Overview of the Italian Cooperative Movement
Source
* Pathways to a Cooperative Market Economy Workshop. Report from the Research Workshop at Padova, Italy, June 8-10, 2017. By Erik Olin Wright, July, 2017
URL = https://www.ssc.wisc.edu/~wright/Cooperative-Pathways/Padua%20meeting%20Report.pdf?
Description
Erik Olin Wright:
Devi Sacchetto: a brief overview of the Italian cooperative movement
"In recent decades, outsourcing practices have led to a degradation of the cooperative principles and a serious degradation of working conditions within cooperatives.
Historically, cooperatives had both an emancipatory left current and a more conservative current supported by liberal elites.
Three peak organizations acted as coordinating associations: Legacoop had socialist origins; Confcooperative was Catholic; and then there was a liberal association of cooperatives. These all existed from the late 19th and early 20th century. The Fascists first destroyed many cooperatives, then tried to control them, hoping to use cooperatives to provide a basis for unity of workers and employers in the fascist corporatist ideology.
Turning points:
1. Change in Communist Party in the mid-1950s – trying to forge an alliance with the middle class; sees cooperatives as third sector.
2. 1968-80: limit the forms of cooperatives that were sweatshops, but favorable to some cooperatives.
3. General defeat of the working class in late 1970s.
4. With the fall of USSR, profound change in political system and cooperative movement. Cooperative movement abandons ideological forward vision.
Since 1980s Cooperatives have adopted a more business-like approach. The Legacoop and
Confcooperative now funds temporary work agency (TWA) -- Obiettiveo Lavoro – which is the third largest work agency in the country and functions just like an ordinary TWA.
As cooperatives have become large, their complex organizational and financial structure transformed them into cooperative groups that function much like conventional capitalist firms.
The three pillars of the cooperative movement came together into an Alliance of the Italian cooperatives: 7% of Italian GDP – 43,000 companies with 1.3 million employees – work in cooperatives.
Because of tax breaks and the support of unions, much of this group operates through the subcontracting system of outsourcing services.
In large cooperatives, participation is mostly communication. Real decisions are made by executives with no real accountability to cooperative members.
The Partner-worker is an ambiguous category: functions as an ally and subordinate to managers, opposed to migrants and nonmember workers. Partnership becomes a mere technical function.
In the service sector, competition among cooperatives is ferocious – they undercut each other.
Social cooperatives: These subcontract on behalf of public sector hospitals, hospices and schools. Flexible hours, physically exhausting. Wages are 25% lower than public sector. Mostly women; migrants employed in unskilled roles. Subjected to double subordination: to public sector and coop managers.
Logistic sector cooperatives are a major sector. Logistic companies subcontract to cooperatives. This has become a site of significant struggle. Unions supported these cooperatives in struggles. The subcontracting system is a way of avoiding unions; unionizing these struggles is critical.
[Comment: General issue here: cooperatives are like pseudo-self-employment through individual subcontracting that we see in the U.S. and elsewhere. This is basically a kind of collective form of new subordination to capital through subcontracting. Cooperatives become a form of intensified self-exploitation.]
Managerialization of cooperatives: if you want to survive in the global market you have to develop and become bigger and bigger. Cooperatives have been overwhelmed by market logics and rules. They are used as a tool to manage the decline of the welfare state by stripping down the direct public sector. The increase in the size of cooperatives contributes to the erosion of internal solidarity.
When the labor movement is strong, cooperatives can be true to their values. Now that they are weak, the cooperatives can be manipulated for capitalist purposes.
There are also many fake cooperatives. There are cases in which a fake trade union was created in order to create a fake agreement with fake cooperatives.
Francesco Garibaldo: Studies of Reggio Emilia in 2010 and Imola 2017
– fieldwork on working conditions in the stronghold of the cooperative sectors.
Common theme: The deterioration of cooperative principles towards more business criteria, closer to that of a capitalist company. There are two different sorts of perceptions by workers:
Fake participation & corporatist participation.
Fake cooperatives: an entrepreneur creates a cooperative because of strategic advantages, but it is entirely phony.
Corporatist solution: Those with a long perspective on this see a gradual abandonment of cooperative values in which “cooperation is a façade”. Wealthy members of a cooperative control the cooperative and control other cooperatives. A minority of people create a good situation for themselves, but not for outsiders and nonmembers.
There is a general perception that this deterioration is often the result of demands of clients of the cooperative; this is a structural condition that imposes extreme flexibility and cost cutting. The privatization process was based on the possibility of cutting costs through harsh labor conditions, and this privatization led to the boom in cooperatives operating under intense competition. The result is a downward spiral.
In carework cooperatives, the workers saw cooperatives as a way of self-organizing and acting on principles of meaningful work. Workers thought that complex social services made it possible to strike a deal that is not just cost cutting, but also, because of the quality requirements of such services, could support the realization of other values. This possibility was blocked because of competition.
In Imola I studied a service cooperative in which wages and working conditions are in line with best of private sector. But still the cooperative is competing with private firms on the same grounds as private firms. This firm is the hub of a supply chain of firms in which there are 270 cooperative members and 2000 nonmembers in this supply chain hub. Those 270 are “a happy few”, but this is not a process of diffusing ownership and quality of work.
Discussion:
- Q. Is there criminal involvement in any of these cooperatives?
Response: There is also criminal entanglement with the cooperative movement. Some cooperatives are now considered criminal organization. Especially serious in the construction sector connected to the state.
- Q. What is the connection to trade unions?
Response: this is a longstanding historical issue -- can cooperative members strike against the cooperative if they are also the owners? Trade unions argue that the managers are separate from the owners and the strike is against the managers. There are possibilities for collaboration with unions when cooperatives are small. In big organizations, I don’t see how cooperatives can contribute really to workers welfare.
- Q: what about other mechanisms of democratic activation?
Response: there are discussions around working conditions and the labor process, but not more than in a private company. There is some education around business issues – there is information and people feel informed. But in practice there is very little actual involvement of worker-members in business decisions.
Lisa Dorigatti, University of Milan
Cooperatives are a big part of the economy. During the recession, cooperative sector seemed especially resilient. Growth during the recession in services, but decline in manufacturing and construction.
But: what about employment conditions? Conventional argument is that wages and working conditions are worse in cooperatives, but intrinsic rewards are higher (more meaningful work, etc., and discussed in Borzaga research).
Cooperatives are especially important in Transport services, logistics & warehousing = 300,000 cooperative member employees = ~40% of sector. Health and social services also have about 300,000 cooperative member employees.
Social assistance sector: There was massive decline in public institutions and increase in nonprofit sector 2001-2011, mostly cooperatives. The governance is through local government authority, but provision is mainly by private nonprofit cooperatives. A full-time employee in a social cooperative earns 1100 euros/month = 2-300 less than a comparable employee in public service. The same work, but earn less due to less generous sectoral collective agreement, but also lack of second-level bargaining. Also, they have worse working hours and paid vacation days. There is highly fragmented contracting for different tasks and much income instability. Market insecurity is transferred to workers: cooperatives are paid by local government for hours served, and if the hours drop, the pay drops.
There is frequent renewal of the contractual tenders to cooperatives, which also leads to greater instability since often contracts are not renewed due to intense competition.
This leads to loss of seniority and more precarious employment compared to public sector employment. There is weak provision of professional services – no payment for indirect activities (eg. talking to parents, planning activities, etc.). Most of the problems are the result of the contractual process.
The main motivation by municipalities for this was a) lower costs, and b) greater flexibility. The public sector of provision is more rigidly regulated. The tender mechanism as such exposes the system to costcutting. Cooperatives get the same amount of money to do more. More competition among cooperatives makes things worse.
Logistics sector:
Often fake companies, fake cooperatives There are no company-level agreements and managers act unilaterally to impose sacrifices on workers Widespread violation of collective agreement and wage theft Difficult for labor inspectors to sanction this because workers do not denounce this High income insecurity and instability: short/long hours/ Clients take advantage of all of this to violate rules frequently; and failure of state to take responsibility for enforcing. The state is an enabler of violations
[Comment: The key idea here and in logistics: outsourcing to external personnel to increases flexibility and displaces risk. Cooperatives are a mechanism for creating loopholes for the avoidance of labor standards. The cooperatives only exist because this is a way of lowering costs and displacing risks. The democratic right to derogate standards by collective choice becomes the loophole to destroy standards.]
Originally, some of these were set up as charities or as parent-initiated groups to provided better services. But then in the privatization era they grew for cost-cutting reasons. Arguments in favor of this explicitly announce the greater “efficiency” of cooperatives because cheaper and flexible. [cf overpaid privileged state worker rhetoric of attack on public sector workers.]" (https://www.ssc.wisc.edu/~wright/Cooperative-Pathways/Padua%20meeting%20Report.pdf?)