it was a case of the towns manufacturing industry being mainly cooperatively run. You see, mass lay offs and pay cuts to the workforce isn’t something that happens in worker coops like it does in private industry. The reason? Because each member of the cooperative has an equal say and an equal vote. When tuff decisions have to be made in times of recession coops hold a collective meeting in which they can decide the fairest way to cut costs and maintain each other’s jobs. 

During the more recent crisis of the Covid-19 pandemic Oñati’s coops have again proved themselves to be strong and adaptable. EH Bildu, a left pro Basque independence party with strong ties to Sinn Féin, lead the town council. The party’s economic policies align with the principals of the worker coops. These shared economic views have brought about a highly creative solution to the barriers of Covid-19. A local digital technology firm called ‘Magnet Coop’ were hired by the town council to create a digital platform for local businesses and coops who shut down during the crisis. On the platform shoppers could buy a coupon which offered a 20% discount on purchases from local businesses. The value of the discount would then be covered by the town council. The digital platform proved a success. Over €200,000 was spent in Oñati’s shops through the platform with €40,000 worth of discounts being covered by the council. There are currently plans to make the digital platform a permanent feature beyond Covid-19.

The Oñati coops are just one example that rural Ireland could draw inspiration from. Another example exists in the central American nation of Nicaragua. To combat US economic sanctions the leftist Sandinista government of Nicaragua have backed rural coops. So much so that the number of worker coops in the country is now more than 5,000. These coops span across the sectors of agriculture, fishing, crafts, and transport. Orlando Núñez Soto, Social Affairs advisor to the president, laid out in a 2017 interview just how important cooperatives are to the nation’s economy. Nicaragua has what it calls a ‘popular economy’ that consists of coops and small family businesses. Orlando explained how this popular economy accounts for a whooping 70% of the nation’s employment and generates 50% of the nation’s wealth. The scale and power of worker coops in Nicaragua is an example of what can be achieved with the backing of a left-wing government.

In Ireland there are currently a few roadblocks that make the setting up of a coop more difficult. One of these roadblocks is a policy that makes any start up cooperative have at least seven members. Sinn Féin is challenging this policy through the party’s worker cooperative document. The Document was put together after extensive research from the party and input from trade unionists. If the document was put in action it would lower the number of members needed to form a cooperative down to just three. The document would also create a worker buyout pathway in the event of a private business being sold. A similar buyout model has proved successful in France. Another roadblock is the decades of free market centred and Foreign Direct Investment reliant governments. There is no room for worker cooperatives in either Fianna Fáil or Fine Gael’s economic outlook. 

But all is not lost. Power grows from organising and our rural communities are at their strongest when united behind a shared goal. We understand the importance of shopping local (for every €1 spent locally 45c stays local) and we share in the delight when a small business grows from a local face in our community. We embody the principals of worker cooperatives in our daily lives, now let’s organise and build them!

le Matthew McLaughlin