1111~11~lllnl~~I~~I~I~1111 lute of 8 3501 00086 7454 ..a- 1 StudIO es .,.-~v-'-'-i .'-~ l.J"-J""~ . ",.,' -'.'L . Worker Cooperatives with Particular Reference to Malta: An Educationist's Theory and Practice Godfrey Baldacchino )nal Paper No. 107 Worker Cooperatives with Particular Reference to Malta: An Educationist's Theory and Practice Godfrey Baldacc;l¢p.o . January 1990 Institute of Social Studies The views expressed in this publication are those of the author and not necessarily those of the Institute of Social Studies. © Institute of Social Studies The Hague, 1990 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of the copyright owner. CIP-GEGEVENS KONINKLIJKE BIBLIOTHEEK, DEN HAAG 'Baldacchino, Godfrey Worker cooperatives with particular reference to Malta: an educationist's theory and practice/Godfrey Baldacchino. - The Hague; Institute of Social Studies. - (Occasional papers / Institute of Social Studies. ISSN-0920-8615; no. 107) Met bibliogr. ISBN 90-6490-033-7 SISO 356 UDC 334.7.01 (458.2) Trefw.: cooperaties; Malta Printed in The Netherlands INSTITUTE f;)P SOC~Al SlUD~ES CONTENTS ~''''''''·':''''''''-'1..·''..:o'Ior~.--'1I:tl~t.:.:l-..."l.o='''~='''''M''''''''' __ )r AM~ : 4(.5 .LJbs: ~ATUMI ~ -lo...q1 Page Foreword QASS.,j 33/. I~~ C15g ,~) 1 Introduction PART ONE: THEORY BUILDING 9 2 The Case for Worker Cooperatives 9 3 A Strategy for Successful Worker Cooperation 26 4 An Ideological Battle: Focus on Education 51 PART TWO: EMPIRICAL APPLICATION 67 5 Introducing the Maltese Environmental Condition 67 6 The Maltese Cooperative Sector 85 7 Elements of Mediation in Maltese Society 97 8 Looking Back and Looking Forward 127 Bibliography 135 Appendices 157 FOREWORD This study first saw the light of day as a research paper submitted in partial fulfllment for a Master's Degree in Development Studies at the Institute of Social Studies in The Hague in 1986. I would like to thank various individuals for assisting and encouraging me to complete the task at hand. To my supervisor, Freek Schiphorst, fell the main burden of helping me to refine my argument and improve the quality and readability of the paper; together, we logged many hours of fruitful and pleasant discussions. Henk Thomas and Henk van Roosmalen contributed further, complimentary advice, which I very much appreciate. Further academic inputs were received from fellow partjcipants, particularly from Omolara Olanrewaju, Nelson Neocleous and Mohammed Taher, who was kind enough to share with me his knowledge and experience of the Comilla programme in Bangladesh. From across the seas, Kenneth Wain and Frank Ventura, staff members of the Faculty of Education at the University of Malta, provided useful criticism. Edith and Saviour Rizzo and Edward Zammit, my workmates at the Workers' Participation Development Centre (WPDC), provided indispensable support facilities. More of these were forthcoming from my parents and parents-in-law who kept me posted on developments in Malta during my absence. I would like to express my appreciation to the Chairman and members of the WPDC Committee for their financial support during my stay in The Netherlands as well as for nurturing my research interests. On leaving Holland and having returned to Malta, I revised the text, following further advice from Freek Schiphorst and Henk van Roosmalen. I also took the opportunity to update and refine the contents, making them more accessible to a wider, less academic readership. Here I must acknowledge the assistance of Reverend Fortunato Mizzi, Richard Matrenza and the Chairman of the Cooperatives' Board, Joe Galea. Further thanks are due to the ISS Publications Committee and supporting staff, as well as to the two anonymous referees, who spurred me on to undertake the tough but challenging exercise of extensive draft revision, which has led to this actual text. I must also thank the Labour & Development programme secretary at the Institute of Social Studies, Lijske Schweigman, as well as library staff, both at the Institute and the University of Malta, who patiently handled my many queries and requests. Finally, a special acknowledgement to Anna, my wife, for her encollrageIIleI1t at c!ifficult mOIlle!!ts of the project and for beinga,!! understanding companion in the pains of creative writing. To her goes the credit for the typing of innumerable drafts. My sincere apologies to her and to my son James for neglecting them, in favour of books and documents, over many months. To them I dedicate this work. Godfrey Baldacchino Marsascala, Malta November 1988 11 'Give men a better environment, and they will respond to it by becoming better workers, and better men' ROBERT OWEN 'The cooperative system will never transform capitalist society. To convert social production into one large and harmonious system offree and cooperative labour, general social changes are wanted, changes of the general condition of society' KARL MARX 'It is only by pursuing the impossible that the possible becomes true' MAX WEBER iii 1 INTRODUCTION The Issue The issue of worker cooperation remains at the top of the agenda for workplace organization today, although the history of worker (or producer) cooperatives is littered with failures. Yet, despite the glaring and disappointing evidence, the establishment of cooperative forms of work organization continues unabated; indeed it has gathered momentum over the last few years, in both industrialized and industrializing eco­ nomies. These initiatives have been forthcoming from a motley band of proponents: on the one hand, government officials, economic planners, trade unionists and management consultants have shown themselves disposed to finance, advise or even create worker cooperatives from above. On the other hand, an even more diverse collection of underprivileged groups or individuals is striving to preserve employment or otherwise hoping to fashion for themselves a more meaningful work environment. A Warranted Field of Study A cardinal principle guiding this text is that it would be premature to dismiss the worker cooperative as yet another misguided Utopian vision. The dismal evidence of failures to date is staggering and cannot of course be refuted, but a fair dose of optimism in the feasibility of worker cooperation is not totally unwarranted. Firstly, although it is difficult to defme a successful worker cooperative, there are a few lonely beacons of success, model organizations in terms of quantitative criteria (profitability, productivity per head, employee turnover) or qualitative ones Gob satisfaction, motivation, power dis­ tribution). Secondly, the promises of worker cooperation are tempting and taunting; they have been hailed as a 'third sector', emerging from the forces of big business in the West and of the centralized colossus of the East. 1 The cooperative organization of production offers an improved access to economies of scale which are reaped by medium to large scale enterprises without sacrificing the pride of skill and self-control usually associated strictly with self-employment. The combination of the interests of capital and labour within the same individuals, as owner-workers, could defuse normative conflict and the resulting bitter and acrimonious industrial relations. Worker cooperatives offer a potential for satisfying workers' desire for greater self-actualization, for more control over th~ conditions of their work and for a more just and equitable share in the fruits of their efforts. Cooperative production can rectify the lack of access to certain products and services in economies geared to the production of profit rather than of use value and social needs. The possible contribution by worker cooperatives towards job creation or preservation becomes particularly attractive in the current scenario of global open unemployment and underemployment.2 Lastly, more traditional ways of arranging production can be unjust and oppressive. In the standard economic systems of the world today, it is in small minorities that power is vested, with all its ramifications: decision-making, income distribution, profit allocation, personnel mana­ gement and organization of production. Consequently, the vast majority suffers, sometimes in poverty and powerlessness, often in resigned silence. 3 It is partly in reaction to these conditions that experiments with worker cooperation continue to be made. In the meantime, both western style capitalism and Soviet style central planning appear to have run their course and reached a dark alley, from which the only way out is to grant greater self-determination and freedom to the worker. They also appear increasingly to appreciate and resort to the advantages of cooperation and of work humanization.4 These initiatives might only be cosmetic concessions which serve to further legitimize established power relations.5 Nevertheless, the general climate in the world today appears more disposed towards worker cooperation.6 Over the years, though, the dismal record book has taken its toll among the proponents of worker cooperatives. Many sympathizers have concluded that their conception of a democratic transformation of the classic workplace was pure fantasy; they have consigned the topic of worker cooperation to that of Utopian literature. Such a shift of opinion is quite easy to justify: all too often, worker cooperatives have been victims of either