I drive through Germantown from time to time, and my route takes me past a small, warehouse-type building that bears the legend, “Southern Broom and Mop Co.” There is never any sign of activity there when I drive past. It looks as if it must have been in existence for a hundred years or more, a bit of flotsam left over from our city’s industrial heyday in the late nineteenth century, when much of what Nashville needed for its daily functioning was manufactured or grown right here in middle Tennessee. When I went to research this story, I discovered that, in reality, the company has only been in existence for about twenty years, and is a janitorial service, not a manufacturing enterprise. What’s more, the building has recently been sold–for nearly a million dollars–and will be turned into yet another trendy, high-end restaurant in this rapidly gentrifying neighborhood. That’s too bad. Even the wealthy can only eat so much–but everybody needs a mop and a broom.
In a recent post, I proposed that we re-industrialize Nashville, spreading new, preferably worker-owned enterprises throughout the city so that as many people as possible could walk to work, and thus lessen the pressure on our roads, and the pressure on low-income people to spend money on an automobile. There’s two ways to increase peoples’ disposable income. One is to pay them more, and the other is to lower their cost of living. Even “cheap” cars–some would say, especially “cheap” cars–are expensive!
Today, I want to talk about two aspects of my plan. One thing I want to do is explain the Mondragon Co-operative model, and examine how it could fit Nashville. Another is to talk about what kind of industries would be suitable for the city, where they should be located, and how to raise the startup capital they will need. I will outline some general ideas about appropriate manufacturing enterprises, but the amount of detail involved is more than I could cover here. I think that the Davidson County planning commission and the neighborhoods should work this out among themselves. There are many variables and alternatives. I couldn’t possibly anticipate them all, but citizen involvement and an intelligent, responsive, well-informed oversight agency should be able to figure it all out over the course of a few years.
The first thing I want to say about this plan is that I am not proposing a return to the old industrial model. The old industrial Nashville was a pit of pollution, its air filled with coal smoke, its earth and waters fouled. Nashville’s new factories should be, in the nonpolitical sense, green. They should be quiet, nonpolluting, energy-efficient enterprises that will not detract from their neighbors’ quality of life. Some things we may want to do are going to be loud and/or smelly, and we can find ways to buffer these from their surrounding communities. Since community members, as employees, will also be owners of these enterprises, they will have the power to change things if they need to be changed.
So, what are the basic principles on which Mondragon factory co-ops are founded?
One is “Democratic organization.” As they put it,
The basic equality of worker-members in terms of their rights to be, possess and know, which implies acceptance of a democratically organised company based on the sovereignty of the General Assembly, electing governing bodies and collaborating with managerial bodies.
In other words, the company is transparent to its workers, who are also its owners, and who run the company through its General Assembly. Two other principles, which they call “The Sovereignty of Labor” and “The Instrumental and Subordinate Nature of Capital” basically affirm that capital is useless without workers, and that therefore the needs of the workers are more important than the needs of capital. This does not mean that the provision of capital–that is, investment money–should be taken for granted. It just means that the workers who add value to capital with their labor are entitled to a fair share of the wealth they create, as is the provider of the capital–or to use a more modern term, the financing.???
Another principle is “participatory management.” Here’s another quote from Mondragon’s website:
The steady development of self-management and, consequently, of member participation in the area of company management which, in turn, requires the development of adequate mechanisms for participation, transparent information, consultation and negotiation, the application of training plans and internal promotion.
Internal promotion is a very important part of this. It presumes that workers who have been with the business for a while know it well enough to become its managers, and will make better managers than specialists brought in from outside who do not understand all the subtle dynamics of a business.
Another principle is what they call “Payment Solidarity.” What this boils down to is that the pay differential between top management and the lowest paid person on the payroll is no more than a factor of about six, whereas in a typical American corporation, the ratio will be more like 400 to 1. To put this in annual salary terms, in a private company, the lowest paid workers might be making $16K a year (minimum wage), while the CEO is making $6.4M. That’s 400 to 1. In a Mondragon enterprise, workers are paid better, so the smallest annual income in a company might be more like $30K, while a top manager might make $180K. Sure, that’s not much compared to $6.4M, but I don’t see how a person could possibly “need” the $18,000 a day that a 6.4 milllion dollar salary divides up into. I worked hard all my life and rarely earned $18K a year, y’know? $180 K divvies up to just south of $500 a day. As someone who has gotten by his whole life on less than $500 a week, that sounds like plenty to me.
Mondragon is pledged to “Inter-cooperation,” not competition, and to “social transformation.” In their words, their businesses are dedicated to
…willingness to ensure fair social transformation with other peoples by being involved in an expansion process that helps towards their economic and social reconstruction and with the construction of a freer, fairer and more caring … society.
Privately owned business, by contrast, is legally committed to making the most money possible for its owners, and devil take hindmost. It doesn’t matter if corporate policies decimate communities and ecosystems and, in the long run, destroy the Earth as a habitable location for complex organisms such as ourselves. If I business isn’t maximizing short-term profit, its shareholders can take it to court and have such dangerously altruistic management removed.
As an aside, there’s a saying among so-called conservatives that the most terrifying sentence in the English language is, “I’m from the government and I’m here to help.” I disagree. A far more terrifying sentence is, “I’m from private business and I’m here to help.” Private business is here to help itself, twenty-four hours a day, seven days a week, all year long. That’s what corporate law and our economic paradigm say they must do. A for-profit corporation cannot legally be unselfish. The government, however inept or downright corrupt it may be in practice, is intended to be the peoples’ tool for taking care of things. If the government isn’t doing a good job, we can, at least in theory, elect more competent people. But if private business isn’t treating us right, good luck!
Mondragon makes its commitment to social justice clear in its principle, “Universality,” in which they pledge
…solidarity with all those who work for economic democracy in the area of the Social Economy by adopting the objectives of Peace, Justice and Development which are inherent to the International Co-operative Movement.
Mondragon, in other words, plants itself firmly in the new, post-competitive paradigm. Shifting to this new paradigm, with its themes of co-operation with each other and harmony with the planetary ecosystem, is not an exercise in “New Age” la-la. It is rapidly becoming obvious that continuing business as usual in the old, competitive, get-rich-quick and damn the consequences paradigm is going to kill us all sooner rather than later. Injecting a solid dose of the Mondragon way into Nashville will help us transition into one of the most vibrant, cutting-edge local economies in America.
The final Mondragon principle is “Education.” As they put it,
To promote the establishment of the principles stated above, it is essential to set aside sufficient human and financial resources for co-operative, professional and youth education.
When you work for, or buy from, a Mondragon enterprise, you are enriching an entire community, quite possibly your own, and not the just owners of the company.
Why go to all the bother of setting up co-operatives? Why not just rely on the free enterprise system to accomplish the goal of re-industrializing Nashville?
I’ll answer that indirectly. There was a phrase that Bush the younger floated a few times that has stuck in my head: “We need to create an ownership society.” It was never clear what he meant by that, and it never went anywhere, but here’s what it means to me: an ownership society is one in which people have a stake in many of the factors that affect their lives. Three of those factors are where people live, where they work, and where they shop. People who own their homes, neighborhoods, workplaces and the stores where they shop are going to take a lot more responsibility for what goes on there, and I think that’s a good thing.
I think it’s also good for the managers of such businesses, for the people who might be the owners if the business was privately held. If you are an owner/manager, you are kind of out there by yourself, with a lot of responsibility on your shoulders. If you are managing a co-op business, everybody else is a co-owner, the responsibility is shared, and the stress level is lower–not just for the manager, but for the employees, who do not need to worry about management making decisions they won’t like. Company morale is high, which increases productivity and quality, which makes the business better. I would like to think that, once some good examples get going, privately owned Nashville businesses will see the benefits and convert themselves into co-ops.
There are other cities and groups in this country who are looking to Mondragon for guidance. From New York to California, and in many locations out here in the middle, Americans are already connecting with Mondragon and putting Mondragon’s principles into practice. There is a U.S. Federation of Worker Co-operatives that offers help organizing and financing new enterprises.
OK, so much for the form. How do we pay for this? And what are we going to manufacture?
When it comes to setting up this network of co-operative factories and businesses, e would not have to make it up as we go along. Both Mondragon and The International Co-operative Alliance are available for consultation. Financing? In the last couple of decades, Metro has come up with around a billion dollars to finance high-end projects like LP Field, the Schermerhorn, the convention center, and a new baseball field and outdoor concert venue. We know how to raise money in this town. All of these high-end, big-ticket projects depend for their success on relatively well-off people with disposable income. It should, therefore, not be a problem to start financing the establishment of businesses that create a lot of middle-income jobs by providing us with products we were going to buy anyway. Spending our money on products made in Nashville by locally owned companies makes our community wealthier, while spending money on imported goods made and sold by multinational corporations impoverishes us by sending money out of town and increasing income inequality.
I am talking about setting up businesses, not charities. These enterprises will be carefully designed to pay their own way and then some, so startup capital will be repaid and made available again for the next step in the unfolding plan. Some communities have started local co-operative enterprises by broadening the concept of “Consumer Supported Agriculture” to include non-agricultural businesses. The Mondragon system has its own bank, which has recently partnered with the National Co-operative Bank here in the US to boost financing of new co-operative enterprises in our country. The size and scope of what I am proposing for Nashville, I suspect, would quickly generate a large enough revenue and profit stream so that we would be starting a co-operative bank here in Davidson County, which could work with the several customer-owned credit unions already up and running to provide banking services in low income areas, and end the predatory extractions levied by check cashing services and payday lenders.
As far as what manufacturing or other business enterprises to establish, let’s look first at what’s already happening, and then at what we use a lot of in Nashville that comes from someplace far away. For purposes of this discussion, I am not going to consider the music business or the city’s numerous hospitals and health care provider headquarters, for reasons that would take another, as yet unwritten, post to explain.
The main local business movement already in motion is local agriculture. This has already begun to turn into local food processing, and I think in the natural course of things we will also be seeing local seed production and local organic fertilizer production. Agriculture also needs farm tools, from hoes to farm implements that require a tractor–or a team. Tractors and teams need hardware, some of which could certainly be manufactured locally. One limit here is that Tennessee’s iron deposits have pretty much been mined out, which makes local metal production, other than recycling, unlikely. Still, small and medium-scale metalworking–blacksmiths and small casting operations–are a strong possibility. These are excellent skills to teach teenagers, and used to be one of the main foci of high school “industrial arts” classes. The other focus was woodworking, another skill ripe for reintroduction to our regional economy. Local agriculture could also branch out from vegetables and fruit into grains, beans, and serious quantities of local meat. These, in turn, would need, in the case of grains and beans, cleaning and milling facilities, and, in the case of meat, the re-establishment of at least one local slaughterhouse and processing facility. Encouraging agriculture in Davidson County would also require co-operation from Metro government in the form of tax breaks for farmers and recognition of the high value of farmland. Current Metro tax policy makes farming financially difficult, and our current zoning/planning paradigm sees open land as a blank canvas, rather than recognizing its inherent value.
Another way in which we would need to change our zoning codes is that, in the interest of getting cars off the streets, we ought to make it easier for people to have home businesses. To make this more of a neighborhood discussion, rather than something that gets decided from on high by outsiders, much of our currently centralized zoning and codes process should be turned over to neighborhood councils, and decided locally.
Another aspect of re-industrializing Nashville is the creation of feed streams from one business to another, in which the waste from one business is the raw materials for another. In the case of the business of processing animals into something people can use in their kitchen, I can think of at least two such possibilities. One is the rendering of fat into soap, and the other is composting whatever animal parts cannot be eaten so they can be used as fertilizer. There are many such possibilities, and I’m happy to let the well-paid wonks at the Planning Commission sort them out with the neighborhoods.
The other source of inspiration for re-industrializing Nashville is the question, “What material objects do we really need for a gracious life?” That’s where it gets interesting. We need clothing, including shoes, and other textiles like sheets and blankets. We need household items like the brooms and mops I talked about at the beginning of this post. We need pots and pans and plates and silverware. We need stoves. We need things that are built to last, things that are repairable.
As I have suggested elsewhere, I don’t think we should overlook the possibility of reintroducing horses and buggies as a locally created, locally fuelled, sustainable alternative to automobiles.
To go in a different direction, we also need paper in various forms, and ink with which to write on some of that paper. It’s all very well for us to talk about moving to “a paperless economy,” but I have to wonder just how much we should depend on the continued existence of the internet, which currently uses about 10% of all electrical power generated in the U.S. If things in this country get to the point where keeping the lights on is a dicey proposition, we could lose the internet, and have to return to writing each other letters and publishing things on by-gawd paper. Meanwhile, at the other end of our bodies, unless we make a major cultural shift and go back to using rags, we are going to continue to want toilet paper.
I know I’m getting into unpopular territory here–yep, straight into the toilet! None of us, including me, likes to think that so much of what we take for granted–from toilet paper to the internet to the automobile–could just slip out of our grasp, but it really could happen. If global warming and sea level rise keep on happening, and there is no reason to believe they won’t, international trade will be widely curtailed as port cities are overcome by rising waters, and much of our electrical generating capacity, located at sea level or as dependent on long supply chains, could drop out. If, or when, these things happen, and we are forced into a rapid transition, AKA a fall, into a more local economy, it will be much more of a catch-as-catch-can affair. We need to find every way we can to lower our energy usage–tightening houses, finding alternatives to air conditioning, and turning out lights, for openers–and cutting our electricity and fossil fuel use every way we can. Solar hot water, solar electricity, water wheels, cogeneration. Diversity and resilience are the keys to our survival in many, many ways.
Just as in the Biblical story of Moses’ interpretation of Pharaoh’s dream, the time to prepare for the lean years is now, while times are still good. And, if I’m wrong and the poop doesn’t start pelting us through the air intake,if we’ve done as I suggest, we’ll still have a vibrant local economy that will lessen income inequality and enrich our entire community. It’s a win-win situation.