The elections in Sept 1930 catapulted the socialist Democratic Front into a congressional majority.  This frightened the capitalist class greatly and a great flight of capital overseas commenced, until Congress passed emergency legislation.  After conservative President Pierisin attempted his coup in January 1931, the socialist majority removed him from office, and took over the executive functions of government. This greatly frightened the capitalist class, and even though their allies commenced armed rebellion in March 1931, many became convinced that Bergonia was becoming a lost cause for them.  Thus after the fighting broke out, the richest capitalists fled the country, while most of the rest did not leave their fine homes.

In some cases the managers and owners were seized and thrown out, and in some cases the bosses were locked out.  Many capitalists resorted to armed gangs to protect their property, and many workers joined political militias to fight them.  In some places the police supported the gangs and in others they supported the militias.  Fortunately some owners yielded more gracefully to the revolutionary wave and voluntarily handed the keys over to their employees, and in some cases the mid-level managers and even the executives stayed around to help the workers with their new responsibilities. 

By the end of the year, roughly 70% of the economy within the "Democratic Zone" (the regions not controlled by the Kilitan), had effectively been "socialized" by worker action.  Each "socialized" enterprise set up an assembly of all the workers-- direct democracy where every worker had a voice and a vote.  The assemblies conducted business "on the plant floor," so to speak, and elected the managers of the enterprise, and also an executive council.  This process paralleled the spontaneous creation of anarcho-syndicalist cooperatives in Spain, particularly in Catalonia.  

The assembly elects the members of an executive council, which is analogous to a capitalist board of directors, though much more active.  The executive council of a large cooperative typically meets once a week.  In smaller co-ops the council meets monthly.  

The corporate charter generally allows representation of major blocks of workers within a corporation.  Bergonia has two international and six regional airlines.  Each one includes on its exec council representatives of the pilots, attendants, ground and counter-workers, mechanics, technical, and what is commonly called "CLS" (clerical, laborers & service). Some corporations, chartered or licensed by the national or state government, include on their councils representatives of outside interests. For example, the councils of electric utilities include both workers reps and reps chosen by the energy ministry, and the airline councils includes a representative from the national transportation ministry.  There have been experiments with consumers representatives on councils, but no satisfactory method of selection has been found.

Organization of Big Corporations

Cooperatives build long-term relationships with one another and form large "federated" corporations.  The capitalist corporation is, without the uniforms, a military-style hierarchy of bosses and subordinates, with various commands and regiments.  In contrast, the big Bergonian socialist corporation is a federation of collectives, working together in a mutual enterprise, bound together by contracts, reutilized working arrangements, and consensus developed through regular consultation.  The collaborating collectives meet together as circumstances require to work things out. 

The key to the routine is the set of written procedures which the various cooperatives sit down and write together.  The chief document functions at law as a contract between and among the various coops.  The secondary documents comprise a manual for everyone's collective guidance.  The manual spells out things like the division of responsibility and work, division and allocation of money, standard routines for intercommunication and processing the work, and performance goals for each collective.  The contract and the manual work like a formal set of laws for everyone in the federated corporation.  

The individual worker typically is loyal to his collective.  But in a federated corporation the individual worker has loyalty to both his immediate collective and the federation.  Often the collectives have worked together collegially and familiarly for years.  They often share an esprit de corps. 

In the auto industry, for example, there are three national brands of cars and trucks, each with its family of models.  (a) Banken Motors, retaining the name of Arein Banken, the capitalist who founded the corporation in 1910. (b)  Seprei (Reliable) Motors.  (c)  Landauer Motors, originally organized by militant anarcho-syndicalists.  (In 1934 the syndicalists chose the name to honor the great German anarchist Gustav Landauer who in the abortive German revolution of 1919 was murdered by the military with the connivance of the Marxist Social Democrats.  Adopting this name was intended as a slap at the communists.)   Each of the three corporations is headed up--"coordinated" as the Bergonians put it-- by an umbrella corporation.  This corporation designs the automobile, by contracting with several collectives of engineers.  It has contracts with the workers at several factories who make the parts and assemble the vehicles.  It sponsors several marketing collectives.  The federated auto corporation also includes a group of information-technology collectives, a collective of market researchers, several cooperatives who handle product testing, a workplace safety and risk management cooperative, and a collective of procurement specialists.  There is even a collective that manages the unified phone system for the other collectives.  Each of these specialized collectives have relationships with "general services" collectives, whose members handle clerical and filing, and keep the place clean, repaired and organized.  

As another example, a newspaper consists of a corporation of reporters joined with a printing corporation, a corporation of ad-men and marketers, and a corporation of distributors.  Their representatives sit together on the executive council.  Each of the four corporations has its own executive council.    Each one of the four groups has its own assembly, and occasionally the workers of all four corporations meet in one big assembly.  The assemblies approve the hiring of officers including a president-publisher, a procurement chief, and a chief financial officer.  The corporation of reporters selects the editors of the newspaper.  

When Corporations Face Trouble

Workers and management sometimes make stupid decisions. Management sometimes turns out to be corrupt.  Unexpected changes in markets occur.  In such cases workers can't pay their enterprise's bills without starving themselves.  One of the worst and most common managerial sins is taking on too many workers, often the sin of nepotism, and then refusing to get rid of any.  Law allows a corporation to reduce its size by a simple majority vote of either council or assembly, but then strict seniority governs who must go.

A commercial court can appoint emergency managers and initiate emergency audits. In extreme cases the court can suspend a corporation's council and remove the management, and then give the workers the choice of either (a) liquidating then enterprise or (b) temporarily working under a government manager while rethinking and reorganizing with the help of outside consultants. Everyone is cushioned by the net of social services and replacement income, and so workers never have to worry about dire poverty, but sometimes they hit bumps in the road. If a corporation is disbanded or suffers extreme shrinkage, the employment office intervenes to procure new positions. 

Old Declining Industries

Government planning locates new industry in places with shrinking economies.  This is national policy, so that no part of the country grows at the expense of another.  Growing industries must recruit additional workers from the pool of idle workers whose corporations have been dissolved or who have been laid off in a shrinking industry.  This would be as if the US government required 

By law, as well as by nearly all corporate by-laws, lay-offs are made according to seniority, and then by lot.

Often a corporation asks for assistance in converting from a dying industry to a new one.. The syndicate for a dying industry will often work with the central ministry to convert into a new industry.  Hence typewriter and adding machine factories retooled and retrained to make chips, monitors and keyboards, with the assistance of retraining, new management, and development bank loans.  Likewise coal miners become manufacturers of computer and electronic controls for automated equipment.  This is under the principle that the workers of any new industry must come first from any displaced industries.  

How New Industries Form

As said, when a need arises for a economic expansion and the organization of new productive units, sometimes cooperatives in dying industries are converted.   

Innovators can start small businesses, then organize and spin off separate corporations (which become worker-controlled above 12 people), and finally coordinate the corporations in a federated entity.  As the enterprise grows, the innovator can continue nurturing his invention.  Any of the corporations he founded can hire him as a manager.  The corporations can hire him as a consultant.  Or he can operate a small design and concept corporation and contract with the other corporations for the manufacture, servicing and marketing of the machine, software or technology.  This is one way which people in Bergonia can become relatively rich.

The development councils, sometimes at the direction of Congress or the bushenre, organize new economic enterprises.  The development councils and ministries will recruit workers to form a new cooperative. This works for opening up new technologies, such as biotech, environmental sciences, health care, and information technology.  The public development banks lend the new cooperatives money, and the new cooperative will join the appropriate trade syndicate.  In Berg-Soc the central authority will not run the socialist economy, but it does have the power and responsibility to sponsor new cooperative enterprise as needed. 

Management of the Cooperative

The average guy wants to work with a profitable enterprise that will take care of him and his family, so he for the most part appreciates management as an indispensable skill, at least a necessary evil.  Workers have the incentive to work hard and contribute to their enterprise, and generally are content to do so under the direction of competent management.

Managers consists of two types. First, a professional class of careerist managers, jumping from corporation to corporation sometimes as often as every five years. They have among themselves tight bonds of friendship, and a group of them will often present themselves to recruiting councils as a (take-it-or-leave-it) team.  Another class of managers are men who have risen up through the ranks, men who started on the shop floor but by dint of natural ability and schooling on the side became managers. Typically such men became managers through democratic processes, as well as promotion, and gained the trust and loyalty of the workers themselves. 

The problem of management becoming aloof and imperious is worse in the larger federated cooperatives, naturally.  Most managers come up out of the ranks of workers.  The workers in production teams elect their foremen (usually a chief foreman and also a second foreman, and they work in  conjunction  with production  leaders appointed by the plant management.  Some foremen and workers attend college while they work, studying accounting, efficiency techniques, relevant law and  "applied  economics."   Other workers go to college in engineering and applied sciences.  When some of the workers attain education, they apply to management for promotion to the production leader positions.  All the higher management people come out of the ranks of the production leaders.   

Therefore the typical plant manager is a fifty-old man who worked his way up the ladder from his  first assembly line job when he was nineteen years old.  He still has friends from his youth working on the plant floor and on the loading dock.  During his twenties he went to part-time status in order to attend the local college and learn management.  During several stints he left work to attend intensive semesters of physics, engineering and systems design.  He developed a specialization in  electrical systems and worked in product design (including writing specifications) and quality control.  When he was in his late thirties, the cooperative decided to participate in a manager program with fifty other co-ops in which they traded managers for two years stints.  He spent a year managing in a plant making HVAC controls and another making electric motors.

"Bossism" and corruption  

The worst thing in the Berg world-view is abusive authority.  Thankfully we have progressed from the days of Sargon and Atilla, but Hitler lived not so long ago.  We all recoil from the big Hitlers in history, but we conveniently forget that history's great atrocities are committed by average men willing to be led.  Worse yet, we see thousands, millions of little Hitlers in workplaces around the world.  The capitalist enterprise is a dictatorship no less than the bureaucratic state.  Both are modeled on hierarchical military organization, and often are just as cruel. Sadly, the first large organizations in human history were armies.  The tyrant is an inevitably byproduct of hierarchy, and therefore he proliferates the ranks of corporate hierarchy.. Virtually every American has experienced the cruel boss who berates his employees (mere employees-- capitalism's word for "slave" or "labor-unit"), treats them unfairly, like trash, and turns them out into the street.  Though corporate wage labor is in essence the same as slavery (though obviously not in severity), they are different in the nature of the whip: in slavery the slave may not leave, while in capitalism the worker may be put out.  

Americans sometimes say the boss "has gotten too big for his britches."  Meaning the same thing, Bergonians say that the boss "wears a hat too big for his head" or "buys pants too big for his ass," or "too long for his legs."  The socialist Bergonian thinks that "Bossism" is the worst of sins.  Bossism in its most exaggerated form manifests as megalomania.  It is born and sustained by the psychological pathology known to psychologists as narcissism.  Here and there it is understood that narcissism is as an essential part of the corporate boardroom.

The point of revolution is to end bossism, and the point of perpetual revolution is to keep bossism forever at bay.  Mao engaged in a wholly futile effort to engage in perpetual revolution.  The Cultural Revolution began with the sanctioned slogan "Open Fire on Headquarters."  The Red Guard went over the top and violently disrupted the entire society.  Fortunately, Bergonians have learned well how to practice the art of rebellion within a stable structure, so that mini-revolutions occur within the stable socialist system.  Decentralization makes this possible, just as it makes possible the autonomous authority in the first place.  But much more important in the generation of these mini-revolutions is the basic willingness of the Bergonian people to take action when action is needed.  The manager who becomes "bossy" risks provoking open ridicule and defiance, and sooner or later the workers council will sack him.  When the manager turns into a boss, the workers are perfectly within their rights to back-talk him, ridicule him, occupy his office, and scatter his papers.  If he doesn't get the hint and correct himself, or work things out with his workers, then then workers assembly or council will fire him.  

But even managers who treat their workers well may fall prey to excessive pride.  Many managers take pride in what they do, regarding what they do as a "profession."   They sometimes generate zealous rivalries with other managers in competing businesses.  They enjoy boasting of their achievements over drinks and in public, and sometimes cook the numbers just to look good.  Managers not only receive good salaries (like the other workers, taken out of "labor’s portion"), but the workers often promise them performance bonuses at the end of the accounting period.  These incentives however can encourage excessively aggressive management, as well as fraud.

Worse, managers have from time to time embezzled and taken or paid bribes.  The significance Bergonians put on trust between managers and workers means that stealing from workers is a felony, punishable by mandatory imprisonment.  Fortunately such theft occurs infrequently.  When a boss is convicted of theft, he is dispatched to a minimum mandatory of two years of imprisonment with manual labor. But the police first return him to the plant for a healthy dose of embarrassment and humiliation at the hands of the angry, cheated workers.  

For more on Bossism, see Dilbert.

Assessment of worker-owned enterprises

Idealists can't deny the lousy side of human nature:  Problems inevitably exist with this socialist-anarchist scheme of enterprise management, as with all human organizations.  Nearly all indigenous Bergonian socialist doctrine explicitly states that greed, hatred, fear and ennui are inherent to humankind (like original sin), and that these will infect any human organization, including the socialist-syndicalist cooperative.  Democracy and Socialism-- and the socialist corporation itself-- however will be able to (a) limit opportunities for the bad impulses, (b) inculcate good altruistic values into the culture so that people expect good out of each other, themselves, and their children, and (c) provide ample opportunity for the good impulses inherent in humankind.  There is a good side to human nature equal to the bad.  Now for specifics:

Problems:   The problems begin because decision-making under these democratic auspices is all too often slow, messy, and confused. Workers get sick of attending meetings and paying attention.  Workers often just want to put in their day of work and then go home at day's end to rest and do things with their families.  They then allow themselves to be led, and without personal involvement they become susceptible to rumors.  Cliques form, compete against each other, and try to exploit the rest.  The prevailing clique and the managers become autocrats and sink into the sickness of bossism.  Workers and managers steal and often take advantage of perks.  At best groups tend to grow conservative, and often resist new business practices.  Majorities oppress minorities, meaning that unpopular individuals get marginalized and then oppressed.  Workers sometimes skimp on capital investment or putting quality into the product in order to increase their immediate income.  

History has shown that worker control of industry does not produce a panacea for the ills of capitalism.  Worker-controlled industries in Yugoslavia still behaved in the same manner as capitalist firms.  They sought subsidies and protection from government, eschewed expenditure on pollution controls, and generally assumed short-sighted self-interested goals.  Bergonian industry had had a similar experience, particularly in the realm of seeking government largess.  Most critically, workers in both in Yugoslavia and in Bergonia have tended to vote themselves raises instead of setting aside money for capital investment, just as executives and shareholders in capitalist countries typically sacrifice the long term interest in favor of dividends and manipulations of the price of stock.  Moreover, well-paid industrial workers in rich, successful industries often show scant interest in sharing their collective wealth with their community as a whole.  This occurs in developing countries as well; oil workers in Venezuela make much more money than the average worker and their unions have become reactionary.

Strengths:  The democratic structure of the corporation allow majorities to rectify bad decisions, get rid of thieves and bad leaders, and air grievances openly.  Whatever great negatives one perceives in Bergonian worker-owned enterprises, the Bergonians say "its a terrible way to organize, but capitalism and state socialism are so much worse."  

A general sense of "workplace civic duty" prevails.  How does this happen?  Consider that most Americans are relatively honest, and that they maintain their honest expectations within a culture that worships money and materiality and a system that functions under corrupt priorities.  American bourgeoisie rectitude is a good thing because it internalizes fairness and honesty as controlling values.  These values do ameliorate, to some degree, the excesses of capitalism.  However much Marxists impugn it, no matter how much the avant-garde flouts it, no matter how much post-modernists deconstruct it, "bourgeoisie morality" forms the type of moral underpinning that socialist worker ownership needs.  One may sneer at the pretenses of American democracy, but compared to fascist or communist states those pretenses seem rather modest, and indeed rather successful.

Moreover, worker-owned industries draw strength from the underlying sense of community.  The workers and their families know each other and often live in the same neighborhood.  They attend each other's weddings and funerals.  Their kids play together, often on teams that compete against teams sponsored by other corporations.  Often people work within the same cooperative enterprise for years, decades, whole work-lives, and they have often known each other for as long.  All this provides group cohesiveness that is absolutely unknown in the USA, and is more akin to Japanese corporate loyalty.  Capitalist distracters of collectivist enterprises assume that they become inefficient because too many of the workers will slack off lazily and let their fellows carry them.  They over emphasize the power of rules and structure (as if a boss still existed who would let this happen) and they overlook the functioning of a community, where the workers would get after their under-performing colleagues.  The incentive to look good in front of one's fellows is dependably a better motivator than private selfishness.

Cooperatives sometimes resort to an institution call the Revival, where a cooperative will resolve to rethink and repair itself.  This something of an orchestrated revolution.  Most orchestrated revolutions are managed by the authorities who are the very problem they are pretending to solve.  In order for a revolution or renaissance to be genuine, it has to be unpredictable.  The workers may get their spouses, children and friends involved. They will kick it off with a night-time "spirit rally" with music and dancing (see shamanistic community "healing" dances which occur in many archaic societies, increase parties and get-togethers to build up the communal bond, enter into a protracted procedure of letter-writing and meetings to identify problems (including any source of unhappiness among the workers) and search for new ideas.  Individuals who don't get along are expected to bury their hatchets.  Some meetings may take the form of group therapy-- with even an outside therapist coming in-- to get everything out on the table.  Everyone is expected to engage in self-criticism, and everyone is subject to criticism from the group.  Absolutely anyone is entitled to speak and proposes changes.  There is usually one formal session where temporary leaders-- the janitor, the cook, the stockboy and the apprentice-- are put in charge.  They form a one-day executive council to consider all manner of outrageous proposals.  Another "spirit rally" closes the Revival.  Any corporation with serious troubles is expected to undertake a Revival, and other corporations do so just to insure health.  But frequent revivals are considered wasteful, perhaps self-indulgent (yes, groups can be self-indulgent too), and cheapening the process.

For a real-world example of how worker-owned industries in a capitalist world suffer the plight of bossism, read about the Mondragon cooperative enterprises of Spain.

Rev. 1 Dec 03