Marx on the Role of Co-operatives
In The Grundrisse
In the Grundrisse, Marx works out his ideas as a sort of dialogue with himself on paper, posing questions, discussing them, and working towards solutions. He uses his method of Historical Materialism to achieve this. What does that method come down to here? He begins with an overview of the world, and dissects that world into its component parts. Having sifted out the relevant aspects from the irrelevant, he then begins a further investigation of those relevant parts. And that further investigation involves stripping away the outer layers of these phenomena by a process of abstraction until you arrive at the rational core. It is what Max Weber would have called the “Ideal Type”. But, Marx’s materialism cannot settle on this Ideal, an Ideal which, because it is such is not real. For an Hegelian this Ideal would be nothing more than a Moment in the development of the Ideal, and its representation in the real world nothing more than its reflection, and changes in the material world a series of such Moments, each appearing as a negation and negation of the negation. Instead, for Marx it is not this process of the unfolding of the Idea, which is the vehicle of change, but rather it is the material world itself which brings that about, and the change in ideas rather being the reflection of those changes.
If concepts such as Labour and Capital, which form Moments in this process of historical change, are to be understood then they cannot be understood in the form of the Ideal, but only in their real material existence, because it is from this material existence that the fundamental basis of change derives. Indeed, taken as the pure abstracted Ideal no change can arise from Marx’s perspective, for to do so would require that this Ideal World itself had a life of its own that it was driven forward by some unknown force whether that force be termed God, or Reason.
The Pure Ideal forms of categories such as Labour and Capital uncover for us their rational core, their essence, but it is the divergence of the real categories from that Ideal which shows the driving force of change in the real world. Listen to Marx’s explanation of this in the Grundrisse in relation to these two categories.
On p206 he describes this “Ideal” Labour, “purely subjective existence of labour, stripped of an objectivity. Labour as absolute poverty”, but Marx does not mean poverty in the normal sense here. The worker might be rich in income terms, what Marx means is then outlined, “poverty not as shortage, but as total exclusion of objective wealth.” That is Labour as Not-Capital. I’ve compared it with a Chris Rock routine I saw a while ago.
The routine went something like this.
“There are no wealthy black Americans. There are some RICH black Americans, but they aren’t WEALTHY. Bill Cosby is RICH from all the shit he does, but he ain’t wealthy. Now the white mother-fucker who writes the cheque to pay him for all that shit he does, NOW HE’s WEALTHY.” He went on in similar vein, before “The reason we ain’t wealthy is we spend all our money on rims. We might have the worst car on the block as long as its got good rims. Shit if we hadn’t got a car we’d put rims on our toaster. Now Bill Gates he ain’t got no rims, but he owns Microsoft.”
This is precisely the point that Marx makes. Workers can have high incomes (relatively), but if all that income is spent on consumption then the worker cannot become (WEALTHY) because they can’t accrue CAPITAL. But as Marx points out (though he bends the stick) workers wages are usually so low they can’t save, when they are raised they take the opportunity to expand the sphere of consumption and culture (what Marx describes here as the “civilising mission of Capital”), and to the extent they save the Savings Banks pay them low interest and lend it to Capitalists who use it to make much more money etc. It is only possible to break out of this if instead the savings become Capital. He says,
" … if the worker’s savings are not to remain merely the product of circulation - saved up money , which can be realised only by being converted sooner or later into the substantial content of wealth, pleasures etc. – then the saved up money would itself have to become capital, i.e. buy labour, relate to labour as use-value. It thus pre-supposes labour which is not capital, and presupposes that labour has become its opposite – not labour. In order to become capital, it itself presupposes labour as not-capital as against Capital; hence it presupposes the establishment at another point of the contradiction it is supposed to overcome. If, then, in the original relation itself, the object and the product of the worker’s exchange – as product of mere exchange, it can be no other – were not use value, subsistence, satisfaction of direct needs, withdrawal from circulation of the equivalent put into it in order to be destroyed by consumption – then labour would confront capital not as labour, not as not-capital, but as capital. But capital, too, cannot confront capital if capital does not confront labour, since capital is only capital as not-labour; in this contradictory relation. Thus the concept and the relation of capital itself would be destroyed.”
And this concept of “Labour, which is not Labour”, “Capital which is not Capital” is precisely the solution that Marx gives to the problem. He has here subverted the starting point of the Ideal Labour and the Ideal Capital by standing them on their head and relating them not to the Ideal but the material realities. The worker cannot get out of his situation, cannot but be reproduced as Labour through saving, but only through ownership of Capital. And again Marx does not arrive at this conclusion simply by sucking this solution out of his thumb. Just as the living experience of the development and activity of the working class, especially of the Chartists, was the material reality that led Marx and Engels to their discovery of Historical Materialism, led them to see what the means was by which society was to be transformed, so the material world presented Marx with the means by which the workers were to resolve this contradiction, were to acquire not savings, but Capital. It was the experience of the establishment of workers Co-operatives, which provided Marx with the living example of that solution.
Marx, recognises the greater efficiency of the workers Co-operatives established in Lancashire. He says,
“It is manifest from the public accounts of the co-operative factories in England  that — after deducting the manager's wages, which form a part of the invested variable capital much the same as wages of other labourers — the profit was higher than the average profit, although at times they paid a much higher interest than did private manufacturers. The source of greater profits in all these cases was greater economy in the application of constant capital. What interests us in this, however, is the fact that here the average profit ( = interest + profit of enterprise) presents itself actually and palpably as a magnitude wholly independent of the wages of management. Since the profit was higher here than average profit, the profit of enterprise was also higher than usual.”
Capital Vol III Ch 24.
This greater efficiency of Co-operative production – which of course lies at the heart of Marx’s argument in favour of Socialism, for without it Socialism, which is nothing more than Co-operative production, and the ideas that flow from it on a national scale, would offer no benefits over Capitalism in terms of increasing Man’s productive potential – is important to understand also in relation to later arguments about the ability of Co-ops to develop under Capitalism. The argument put forward here by Marx, concerning the more efficient use of Constant Capital was also echoed by James Connolly in his description of the agricultural and manufacturing Co-op at Ralahine. Connolly states,
“To those who fear that the institution of common property will be inimical to progress and invention, it must be reassuring to learn that this community of ‘ignorant’ Irish peasants introduced into Ralahine the first reaping machine used in Ireland, and hailed it as a blessing at a time when the gentleman farmers of England were still gravely debating the practicability of the invention. From an address to the agricultural labourers of the County Clare, issued by the community on the introduction of this machine, we take the following passages, illustrative of the difference of effect between invention under common ownership and capitalist ownership: –
“This machine of ours is one of the first machines ever given to the working classes to lighten their labour, and at the same time increase their comforts. It does not benefit any one person among us exclusively, nor throw any individual out of employment. Any kind of machinery used for shortening labour – except used in a co-operative society like ours – must tend to lessen wages, and to deprive working men of employment, and finally either to starve them, force them into some other employment (and then reduce wages in that also) or compel them to emigrate. Now, if the working classes would cordially and peacefully unite to adopt our system, no power or party could prevent their success.”
This, of course is one of the areas where Co-operative production is able to exert its greater efficiency compared to Capitalism, precisely because as stated above the workers have a direct interest in such innovation. But, as Connolly’s further description of the Co-operative demonstrates this was not the only advantage. Bouregois economists tend to have a limited view when they build their models for profitability, and even some Marxist economists tend to lose sight of the human element, the element of alienation of labour, which formed an important part of Marx’s thinking. As Connolly demonstrates the general condition of life and well-being of the memebrs of the Co-operative must have given a significant increase in their individual and collective productivity way beyond what any Capitalist enterprise can achieve by its coercive methods. AS Connolly writes,
“At the prices then prevailing, this amount of produce would be equivalent to about, £900, £700 of rent for the use of natural forces and opportunities, and £200 of interest upon capital. It was thus a pretty stiff tribute that these poor Irish toilers had to pay for the privilege of making a little bit of their native soil fruitful. This tribute was, of course, so much to be deducted from the means of improving their sunken condition. In any future efforts that may be made to profit by the example of Ralahine and to apply again the principles of co-operation in farming, there ought to be the utmost care taken to reduce to a minin um the tribute payable to non-workers, and if possible to get rid of it altogether. If, despite this heavy burden of having to produce a luxurious maintenance for loungers, the condition of the toilers at Ralahine, as we shall see, was marvellously raised by the introduction of the co-operative principle amongst them, how much more satisfactorily would it have been raised had they been free of that depressing dead weight?”
Such is the lesson of Ralahine. Had all the land and buildings belonged to the people, had all other estates in Ireland been conducted on the same principles, and the industries of the country also so organised, had each of them appointed delegates to confer on the business of the country at some common centre as Dublin, the framework and basis of a free Ireland would have been realised. And when Ireland does emerge into complete control of her own destinies she must seek the happiness of her people in the extension on a national basis of the social arrangements of Ralahine, or else be but another social purgatory for her poor – a purgatory where the pangs of the sufferers will be heightened by remembering the delusive promises of political reformers.
In the most crime-ridden county in Ireland this partial experiment in Socialism abolished crime; where the fiercest fight for religious domination had been fought it brought the mildest tolerance; where drunkenness had fed fuel to the darkest passions it established sobriety and gentleness; where poverty and destitution had engendered brutality, midnight marauding, and a contempt for all social bonds, it enthroned security, peace and reverence for justice, and it did this solely by virtue of the influence of the new social conception attendant upon the institution of common property bringing a common interest to all. Where such changes came in the bud, what might we not expect from the flower? If a partial experiment in Socialism, with all the drawbacks of an experiment, will achieve such magnificent results what could we not rightfully look for were all Ireland, all the world, so organised on the basis of common property, and exploitation and mastership forever abolished?”
Its with the backdrop of these many experiements in the development of Co-ops such as that at Ralahine, the Chartist Land Co-op, the Lancashire Textile Co-ops etc. that Marx sees in the material world the solution to the problem posed of how Labour is to become “Not-Labour”, and Capital “Not-Capital”.
“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises. into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale. The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.”
He goes on,
“The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production. It is this ambiguous nature, which endows the principal spokesmen of credit from Law to Isaac Pereire with the pleasant character mixture of swindler and prophet.”
In fact, we can see Marx’s mental process at work here. In the Grundrisse, we have the question how is Labour to become “not Labour”, but its antithesis Capital. How is Capital to become “not Capital”, but its antithesis Labour. And in Capital the question is resolved.
“But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.”
This is Marx’s Historical Materialist method at its best. First, analyse the reality identify the component parts – here Capital and Labour – identify their rational core, and from that identify the laws of motion, the antagonism that must be resolved. Then look to the material world for the basis in reality as to how that contradiction is being resolved. Learn its lesson, theorise it, develop it, and then offer it back to the working class as the solution. And the solution to the problems posed by Bray’s inadequate ideas about how the workers could buy up Capital is set out too.
“The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale.”
“The two characteristics immanent in the credit system are …. to constitute the form of transition to a new mode of production”
This is damning for the Leninists, and Luxemburgists later arguments against Co-operatives. Here we have Marx, the revolutionary, talking not about some wham bam political revolution to establish state power, which then nationalises the means of production, but rather talking about the “gradual extension of co-operative enterprises on a more or less national scale.” And, it’s clear that he is not talking here about a gradual extension AFTER some political revolution. Were that the case then there would be no need for the use of Credit to affect that change, we would be back to the old statist formulations of the Communist Manifesto, speaking rather of the extension of nationalisation. And Marx, in the Grundrisse had made this idea clear,
"As the system of bourgeois economy has developed for us only by degrees so too its negation, which is its ultimate result." p712.
In fact, the idea developed here is wholly consistent with the argument put forward, by Ernest Jones, or at least with my slight elaboration on it. Co-operatives are the means by which workers resolve the antithesis between Labour and Capital, even if only at first by making the workers into their own Capitalists. They represent “transitional forms from the capitalist mode of production to the associated one”. They develop gradually within Capitalism, by the use of Credit to extend on a national scale, but that national scale, that national organisation is necessary for them to survive as against the hostility the bourgeoisie will demonstrate to them, and as the only means by which that limited nature of being just workers Capital can be resolved, which leads inevitably to them reproducing “everywhere in their actual organisation all the shortcomings of the prevailing system.”
Just as Capitalist enterprises had faced such opposition from feudalism, the use of guild monopolies, legal restrictions on the use of Capital and machinery, the number that could be employed and so on, the use of taxation of profits to hinder industrial development, sometimes as Hobsbawm shows in “Industry and Empire” as much by the Merchant and Money Capitalists in alliance with the feudal classes, as by the latter themselves, so Co-operative enterprise would face similar opposition from the bourgeoisie, insofar as it was a threat to them. It would face at least the kind of opposition through high interest charges referred to by Marx in relation to the Lancashire Co-ops above, and high interest and rent payments referred to by Connolly. Yet, despite realising all of that, Marx still sees this Co-operative enterprise as vibrant enough, representing the greater productive potential of the future society, to argue for its gradual extension on a national basis. And, let’s remember this is no aberration of Marx, not some off the cuff remark in some peripheral piece of work. This is Marx in perhaps, the most important Volume of his most important work. Nor is it just Marx. Vol. III of Capital is almost as much the work of Engels as it is the work of Marx himself, and published long after Marx had written these words. Had things moved on in such a way that Engels was led to believe that Marx’s argument here had become out of date, can we believe that he would not have said so? Engels produces copious notes, and such sentiments where appropriate, but not only does Engels not argue against the conception outlined here, on the contrary, he adds to it in his own writings as we shall see.
In The Address to The First International
In his Address to the First International, Marx not only summarises the argument we have previously seen put forward, by Jones, but he adds an additional political twist. He writes,
“But there was in store a still greater victory of the political economy of labour over the political economy of property. We speak of the co-operative movement, especially the co-operative factories raised by the unassisted efforts of a few bold “hands”. The value of these great social experiments cannot be overrated. By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart. In England, the seeds of the co-operative system were sown by Robert Owen; the workingmen’s experiments tried on the Continent were, in fact, the practical upshot of the theories, not invented, but loudly proclaimed, in 1848.
At the same time the experience of the period from 1848 to 1864 has proved beyond doubt that, however, excellent in principle and however useful in practice, co-operative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. It is perhaps for this very reason that plausible noblemen, philanthropic middle-class spouters, and even keep political economists have all at once turned nauseously complimentary to the very co-operative labour system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatising it as the sacrilege of the socialist. To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means. Yet the lords of the land and the lords of capital will always use their political privileges for the defense and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labor. Remember the sneer with which, last session, Lord Palmerston put down the advocated of the Irish Tenants’ Right Bill. The House of Commons, cried he, is a house of landed proprietors. To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen’s party.”
A good summary of Marx’s position. The development of Co-operatives by the hand of the workers themselves was “ a still greater victory of the political economy of labour over the political economy of property” than the passing of the Ten Hours Act. Far better than any number of pamphlets, treatise, or Party Programmes advocating the advantages of socialism, “By deed instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labour need not be monopolized as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart.”
But, as Jones had argued, such Co-operatives could not be successful so long as they remained isolated experiments. “To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means.” Exactly what this fostering by national means constituted we will see later. But, it is clear here that Marx, has no truck with those of his time who thought that this could be done by appeals to the bourgeoisie as the inheritors of Owen advocated, nor as Proudhon believed possible. And, if it could not be achieved by appeals to the bourgeoisie, it could neither be achieved by appeals to the State, a state, which was after all the state of that bourgeoisie, and its associates in the landlord class. “Yet the lords of the land and the lords of capital will always use their political privileges for the defence and perpetuation of their economic monopolies. So far from promoting, they will continue to lay every possible impediment in the way of the emancipation of labour.”
As Jones had set out, the formation of a national co-operative federation would reduce the power of the exploiters to stand in their way, but so long as they held the power of the State, they would still hold the upper hand. It would be necessary, alongside the development of Co-operatives, and their gradual extension and integration, alongside the day to day trade union struggle, for workers to tie all of these together in a POLITICAL fight against the exploiters. “To conquer political power has, therefore, become the great duty of the working classes.”
In The Critique of the Gotha Programme
The fundamental division between a Marxist and all other socialists is the Marxists insistence on the role of the working class as the revolutionary agent of change. It is a position that Marx and Engels themselves came to only gradually.
Originally, as Young Hegelians, they too saw things in statist terms. History was made, not from below by the masses, but from above by enlightened Men – and it almost always was men – through whom the Idea manifested itself. Initially, Marx and Engels, themselves, are nothing more than enlightened Liberals. Even when their politics moves past that – and for wholly understandable reasons given the time – the first organisation they join is a small conspiratorial group – The League of the Just – which again sees change as being brought about by an enlightened minority. On the back of the experience of the Chartists and their gradual development of their Critique of Hegelian Idealism, they arrive almost simultaneously but separately, at the theory of Historical Materialism. But, even at this time they are members of the Communist League, an organisation, which stands midway, really, between the League of the Just, and the First International. That is why, in the Communist Manifesto, although it sets out the theory of class struggle, which flows directly from Historical Materialism, the formulation of the demands not only owes much to Liberalism – many of the demands contained in it were not only compatible with, but implemented by the bourgeoisie – the concept of transition is highly statist.
Whilst, Marx and Engels moved on and away from that statist conception as they refined their ideas on class struggle, on the state, and on historical materialism they moved further away from the statist conceptions of the Manifesto. As Engels was to say later it had become outdated. Not outdated in the underlying concept of class struggle, not outdated in its criticism of the various alternative strands of socialism, not outdated in the outlook and tactics that the Communists had to adopt both to the Workers and to the workers parties, but outdated in those demands, and the means by which they were to be implemented. Outdated, precisely because a force now existed that could change society, and outdated because the intervening period had shown the means by which that class could change society by its own actions rather than needing to rely on some state acting on its behalf.
Unfortunately, their theory was never properly understood in their own lifetime, so it is little wonder it is even less understood today. Worse, whilst Marx and Engels were to move forwards, their comrade, of the time, Ferdinand Lasalle was not. He was to remain held prisoner to those statist conceptions of how society was to develop. Even more unfortunately, the main Workers Party that was to develop at the end of the 19th century, as a great blossoming of workers militancy and political development accompanied the Long Wave boom of the late 1880’s to 1914, the German SPD, had grown up from the fusion of Marx’s followers – the Eisenachers – and of the followers of Lassalle. Although, traditional Marxist mythology has it that this party was a Marxist party the truth is that it was probably more influenced by Lassalleanism than Marxism. Certainly, in that most important aspect of how socialism was to be brought about it owed more to the statism of Lassalle, than it did to the Libertarianism of Marx and Engels, whose focus was soundly based on the need for change to come from the bottom up, to come from the conscious self-activity of the working class. This idea is clearly set out in the work by Hal Draper - The Two Souls of Socialism .
It is, as Draper sets out, this division, which marks the real division in the socialist movement. Draper himself was an adherent of the Third Camp. He was himself to leave the Third Campist ISC he had formed earlier because, in his words, it had ceased to put the working class at the centre of its politics. See: Hal Draper Although, Draper himself set out some criticisms of Leninism it is notable that in the Two Souls he fails to locate Leninism within that statist tradition, yet it is clearly within that tradition that it belongs; and not surprisingly. The German SPD was the leading “Marxist” organisation at the beginning of the twentieth century. The connection of Engels to it, the general acceptance of its leading member and theoretician – Karl Kautsky – as the inheritor of the mantle of Marx and Engels, summed up in his description as the “Pope” of Marxism, meant that its ideas held great sway within the worldwide Marxist movement, including in Russia, where it was looked to as a model by Lenin.
Whilst Lenin was later to separate himself off from Kautsky, in his re-evaluation of Marx’s work – particularly in his “The State and Revolution”, where he unmasks the extent to which Kautsky and his supporters had misrepresented Marx’s position on the State, the extent to which Marx was at one with the Anarchists such as Proudhon and Bakunin when it came to the capitalist state – Lenin himself, again for wholly understandable reasons, given the time and conditions, whilst separating himself from those reformist, statist views simply replaced them with his own revolutionary statist conception of socialist transformation. Where, for the reformists, the working class had been reduced, not to the revolutionary agent of change, but to just the means by which the socialist elite was elected to power, in order to hand socialism down gradually from on high, for Lenin the only thing that was different, really, was the recognition that the bourgeois state could not simply be captured. Other than that nothing was different, the working class was reduced now, not to voting fodder, but cannon fodder, the force out in the streets that would destroy the old state, and put in place a different socialist elite – the Bolsheviks.
But, it is precisely this top-down, statist view of how socialism can be brought about that is antithetical to everything that Marxism stands for. Its not only that Marx’s theory of Historical Materialism, his analysis of previous class struggles and social revolutions, his detailed analysis of how economic and social relations determine ideas and so on – for example in the Eighteenth Brumaire of Louis Bonaparte, the Civil War in France and so on, his setting out of how he saw the role of Co-operatives etc., demonstrates why, for him, it is necessary for those economic and social transformations to take place before the ideas of the new class can become dominant; it is that he also sets out, not only his argument, as to why workers have to proceed on the basis of their own activity in this regard, but sets out, explicitly, his outright hostility towards the idea that such changes can be brought about, from above, by the State – not just by the bourgeois state, but by ANY state. The clearest exposition of that is in his Critique of the Gotha Programme
In fact, Marx’s words are so clear that it is difficult to understand how any statist socialist can honestly consider their views compatible with Marxism.
Criticising, this statist notion, of appeals to the bourgeois state, Marx says,
““The German Workers' party — at least if it adopts the program — shows that its socialist ideas are not even skin-deep; in that, instead of treating existing society (and this holds good for any future one) as the basis of the existing state (or of the future state in the case of future society), it treats the state rather as an independent entity that possesses its own intellectual, ethical, and libertarian bases.”
Could Marx, be any clearer, emphasising not just his attitude to the current state, but to the future state. It is abundantly clear here, which way round Marx sees things, and it is the complete opposite to the view of the Leninists and statists. The basis of the state now and in the future is existing society. It is the economic and social base of the society, which determines the nature of the State, not vice versa. To believe that you can either capture the existing state, or else to destroy that State and create a new one in its place, and then use that state to transform existing or future society is according to Marx here not just perverse, but those that advocate such a conception demonstrate that their “socialist ideas are not even skin-deep”. It is to treat the state not as dependent upon that economic and social base out of which arises the power, the culture, the ideology of the ruling class (current or future), but to treat it “state rather as an independent entity that possesses its own intellectual, ethical, and libertarian bases.” An independent entity that can then dispense those intellectual, ethical and libertarian values downwards into the society on which it is supposed to rest. A look at the experience of the Russian Revolution shows the attempt to do that, and if we use Marx’s method the clear understanding of why it was bound to fail. Those values cannot come from some minority or vanguard that controls the State they can only come from the base of society upwards. Without that, the State and that vanguard will at best come up against apathy and indifference to the ideas and ethics it is trying to dispense, or else will come up against outright hostility. If we look at the Russian Revolution we see that, if we look at the English Civil War we see that, and even though, perhaps to a lesser extent, even in the Great French Revolution we see that. We are left with the lesson that Marx and Engels had learned that only through a gradual transformation of the economic and social basis of society, a transformation, which creates new social relations, new ideas, culture, ethics etc. within the rising class sufficient for those ideas and culture to begin to challenge and then surpass the old ideas can the fundamental social revolution take place, that creates the basis on which a political revolution is not only possible, but necessary; a political revolution, which establishes a State, which does now represent those new values and ideas. As Marx put it criticising the statist Lassallean conception,
““Instead of arising from the revolutionary process of transformation of society, the "socialist organization of the total labour" "arises" from the "state aid" that the state gives to the producers' co-operative societies and which the state, not the workers, "calls into being". It is worthy of Lassalle's imagination that with state loans one can build a new society just as well as a new railway!”
This compares starkly with the traditional response of the left, seen recently over the Bank Bail-outs, of calling on the bourgeois state to act in workers interests. For Marx, it is not some top down process, but “the revolutionary process of transformation of society”, which brings about the “socialist organization of the total labour”. But, for Marx the Historical Materialist what does ““the revolutionary process of transformation of society” mean? Not what it means to the Leninist or statist. For Marx, a social revolution is the process, which goes on, behind men’s backs, by which the way in which he goes about producing his means of existence is transformed. That cannot mean the conditions, which pertain under Capitalism, even though those conditions have created socialised labour, in place of the isolated labour of the peasants and artisans. It cannot mean that, because that socialised labour is the form of Capitalist production. Moreover, although that socialised labour, under Capitalism, creates conditions under which groups of workers are led to combine to further their interests, although it creates the working class as a class “in itself” – that is it creates a class of society whose members share broadly similar conditions of life, whose objective interests in relation to their economic position are broadly similar – it does not, and cannot, turn that class into a class “for itself”, that is a class, which recognises those common interests, and acts accordingly. What is more, the very conditions under which it exists, mitigate against it achieving that end to such an extent that no amount of propaganda or education can overcome those natural conditions which continually reproduce division within its ranks, and which thereby prevent it from achieving a proletarian class consciousness.
What are those conditions? Even within a single workplace every worker is in competition with every other worker, even as, at the same time, they recognise on occasion the need to combine. With only their labour-power to sell, the individual worker seeks to advance their own interests even at the expense of their fellow worker if need be. Every worker will seek to obtain advantage in gaining promotion, in trying to obtain additional scraps from the bosses’ table. Every worker will seek to avoid any action that might jeopardise their future prospects or income. Every worker will seek to obtain the advantages gained by others activism, whilst avoiding the cost and risks of engaging in such activism. That is not to say that EVERY worker WILL act this way. A few who, for various reasons, do become class conscious will act differently, they will become the Trade Union activists and so on. But, every TU activist will recognise the above amongst their fellow workers, and the greater the risk to the individual worker the more heightened these tendencies will be. That is why Trade Union membership never gets anywhere near a majority of workers even at the most militant times.
When unemployment rises, the competition between one worker and another becomes even more intense, and as we have seen recently with the refinery strikes competition between groups of workers becomes more intense too. Not only are workers divided on an individual basis, but they are divided one enterprise to another, one industry to another, one district to another, one country to another not to mention division by sex, gender, age, race, and sexual orientation. The very functioning of the capitalist system reproduces on a daily basis all of these divisions which appear natural to every worker and every group of workers, and which, far from engendering the kind of solidarity, co-operation and comradeship required by a class conscious mass, necessarily produce its direct opposite.
Only, by changing fundamentally those very conditions, which breed that division, competition and hostility, within the working class, between its individual and component parts, can a working class which exists “for itself” be created. And without a working class that exists “for itself” socialist class-consciousness is impossible, and therefore socialist revolution is impossible. Some kind of revolution is possible if workers get really pissed off – more often it is a disgruntled peasantry or petit-bourgeoisie, revolting against the lack of basic bourgeois freedoms, and fulfilment of basic needs that is the backbone of the revolution, which, in modern times, forces, utilising Marxist verbiage, have won the leadership of – but, such revolutions cannot truly be called socialist if the workers do not have such a socialist class consciousness. Rather what we have is a revolution AGAINST something rather than positively FOR socialism.
Of course, this doesn’t mean that workers should not seek state aid for their Co-operatives, particularly if they do so from a Government of a real Workers Party, not that they should reject any assistance offered. As Engels once put it referring to the attitude towards the bourgeois state, “We will ask them for nothing. If they give us something we will accept it, but we will show no gratitude for it.” But, it is to say that Marxists will have to be very circumspect in the way they ask for such support, or accept such support when offered. There can be no question of Marxists doing so in such a way that leads workers to believe either that the bourgeois state is in some way class neutral, nor that the answer to their problems can be obtained by such appeals to the State rather than through their own self-activity. If there is any possibility that such support might be used in order to obtain influence over the workers co-operatives then it must be rejected. As Marx put it,
““That the workers desire to establish the conditions for co-operative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of co-operative societies with state aid. But as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.”
Again Marx is quite clear here. The co-operatives value lies precisely in the fact that they are the “the independent creations of the workers and not protégés either of the governments or of the bourgeois.” In his attack on the Lassallean statist notion of Co-operatives created from the top down by the State here we have a direct comparison with the Leninist and statist concept of nationalised industry even in the form in which these nationalised industries are to be under “workers control”, a demand which is meaningless outside a revolutionary situation, because it is clear that the bourgeois state is not going to simply hand over control of its property to workers. Marx says, of such nonsense.
“From the remnants of a sense of shame, "state aid" has been put -- under the democratic control of the "toiling people". …
And, once more to emphasise that it is only from below that such change can come, that the working class has to already have developed to a stage where it is in reality the ruling class, and not from appeals to the bourgeois state, Marx comments,
“Second, "democratic" means in German "Volksherrschaftlich" [by the rule of the people]. But what does "control by the rule of the people of the toiling people" mean? And particularly in the case of a toiling people which, through these demands that it puts to the state, expresses its full consciousness that it neither rules nor is ripe for ruling! ….”
See: Critique of the Gotha Programme .
Further clarification on this point is given by Engels in his letter to Bebel of March 1875, where he writes,
“Fourthly, as its one and only social demand, the programme puts forward -- Lassallean state aid in its starkest form, as stolen by Lassalle from Buchez.  And this, after Bracke has so ably demonstrated the sheer futility of that demand; after almost all if not all, of our party speakers have, in their struggle against the Lassalleans, been compelled to make a stand against this "state aid"! Our party could hardly demean itself further. Internationalism sunk to the level of Amand Goegg, socialism to that of the bourgeois republican Buchez, who confronted the socialists with this demand in order to supplant them!
But "state aid" in the Lassallean sense of the word is, after all, at most only one measure among many others for the attainment of an end here lamely described as "paving the way for the solution of the social question", as though in our case there were still a social question that remained unsolved in theory! Thus, if you were to say: The German workers' party strives to abolish wage labour and hence class distinctions by introducing co-operative production into industry and agriculture, and on a national scale; it is in favour of any measure calculated to attain that end! -- then no Lassallean could possibly object.”
See: Engels to Bebel
Again, could Engels be clearer. Bracke had “demonstrated the sheer futility of that demand”, for state aid, “all if not all, of our party speakers have, in their struggle against the Lassalleans, been compelled to make a stand against this "state aid"!”, and by advocating it the Party could “hardly demean itself further”. It was not a socialist demand, but the demand of “the bourgeois republican Buchez, who confronted the socialists with this demand in order to supplant them!”
But, Engels then makes clear what the socialist position would be as defined by the Marxist theory.
“The German workers' party strives to abolish wage labour and hence class distinctions by introducing co-operative production into industry and agriculture, and on a national scale; it is in favour of any measure calculated to attain that end!”
Engels letter to Bebel
The application of this method was given in Engels letter to Bebel. Engels in a letter to August Bebel in dated 17th November, 1885 noted that state help was being provided to the bourgeoisie which was coming out of the pockets of the workers and peasants. Engels argued that this should not be opposed but it would be justified only if similar help was approved for the urban and rural workers, especially to establish cooperative farms on the state domains. Engels makes clear the difference between this position and the position that Lassalle had advocated of state aid for Co-operatives. In Lassalle’s case it was a demand for the state to establish those Co-operatives, not the workers themselves. Engels writes,
“This is a measure which we must under all circumstances press for as long as large landed property remains there, and which we must ourselves carry out as soon as we come into power: the transfer - initially on lease - of the large landholdings to self-managing cooperatives under state supervision and in such a manner that the state remains the owner of the land. The measure has, however, the great advantage of being practically feasible, objectively speaking, but that no Party other than ours can take it up, and also that no Party can bungle it. And with that alone Prussia is done for, and the earlier we popularise it, the better it is for us.
The matter has nothing to do with either Sch[ulze]-Delitzsch or with Lassalle. Both propagated small cooperatives, the one with, the other without state help; however, in both cases the cooperatives were not meant to come under the ownership of already existing means of production, but create alongside the existing capitalist production a new cooperative one. My suggestion requires the entry of the cooperatives into the existing production. One should give them land which otherwise would be exploited by capitalist means: as demanded by the Paris Commune, the workers should operate the factories shut down by the factory-owners on a cooperative basis. That is the great difference. And Marx and I never doubted that in the transition to the full communist economy we will have to use the cooperative system as an intermediate stage on a large scale. It must only be so organised that society, initially the state, retains the ownership of the means of production so that the private interests of the cooperative vis-a-vis society as a whole cannot establish themselves.”
See: Second Letter .
We have here then the position of Marx and Engels in relation to the necessity of establishing Co-operative production in order to begin the transformation of economic and social relations, the basic requirement for creating a class conscious proletariat, developed enough and powerful enough to transform itself into the new ruling class. If that concept was distorted and lost in the years that followed it remained in the writings of other Marxists even into the beginning of the last century.
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