Industry Federations

November 21, 2023

Every worker council in a participatory economy belongs to a federation based on what it produces. And every industry federation is part of a federation structure with several levels and possibly also geographical divisions within the National Federation of Worker Councils, which represents every worker in every worker council in the whole economy.

The acting and decision-making body in a federation is made up of the delegates from the member councils. The number of delegates that each council can send could be based on the number of members in each council at a certain time, for instance, at the beginning of the year. The final decision making power in a federation rests with the collective of workers being represented. 

Most decisions in federation assemblies can presumably be made by the representatives with different majority rules depending on the type of decision. When a decision is extra important, or if a majority is small, a vote can always be put to all workers in the federation in the form a referendum. And for some decisions, it can be decided that each member council should have one vote. The aim, of course, is always to maximise the degree of self-management and democratic decision making, which means that federations must decide on rules about what types of decisions should be made at what level in the federation structure and how.

A federation should, to the extent possible, be made up of member councils that face similar conditions and circumstances in their production, and which are affected in a similar manner by decisions that the federation make. Also, different industries often target and produce for different geographical markets; local, regional, national and/or international, which should be considered when defining geographical divisions of federations.

The role of industry federations

The purpose of creating federations is to facilitate, coordinate, negotiate and execute the numerous necessary decisions and activities that affect not only an individual worker council in an individual year but larger groups of worker councils and often over a long time period. And to do so efficiently and in a way that maximise self-management.

When discussing annual planning, a participatory economy, like any modern economy, is very much interconnected and presupposes a lot of coordination outside of the annual planning procedures. Many production decisions and activities are intertwined, have far-reaching, widespread, and long-term effects on many different actors. A lot of important decisions and tasks in a Participatory Economy therefore need to be coordinated and organised collectively through industry federations with the help from attached federation coordination and support units. Collective coordination may even be more important in a Participatory Economy compared to a capitalist market economy considering the decentralised structure of the former, in which the main actors are self-managed workplaces and consumer neighbourhoods. 

Some industries benefit extra much from, or even presuppose, a high degree of coordination between individual worker councils when planning and carrying out production, for example the construction industry and industries with high set-up costs and scale economies in production. In these industries, the level of efficiency will increase very dramatically if certain tasks and production decisions are planned and coordinated collectively.

The worker council representatives in industry federation assemblies can and will set up and monitor separate coordination and support units whenever they find it useful in helping them perform their tasks efficiently but note that federation representatives cannot delegate their final decision-making power to anyone outside the federation assembly. Support units are workplaces that are always subordinate to federations and important decisions can only be made by the federation delegates.

Funding of Support Units and Shared Projects

Coordination support units and other shared federation projects, such as reviewing committees, industry training programmes and general running costs for administration etc., will be collectively funded by the worker councils belonging to the initiating federation. For instance, federation member councils can be requested to set aside and transfer a part of their gross revenues, or some other sum calculated in a way that fairly allocate shared costs to member councils, to a joint federation account, from which funds can then be transferred to the accounts of relevant workplaces that produce and provide the shared services.

Sharing of Risks and Costs

Worker councils may collectively decide to allocate certain individual costs and risks over time and between worker councils in a federation, and by doing so, increase fairness and comparability of performance of worker councils. For instance, it may be costs for repairs of capital goods due to unforeseen events and, possibly in some cases, planned maintenance work that occurs very irregularly and with long periods between each occasion. 

Worker councils could, for example, agree to being charged an annually calculated fee expressed as a percentage on a capital asset’s original production costs. The total sum of fees in a period should ideally cover repair and maintenance costs during the period for all workplaces in the industry. When a member council incur costs for actual repair and maintenance work, it receives funds in accordance with the agreed rules, to cover (all or part of) the relevant costs. This way, costs and risks can be distributed more evenly between years and between an industry’s worker councils, which makes comparisons of the councils’ SB/SC ratios fairer. 

The Federation Structure

The structuring and organising of all industries in the economy are obviously something that a future participatory economy will discuss and decide but to illustrate the task, we will here sketch a possible industry classification schedule of worker councils on the production side of the economy, not considering workplaces connected to public service systems or a consumer council or federation. Of course, the process of organising worker councils in a federation structure will be affected by and go hand in hand with many important and long term industry decisions about how best to organise production processes and supply chain solutions, development and implementation of production technology and the allocation of necessary production facilities, decisions about whether production should be large or small scale or whether intermediate goods and services should mainly be produced “in house” or  be “outsourced” to external suppliers. 

At the most general level the economy’s worker councils could be divided into a few main federations according to the general function they perform in the economy, such as, for example:

  1. agriculture, forestry, and fishing
  2. extraction of minerals
  3. manufacturing
  4. construction
  5. distribution, freight and transport, and
  6. other services.

Each of these main federations could then be divided into sub federations or subgroups based on a more detailed breakdown and grouping of the goods and services that member units produce or differences in production technology involved to create the best possible conditions for self-management and efficient decision-making. 

An industry’s total production volume should, if possible, never be controlled by a large individual production unit or a small group of large units. Such situations should be avoided to the extent possible to avoid monopoly or oligopoly situations. And the expected requests from one individual customer, and the expected production volumes of one individual producer, should as a rule never represent a significant part of the units in a main product category.

A federation structure based on what is produced, as has been described above, could be supplemented by a geographical structure, e.g., by regions, if and when it simplifies administration, analyses and comparisons, or if it increases the degree or justice, for example, by better reflecting regional differences in circumstances. This will be significant for federations that organise worker councils providing services since their markets are often geographically defined in a different way than worker councils that produce goods. 

In any case, the goal of the federation formation and industry division is to create the best possible conditions for efficient, self-managed and fair decisions in the annual planning, investment planning and the long-term development planning and when preparing and implementing the plans, by assembling worker councils in federations based on their main interests and the circumstances they face in their production and the issues that they need to find solutions to.

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