General Introduction
Part One. Design of the organisation of a worker cooperatives society
Chapter 1. Preview of the main elements of the design’s worker cooperatives society
Introduction
Division 1. Main elements of the organisation of the worker cooperatives economy
1§1. The cooperative as legal entity and its democratic governance
1§2. Markets, types of cooperatives and the ‘single person enterprise’
1§3. Membership of an existing cooperative and the foundation of a cooperative
1§4. Legally required resistance buffer, ‘uncommitted’ reserves and dividends
1§5. Credit-debt relation between cooperative banks and other cooperatives
1§6. Competition between cooperatives
Division 2. Description of the design’s parliamentary democracy and state institutions
1§7. Parliamentary democracy
1§8. State institutions and the public sector
Table 1.1. Public sector institutions, with estimates of their assigned state expenditure and workforce
1§9. State expenditure and workforce of the public sector
1§10. Functions of state agencies vis à vis cooperatives
Table 1.2. Functions of state agencies vis à vis cooperatives
1§11. Remuneration of public sector workers
1§12. Taxation
Division 3. Macroeconomic income and expenditure flows between cooperatives, households and state institutions
Division 4. The design’s legal entities
Scheme 1.3. Main income and expenditure flows between aggregates of cooperatives, households and state institutions (abstracting from savings)
Chapter 2. Design of the economy of a worker cooperatives society: economic democracy and the organisation of cooperatives
Introduction
Division 1. Organisation of the cooperatives economy
2§1. General characterisation of the cooperatives economy
Scheme 2.1. Macroeconomic connections between households and cooperatives (abstracting from saving)
2§2. Types of worker cooperatives
2§3. The cooperative as legal entity
2§4. Foundation of cooperatives
2§5. Governance of cooperatives
Addendum 2§5. Comparison of capitalist and cooperatives (non-)ownership relations
Scheme 2.2. The cooperative and its council’s rights and main authority
Table 2.3. Summary memo of 2§3–2§5: legal and effective ownership and governance
2§6. Credit-debt relation between cooperative banks and other cooperatives
2§7. Distribution of income prior to taxation: (a) legally required resistance buffer
2§8. Distribution of income prior to taxation: (b) wages
Addendum 2§8. Likely moderate wage differences compared with capitalism
2§9. Distribution of income prior to taxation: (c) dividends
Table 2.4. From value-added to disposable surplus and dividends
2§10. Intermediate conclusion: jobs preservation, maximisation value-added, and elimination of capital and the accumulation of capital
Table 2.5. Summary memo of 2§10: assets dimension, and aims and instruments of production – comparison capitalist stock corporation and Design cooperative
2§11. Recordkeeping
2§12. Change of workforce: (a) additional workers
2§13. Change of workforce: (b) retirement or movements
2§14. Expansion and contraction of cooperatives
2§15. Cooperatives’ ownership or renting of self-occupied premises
Addendum 2§15. No real estate market
2§16. Bank payment accounts and their rate of interest
2§17. Cooperatives specialised in insurance
Addendum 2§17. Exclusively financial markets for investment loans and insurances
2§18. Cooperatives specialised in auditing
2§19. Competition between cooperatives
Addendum 2§19. Tendency for non-aggressive and non-destructive competitive interaction between cooperatives
2§20. Distribution of wealth prior to taxation
Division 2. Direct support of cooperatives by state institutions, and the macroeconomic connections between households and cooperatives
2§21. The direct support of cooperatives by state institutions
2§22. Macroeconomic monetary connections between households and cooperatives
Scheme 2.6. Macroeconomic monetary connections between households and cooperatives, and interconnection with the state’s ‘Savings and Loans Bank’
Division 3. The cooperatives economy’s markets; and reasons for the book’s not taking the ‘socialism’ road
2§23. The Design’s markets and commodification of products
2§24. A note on the ownership of means of production
2§25. Aims for a socialist alternative to the Design
2§26. Central planning as alternative for the cooperatives’ local planning
Addendum 2§26. Comments on Tony Smith’s proposed form of socialist planning
Concluding summary chapter 2
Table 2.7. Key distinctions between the capitalist and the Design cooperatives economies
Table 2.8. Main requirements or restrictions for cooperatives and councils
Appendix 2A. Examples of Income accounts and Balance sheets for cooperatives
Sheets 2A.1 Income account and balance sheet for a production worker cooperative
Sheets 2A.2 Income account and balance sheet for a cooperative bank
Appendix 2B. Foundation of a cooperative bank
Sheet 2B.1 COB founding balance sheet: money-creating loan to the Guardian Bank
Sheet 2B.2 COB founding balance sheet: initial reserves of the COB
Sheet 2B.3 COB balance sheet during its transition to full establishment
Chapter 3. Design of the state in a worker cooperatives society: democratic governance of the state and the organisation of state institutions
Introduction
Table 3.1. Types of production in the state sector and in a specific public sector institution
Table 3.2. The Design’s economic and public sector legal entities
Division 1. The state’s democratic organs and the general organisation of state institutions
3§1. The democratic organs of the state
Scheme 3.3. Democratic organs of the state and their election
Scheme 3.4. Main tasks and powers of parliament and government
3§2. State agencies and other state institutions: establishment, budget and amount of workforce
Table 3.5. State and state institutions
Table 3.6. Budget and workforce constraints
3§3. Councils of state institutions and remuneration of parliamentarians, ministers and state workers
3§4. Finance of the state and state institutions
Table 3.7. Overview of the tax categories and tax rates
Addendum 3§4. Summary of the general regulation for state agencies
Division 2. Institutions safeguarding public security and justice
3§5. Public security
3§6. The judiciary, and administrative prosecution
Division 3. Protecting constraints: environment; safety output and work; work-time; minimum wages
3§7. Physically circular production
3§8. Safety of, and information about, output
Addendum 3§8. Note on the consequences of advertisement prohibition
3§9. Safety at work
3§10. Work-time
3§11. Minimum wages
3§12. Inspectorates
Division 4. Institutions safeguarding the finance of cooperatives and the financial constellation at large
3§13. The Central Bank
3§14. The Guardian Bank
3§15. The Investment-credit Guarantee Fund
3§16. The Savings and Loans Bank
Table 3.8. Summary of the Design’s various rates of interest
Division 5. Job securities, jobs shortages and restricted abilities to work
3§17. Job securities and jobs shortage agency
3§18. Qualifications mismatch and other non-recession joblessness
3§19. Recessional joblessness
3§20. The articulation of joblessness due to qualifications mismatches and to recessions, and conclusions on joblessness in general
3§21. Restricted abilities to work, and sickness payments
Division 6. Income allowances (exclusive work-related allowances)
3§22. Child-related allowances
3§23. Costs of living allowances for students
3§24. Pensions
Table 3.9. Summary of the Design’s income securities and income allowances
Division 7. Wellbeing institutions: health, education, culture
3§25. Workers’ council governed foundations
Subdivision 7A. The health sector
3§26. National Health Agency: tasks and delegated authority
3§27. Primary medical treatment and prevention
3§28. Hospitals
3§29. Care institutions
Table 3.10. Estimates of the state expenditure on, and the labour force of, the health sector
Appendix to subdivision 7A: Details of a possible organisation of the health sector
7A-1. Primary medical treatment and prevention
Table 3.11. Composition of a primary medical treatment clinic per about 10,000 inhabitants
7A-2. Hospitals
7A-3. Care institutions
Subdivision 7B. The education sector
3§30. National Education Agency: tasks and delegated authority
3§31. Pre-primary education
3§32. Primary, secondary and tertiary education
Table 3.12. Educational institutions qua level: spread, size and student/staff ratio
3§33. Research by universities and by other state-financed institutions
3§33-A. Universities and university research
3§33-B. State-financed research institutes
Subdivision 7C. Cultural heritage and contemporary creative arts and arts performance
3§34. Culture and cultural heritage agency: task and delegated authority
3§35. State and non-state museums, and the national library and archives
3§36. Contemporary creative arts and arts performance
Table 3.13. Final finance of contemporary arts in case of absence of subsidies
Table 3.14. Summary of the organisational form and the current expenditure finance of cultural heritage and of the main contemporary creative arts and arts performance
Division 8. Real estate, mining and infrastructure
3§37. Housing, real estate and the tasks and delegated authority of the ‘national real estate agency’
3§38. Concessions for mining and other extractions from the Earth
3§39. Infrastructure and the ‘national infrastructure agency’
Division 9. User charged production and services undertaken by ‘Workers’ council governed foundations’
3§40. Public transport and the special treatment of railway transport
Table 3.15. Public transport: responsible administration, and carriers
3§41. Essential production or services that might possibly not be taken up by PWC s
3§42. Possible stagnant underinvestment by PWC s
Division 10. Regulation of auditing, of patents and copyrights, and of competition
3§43. Auditing rules and the supervision of registered auditors
3§44. Patents and copyrights
3§45. Competition and market power
Division 11. Taxation, and key macroeconomic and other social-economic policy instruments
3§46. Taxation
Table 3.7. Overview of the tax categories and tax rates (repeat from 3§4)
Table 3.16. Example of an income tax assessment sheet
3§47. Key macroeconomic and other economic policy instruments
General Addendum. An evaluation of chapter 3 in the perspective of chapter 2
A. The initial goals and their implementation
B. From deemed strong to weak points
Concluding summary chapter 3
Table 3.17. Public sector institutions, with estimates of their assigned state expenditure and workforce
Table 3.18. Functions of state institutions vis-à-vis cooperatives
Table 3.19. Classification of state agencies by their expenditure: from surplus-running to big spending ones
Appendix 3A. Estimates of state expenditure, taxation revenue and the state’s labour force
3A-1. Introduction and method
3A-2. Summary of the Design’s state expenditure
Table 3A.1. Summary of the annual state expenditure
3A-3. State expenditure according to the international ‘classification of the functions of government’ (COFOG)
Table 3A.2. Estimate of the Design’s state expenditure in comparison with the OECD average: COFOG 1st digit in % GDP
Table 3A.3. Estimate of the Design’s state expenditure: COFOG 2nd digit in % GDP
3A-4. Taxation revenue from the income tax
Table 3A.4. From GDP to the average taxable income: estimates
Table 3A.5. Calculation of the number of income receivers
Table 3A.6. The average tax rate on the fixed incomes
Table 3A.7. The average of the (median) tax rate on the fixed incomes
Table 3A.8. Taxation revenue from the receivers of fixed incomes
Table 3A.9. Taxation revenue from the receivers of non-fixed incomes (primary income, except income from savings): at an assumed distribution of income as decided on by workers councils – alternative 1
Table 3A.10. Coverage of state expenditure by income taxes: alternative 1
Table 3A.11. Taxation revenue from the receivers of non-fixed incomes (primary income, except income from savings): at an assumed distribution of income as decided on by workers councils – alternative 2
Table 3A.12. Coverage of state expenditure by income taxes: alternative 2
3A-5. Estimate of the labour force of the public sector
Table 3A.13. Estimate of the labour force of the public sector, in % of the total labour force
Appendix 3B. The administrative burden for cooperatives in comparison with capitalist enterprises
Table 3B.1. Number of administrative burden increases and decreases for comparatives in comparison with capitalist enterprises: qualitative estimate
Appendix 3C. Constitutional rights and main other constitutional elements
Division 1. Constitutional rights
Division 2. The Parliament and the Government
Section 2.1. Election and composition of the parliament
Section 2.2. Parliamentary procedures
Section 2.3. The government
Section 2.4. Legislation
Section 2.5. Relations between the parliament and the government
Division 3. The judiciary
Division 4. Miscellaneous institutions and provisions
Section 4.1. State agencies and other state institutions
Section 4.2. Workers council governed foundations
Section 4.3. Audit
Section 4.4. National Ombudsperson
Division 5. International matters
Division 6. Worker cooperatives, Single person enterprises, and individual services for households
Division 7. Revision of the Constitution
Appendix 3D. Abuse of power and other improper behaviour by parliamentarians, ministers, other state workers and political parties: judicial proceedings
Appendix 3E. Regulation of the turnover tax for ‘Single person enterprises’
Appendix 3F. Stand-in work as organised in ‘stand-in cooperatives’, and the prevention of casual inferior jobs
Appendix 3G. List of separate accounting maintaining state agencies and other state institutions
Chapter 4. Municipal and provincial administrations
Introduction
4§1. Establishment and budget of municipalities and provinces
4§2. Municipal democratic organs
4§3. Tasks and authority of the municipal administration
4§4. Provincial democratic organs
4§5. Tasks and authority of the provincial administration
4§6. Workers councils of municipal and provincial institutions
Chapter 5. International economic relations
Introduction
5§1. International migration
5§2. International trade
5§3. International ownership titles
5§4. International balance of payments
5§5. International development transfers
Appendix 5A. Regulation of international ownership titles and of import duties
Part Two. From modifying capitalism to transition
Introduction to Part Two
Chapter 6. The modification of capitalist practices by ‘worker-owned cooperatives’ and similar democratic enterprises
Introduction
Division 1. Worker-owned cooperatives within capitalism up to 2020: number and performance
6§1. Worker-owned cooperatives (WOC s) and similar legal entities: general characteristics
6§2. Worker-owned cooperatives and other cooperatives: terminology and quantifications
Table 6.1. Classification of cooperatives as functioning within capitalism
Table 6.2. World employment in or within the scope of cooperatives around 2016
Table 6.3. Continental employment in or within the scope of cooperatives around 2016
Table 6.4. Scarceness of data on WOC s around 2016
Table 6.5. Country-wise employment in WOC s around 2016: world top-10’s relative and absolute rank (out of 51 countries)
6§3. The performance of worker-owned cooperatives: some key results of empirical research
(1) A general summary of the economic performance of WOC s
(2) The productivity and investment performances of WOC s
Division 2. Complexities of worker-owned cooperatives’ functioning within globalising capitalism: the case of Mondragon
6§4. The organisational structure of individual Mondragon cooperatives and of the Mondragon umbrella
Scheme 6.6. The organisational structure of the Mondragon cooperatives
Scheme 6.7. Main organisational structure of the Mondragon Corporation
6§5. The ten 1987 principles of Mondragon
6§6. Worker-member salaries and paid-in capital, and inter-cooperative solidarity funds
6§7. The course of Mondragon’s employment: general quantification 1983–2019
Table 6.8. Employment of Mondragon, Spain and the aggregate of OECD countries: growth 1983–2019
Graph 6.9. Total employment Mondragon in comparison with that of Spain: 1983–2019
Graph 6.10. Employment Mondragon Corporation by divisions 1996–2019
6§8. Mondragon’s sales 1996–2019
Graph 6.11. Mondragon total sales and its industrial international sales 1996–2019
Graph 6.12. Mondragon’s industrial international sales proportions 1996–2019
Table 6.13. Number of Mondragon cooperatives and subsidiaries 1998–2020
6§9. Mondragon’s way of employment in face of globalising capitalism’s competition
(1) Types of employment
Table 6.14. Main Mondragon legal entities and their types of employment
(2) Retail cooperatives: worker-members and other employment
Graph 6.15. Proportion of worker-members in the retail division employment: Eroski Group, 2000–2019
(3) Industrial cooperatives: worker-members and other employment
Graph 6.16. National and international employment of Mondragon’s industry division 2001–2019
Graph 6.17. Proportion of worker-members in industrial cooperatives 1995–2019 (with an indication of their proportion in the total industrial employment)
(4) Comparative employment performance of Mondragon, Spain and the aggregate of OECD countries: 2001–2019
Table 6.18. Comparison of the Mondragon employment in Spain, with that of Spain and the aggregate of OECD countries: 2001–2019
Graph 6.19. Comparison of Spain’s retail employment with Mondragon’s: 2001–2019
Graph 6.20. Comparison of Spain’s industrial employment with Mondragon’s industrial employment in Spain: 2001–2019
Division 3. Cooperatives as subcategory of ‘social and solidarity economy entities’
6§10. Social and solidarity economy entities
Table 6.21. Social and solidarity economy entities as prevalent within capitalism: end 2nd decade 21st century
6§11. Employment by SSE entities – a geographically limited account
Graph 6.22. Persons that lead a ‘social enterprise’ as indicator for the dispersal of SE s: world regions estimates 2014–15
Graph 6.23. Employment growth in SSE entities within the EU in comparison with the total EU employment growth: 2002–2015
Table 6.24. Employment and employment growth in SSE entities within the EU in comparison with the total EU employment: 2002–2015
Concluding summary chapter 6
Chapter 7. Circumstances just before the transition: financial and real estate markets and the scope of capital flight
Introduction
7§1. The ‘critical period’ just before the transition
7§2. The value of financial assets in the critical period
Graph 7.1. Distribution of net wealth, financial assets and capital ownership assets: average of 24 OECD countries around 2019, shares of quintiles and top 10%
7§3. The value of real estate in the critical period
7§4. Country dependent effect on taxation revenue
7§5. The value of other real assets (non-real-estate) in the critical period
7§6. Capital flight in the critical period
Table 7.2. Effects of turbulences financial and real estate markets during the ‘critical period’
7§7. Direct effects of changes in assets value and capital flight
7§8. Turbulences’ investment effects on production, employment and incomes
Table 7.3. Turbulences’ investment effects on production, employment and incomes: non-WOC sector
7§9. Reactions: the central bank, government and ‘the public vote’
7§10. A concluding appraisal of the critical period
Chapter 8. Transition to a worker cooperatives society
Introduction
Table 8.1. Legal entities during the transition: Design and Capitalist legal entities
Division 1. Transitional legislation phase 1: transition foundations
Subdivision 1A. Institutional changes and regulation in the public sector domain
8§1. Democratic organs of the state (cf. 3§1) – full enactment
8§2. Competences of the judiciary – phases 1–3
8§3. Ministries and state agencies (cf. 3§2) – full enactment
8§4. Unchanged municipal and provincial administrations – phases 1–4 {requires no legislation}
8§5. The four banking and fund agencies – full enactment
8§6. Competition and the ‘competition authority’ – full enactment
8§7. Workers council governed foundations – phases 1–4
8§8. ‘Agency for temporary workers council governed foundations’ – full enactment
8§9. Taxation during the transition – permanent transition legislation
Table 8.2. Overview of tax categories and tax rates during the transition
Subdivision 1B. Regulation of social-economic provisions
8§10. Minimum wage – full enactment – and temporary ‘minimum costs of living allowances’ – phases 1–3
8§11. Housing legislation: rental dwellings – permanent transition legislation; and rental dwellings construction – phases 1–2
8§12. Health provisions: temporary regulation – phases 1–4
8§13. Education provisions: temporary regulation – phases 1–4
Subdivision 1C. Institutional changes and regulation in the economic domain
8§14. The Design’s cooperative as legal entity; unique form for newly established multi-worker legal entities in the non-public sector domain – full enactment
8§15. Temporary exceptions for the Design’s cooperatives – phases 1–2
8§16. Financial markets: shares, bonds, mortgages and consumer credit – permanent transition rules
8§17. Accommodation by the SLB of banks’ investment credit – permanent transition rules
8§18. Conversion of the legal form of pre-transition entities (those of WOC s in particular) into Design cooperatives – phases 1–3 and permanent transition rules
Subdivision 1D. Recession policy, the general transition strategy and concluding matters phase 1 {requires no legislation}
8§19. General comments on phase 1
8§20. Recession-countering policies
8§21. State expenditure and taxation revenue due to phase 1 legislation
Table 8.3. Extra taxation revenue due to phase 1 legislation in comparison with the Design
Table 8.4. State expenditure due to phase 1 legislation
8§22. Note on the transition in general in face of the ‘phase 1 taxation measures’
8§23. The transition strategy for the gradual legal conversion of pre-transition capitalist enterprises into Design cooperatives
Table 8.5. Stock corporations (including banks): taxation, expansion, break up and continuity
Table 8.6. Firms and limited-owner incorporates: taxation, expansion and legal conversion upon retirement of owner
8§24. Amount of legislative work in phase 1, and the duration of the legislative transition phases 1–5
Table 8.7. Indication amount of legislative work phase 1: sequential measure
Table 8.8. Indication of the duration of the legislative transition phases 1–5
Division 2. Transitional legislation phase 2: completion of elementary transition
8§25. Full-time position and maximum work-time – full enactment
8§26. Workers’ councils public sector, except remuneration matters – phases 2–4
8§27. Pension allowances – full enactment
8§28. Child-related allowances – full enactment
8§29. Costs of living allowances for students – full enactment
8§30. Preparatory regulation on job securities – phases 2–3
8§31. Auditing – full enactment
8§32. Legal separation audit and accountancy companies – full enactment
8§33. End of year income account and balance sheet of economic domain entities – permanent rules
8§34. Conclusions on phase 2 and phases 1–2 together
Table 8.9. State expenditure due to phase 2 legislation
Table 8.10. Indication amount of legislative work phase 2: sequential measure
Division 3. Transitional legislation phase 3: preconditions for mature transition
Table 8.11. The transition phases duration in years
8§35. Design cooperatives: termination of exceptions 8§15; rules for pre-transition entities – full entry into force Design ch. 2
8§36. Physically circular production, safety of and information about output, and safety at work – full enactment
8§37. Municipal and provincial democratic organs
8§38. Real estate and the real estate agency – full enactment
8§39. Mining and other Earth extractions – full enactment
8§40. Infrastructure – full enactment
8§41. Patents and copyrights – full enactment
8§42. Concluding matters phase 3
Table 8.12. State expenditure due to phase 3 legislation
Table 8.13. Indication amount of legislative work phase 3: sequential measure
Division 4. Transitional legislation phase 4: advanced transition
Table 8.11. The transition phases duration in years (repeat from introduction 8D3)
8§43. Joblessness due to qualifications mismatches and to recessions – full enactment
8§44. Restricted abilities to work – full enactment
8§45. Appointment procedure of the judiciary and administrative prosecutors – full enactment
8§46. Public security – full enactment
8§47. International economic relations (ch. 5) – full enactment
8§48. Concluding matters phase 4
Table 8.14. State expenditure due to phase 4 legislation
Table 8.15. Indication amount of legislative work phase 4: sequential measure
Division 5. Transitional legislation phase 5: matured transition
8§49. Remuneration of public sector workers and full competences of their councils – full enactment
8§50. The health sector – full enactment
8§51. The education sector – full enactment
8§52. State-financed research institutes – full enactment
8§53. Regulation of the culture sector – full enactment
8§54. National railway transport – full enactment
8§55. Finance of the state and state institutions – full enactment
8§56. Municipalities and provinces (ch. 4) – full enactment
8§57. Minimum work-time, and a temporary part-time position – full enactment
8§58. Temporary work as organised through ‘stand-in cooperatives’ – full enactment
8§59. Concluding matters phase 5
Table 8.16. State expenditure due to phase 5 legislation
Table 8.17. Indication amount of legislative work phase 5: sequential measure
Division 6. Full implementation in practice of the transition legislation
Concluding summary of chapter 8
Table 8.18. The transition legislation phases and their implementation in practice
Appendix 8A. Various summarising tables
Table 8.19. Summary of the transition’s phase-wise enactment of allowances and compensations
Table 8.20. Summary of the entering into force of legislation
Table 8.8. Indication of the duration of the legislative transition phases 1–5 (repeat from 8§24)
Table 8.21. Indication amount of legislative work phases 1–5: sequential measure
Table 8.22. Legislative transition implementation of the Part One Design
General summary
A. Summary of part one: design of the organisation of a worker cooperatives society
Table GS-1. Legal entities and their governance and percent of the workforce
Table GS-2. Key distinctions between the capitalist and the Design cooperatives economies
Table GS-3. Main requirements or restrictions for cooperatives and their councils
B. Summary of part two: from modifying capitalism to transition
Table GS-4. The transition legislation phases and their implementation in practice
References
Index of names
Index of subjects
Abbreviations