On this week’s episode of Economic Update, Professor Wolff discusses U.S. Universities and Politicians' repression of student protesters, the continued global demands of indigenous people for liberation from colonialism's legacies, and Harvard's corporate administration sacrificing its students' and faculty's freedom of expression to pander to some of its donors. Finally, Professor Wolff interviews Professor Jerome N. Warren, editor of the newly published Routledge Handbook of Cooperative Economics and Management.
Economic Update
Economic Update: The Global Movement for Cooperatives:
Support from the production of Economic Update comes in part from Democracy at Work. A non-profit 501(c)(3) organization and publisher of books by Richard Wolff, who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University, has authored numerous books on the subject of social economics, including Greek thinking Marxism, Understanding Capitalism, and Democracy at Work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com. Welcome, friends, to another edition of Economic Update, a weekly program devoted to the economic dimensions of our lives and those of our children. I'm your host, Richard Wolff. As usual, I want to remind you that Charlie is a waiting word if you have ideas, suggestions, materials for us to consider in terms of future program segments. You can reach him at charlie.info438@gmail.com. All right, let's turn to our Economic Updates for today. And they're all on a similar kind of theme. You might call the theme waking up about issues that should have been addressed long ago. So let's begin with a remarkable development. Universities and politicians around the country are upset when people are out there protesting, as they have every right to do, important issues about which Americans disagree. If ever there was a reason to welcome, to applaud people who take the time and trouble to learn about these issues, to learn what the facts are, and then want to share with their fellow citizens how strongly they feel. This is something that's called civic participation. We're supposed to support it, to encourage it, to reward it. How then understand when in North Carolina, for example, a Republican legislator introduces a bill with the following specification. It's to deny students who are convicted of participating in a protest. That's all. Didn't do any violence to anybody, didn't do anything other than bother some local over-eager politician or policeman, to deny them all forms of student aid. A student therefore feels strongly, learns about an issue, participates in a protest, and is punished by damaging perhaps even ending their education. What possible sense does that make? That's pure nasty revenge politics that also involves, as a nation, shooting ourselves in the foot. Shows you how far these folks have gone. Michigan University did something similar. Instead of working with local police authorities, around questions of student protests, and by the way, all of these protests are absolutely peaceful. They're anti-war protests, so you can understand why they might go out of their way to be as peaceful as they possibly can. But what did the University of Michigan do? It bypassed the local police that it always dealt with in the past when there were issues like this, and they went directly to the state attorney general, a person who has received funding from pro-Israeli funding organizations, and whom they could figure would come down hard on the students, which he immediately announced he's going to try to do. What is this about? Punishing the articulation of free protests. So you get these politicians who give you a quick verbal lip service. Protest is good under American law. We are not an authoritarian society. Yeah, you know what this is? Authoritarian social behavior crunching down on peaceful protest. It would be recognized everywhere else. We got to recognize it right here at home. The second is again the kind of protest. King Charles, yes, I kid you not. Britain has a king, King Charles. It's only been in there a short time. King Charles went on a visit to a former colony of Britain, Australia, and that colony has, among its other qualities, the sad, the tragic, the violent history of having suppressed, and that's a polite word for, killed in large numbers, the native population, the indigenous population that the British found in Australia when they took it as a colony, and they created what's called settler colonialism, an apartheid society in which white British settlers ran the country for their own benefit and eliminated or ethnically cleansed the indigenous population. Only three or four percent of the people of Australia today are indigenous. One of them was elected to the Senate in Australia, and that woman stood up when the king visited and shouted the following words, not my king, letting everyone know, as she has already done, and as is now quite well known, that the Australians have a long way to go to make up to those still living for what they did to all those that they killed. To bring a king into this situation is a bizarre choice. It's a kind of tone deafness that makes you wonder who's willing to show there. The whole thrust of the world today is for indigenous people to stand up as they are doing in Australia and demanding some sort of recognition, some sort of apology, and yes, some sort of reparations, at least to get the idea across, it's not appropriate to come and bring back memories and symbols of a past about which there ought to be a big apology, if nothing else. Okay, we already see that around the world. Recent years have seen museums in Europe bitterly fighting, but finally recognizing that the historical time has come to take those statues and all the other valuable art forms stolen by them from the countries they colonized in Asia, in Africa, in Latin America, and returned them so they can be put on display in the countries from which they were stolen for the people to whom they were meant to speak. In that situation, the king might have sent some things from the British Museum rather than drag himself that far across the world to offend the people who deserve an apology. And you know what was also awful? When the issue of reparations came up, which some of the indigenous fight for, the new prime minister from the labor party of Britain, a starmer, ruled them out of order, we are looking to the future, he said, not to the past, all good. I can see why you want to do that. That's more tone deafness. Yes, there are pros and cons about reparations. Let's talk about it. Let's argue it. Let's make it in the context of what we all know is the right and moral thing to do. It's remarkable that the British with their empire around the world are still trying somehow to hold on to, to minimize the horror that it meant for so many. Last update, we may have time for. I'll see how quickly I can get through it. This one has to do with my alma mater, Harvard University. Yes, I'm a graduate of Harvard, but I'm sad I have to report that Harvard in late October of this year, twice suspended 50 faculty member 50. Here's what these faculty members did. They had an absolutely silent, quiet, utterly unviolent study in in Harvard's major library called the Widener Library. I remember spending many hours doing my coursework and writing my papers in that library. They sat in the library during which students who wanted to use the library were free to come in and con, go out as they did. For what were they doing? They were protesting how Harvard came down on students who had had a study in similarly quiet, similarly 100% peaceful. The university had published them, had suspended them, had dealt with them in every other way than they ought to, protesting an important issue. In this case, again, the Israel Gaza story. That is a right of the students. That is a prerogative of the students. It is what they were learning about that led them to want to share it with other students in a quiet, respectful, peaceful way, a study in in the library. And you know what it taught me as I listened and watched, struck that my alma mater would do such a thing, would behave. I learned again what it means that American universities pattern themselves on businesses and on corporations. What do I mean? If you know anything about universities, you know they started in the Middle Ages in Europe. And you know what they were then, groups of teachers and students who had a kind of co-op and together they learned and they taught each other. They didn't need and they didn't have administrators. How sad, how far we've come. Now the administrators sit on top. They tell the faculty and the students what to do. They punish the faculty and the students when they feel like it. I know why Harvard does this. It is worried about the donors who might withdraw their money and being a corporation. It's all about money. Free speech out the window if it contradicts the money. It's an ugly tableau, doubly ugly an institution that refers to itself, refers to itself as a temple of learning. They haven't learned what they needed to. Otherwise, they couldn't behave in the way they have chosen to. Shame on organizing a university this way. Shame on making it a corporation and shame above all that an institution that prides itself on being a temple of learning could possibly punish the learning and the teaching that these students and faculty were engaged in. We've come to the end of the first half of today's show. Please stay with us. I think you'll find our second half an interview on cooperative work. Very interesting. Welcome back friends to the second half of today's economic update. I am very pleased to bring to our cameras and our microphones Jerome Nikolai Warren. He's a German American political economist currently at the universities of Cologne and the Goethe University in Frankfurt, Germany. His work focuses on the intersection between cooperation, sustainability and business networks and particularly on Italy's large cooperative movement. He is lead editor of the just published Routledge Handbook of Cooperative Economics and Management and its companion volume Global Cooperative Economics and Movements forthcoming from Routledge as well. Between 2022 and 2024, he advised the Belgian Sovereign Wealth Fund on strategies to make Belgian firms more sustainable. He is the founder and president of the Rudolph Rocker Institute, an important leader of the anarcho-syndicalist movement in Europe and the United States in the 20th century. So first of all, if I may call you Jerome, welcome to the program and thank you for spending some time with us. Thank you for having me. All right. Here's a question I'm asked probably more often than any other. How widespread is the social movement for cooperative production across the world? I mean, obviously you're interested in this. You're the editor of these two volumes, but give us a sense. Give my audience a sense of where the movement for cooperatives is in your judgment now. I think it's a great question, Rick, and I think it depends. And most economists, you know, I studied economics really near classical economics as an undergraduate. If you read an economics textbook, if they deal with cooperatives, they say something like co-ops make up one to two percent of the global GDP and there's an info box and that's it. But of course, this doesn't regard a lot of the work that's being done all over the world, including the United States, to build up these kinds of networks and ecosystems. So there's in Italy, for instance, an enormous movement that's been ongoing for 150 almost 200 years and about eight to 10 percent of the Italian economy is actually cooperative. Formerly, of course, there are ties to other sectors as well. And in regions like in the Basque region in Spain, it's similar. You have regions where there are a third or more of the economy is actually made up of co-ops. But I think it's a very distributed and different and divergent scenario or situation in different parts of the world. And in fact, in the companion volume that you just mentioned, the second one that's coming out next year, we have a chapter. The introductory chapter is written by five different experts, one from North America, one from South America, one from Africa, one from Europe, and one from Asia. That's kind of looking at exactly this question. What is the cooperative movement? Can you even speak about one movement or are they different movements that are kind of interlocking and interlacing? And I'm of the belief that the second is true, that we have different cooperative movements that bring different resources and different perspective, so to speak, on cooperation. Perhaps the common denominator is exactly that is a logic of cooperation, a logic of working together to solve problems and to build a better world. So in my opinion, again, this Italian movement is one that is very strong, that has a large weight, gravity in its own economy. For instance, they are protected by the constitution in Italy. The situation looks, of course, different in other places, like in the US, where you have a quite sclerotic movement, especially with worker cooperatives. So in the US, you have more of the employee stock ownership plans, which some say are more conservative, and they're more of a retirement plan. But of course, they are a large ecosystem of employee-owned businesses. You have about 6,500 of them in the US with about 12 million employees. Of course, they have a different ethos, I guess you would say, than a former worker cooperative in Italy or in the Basque region. You know, there are different movements in Asia. You know, I'm learning about the movement in Japan. There's a large movement or in Korea of consumer cooperatives that also have some connection to solidarity economy. And again, I think the common denominator is this idea of working together to solve various problems, and using that as a foundation for other issues that come up, of course, over time and the business cycles and so on. All right, let me, that's very helpful. Let me go to the second most frequent question that I get, because I think we're on a roll with that. The second most frequent question goes something like this. For many people, the questioner says, the co-op is a quaint, charming, nice footnote, the way you you began your answer. But for others, it's a very serious political issue, because it is seen as an alternative to capitalism, an alternative to the whole system of owners that are not working on the place, that a tiny group of people at the top, unaccountable to the mass of the workers beneath them, make all the key decisions, that there's an edge, a political agenda, if you like, buried in the details of how co-ops work. How do you come down on that? How would you answer is the co-op both of those things? Is it one, is the other? What's your sense of that? That's also a really good question, and I think that it's one that currently there isn't one answer to. Is the cooperative an alternative, or is it just another form of self exploitation that fits within the system? I think it depends. I think there are cooperatives in the world that are, in a sense, building alternative structures, building alternative economies that are really whatever regard they have, whatever possibility they have, are extracting themselves from that global capital circulation. To me, the main issue, the main agenda, in regards to answering this question, is really having some rigor and having some methods to measure and understand what cooperatives are doing. To get back to this handbook, there's a really interesting chapter by my fellow co-editor, Lucio Vigiero. He's from Italy, who's measuring actually hierarchy in organizations. I think this is a great provocation to the cooperative movement, or movements globally, to really, so to speak, what do you say, to put action to those words? You talk about a cooperative identity, a democracy at the workplace, and so on. Of course, we know that there are cooperatives that are failing in this regard. That's what I mean to say. There's not, to speak, one cooperative ethos that's out there. There are many cooperatives, again, that run things in a similar way as traditional businesses. You have quite standard MBA managerial practices, disconnect to the membership, the rank and file membership. This idea of actually measuring the degree of democracy in a cooperative is something that can be very useful to understanding exactly what is the contribution that cooperatives make to empowering the members. I think, in my opinion, and the reason that I dedicated my life and career to studying cooperatives is that not that they're utopia. You just found a cooperative here in New York City or elsewhere, and the world will be okay. But they provide an engine, a motor, a process for deliberating democratically, which is not to say that this happens in every cooperative, which is why I think there's a need of this interchange between researchers, policymakers, and the cooperative practitioners themselves, who are also always figuring things out as they go along. You know, it makes sense that I reflect on your words. We are, I think, I certainly hope so, in a transition. However slow, however frustratingly, the notion that we can do better than capitalism is one that is catching on, and people are exploring and looking for what would be, what might be. And so I think they're experimenting, and as you point out, there's a whole range of what those experiments show, and they will teach us which ones we're going to select for as it becomes clear what the alternatives are, and we're kind of early in that process. Yeah, I can actually say to that maybe, you know, it's something that needs to be said that a lot of these disciplines, management, for instance, you know, this is a handbook of cooperative economics and management. It's a very young science, so you can go back to the ancient Babylon and find some kind of managerial or accounting practices. But the idea of seeing management as a science as a discipline in itself is quite new. And I have colleagues who work more heavily in management, and they say, well, it's a young science, and we really do need to actually evolve and develop that science. And we're trying to introduce, again, this cooperative ethos and to focus on cooperatives as a distinct set of enterprise types and organizations that also need their own resources in terms of managing members, managing a broader community, and not merely copying and pasting, so to speak, the management practices of a corporation or even a non-profit or charity, so to speak, which I've seen in my research. And these types of practices can actually destroy cooperatives because the members become disengaged. So, you know, back to your question of, you know, are cooperatives alternatives? They can be, and they can be, if it's done right, as what Benjamin Franklin said at the start of the United States, we've given you a republic if you can keep it. And in the same way, I think cooperative members are given a certain very precious resource if they can keep it. And that means, again, a constant process of engagement and community building. You know, I vibrate to that because I've been a professor all my life, I've taught occasionally in business schools, and the excitement it would mean if we had a mentality that said, management is something everybody has to study because everybody in a cooperative is called upon to be a manager. It transforms what education would mean. It democratizes the whole concept. We have to train everybody. Otherwise, we're not going to succeed in this venture, as you put it, to see how much it can be a transition forward. Okay, let me ask you a question of interpretation, at least in the United States, and I guess it's different in Italy and in other places. But in the United States, I'm struck by how very little is known to talk about a co-op. Most of the time, if I'm in an audience that is a typical audience, they don't know anything about it at all, I have to go to the most basic kind of encyclopedia and give them the raw facts so that they begin to have some frame of reference to what I'm talking about. Why is that? Why do you think co-ops, which we know have been around for thousands of years as efforts people have made in a host of circumstances, why is so little known? I have the same sense as you, Rick, and in fact, a classmate of mine from high school, wrote me just the other day. It's all, I guess, on Facebook or somewhere that I'm doing this book tour. And she also wrote, "What is a cooperative?" So I get that myself. And I think part of it is just to do some self advertisement of the handbook. We have a wonderful chapter by an Australian, actually a cooperative practitioner there. Linda Benison, who has done a study exactly of this question in Australia as a case study, probably a very similar legal landscape to the United States, to the UK, this kind of Anglo-Saxon legal tradition, and asking, "Why are there no larger number of cooperatives in Australia today than in the 19th century?" And she actually suggests that it's this path-dependent evolutionary process where they are excluded from the beginning, and therefore you build up a legal infrastructure and an institutional infrastructure that increasingly marginalizes and excludes them over time, which she says includes in Australia the legal education. So if you study law in Australia, you have many courses on corporate law and tax law and many other courses, but you do not have one single course that covers, in detail at least, cooperatives and cooperative law. So you have lawyers all over Australia who are advising business people how to start a business, and they don't have any knowledge about a cooperative or what it is, so therefore the business people who don't have the knowledge, and perhaps their employees therefore don't have the knowledge, so that's a self-reinforcing process. And I think this is the case in many places in the world, the ILO, the International Labor Organization, passed a resolution, I think in 2001, it's resolution 193, which actually mandates members, United Nation members, to include cooperatives in their curricula. So in fact, this book is contributing, so to speak, a public good in that regard. And in many regards, I mean, the book will be available open access, so it is publicly available once it's out. In fact, you'll see that, you know, this is a resource that is quite needed, and in fact, I was giving, I guess, lecture myself at a course at Harvard Business School earlier this year, and one of the students had invited me, and the professor, you know, when I was finished, it's very nice. I had never heard of any of this thing. This is, you know, one of the most prestigious business schools in the world, so we have a long way to go, Rick. But your book and your tour and your appearance on this program is part of what is happening. I can certainly attest, I went to Harvard and Stanford and Yale in my education, and I took a lot of courses in economics. I never heard a word about co-op. Whenever they talked about the firm, it was a firm organized, in strict capitalist hierarchy. The notion of a democratic alternative never occurred at all. It was a total censorship. Anyway, we've run out of time as we often do. I want to thank you, Jerome Warren, for coming on the show, and I want to urge people take a look at that Routledge Handbook. It is a way to get into this material quickly and effectively by people who are working right at the cutting edge. And to all of you, I say again, as always, I look forward to speaking with you again next week. Support from the production of Economic Update comes in part from Democracy at Work, a nonprofit 501(c)(3) organization and publisher of Books by Richard Wolff. Who is a professor of economics emeritus at UMass Amherst and a visiting professor at the New School University has authored numerous books on the subject of social economics, including rethinking Marxism, understanding capitalism, and democracy at work, a cure for capitalism. Further information is available at democracy@work.info and rdwolf.com.