Tour for Economic Democracy—Italian Style

Marco Procaccini

Corporate rule. Unaccountable control of capital wealth. Poverty, unemployment and homelessness. Oppression. Depression. Dictatorial regimes. Corruption. Chronic uncertainty. Blackmail. Ecological destruction. War. These are just a few of the more than frustrating yet largely accepted consequences of our capitalist economy.

But not for very forward-thinking regions around the globe like the Emilia Romagna in northern Italy. And its economists are being invited to BC to report on their activities and exchange ideas. From June 23 to 27, two representatives of that region’s success will be speaking in Vancouver as part of a tour sponsored by the VanCity Capital Corporation and the BC Region of the Canadian Cooperative Association.

What’s so special about Emilia Romagna? “Economic democracy,” says Professor Stefano Zamagni, a leading Italian economist and Dean of Cooperative Studies at the University of Bologna, the regional capitol of Emilia Romagna (also called the “reddest city in Italy” for its strong labour and cooperative movements and its unbroken electoral success of socialist representatives since free elections were instituted in 1948). He, along with community economic development and social service advocate John McKnight of Prince George, will be the featured speakers of the tour.

The economy in the region of about four million people consists mainly of cooperative, labour-sponsored and employee-owned enterprises and self-employed artisans—or “artigianati”—operating in decentralized yet democratically managed cooperative networks.  They account for almost 40 per cent of the businesses in the region.

In addition, there are over 325,000 manufacturing enterprises in the region, making it one of the densest industrial zones in the world. Yet over 90 per cent of these firms have fewer than 50 workers. There are also over 8,000 worker cooperatives.

Furthermore, an estimated one in twelve people are self-employed, one of the highest per capita rates in the world. The entire local economy is focussed around long-term democratic planning a community involvement in decision-making.

According to national government reports, Emilia Romagna enjoys the highest Gross Domestic Product per capita, and one of the highest living standards, in all of Europe, with average wages doubling the national average and productivity and unemployment rates that are among the best on the continent. The region excels in exports of manufactured goods, especially machinery and high tech.

This, according to Paul Ginsborg, Professor of Contemporary European History at the University of Florence, outperforms the rest of the Italian economy, which, in the last 20 years, itself has outperformed the rest of Europe.

Italy is also known for its well-established public services and crown corporations. But in the 1970s, Ginsborg says, a movement developed among socialists, labour and community activists, many academics and citizens organizations that expressed dissatisfaction with the country’s highly corporatized structures—both private and public sectors—and set out to develop more democratic and accountable ways of running local economies.

After an electoral sweep by a “left” coalition in the 1974-75 elections, a huge restructuring project began to transfer control of social services and economic development projects to the country’s 20 administrative regions. This process involved setting up community cooperative ventures to deliver health and social services under the direction of locally elected councils. National government funding, however, was not cut, and no services suffered.

“The regional governments are more familiar with regional realities and more accessible to regional demands than the remote Roman ministries they replaced,” says Princeton University Economics Researcher Robert Putnam. “They provide multiple laboratories for policy innovation.  They help to nurture or moderate a pragmatic, tolerant style of policy making and conflict management.”

In Emilia Romagna, activists took the regionalization process even further: to the private industrial sector. Traditionally, local firms acted as suppliers to major corporations, a situation that was not very prosperous for these businesses, the workers in them and their community. This had to change.

Local governments began to organize cooperative structures between all of the small firms, which were then encouraged to pool their resources and expertise and develop new marketing strategies to broaden their client base. A financial cooperative, like a credit union, was set up to provide capital and manage finances for these cooperative networks.

Within a matter of a few years, says Putnam, the overall standard of living and community health had improved drastically. That is economic democracy in action.

But can it be accomplished here in Canada, where economic democracy, the historic basis of socialist economics, has been largely forgotten by the Left, hated and feared by the Right, censored by the major media and dismissed as idealistic by many business think tanks?

It certainly is possible, according to VanCity Capital Corporation Chair Bob Williams, who put together the tour.

“I have long been intrigued by the impact that democratically based economic institutions can have on community,” he said. The Capital Corporation is part of the VanCity Savings Credit Union. As a former board member of VanCity, and veteran cooperative movement activist, the former NDP cabinet minister in the Barrett government sees a lot of potential for these types of business activities in BC.