A Positive Strategy Forward for Chicago SDS
Below is an outline for a positive strategy for chicago SDS to pursue next semester, and I’d like to hear some feedback on it. These documents are rough rough drafts but I would like to hear what others have to say about this strategy. Essentially the plan is to use the resources of Chicago’s university in a cooperative incubator. The schools would provide the technology and identify market opportunities for worker cooperatives to be located in oppressed communities like austin on chicago’s west side.
Introduction
Stable employment is the anchor of every community, and when jobs leave so does the lifeblood of a community. Residents of Chicago’s south and west sides have struggled with the deindustrialization of the 1980’s and have seen their neighborhoods spiral downwards into a state of entrenched poverty.
The city of Chicago has failed to address the problem of entrenched poverty in many of its neighborhoods. Many times it has resorted to simply tearing down neighborhoods, removing the residents and selling the land to real estate developers in a process called gentrification. Another strategy has been to allow polluting industry into neighborhoods that have been fought off by communities with enough political connections and money.
Mayor Daley’s latest strategy however has been to court big box retailers into low income communities by restricting wages and offering favorable financing schemes. Landing a Wal-Mart in Austin or Englewood is not going to start development in those neighborhoods for a number of reasons. First the Wal-mart will undercut whatever small business exists in these communities destroying both livelihoods and some of the tax base. Second Wal-mart workers will not have a net “multiplier” effect on the community like most other businesses. A money multiplier effect is when a workers wage becomes recycled into the local economy through their purchases at other businesses. Wal-mart simply does not pay enough to its workers for them to make a significant contribution to the local economy, instead most of their money gets recycled back into Wal-mart’s products.
It is clear that relying upon traditionally structured businesses to produce employment in these communities has been a failure. Shareholders are the only people consulted for decisions, meaning that the business can leave at any time, or even worse, the shareholders can slowly run the company into the ground extracting as much wealth as possible from the business’s productive capacity and its workers.
Clearly a new urban development paradigm is needed. Advocates for social justice must expand their strategy to include wealth creation in addition to protesting working conditions at Wal-Mart or the outsourcing of jobs. Entrenched poverty will only be solved by establishing ownership of enterprises within depressed communities, ensuring the profits are recycled back into the local economy which will create a money multiplier effect, generating even more growth.
A New Way Forward: A Green Cooperative Incubator
Our plan for generating employment in Chicago represents a new way forward, we want to establish enterprises that are both accountable to their workers and that contribute to the greening of our city and surrounding environment. The tool that we will use is called an incubator. As students we hold a unique position to pressure our institutions to live up to their stated social missions and to aid in wealth creation in low income communities and participate in a Green Cooperative Incubator.
Traditionally incubators have been restricted to partnerships between universities, their graduates, a few investors, and local government for the purpose of creating hi-tech industry. In this model the university graduates bring their university projects into the market place and the incubator helps them to establish a business towards this end.
Our Green Cooperative Incubator would be qualitatively different because it would focus on creating employment for low income communities, and not university graduates, but more importantly it would focus on using the cooperative enterprise model where enterprises are democratically directed by their workers. Democratic cooperatives have proven wildly successful in the Mondragon Basque region of Spain and the Emilia Romanga region of Italy, both of which were devastated after the Second World War.
Mondragon Cooperative Corporation
The Basque region of Spain was devastated after Franco’s vicious assault during the Spanish civil war, and was punished by the central government for being one of the last provinces to submit to fascist rule. In 1956 five engineers and a priest named Don Jose Maria Arizmendiarreta began a stove making company named ULGOR based on the cooperative principles espoused by Don Jose Maria. ULGOR proved successful and by 1959 it required more capital and prompted Maria to visit door to door to raise capital for a cooperative bank, also know as Caja.
As a student of cooperatives, Maria knew that cooperatives tended to become isolationist and disintegrate after some generations of workers. The Mondragon project was intended to rebuild the Basque region and to generate employment and as Mondragon expanded, each enterprise remained networked with each of the others. A Congress of Cooperatives established ground rules for the cooperatives to operate under, and served to help restructure and bail out struggling enterprises. This approach has created significant results with only one failed enterprise out of over 150 enterprises under the Mondragon network, this is especially promising consider the US failure rate for start up businesses is around 50%.
Today Mondragon Cooperative Corporation’s member enterprises have won contracts from NASA, hold the largest share in big ticket domestic appliances in Spain and a growing share in the European Union market, include the largest retailer in Spain through the cooperative big-box chain Eroski, and have been expanding industrial production outside of Spain.
Emilia Romanga
Emilia Romanga is a region in Northern Italy that was also devastated by WWII and was liberated by the Italian communist partisans. It has been rebuilt through the dynamic policies of the Italian Communist Party that has emphasized small businesses and cooperatives. The region has 325,000 firms and 4 million people, one of the highest firm ownership per capita rates in the world.
Small businesses and cooperatives have been promoted by the Communist Party through the sale of capital and land taken through the equivalent of eminent domain. The local government has also established incubators and service centers, where firms can loan time shares on expensive equipment that couldn’t be purchased on an individual level. Many of the businesses emerged after spinning off of other businesses, where employees from one company would create a spinoff company to supply their former employer with inputs. This had led to one of the most dynamic economies in Europe, winning Emilia Romanga a rating in the top ten most prosperous areas in the entire European Union. The cooperative movement in Emilia Romanga is an example of how a democratic decision making model in the workplace can lead to a dynamic, employment and technology intensive economy that has the ability to lead a community out of poverty.
The Next Step: A Green Cooperative Incubator in Chicago
Our Green Cooperative Incubator in Chicago would focus on utilizing green technology to transform our local economy. In the next decades there will be a massive expansion in the market opportunities for green tech companies in the manufacturing and service sectors. The renewable energy transition we must make to save the planet will need new manufacturing plants for solar panels and wind turbines, and will require firms to install the panels and turbines, and will require firms to recycle greater amounts and more varied types of waste to limit resource use.
These opportunities are the path out of entrenched poverty for many of Chicago’s community. We have a moral and environmental obligation to end Eco-Apartheid where the benefits of the green tech revolution are concentrated in the wealthy, mostly white, suburban areas. If we do not end entrenched poverty, the massive waste and pollution involved in maintaining such a state of affairs will negate any positive impact from a green suburbia and will eventually kill the planet.
Design of Green Cooperative Incubator
The board of the Green Cooperative Incubator would comprise of representatives from participating universities that would be responsible for coordinating their institutions’ contributions. Physical science departments would collaborative to research green technology deliverable to the market, and business departments would collaborate to author viable business plans. The universities would then fund feasibility studies to determine if the business plans would proceed to the next stage of development.
Also sitting on the board of the incubator would be representatives of participating financial institutions and student representatives appointed by the participating school’s student government. These student representatives would serve as a check to the power of the universities and act to ensure the integrity of the program. A liaison with the Chicago city government would also have a seat on the board, with the entire board electing a chairman. Board members representing community environment groups would be invited to join because of their intimate knowledge of the social and environmental justice issues facing their communities.
If a proposal for a cooperative enterprise would be found feasible; the next stage would be to select an initial manger to act as a “godfather,” similar to the model used to begin new enterprises in Mondragon. The manager would be appointed by the board, and would have to act within the guidelines set by the board and relinquish control of the enterprise after two years to the workers. The initial manager would not have any extra equity in the company, merely control rights. All of the equity of the business would be owned by the incubator with the workers purchasing equity collectively back from the board, with shares structured to ensure that each person would receive one vote. After two years the control of the enterprise would be relinquished to the workers, but if the enterprise were to fall into arrears in their equity payments or other financial trouble, the board would have the right to reappoint a manager for a temporary period of time.
What’s Next?
We must use our universities to initiate the Green Cooperative Incubator because those are the institutions we can most easily influence. Also school administrations would likely be more receptive to becoming the core of the Green Cooperative Incubator than any other institution.
Our campaign will focus itself on a single educational institution to create an organizational base that can then expand to other universities. The campaign for a Green Cooperative Incubator has the potential to link many student groups into a single campaign, we can expect anti-war groups, identity based groups (Black, Hispanic, Muslim student unions), fair-trade groups, Jobs with Justice, and environmental organizations to collaborate on the project.
Universities such as Depaul, UIC, and IIT have already committed themselves to promoting sustainable development in Chicago, meaning that we will have a moral high ground when advocating that they adopt our Green Cooperative Incubator proposal. If we can obtain support from one university, it will be much more likely that other universities will also lend their support. The snowball effect will make our task easier with the second and third universities, whereas attempting to pressure multiple universities simultaneously will spread our organizers too thin and we will not reach the critical mass to pressure any single university to adopt out plan. We must engage in typical advocacy, organizing demonstrations in support of our proposal, holding dozens of teach-ins across the campus, engaging in sit-ins, disruptions, and further escalations if our demands aren’t met in a timely manner.
If you support social and environmental justice please join Chicago SDS in our campaign for a Green Cooperative Incubator. We will be holding a series of forums in July about the campaign and are laying the foundations for further action this summer. Get in touch with us at chicagosds@gmail.com or at www.newsds.org/chicago
Op-ed for In These Times
Forty years ago the Black Panthers drafted the Ten Point Program; a survival platform for oppressed communities necessary to build towards a revolutionary future. The Program demanded that basic needs be fulfilled, and importantly, that jobs be provided to oppressed communities. Forty years later employment remains the most pressing demand. Today we need a revolutionary vision on how to generate employment.
The left has to date largely ignored the issue of creating employment in oppressed communities. Creating employment has been left in the hands of predatory capitalists; the Wal-Marts, the polluting industries that have been rejected everywhere else, the day labor agencies etc. As a movement we have failed to recognize how employment can affect communities and their potential to organize and overcome oppression.
Communities suffering from unemployment, underemployment and poor employment degenerate into concrete jungles. Employment provides economic stability for families; in the absence of such stability it is nearly impossible to successfully organize for change. Without communal stability movements decay from opportunistic survival behavior; selling drugs to pay for rent, scabbing, joining the military to pay for school, etc.
The failure of Chicago’s campaign to oppose Wal-Mart’s entry was instructive. If the revolutionary movement is to be successful it must provide a program to meet the basic needs of communities. We must continue to oppose Wal-Mart but we must expand beyond opposition campaigns.
Green Cooperative Incubator
Incubators are projects that promote the creation of businesses, and have traditionally been used as collaborations between universities, their graduates, and towns to promote hi-tech business development. We need to use our universities instead to promote employment in low income communities and to bring the benefits of green technology to fruition. Whereas most incubators favor upper and middle class managers to start small businesses, our incubator will promote qualified management from low income communities, and will promote a cooperative model of organization, anchoring the profits and ownership of the enterprise in low income communities.
Cooperatives have been used in Mondragon, Emilia Romanga, Venezuela, and have shown the viability of economic cooperatives as a tool to generate employment and empower communities. We have to learn from these models and adapt a plan using resources available to us in Chicago.
Creating a Green Cooperative Incubator can be done immediately once we organize and apply focused pressure on selected actors. Students must pressure their universities to participate in the incubator by dedicating funding and faculty to identify market opportunities for cooperatives, and also to dedicate research towards technology for use by the cooperative enterprises. Many schools already have programs toward environmental and sustainable business, which makes it much easier to obtain institutional support for a cooperative incubator.
We must also pressure aldermen from oppressed communities to obtain local government support. Significant support can be gained from the city with directed political pressure, from TIFF programs, small business loans to outright grants.
Financial institutions must also be involved in the incubator to provide seed capital and financing for the cooperative enterprises. Obtaining financing would be the least difficult part of the cooperative incubator because of the network of social investment institutions in the Midwest, and if they cannot provide adequate financing traditional lending institutions can be accessed for financing at discount rates through the city of Chicago programs for small businesses.
Our incubator would generate business plans for cooperatives to be located in oppressed communities. New cooperatives would follow the examples set by other successful models where a manager is appointed by the incubator for the first two years while the rest of the workers are trained to operate in a democratic workplace and learn how to make decisions about the company. Once the cooperative is turned over to the workers each worker would receive one vote in major decisions like electing the most skilled to supervisory positions, issues of pay, annual operating plans etc.
These first generation cooperatives would be a useful tool for establishing concrete political organizations in oppressed communities. Employment opportunities would be available for political organizers and would allow organizers to have the personal financial stability necessary for successful organizing efforts.
Green economy market opportunities will continue to expand for cooperatives; from installing green home improvements to manufacturing solar panel components to recycling demolition waste. A green cooperative incubator can distill these opportunities into actionable business plans that will create employment for oppressed communities. Universities can be changed from research institutions for war criminals like Boeing into partners providing important technical expertise for cooperative economic development. The green worker cooperatives created will anchor communities and create the stability necessary to build a revolutionary movement.
Movement for a Democratic society will be holding a series of public forums on the green cooperative incubator project throughout July. To participate in the creation of a new development paradigm please visit www.newsds.org/chicago
