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Dublin: 13 °C Monday 22 December, 2014

Column: If politicians re-lived the Celtic Tiger would anything be done differently?

After the boom-years, people are wondering if there is an alternative system that might work better, writes Órla Ryan, who says worker co-operatives might be just what we’re looking for.

Órla Ryan

IN THE LAST few years our country and continent have gone – and continue to go – through tumultuous times. So what have we learnt from our harsh lessons?

If our politicians and executives could re-live the Celtic Tiger and the pre-boom years, would anything be done differently?

Hindsight is a wonderful thing, but has the potential to be forgotten if a decision maker, from gambler to governor, is faced with the prospect of profit.

Paying for the mistakes of those at the top

Arguably the most repeated complaint of recent years has been ‘Why did we save the banks and not burn the bondholders? Surely pumping money into such organisations, some of which are now defunct, makes no sense’. It seemed, yet again, that people on the bottom rung of the wage ladder paid for the mistakes of those on the top.

People who questioned the Government’s actions in this regard were usually simply told ‘there is no alternative’. The same answer is often trotted out when people question our current banking and economic systems – so much so that the phrase has received its own acronym: ‘Tina’.

Many things have been discussed during our Presidency of the Council of the EU, from vulnerable families to CAP reform and budgets to tax evasion. However, as Ireland’s presidential term nears its end, the time is fast approaching for the EU to look towards future presidencies.

The benefits of workers co-operatives

Of course certain subjects will always feature on the agendas of plenary sessions and meetings, but perhaps some new areas should also be looked at during upcoming presidencies. One such issue is the potential economic benefits of worker co-operatives.

At a recent seminar at the UCD School of Social Justice, participants discussed alternatives to capitalism. The idea of Ireland setting up more worker co-operatives (one such organisation was founded in Limerick in October of last year) was deemed the most viable and achievable option.

The Limerick Workers Co-operative was inspired by the Mondragon Corporation in the Basque region – members of the organisation visited Limerick in 2011.

Mondragon is the world’s largest co-operative and the seventh largest business in Spain. It is divided into four main categories: finance, industry, retail and knowledge. The corporation comprises over 250 companies and bodies, approximately half of which are co-operatives. It employs about 84,000 people worldwide, although fewer than half of these are members.

The power to withstand the recession

Mondragon is not only withstanding the recession, it’s becoming stronger and now has global sales of €15 billion. Staff and financial resources are spread evenly: when there is a surplus of employees in one co-operative, workers are re-allocated to another co-op. Similarly, when one group needs financial assistance they receive a loan from another.

The mission statement of worker co-operatives is simple: they aim to create and maintain sustainable jobs, improve the quality of life of their members and promote democratic self-management and community development.

These types of organisations share an ideological background with credit unions but differ as they provide members with an income.

Learning from our neighbours

And here’s the kicker at Mondragon: managers’ salaries are capped at eight times the wage of the lowest paid worker and, when pay cuts have to be made, they take the biggest financial hit. Perhaps we could learn something from our European neighbours

The Desjardins financial co-operative group in Québec, with almost 6 million members and clients, is another example of a successful horizontally-led organisation. Notably, it is the only bank in Canada to have set up its own safety fund.

Fresh thinking is needed in Ireland and the EU if we are to avoid a repeat of the banking collapse. Dr Kathleen Lynch, Professor of Equality Studies at UCD’s School of Social Justice, fears that Ireland is “ignorant” in this regard as we are “cut off from European alternative thinking”.

Dr Lynch maintains that not enough funding is made available for “critical work in social science” due in part to “a strong anti-intellectualism in Irish society”. She believes grants are often given out to support research in other branches of humanities such as history as that particular field “doesn’t threaten anyone”.

A fresh approach to modern life and business

Almost all of the financial assistance the School of Social Justice has received has been directly or indirectly from Europe. Dr Lynch thinks it is time for a fresh approach to banking and corporate systems, saying the aftermath of the banking collapse was “a dream time to start” implementing changes.

The lecturer was part of a group that addressed the Joint Oireachtas Committee on Jobs and Innovation last September on the potential benefits of setting up worker co-operatives in Ireland. The idea was also discussed at a Seanad think tank on job creation in January 2012.

Dr Lynch attributes the success of worker co-operatives to the fact that they are not driven by shareholders’ interests and have indivisible reserves that can’t be sold off.

Co-operatives are by no means infallible institutions, as the recent troubles at the Co-op Bank in England highlight, but surely more research should be done in this area in Ireland, the EU and beyond. At the very least, Tina should become Tia: there is an alternative.

Órla Ryan is an MA Journalism student in NUI Galway. She is one of 25 citizen journalists covering Ireland’s presidency of the EU Council through Youth Media and the Irish Presidency.

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