Challenges of the Cooperative Movement In Addressing Issues of Human Security In the Context of a Neoliberal World: the Case of Argentina

The response of some Argentine workers to the 2001 crisis of neoliberalism gave rise to a movement of worker-recovered enterprises (empresas recuperadas por sus trabajadores or ERTs). The ERTs have emerged as former employees took over the control of generally fraudulently bankrupt factories and enterprises. The analysis of the ERT movement within the neoliberal global capitalist order will draw from William Robinson’s (2004) neo-Gramscian concept of hegemony. The theoretical framework of neo-Gramscian hegemony will be used in exposing the contradictions of capitalism on the global, national, organizational and individual scales and the effects they have on the ERT movement. The ERT movement has demonstrated strong level of resilience, despite the numerous economic, social, political and cultural challenges and limitations it faces as a consequence of the implementation of neoliberalism globally. ERTs have shown that through non-violent protests, democratic principles of management and social inclusion, it is possible to start constructing an alternative social order that is based on the cooperative principles of “honesty, openness, social responsibility and caring for others” (ICA 2007) as opposed to secrecy, exclusiveness, individualism and self-interestedness. In order to meet this “utopian” vision, it is essential to push the limits of the possible within the current social order and broaden the alliance to include the organized members of the working class, such as the members of trade unions, and the unorganized, such as the unemployed and underemployed. Though marginal in number and size, the members of ERTs have given rise to a model that is worth exploring in other countries and regions burdened by the contradictory workings of capitalism. Today, ERTs serve as living proofs that workers too are capable of successfully running businesses, not capitalists alone.

The Dual Ownership Structure: a Model to Connect the Cooperative Model With Financial Markets

In business literature, the conflicts among workers, shareholders and the management have been studied mostly in the frame of stakeholder theory. The stakeholder theory recognizes this issue as an agency problem, and tries to solve the problem by establishing a contractual relationship between the agent and principals. However, as Marcoux pointed out, the appropriateness of the contract as a medium to reduce the agency problem should be questioned. As an alternative, the cooperative model minimizes the agency costs by integrating the concept of workers, owners and management. Mondragon Corporation is a successful example of the cooperative model which grew into the sixth largest corporation in Spain. However, the cooperative model has long been ignored in discussions of corporate governance, mainly because the success of the cooperative model is extremely difficult to duplicate in reality. This thesis hopes to revitalize the scholarly examination of cooperatives by developing a new model that overcomes the fundamental problem in the cooperative model: the limited access to capital markets. By dividing the ownership interest into financial and control interest, the dual ownership structure allows cooperatives to issue stock in the capital market by making a financial product out of financial interest.