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150: Where is EO? — Cropp, Sammallahti, Co-ops and an EO Movement

Bret Keisling is joined by Matt Cropp of the Vermont Employee Ownership Center (VEOC) and Leo Sammallahti of Mutual Interest Media who discuss whether EO will become a movement, comparisons to other movements, and how EO might interact with allied interest groups.


Episode 150 Transcript

Bitsy McCann: [00:00:03] Welcome to The EO Podcast, where we amplify and celebrate all forms of employee ownership.

Bret Keisling: [00:00:12] Hello, my friends. Thank you for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership.

Bret Keisling: [00:00:20] In the fall of 2020, I did a series of podcast episodes called "Where is EO?" And my premise was EO isn't a movement, but we should be. You can find all of those episodes on our archives at

In the spring of 2021, I revisited the episode "Where is EO?", and I tweeted about whether EO could become a movement and Matt Cropp, who's been on the podcast before gave a response and I'm really happy that Matt is joining me today for the conversation.

Matt, thanks for coming on the podcast.

Matt Cropp: [00:00:58] Pleased to be here, Bret.

Bret Keisling: [00:01:00] So, then you mentioned a parallel between credit unions and employee ownership on Twitter. And when I think of credit unions at all, but especially in the employee ownership space, I think of Leo Sammallahti, who's our first truly international guest.

I tag Leo on the tweet, Leo responded, and Leo you're also joining us on the podcast today. Thank you.

Leo Sammallahti: [00:01:26] Thank you for letting me be in this podcast.

Bret Keisling: [00:01:29] And you are calling in from North Belfast?

Leo Sammallahti: [00:01:32] Yes. Belfast Northern Ireland.

Bret Keisling: [00:01:34] So, you're calling us in from Belfast Northern Ireland. Thank you so much. I really appreciate that.

Leo Sammallahti: [00:01:40] Thank you.

Bret Keisling: [00:01:40] So what we're going to do real quick, Matt, tell the audience, many of them know you, but tell the audience who you are and what you do.

Matt Cropp: [00:01:47] Yup. So I am the executive director of the Vermont Employee Ownership Center (VEOC). We're a non-profit in Vermont, one of, a number of employee ownership centers around around the country. And then, beyond and supplemental to that work, I'm involved with a number of co-op type organizing projects around real estate cooperatives, a co-op brewery, and local investing, stuff like that.

And yeah, there's a lot of sort of gray areas, but really what ties it all together is a broad interest in this kind of alternative, broad based ownership structures.

Bret Keisling: [00:02:14] Excellent. And Leo introduce yourself, particularly to our American audience.

Leo Sammallahti: [00:02:19] Hello, I'm Leo Sammallahti. I'm originally from Finland and I earn my living as a worker member of a worker cooperative called BME. And I'm also an editor of a online magazine called Mutual Interest [Media], which is owned by the writers and the readers as a multi-stakeholder co-operative.

I'm very interested in co-operatives and other forms of more equitable and widely distributed ownership.

Bret Keisling: [00:02:46] And you focus on them internationally, correct? You're tying pieces together around the world.

Leo Sammallahti: [00:02:51] Yes, absolutely. And I would like to mention that in Finland, both the largest bank and the largest grocery store chain are co-operatives. They're consumer owned co-operatives and I am very optimistic about the prospects of co-operatives and other similar sort of widely owned businesses that are global in their membership.

And that is one of my many passions.

Bret Keisling: [00:03:16] Excellent. So let's turn to the question that has brought us all together, and Matt, I'll start with you like how we did on Twitter.

And let me just say, if you're listening Matt and Leo are both in my Twitter circle and there's a number of people they're promoting employee ownership, but they're also doing really smart policy stuff across the board. So I encourage that you follow those guys wherever you can on social media, but particularly on Twitter.

With that, Matt, I believe that employee ownership is not a movement. I believe that we have the pieces in place of in the civil rights context, it's a lot of different groups coming together. We have a lot of different groups in the LBGTQ communities, lot of different groups and interests. We have all of that. We have a lot of employee owners.

But we're not a movement in my opinion. And really not at this point on a path to become a movement, take it away.

Matt Cropp: [00:04:07] So when you made that comment and and the thing that immediately triggered for me, it was something similar was my kind of entry into this whole world of the alternative ownership was through credit unions.

And I graduated from college and into the teeth of the 2008 financial crisis and learned about this idea of, wait banks that could be owned by their depositors? What is this? That's fascinating! Why don't we have more of this? This seems like a very sort of interesting alternative.

And so I went down the rabbit hole and ended up getting my master's degree in history, studying the history of the cooperative movement and cooperative finance, particularly. And one thing that kind of struck me from there that feels like in some ways there's some parallels to the employee ownership world is the question of how did these things evolve and how do they mature and how does the kind of character of the both institutions and the people involved change over time?

So with credit unions, they started out very much as a movement that had certain kinds of goals around giving people of limited means access to credit undercutting the abusive practices of loan sharks things like that. And so it was something that was really driven, there's a certain kind of level of kind of passion and internal drive to do this for the impact it would have on society among many of the people who are involved.

And then over time, and some of the sort of scholars have looked at this have systematized their understanding of all of it a bit, you shift into more of a professionalized mode. Where you have the institutions, people can come into it with it being, okay, this is just a professional choice. I could be working for a bank. I could be working for a brokerage. I could be working for a credit union. What's important is my skillset, not necessarily my sense that there's this kind of broader mission. And then there's the opportunity to then once people are in inculcate them to the mission, but the mission isn't what brings most of the people to the table.

And I think with employee ownership, and it depends on which corners of the world that you're talking about, but yeah, there's probably some similar elements to that. Where you have a first-generation of folks are in the ESOP world around, the experimentation with the model in the fifties and sixties. And then, the kind of administrative, legislative pushes to try to wrangle it into law and with ERISA in 1974. And then, the sort of question of what is the people's kind of vision of it, their connection to it beyond say, just the company or their their their own share of the equity of the company they work for.

And so I think, certainly there's in the credit union world. I think this is where the parallel kind of comes into the modern era, is I think that, yeah, most people in the credit union world no longer refer to it as the credit union movement, they're referred to it as the credit union industry or maybe the credit union space field.

But the, I think that there is a subset of people who have the intrinsic kind of that more intrinsic motivation around. Yeah, okay, there's a vision for what credit unions can do beyond the sort of keeping them running, doing the sort of day to day. And those, I think, my sense is that those people are who constitute the credit union movement. Not everyone in credit unions is part of the credit union movement, but there's a subset of people who hold that sort of deeper vision for what's what this type of institution makes possible.

And I think it's similar, in my kind of understanding and estimation, in the employee ownership world, where there's a lot of folks who are just okay, let's trying to make things, make things function well. And that's an important kind of, that's an important and vital role that shouldn't be discounted, right?

Once you've hit a level of maturity, you want to be able to manage risks and everything else appropriately. But there, there is also these subsets and pockets of people who are put pushing beyond. And that's of the sort of new ideas come from. That's where the kind of new initiatives, that's where the big opportunity is that might be beyond the imaginations of what seems possible in the particular moment can come from and be realized by.

And so I think that there is an employee ownership movement, but employee ownership itself isn't inherently a movement. And so it's about finding who in that world is already in that movement, orientation. How do you network them together? How do you organize them and how do you expand that base.

Bret Keisling: [00:07:53] Matt, before we go to Leo, let me ask, would it be -- and for anyone listening, I'm not trying to speak shorthand. I'm not trying to equate when I speak of other movements, I'm not I'm not trying to give short shrift et cetera, but is it possible that where employee ownership is might've been where the civil rights movement was in the thirties, forties, and fifties. We generally think of the movement maybe as the late fifties, the sixties, et cetera, et cetera. So is employee ownership just at a pre movement stage, if we can get the movement?

Matt Cropp: [00:08:27] I don't know if it's even pre-movement, I think there have been moments where it has been. But I think, the other question with movements in particular is what other movements do they connect to?

So the civil rights movement had an economic justice component to it, though. Martin Luther King was an advocate for kind of credit unions and other forms of cooperative self-help in addition to governmental reform. And this is something where, for instance, looking at the worker co-op space, there's definitely, you know, there I'd say in terms of employee ownership, it's far more kind of movement oriented than ESOP side of things. To the point where, you know you go to conferences and you look at statements, put out by the organization where, you know sometimes that are going to touch on issues that are related to sort of their vision of kind of intersectional economic justice. Where you have, commentary on immigration laws or in addition to things that directly impact the particular structure, a lot of the folks in the organization see themselves as connected to these broader movements for economic justice, for which worker cooperatives are one tool, but not the only tool. And that there's some space for building alliances of mutual support that go far beyond the particular strategy that they're advocating for.

Bret Keisling: [00:09:30] Leo, Matt has given you an awful lot to work with. Why don't you give your view of credit unions, perhaps internationally, and then tied together with Matt's comments about the movement? Take it away.

Leo Sammallahti: [00:09:41] Yeah, so it's funny that you mentioned that you associate me with credit unions because I got introduced to credit unions through Matthew Cropp's article, I think from 2011, where he simply compared credit unions' and banks' bankruptcy risks during the 2008 financial crisis, which were very favorable to credit unions. And I got very interested in credit unions as a result of that article, more than anything else.

Regarding the movement point, I think in Europe there is the credit union movement. It's not so much a separate moment, but it's part of a wider co-operative movement. And when it comes to the co-operative moment, I think that co-operatives historically have been, there has been always a co-operative moment, but they have more been an organizing tool for other co-operatives.

So, for example, in Finland, you had the labor movement and then the agrarian sort of right wing movement that set up their own co-operatives and you didn't just vote for one party every four years, but actually the grocery store that you went to was either a grocery co-operative associated with the labor movement, if you supported the labor parties, or it was a agrarian right-wing grocery store associated with -- and the same went for banks, which were saving banks, very similar to credit unions in the United States.

And this is not just the case in Finland, but it's also a case in elsewhere in, in Europe. So in Italy you had the Catholic associated co-operative moment with their own co-operatives and banks and others. And then you had the left associated ones. And in the last few decades, those sort of politically associated corporate moments have pretty much faded away and they have united into one co-operative movement around Europe, at least, and I think elsewhere in the world as well.

So co-operatives including credit unions and similar institutions -- banking, sort of co-operative banking institutions -- they were more of an organizing method for movements, more than a movement themselves. Although there was a, there was an element of them being movement themselves as well.

And regarding the employee ownership as a movement, I think a lot of it probably has to do with [Louis] Kelso, who you are probably more familiar with them than I am. But with Kelso, I think his goal was very much not to set like a partisan mass movement, but rather approach the sort of small group of decision makers who actually make decisions and intentionally make it so that it's not partisan and that it's very much in the sort of background just decided on. And I think that approach also has its benefits, because if you're very associated with some partisan movement, then when the sort of people who are not supporters of that movement, when they come and take power, you might be in a bad position.

Whereas if you have support among all the people, all the decision-makers, regardless of their partisan association, you are more in a better position to be advanced regardless of what administration is the case.

That being said, this is also the case with credit unions in that, in the United States, no matter which political party you are, they are fairly supportive of credit unions and employee ownership. And I think that can be a good sign because, one thing that America is certainly not lacking of is ideas that can unify people across the partisan wide.

So when it comes to building a movement, I think that's something good to keep in mind, in that I would say that perhaps, more than sort of Employee Stock Ownership Plans, worker cooperatives are probably more partisan and associated with politically associated with the left wing politics. And that might have contributed to their relatively less success compared to Employee Stock Ownership Plans.

But I'm not one to make a judgment about what approach works better because the sort of partisan approach has worked pretty well for co-operatives in Europe. So I'm not saying that either approach is good or bad, but both of them have their positives and negatives.

Bret Keisling: [00:14:03] Leo, you have just a very successfully done a little bit of dance we all do, which is keeping everybody in what I call the EO sandbox together.

Matt, I have a question for you that builds on what Leo says, but first I just, for those who are listening, Louis Kelso and you referenced him so I just want to explain to the listeners, Louis Kelso is considered the founder of ESOPs in the United States. He formed the first one, I think, in the 1950s. And to your point, Leo, about. His approach. He really was fundamental in getting ERISA passed or amended in '74 to include employee ownership. So that's a little bit with Louis Kelso.

Matt, here's my question for you. We try very hard to be agnostics in employee ownership and we just mean, not religiously, but ESOPs, co-ops, collectives. We love all of our support. Pat Toomey, Republican Senator from Pennsylvania, where I am is a conservative Republican Bernie Sanders from Vermont regardless of what you think of Bernie, nobody's done more to grow employee ownership.

So when Leo talks about labor, he mentioned maybe the Catholic sponsored co-ops. We spend a lot of time trying to be agnostic across the board and speak with all of our supporters. At some point is a barrier to the movements, if labor gets involved, is that a barrier to some people?

Matt Cropp: [00:15:22] I think there's an interesting strategic question there around, whether there -- what are the relative merits of having some sort of more kind of centralized sort of unified structures versus what are the benefits of having more of a system with multiple centers?

And I think what Leo brought up, the Italian example, I think is a really interesting one where you basically had three major federations, the ones that were, that was associated with the Catholic, the ones that were sort of associated with the central left, and then the ones that were associated with kind of like the more far left communist party stuff.

And so each of those kind of had its own, those institutions were affiliated with those different those different things, and so they could like advocate in some ways to their own bases. And if there were certain points of agreement that they had, you suddenly had a coalition around it that had very broad based support.

I think it always really is a fine balance of on the one hand, you want to have be able to present a fairly united front on certain things, but on the other hand there's always going to be some fundamental disagreements of values among people. And I think it's -- that can either be papered over, or you can normalize that into things that are almost, that, that create caucuses or structures or institutions for people to come together with those who are their most, their ideological allies. And figuring out the ways to allow for that while not turning that into something that's a circular firing squad that weakens everybody in the movement is a thing that is, I think as an, almost a universal question, right? For any sort of broad-based -- broad-based movement that's going to inherently have enough support that it's success is reliant on being an alliance of factions with potentially different worldviews.

I think in the employee ownership world that kind of comes up in terms of the question of, in terms of which institutions should be pushing and pushing what. And there's certain things where it's, if you want to anything that you want it, anything that's going to have a coherent center to it, you're going to need to have some boundaries around what's inside the camp and what's outside the camp.

And I think in terms of like employee ownership, conceptually is a very broad tent. Where it's okay, we want to have people who work in companies have the opportunity to potentially have their voice heard and share in the wealth that's being created by the activity of the company on the basis of their work. And there's a variety of ways to achieve that. And there's a variety of reasons why might someone might rationalize or justify why that is good.

And so I think it's, it tends to be very, it seems like there's a mix of, you want to have the institutions that are the sort of broad united front, but then you also have the spaces for the people who can find their fellow travelers and do advocacy both within the broad united front and also sometimes outside or in parallel, right?

Bret Keisling: [00:18:01] Matt, that's great. And we're recording this on Zoom and I broke into a big smile because you used fellow travelers in such the perfect way. And I'm like, that's partly what we're thinking about. There's a far right conservative listener. who is oh no! et cetera, et cetera. Leo want to pick up on anything Matt said?

Leo Sammallahti: [00:18:19] Yeah I work in marketing and maybe makes me a crook, but sometimes I do feel like there is also important when it comes to this broad bi-partisan support, the language we use. So if we're going to pitch the sort of employee ownership, we can, on the other hand, say that we will make everybody a business owner, which is appealing more than the right leaning people. Or we can say that listen, this is a way for workers to own the means of production, which is, obviously, leaning to the left.

And here if you have this sort of broad, say a simple website for employee ownership, you have to make a decision on what sort of language you use. And if you use a language that is very broadly appealing, it might be that it does not appeal to anybody with the sort of excitement as if you use some sort of partisan language. Or it might be that there are situations where you cannot avoid using, choosing to use language, that has some sort of partisan resonance in it.

Yes, I would add that the language we use when we advocate for employee ownership, that can be something that where it might make sense to have different groups using different languages to advocate for the same ideas, for the ideas to get broad support.

Matt Cropp: [00:19:38] One thing I would like to follow up on that, is I think that there's also how we conceptualize what a movement is has changed with the media environment and with the sort of way that institutions are organized.

When we were in the age of mass media where you had a handful of outlets and it was relatively capital intensive to get information out, any sort of movement needed to have significant infrastructure and scale to be able to, whether it was like, okay, you need to have your own print shop or be able to afford printing services and, be able to have committees that and local groups that feed up through this party structure or what have you.

And then like in society, generally, you could point to what felt like a fairly dominant culture. And so I think a lot of 20th century movements there's been, or at least a few kind of key times where you had this sort of move--, so the movement was an attempt at creating a counterculture against the dominant culture.

I think what has happened in the last generation has been there's no -- the sort of collapse of a sense of that there's a single dominant culture that the idea of a single counterculture, then, the binary there doesn't work anymore. Instead what we live in is this constellation of subcultures that have relationships to each other, but, and have their own sort of specific languages and values.

And so then in some ways, when I think of kind of movement building going forward, it's less about trying to build the sort of one, the one big thing that encapsulates everything and it's more about, okay, how do you create the space that the different sort of sub, sub-cultures that have some shared goals, but maybe different values and different languages, can link up strategically to get accomplished what they want to get accomplished without feeling that the inability to form a single thing that sort of integrates everything, which is a failure because that's just not how the world works anymore.

I think that's one thing that, especially in terms of some the media theory and other things that have come out of the platform co-op conferences and conversations over the past decade or so and some other kind of they're just developments in the sort of media and cultural environment.

I think that's become increasingly clear to me that the goal is that's more polycentric thing rather than monocentric.

Leo Sammallahti: [00:21:46] One big change that has happened, especially in Europe is a move away from the sort of holistic ideologies and a sort of large network of mass membership organizations centered around them and a move towards more small activist groups with one issue goals. And this sort of environment might be more friendly towards something like employee ownership, where it's a sort of quite narrowly focused on a single goal. It's a sort of one issue organization.

So in that sense, this move-- this change in how movements work from the sort of broad based ideologies to one issue, one issue organizations and movements, I think that can be beneficial for employers ownership movement. Or is it a movement? We don't know.

Bret Keisling: [00:22:36] It will be, darn it. And by the way, I'm a 57 years old. I got ten years left in the field, fifteen? We want to say, generously, 25 years? And I really want to look back and say, we became a movement, so it will happen.

Matt, let me ask you this, I'll tee something up with you and have you talk about it and then Leo if you can contrast internationally or share your thoughts.

Matt, one of the conversations that, that you and I have had separate from this podcast is-- and I want to put this in the context of all of our organizations and advocates are doing a great job and in many metrics, employee ownership in the US is robust. That said we're not doing a great job interacting with the employee owners as a whole. And, for example, there are 10 million employee owners in the United States, 7 million of them work for large, publicly -- large public companies, so let's discount that, we're down to 3 million. And this isn't a knock, our major organizations and the state centers all have sold out conferences time and time again, but they're probably only servicing 15% of the employee owned businesses and you're certainly not getting all of the people to go to the conferences. If you have a thousand employee employee owners at a company, maybe 5 or 10 are going to a conference.

What effect would the employee owners themselves have in creating the movement? And is that something we should find a better way to engage them?

Matt Cropp: [00:24:04] One thing that I do when I look at the kind of array of institutions of the employee ownership world, right? The trade associations, research groups, advocacy groups, there's a pretty robust kind of set of these institutions. But one thing I do think is missing-- so there's organizations of organizations, there's organizations of advocates, there's organizations of academics, but there, there isn't really anything that is like an organization of individuals, of individual employee owners themselves, right? That, yeah there's some little things like we've supported a group of employee owners in Vermont that's been, part of its premise is building, is creating opportunities for people, between companies to meet each other doing community service activities and stuff like that.

But I think that there's some real opportunities in terms of, both kind of people connecting to each other in the context of their identity as an employee owner and figuring out what are the, both what are the ways that we can support each other and learn from each other locally, that could be very practical things that come back to work and inform how people approach their job and their role. But I think there's also some potential there for the kind of advocacy stuff that you know, is not only -- that goes beyond the, hike the Hill type we're pushing a particular bill versus the sense that there's oh, that there's actually, maybe this somewhat coherent interested block of voters where they're going to get more enthusiastic if you're going to support things that advance employee ownership and if you are, blocking those things, you're going to catch some heat for it.

So I think in terms of if I were looking out over the world and could wave my magic wand and say, all right, what would be one new thing that I could create an employee ownership space in the US it would really be some sort of robust very engaging membership organization for individual employee owners.

Bret Keisling: [00:25:48] And Matt, before we get to you, Leo, Matt, as you're aware, I've talked on a number of podcasts and it's really simple. The League of EO Voters and how transcendent would that be if there was an organization where state and local elections, national elections, everybody got a little employee owner survey. And what I like about that is a, I love the idea, but a League of EO Voters, everybody gets what that means. That would be it.

Leo talk to us about internationally, are employee owners engaged in a different way? Just share with us your thoughts.

Leo Sammallahti: [00:26:21] With Europe it's hard because I cannot follow non-English and non-Finnish speaking media. So I am not sure whether I am correct, but my impression is that even less so than in the United States, there isn't really any movement towards employee ownership or there isn't organizations and a sort of social media ecosystem, like you have been building, Bret, built around employee ownership. I would say that's further.

I would like to come back to my point about co-operatives as an organizing tools for other movements. And this is where I think could be very interesting because Kelso had very good ideas and very interesting ideas about how employee ownership could be a new organizing tool for the trade union movement and the labor movement. And the labor movement is absolutely desperate to find new ideas on how to revitalize, it has been in decline all around the world.

And this is perhaps a way to build this movement. So could it be that this League of Voters and organizations could be built around sort of union members who also have ownership in their businesses? Could that be one way to start building the employee ownership movement and perhaps instead of League of Voters, it could be league of union members who would vote in their union elections and their union representatives to advocate for this.

And of course I said instead, but obviously these are not mutually exclusive, quite the opposite. This is one way to start organizing this movement around employee owners.

Bret Keisling: [00:28:02] Matt?

Matt Cropp: [00:28:03] Yeah, no, I think that there's some really interesting kind of questions around, I feel like with the, with Europe, the kind of labor movement is a little bit of a different character because it has always had this inherent or has had much more of a explicit kind of formal connection between a political party and the sort of the institutions of the trade unions. Whereas in the US, the Democratic Party is generally seen as like the labor-esque party in the US but there is there isn't nearly the level of kind of like formal connection between the two in the way that there is in Europe.

But I think it's, there's definitely interesting conversations that happen around labor unions in a variety of ways. There's on the co-op side, there's been this kind of attempted sort of partnership between the United Steelworkers and the Mondragon Cooperatives and which are, big work called complex in Spain to support some stuff and they've been active, I think, in Ohio, especially. We've certainly had some conversations here and there, and Vermont's a fairly low union density state generally, fairly rural, not a lot of kind of old line industry, but around particularly more like the trades and those sorts of those sorts of craft union type things where, you know, thinking about folks who work as contractors for a particular -- union contractors -- for a particular company and the person who owns it selling does it make sense for, in some ways the union to be able to provide some support for a worker owner buyout of, by their union members, of that sort of company.

So I think that there's, there are some real, an untapped opportunities. I think there's also some kind of episodes that have caused some friction and mistrusts over the years. I think one of the big classic ones was was it there's like an airline, maybe American Airlines or something that went through a bankruptcy in the late in the early nineties or late eighties and, yeah, they basically, the ESOP was kind of part of one of the concessions but ended up getting wiped out and so the union that you left, some kind of bitter taste in the mouth.

I think there's a fine line between, what's like a useful point of collaboration and what starts to feel almost like a little, maybe competitive, and there, there's different strategies aimed at the same thing, which is empowering employees and making it so that there's accountability in the workplace, making sure that the compensation is fair. And so I think the goals are very much aligned.

But there's a lot of, I think there, especially on the ESOP side, I think there's more sort of goodwill on the co-op side, but I think there's still a long way to go and a lot of work that needs to be done build trust, understanding, comprehension, and a sense that there's really space strong space to work together and have, or at least have the trains running in parallel.

Bret Keisling: [00:30:28] And Matt, in the United States, certainly historically labor has been aligned with the Democratic Party, at least in general thought, and on the left side of things, but even in the 2016 presidential election a good number of at least rank and file members of labor came out for the former president.

So there are competing interests within labor, I guess is what I'm trying to say. So it's still, I guess it all comes down to juggling the competing interests.

Matt Cropp: [00:30:56] Yup. Yup. And certainly you have the kind of the sort of more kind of like internationalist focus on, of labor around, how do you, and I think there's especially for first world countries there's often the temptation for kind of protectionist nationalism that can benefit certain sectors of the working population that there's certainly a big kind of the populous right, recently, has really latched onto and an attempt to frame themselves as the party of the real working class or some section of it.

Again, it's complicated because just like with the employee ownership movement such that it is the labor movement also definitely has factions and different competing interests and significant disagreements among, a lot of the folks in it.

So I think similarly, this question of, okay, where are the alliances possible? And is it with the whole thing? Is it with particular pieces? And are there even multiple types of alliances possible? And if that's worth pursuing, which I think, I think the unions play a really vital and important role in our broader economic system. And yeah, I would say certainly I think that there's, that those are opportunities worth pursuing, but it's going to be, some tricky conversations, I think, if it goes beyond the surface level.

Bret Keisling: [00:32:04] Well, we certainly know how good Americans have been doing at civil conversation these last few years-- but that is the point and it's also where we've got to bring our country and perhaps the world back.

Leo, what are your thoughts?

Leo Sammallahti: [00:32:16] Yes. regarding the unions, there's actually quite an interesting point and it might be a bit of a side point from this discussion, but that unions actually have quite a lot of pension funds that have ownership in businesses. So it would be an interesting discussion to perhaps, probably not this discussion, but is that a form of employee ownership?

And regarding the union movement and the employee ownership movement, in Nordic countries, the labor movement had a very, the periods in the very beginning of the last century where they were quite positive about employee ownership, but they actually turned against it.

So in Finland, for example, the labor movement and the Social Democratic Party were quite opposed to worker co-operatives due to negative experiences they had. And the negative experiences were not so much to do with bankruptcies, but they actually had to do with the fact that often when a worker co-operative was formed, the founder members became employers and they did not allow new workers to join the co-operative, so they became the enemy.

But at one point in Finland, and in other parts of Europe too, in Finland, all the ports of the country were actually controlled by worker co-operatives. These worker co-operatives emerge in large parts of Europe when the labor movement had to think about how to pay a wage for a job where you have a simple goal that you have to achieve.

So let's say you had a ship and you needed to unload all of it. Now, if you use some hourly wage, it's not a great incentive to work very effectively because obviously they want to work as long as they can. So what they came up with was the solution to form worker co-operatives. And at one point in Finland, all the ports were basically by worker co-operatives and the largest port in Italy as well was controlled by worker co-operatives. So at one period of time, there was a brief period of time when the labor movement in Europe was quite pro worker co-operative. But, for the reasons I mentioned earlier, this moment faded away and they went for consumer ownership instead.

Regarding the movement point, I think one good way to start doing this would be to see different movements that they are like a labor movement and seeing how they could use employee ownership, perhaps as an organizing tool for their own purposes and this way build a movement around employee ownership also.

Bret Keisling: [00:34:48] Leo, first of all, that was great. And I laughed a little bit because you talked about at the end of the last century and I'm old enough that I went to -- wait the 1890s? And you meant the other last century.

Leo Sammallahti: [00:35:01] [Laughter.] Yeah. Sorry.

Bret Keisling: [00:35:02] No, that's on me.

You mentioned pension funds, union pension funds, buying companies on behalf of their employees or union members converting into employee ownership and you said maybe we don't go there. But, darn it. If you guys are amenable, let's go there for a couple of minutes. And the reason for it, I mentioned Jon Shell earlier who is with Social Capital Partners in Canada. And the reason he was on the podcast, he and Marjorie Kelly from The Democracy Collaborative, is because they arranged the financing to turn Taylor Guitars, which is an internationally well-known guitar company, into an employee ownership --into an ESOP -- and it was funded by the Healthcare Association of Ontario [Pension Plan] . They call it HOOPP.

So here's the first time I'm aware of a pension fund funding an ESOP. Matt, are you aware of any unions who have done something similar? And I know I'm a simpleton, but that sounds like a brilliant idea, a way to bridge the gap. Do you have thoughts?

Matt Cropp: [00:36:01] There's definitely been -- and actually my coworker Don Jamison definitely, probably has more thoughts on this kind of going further back -- but yeah, that's been, that question of pension funds and particularly union pension funds as a source for employee ownership buyouts has been I feel like for a lot of folks on the 'that would be real nice if we would make it happen' list of things.

And so that news about this pension fund funding ESOP for the first time was pretty encouraging.

You know,, one of the other things, so, there's the kind of, when we're thinking about movements and resources and infrastructure there's the kind of like individuals doing advocacy, building their relationships with each other. But I think there's also the question of like, how do you start to make, move material resources into the correct position to make impact.

And I think that, the sort of amount of money that's in pension funds and, if there's, if it's able to be good mechanisms for being able to bring that to bear in terms of increasing employee ownership could be a hugely impactful thing if done.

And circling back to that sort of a little bit of Kelso's vision and some of the other things, he is the kind of inventor of the ESOP structure, but he also had this whole additional universe of things based on his view of economics, of, Consumer Stock Ownership Plans [CSOPs] and new SOPs or --.

And I think that there's some of those things are worth coming back to and looking at in terms of saying, okay, what would be the, what are the opportunities to start building deepening kind of relationships or strengthening the model beyond what's been, crystallized into the current law.

And I do think one thing that's related there is the question of, one of the criticisms that people sometimes make of, particularly, ESOPs is the idea of you don't want to have, you know, a significant portion of your assets held in just one company, right? Diversification is important and all of that. And there's been some studies that kind of pushed back on that around all right, especially if you're receiving this as a benefit, there's one element and then increased productivity and all of that. But I think that there's some really interesting possibilities in terms of deepening those relationships between employee owned companies is, and that's, I think also part of this question of like, how do you extend people's vision beyond their one company?

If there were opportunities to say, all right, you have a bunch of companies that are 75% owned by their employees directly. And then 25% of the company is owned by something that all of the employees of all -- like a mutual fund -- that all of the employee-owned companies own. So that it's yeah, so that they have some diversified risk because they're exposed to a number of employee-owned companies, but what's the same as all of them are say ESOPs or something like that.

And there's things like that kind of take it beyond the existing infrastructure and build another layer that I think there's some really interesting opportunities to think about. And, and then, but in order for those things to go from, oh, that could be a cool idea to, okay, that's something that's legally possible and not only possible, but relatively straightforward to do. You don't have to do a lot of elaborate legal hacking to make it happen. That's where some of this kind of advocacy and in the broader vision comes in. To say okay, how can we build these things up, build mutual support and reinforce the strengths that are already there and pool resources that maybe even a piece of that is that pot of money is aimed at creating new employee owned companies or financing new employee on companies on favorable terms.

I think that there's, you know, that there's these -- obviously capitalism is a vitally important piece of the question here, because the point of this is to make capital ownership available broadly rather than narrowly, and then but how do we create the space for that sort of broad problem solving and actually take things from that's a cool idea, to that's a real institution that's actually bettering people's lives? And I think there's a lot of different paths to that, but it's, to me, one of the big questions.

Bret Keisling: [00:39:34] Leo, anything you'd like to add?

Leo Sammallahti: [00:39:36] Yeah, and if we think about, if we would have an employee ownership movement, one of the questions, is that, okay, what would it do?

What would it do to organize and campaign, and obviously a sort of league of voters and impact on legislation on local and federal level. That's obviously a great thing. And that's somewhere where employee ownership movement has actually, or is it a movement or not, but it has made quite a good impact.

But one underutilized way of organizing, I think, is that there is democracy outside local and federal government. So for example, pension funds that we mentioned earlier, their trustees are often elected democratically by the policy holders. And if you're a member of a credit union, you actually have a vote in electing the board of directors. In an insurance mutual it's the same thing and in a trade union too. And I think employee ownership movement could be exemplary movement in utilizing these other methods of democracy.

So they could participate in a pension from trustee elections and campaign on these pension funds, utilizing their capitals to support employee ownership. Or go in their local credit union board elections and stand there and campaign there for these credit unions to somehow advocate for employee ownership.

So one question, perhaps to our listeners, could be that, what could it be that these pension funds and credit unions and insurance mutuals and trade unions and other democratic institutions outside the government, in the public sector, could do to support employee ownership? And that's something, some sort of thinking that I would be very interested to engage and hear other people's thoughts about.

Bret Keisling: [00:41:19] Matt, anything you'd like to add to that?

Matt Cropp: [00:41:21] No. No, I think that's a, yeah, that's a pretty, that's pretty right on. And then, I've certainly seen opportunities at the small scale here in Vermont. The credit union that I'm a member of locally attempted to finance a small worker co-op conversion deal, ran into a bunch of regulatory hurdles and then discovered that they were able to, make equity investments in other co-ops due to obscure little bit of state law. And that sort of was able to turn into sort of an ally in the, and that the ability to say, hey, when we're looking for friendly financing for a little company wanting to, wanting to sell to its employees that makes my job as the, of promoting this idea much easier, because I can point to those kind of friendly sources of financing. And, part of that is because of that is an organization that supports this kind of, broader community wealth building strategy and is accountable to its members democratically.

So I think there's a lot, yeah , we can think of in America, we can oftentimes tend to think that the the point of that you have democratic influence is your vote. And that anything involving in economy is your dollars, right? As a consumer or maybe as an investor, but usually not, usually people are just gonna throw money into a, index fund and then, have no agency from it.

But the reality is that there is this whole array of other places where influence can be exerted and sometimes even to a certain extent, outsize influence, because there isn't otherwise a lot of engagement around this. So going to a mutual insurance company, going to, credit union and saying, hey, here's an idea for something that's going to support and foster the kind of economy that you're designed to participate in.

What can you do? What do you think? Are there opportunities and, both there's the carrot and the stick of the carrot of, hey, here's some new policies that could be actually quite innovative and we just have been nose down on just operational things. On the end of the stick of, if there's organized groups of members who are who are encouraging that if it's just brushed off, you might see a board election challenge or something like that, that sort of really raises the question in a more formalized way.

Bret Keisling: [00:43:16] Gentlemen, we have covered so much information and I really appreciate it. I'm mindful of the fact that I host a podcast, I'm not a telethon, so I do want to bring things to a wrap up. But boy, this has been just a wonderful conversation!

I want to give you a chance both to-- and we'll start with you Leo -- to just sum up anything that you'd like, but I'm wondering with all of the pieces that are already in place and some of the things we've talked about that hopefully people will step up in time.

I'm saying, hey, how do we become a movement? And now I'm thinking there may be a time 5, 10, 20 years down the road where we're just saying, oh my goodness, we became a movement. That there won't be any direct line in the sand, but it's just keep building what we're doing.

Leo, sum up anything that you would like to sum up before we wrap it up.

Leo Sammallahti: [00:44:07] I think that to make a movement, perhaps we should think about what are the exact sort of campaigns and things to organize around. And once we're organizing around those specific goals our movement emerges out of it. And I would like to briefly mention that Matt, I believe discovered this obscure law that allows credit unions in eight states to make equity investments in co-operatives, including worker co-operatives and alongside Vermont, this includes Arkansas, Illinois, Kentucky, Montana, Nevada, New Jersey, and New Mexico. So if any of your listeners are in those states, you should absolutely join the state chartered credit unions there and start campaigning for them to make more equity investments in the co-operatives, because the only credit union that is doing this is Matt's credit union, Vermont State Employees Credit Union [VSECU].

Bret Keisling: [00:45:02] Leo, thank you for sharing that. And Matt, he just opened one more rabbit hole before you give any summaries you'd like, you got to tell us how that came about. That is a very cool tidbit that you forgot to mention.

Matt Cropp: [00:45:15] Yeah, yeah. So it was basically with, there was a worker cooperative conversion where the seller wanted to sell to the employees. And we at the VEOC were supporting the employee group and talking to potential sources of financing. And one of the things, the places that they put in the loan application was the state employees credit union. It first, it hit a wall because of the there's certain regulations around lending in terms of personal guarantees and other things are something that very commonly comes up in employee ownership deals, particularly co-op deals where it's challenging to do personal guarantees for somewhat complex reasons. So we ended up, they ended up using another lender that -- there's a [Community Development Financial Institution] CDFI that's less regulated and was able to deal with that situation better.

But it was running into that unexpected barrier that led to a little bit of research and figuring out that this law existed and the creation of their, ultimately, the creation of their co-op capital program.

Bret Keisling: [00:46:01] Matt, I've got to tell you and Leo, I'm so glad that you pointed out, there are a lot of people in employee ownership who are impactful and it's sometimes it's very public and sometimes people just are doing what they do. And I equate Leo with credit unions that he learned from you. And then you, through your role in the Vermont Center came up with this method under the law that nobody knew that allowed this to happen. And it's portable. And my goal with the podcast is bringing the voice public, and hopefully someone in different parts of the country will hear what Matt Cropp is doing or what Leo's doing internationally and port it there. You're not looking to keep anything secret that you're doing, you would love it to be adopted nationwide.

So Matt, let me give you an opportunity now to sum up the conversation in the movement.

Matt Cropp: [00:46:54] Yeah, yeah. So I think one thing just to circle back to the, the question that kind of kicked us off around is employee ownership a movement? What does it take to be a movement? One thing that when thinking about what do modern movements look like and what differentiates them from previous movements that I think is really helpful framing is the work of Zeynep Tufecki, who you can find her on Twitter, she does a lot of really interesting stuff, but she wrote a book in 2015 called Twitter and Tear Gas, which was the, both about the strengths and the fragility of kind of network movements, which, things like the Arab Spring, Occupy, other things that are have been really facilitated by this new world of media environment.

So I would say, as we think about what does it take both, what does it take for employee ownership to be a movement? And what would that even look -- to do so with the recognition that the movements of today and tomorrow are going to look very different in many ways, but also have some, certainly some similarities from the movements of the past, right? And so to not judge, not necessarily judge our sense of success or failure on those kinds of those older models when there's new, less well tread opportunities a nd paths that we can take on that front.

But I think that overall, yeah, I think for me really it's a question of, what are we trying to achieve? We're trying to achieve a world in which, no one is is in a position where they're destitute, right? We want to have a world where everyone has an opportunity to both build wealth and economic security through their work. To not have to be wealthy first in order to be able to do that.

And also, I think the second piece is for work to be meaningful and to be to be an experience and a place that you go that's not something where you're just desperate to get out as soon as you can, but somewhere where you can feel like, your own vision for the world and your energy is going into something that you're a true part of.

And I think that there's for a lot of people, their work isn't that. And I think we spend enough time and energy at that every week for years and decades that as human beings, I think we deserve to have meaningful and productive and joyful even work lives.

And so I think employee ownership is one of the, probably best ways of accomplishing that. And so I think that those two things that, the economic side and the sort of subjective kind of work-life engagement side are really, in my mind, the two things that employee ownership is trying to achieve.

And so if we can say in addition to, there's more employment companies, yay! But why yay? Okay. Because more people have access to this because more people lives are improved. I think that kind of sort of orientation to this, or what are the goals, can then be the type of thing that can motivate and inform how you organize people to say, okay, are we getting there as fast as we want to be?

What are the, or what are the opportunities that, if we put a little effort, we put a little pressure, wherever the opportunities are that we can accelerate that going forward. And I think there's a lot of room for a lot of different strategies and a lot of creativity. And, some things might even be in conflict with people having different visions on things, and that's okay. It's going to be messy. It's going to be human beings trying to work to restructure a certain piece of the world. But I think it can be, I think we can be successful. We've got a pretty powerful foundation that's based on multiple generations of work already. And so we can pick up that ball and keep moving it towards where it needs to be, so.

Bret Keisling: [00:50:04] Matt, that was beautifully stated. And I always like to throw in, when you talked about wanting to feel like your job is meaningful, wanting to be engaged, wanting to look forward to going to work. I always like to point out to the people who are listening and it's all in the context where employee owned companies are less likely to suffer economic downturns during the pandemic or the last recession, they are more profitable, less likely for layoffs cutbacks, excellent.

Matt, Leo, I want to thank you both very much for your time. I think this is the first of many conversations, hopefully, that people will come together and have, and with a lot of work and everybody doing what you're -- what we are all doing, that we will turn into a movement.

And Matt and Leo, I just both want to say, first of all, again, people follow them on Twitter [@MattCropp, @Sammallahti], LinkedIn [Matt Cropp, Leo Sammallahti], et cetera, but you're both doing such important things in your space and your space is broader than a lot of other people.

Matt, thank you very much for coming on the podcast.

Matt Cropp: [00:51:02] My pleasure.

Bret Keisling: [00:51:03] Leo, thank you very much, my international friend. You've been my favorite EO person that I never met. This has been a delight. Thanks for coming on.

Leo Sammallahti: [00:51:12] Okay, am I in your top three Finnish employee ownership people?

Bret Keisling: [00:51:16] You --I'm giving you all three of the Finnish spots!

Leo Sammallahti: [00:51:22] [ Laughter.] Okay.

Bret Keisling: [00:51:23] And Matt, I love a lot of people in Vermont, but you are at the top of the list. So thank you both very much.

Leo Sammallahti: [00:51:28] Yes, thank you very much. Nice talking to you. Nice meeting you, Bret, for the first time and nice talking with Matt again, and I'm sure we're going to have a lot of conversations in the future.

Matt Cropp: [00:51:37] Yes, definitely as always.


Bitsy McCann: [00:51:40] We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling.

Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.

A note on the transcript: This transcript was produced by Descript, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.


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