Can Co-operatives Work - Part 1

Introduction.

Contents

Part 2
Part 3
Part 4

At the end of his reply to my letter concerning a review of “The Devil’s Whore”, Jim Moody writes, See here

“Finally, Arthur’s conclusion that we should start forming cooperatives is off the wall: Robert Owen tried that over 150 years ago and look where it got him (mired in the muck of a windswept Hampshire farm in one instance).

As such, cooperatives do not function as precursors for socialism or as preparations for revolution, but as idealist, dead-end failures. Even Ken Coates has abandoned the idea.”

This view of Co-operatives as some kind of utopian venture is common on the left. It reflects the fact that for over 100 years that Left has abandoned Marx’s teachings in favour of the teachings of Marx and Engels’ adversary, Lassalle. In place of the Historical Materialism of Marx and Engels, which dictates that ideas are a function of the material productive relations, and that, therefore, socialist ideas can only become the ruling ideas of the age when the working class itself has become the ruling social class, they have adopted the Idealist notions of Hegel, which sees change arising first in the realm of ideas, in the heads of a select few, who then transform society from the top down via control of the State. That was the method of Lassalle criticised by Marx and Engels, and which itself infused the politics of the German Social Democratic Party, even though that Party called itself Marxist. It was the perversion of Marxism, which via the vehicle of the SPD as the most authoritative Party of Social Democracy, infected the whole of the Marxist movement at the end of the 19th century and beginning of the 20th, including that part of the movement, which split away to form the Communist Parties.

In fact, in researching this work I looked back through my old collection of Capital and Class for articles on Co-operatives, and could find just one “British Politics and Co-operatives” by Jim Tomlinson in C&C 12 Winter 1980/81. Speaking of the Worker Co-operatives that had sprung up at the time such as the Scottish Daily News and Meriden Motorbike Co-op, he comments,


“The revolutionary left has been the most consistently hostile commentator on these co-operatives.” He goes on correctly to challenge the central assumption about the need for such Co-ops to assume the same forms as Capitalist enterprises, essentially a regurgitation of the position put forward by Luxemburg under conditions of her faction fight against the revisionists, and which I will deal with later.

If Marxism is to progress, and be in any fit state to lead the working class in the current century then all of this accumulated Lassallean, statist shit has to be removed in order to uncover the true Marxism of Marx and Engels. It is necessary to look in the first instance here at what Marx and Engels themselves had to say about Co-operatives, and their function as the means by which workers can transform society and their position within it. It is necessary to look at what their position was in respect of people such as Owen. Finally, it is necessary to look at whether the criticism of Co-operatives can be justified on the basis of empirical evidence since Marx’s time to see if events would have caused Marx to have changed his view of them as the transitional form to socialist society.

1. Marx on Utopian Socialism and on Owen

In “The Communist Manifesto”, Marx and Engels write about the Utopian socialists.

”The Socialist and Communist systems, properly so called, those of Saint-Simon, Fourier, Owen, and others, spring into existence in the early undeveloped period, described above, of the struggle between proletariat and bourgeoisie (see Section 1. Bourgeois and Proletarians).

The founders of these systems see, indeed, the class antagonisms, as well as the action of the decomposing elements in the prevailing form of society. But the proletariat, as yet in its infancy, offers to them the spectacle of a class without any historical initiative or any independent political movement.

Since the development of class antagonism keeps even pace with the development of industry, the economic situation, as they find it, does not as yet offer to them the material conditions for the emancipation of the proletariat. They therefore search after a new social science, after new social laws, that are to create these conditions.”

We have seen this historically with other classes. The first representatives of the bourgeoisie, such as those who led the English Civil War had enough of a glimpse of the future, to challenge the existing society, but they did not at the time have a sufficiently developed revolutionary class behind them – a class whose interests these new ideas represented – did not yet, have the material conditions within society, to bring those ideas to fruition. For those revolutionaries too their ideas were premature and utopian. Lacking the necessary material conditions, lacking a sufficiently developed revolutionary class to bring about historical change, these bourgeois revolutionaries had been forced to frame their ideas in terms of an appeal to society, indeed an appeal to sections of the ruling nobility, and to present those ideas as being not those to further the interests of a particular class, but society as a whole, had been, as were many variants of moral socialism, presented as religious ideas.

Marx continues,

“The significance of Critical-Utopian Socialism and Communism bears an inverse relation to historical development. In proportion as the modern class struggle develops and takes definite shape, this fantastic standing apart from the contest, these fantastic attacks on it, lose all practical value and all theoretical justification. Therefore, although the originators of these systems were, in many respects, revolutionary, their disciples have, in every case, formed mere reactionary sects. They hold fast by the original views of their masters, in opposition to the progressive historical development of the proletariat. They, therefore, endeavour, and that consistently, to deaden the class struggle and to reconcile the class antagonisms. They still dream of experimental realisation of their social Utopias, of founding isolated “phalansteres”, of establishing “Home Colonies”, or setting up a “Little Icaria”(4) — duodecimo editions of the New Jerusalem — and to realise all these castles in the air, they are compelled to appeal to the feelings and purses of the bourgeois. By degrees, they sink into the category of the reactionary [or] conservative Socialists depicted above, differing from these only by more systematic pedantry, and by their fanatical and superstitious belief in the miraculous effects of their social science.

They, therefore, violently oppose all political action on the part of the working class; such action, according to them, can only result from blind unbelief in the new Gospel.

The Owenites in England, and the Fourierists in France, respectively, oppose the Chartists and the Réformistes.”

Its important to understand then what Marx’s critique of the Utopian socialists is here. His critique is not their condemnation of Capitalist society for its iniquity, any more than that was his Critique of the Moral and Petit-Bourgeois socialists such as Sismondi. In its revelation of those sides of Capitalism, and its unveiling of the apologists of Capitalism both perform a useful function. His criticism of the Moral Socialists, is that unlike the Utopians, their solution to that iniquity is to ignore the historically progressive function of Capitalist development, and instead to hark back to some previous mode of production. The Utopians, at least, those that developed these systems, solution was on the contrary to look forward to a socialist society. So Marx’s critique of the Utopians is not that they present a vision of that future society either. On the contrary, he comments,

” But these Socialist and Communist publications contain also a critical element. They attack every principle of existing society. Hence, they are full of the most valuable materials for the enlightenment of the working class. The practical measures proposed in them — such as the abolition of the distinction between town and country, of the family, of the carrying on of industries for the account of private individuals, and of the wage system, the proclamation of social harmony, the conversion of the function of the state into a more superintendence of production — all these proposals point solely to the disappearance of class antagonisms which were, at that time, only just cropping up, and which, in these publications, are recognised in their earliest indistinct and undefined forms only. These proposals, therefore, are of a purely Utopian character.”

No, Marx’s critique of the Utopians is for none of these things. His critique amounts to this. The initiators of these systems could not locate the working class at the centre of its plans, could not promote the working class as the historical agent by which its plans could be implemented, because that class at that time was itself hardly formed, and was incapable of performing that role. That is why these initiators who “were, in many respects, revolutionary” have to look to other forces to bring about those plans. We see the same thing today. Various groups who call themselves “Marxists”, but who are in reality nothing more than “moral socialists”, having lost faith in the potential of the working class, continue to phrase their Sunday Best propaganda in their “What We Stand For” sections of their papers in Marxist garb, but when they relate to real situations, continually reduce their political programme to an appeal to some other social force, they believe might provide a solution. I have written about this at length in relation to those sects in particular such as the AWL, and the SWP that claim adherence to the “Third Camp”. The Utopians had good reason for their politics. The working class did not exist as a sizeable force. Today’s sects have no such excuse. It is not the lack of a working class that explains their politics, their appeals to the bourgeois state or worse, as the vehicle of implementing their schemes, but simply their lack of faith in the workers, and in large measure a distaste for the real working class, which continually fails to live up to their petit-bourgeois view of what that class should be, continually leaves them standing on the sidelines waiting to come across its model of perfection. (NB. This was written before the perfect example of that was given by the attitude of these groups to the refinery strikes.)

And Marx’s real attack is reserved not for the originators of these ideas, but for their followers who, even when the working class does emerge as an historical force, not only try to preserve the original vision as some kind of Gospel, but who do everything in their power to constrain the actions of workers to the extent that they upset this paradise of potential social harmony. In doing so, as Marx says, they become not just Utopians, but essentially adopt the position of the reactionary socialists.

In fact, in Capital Marx makes clear distinction between Owen and Owen’s followers in this regard.

But, a glance at the concepts set out above shows that it was not the concepts that these Utopians put forward that Marx views as Utopian, but their inevitable lack of understanding of the role of the working class in bringing them about. In one note in Capital Marx talks about Owen’s “Utopianism” revealed in his restriction of workers hours at New Lanark to ten, and comments that this utopia then formed the basis of the Factory Act, that Owen’s “Utopia” of workingmen’s Co-operatives was being realised across Lancashire, and that his “Utopia” of combining Child Labour with Education was being used as a cover for reactionary propaganda. In another note too, Engels comments that in later life Marx was full of admiration for the genius of Saint-Simon, saying that Marx’s comment, comparing him unfavourably with Owen, only reflected the fact that Owen was writing in the more favourable conditions of a more developed British economy.

In Capital too, Marx criticises the ideas of Jeremy Bray as set out in “Labour’s Wrongs and Labour’s Remedy”, where Bray puts forward a notion adopted by Proudhon that workers could simply by up the Capital of the firm they worked for out of a deduction each week from their wages. But, it is this method of acquiring ownership of these businesses that Marx criticises not Bray’s overall concept. In fact, as Marx demonstrates it would be impossible for workers to simply buy up Capital in this way. As he shows, Constant Capital necessarily expands at a faster rate than Variable Capital i.e. wages, and as workers have to finance their own subsistence from these wages it would be impossible for workers to buy up the Capital of their own firm, because that Capital would be always expanding faster than their own share of it. But, it is not the concept of workers buying up their enterprises or of establishing their own Co-operative enterprises that Marx is criticising here. Far from it, he goes on in Capital to argue that it is precisely this method, which history has demonstrated in the form of the Lancashire workers co-operatives which shows the way in which the new mode of production develops within the womb of the old, why it is such Co-operatives he argues, which form the transitional form between Capitalism and Communism.

Yet, in “The Poverty of Philosophy”, where Marx demolishes the arguments of Proudhon, Marx quotes extensively from Bray’s book, calling it a “remarkable work”. And, although Marx demonstrates the fallacy of Bray’s notions of how a communist society might work, fallacies adopted by Proudhon, Marx comments in his appreciation of Bray’s book,

“We need only reply in a few words to Mr. Bray who without us and in spite of us has managed to supplant M. Proudhon, except that Mr. Bray, far from claiming the last word on behalf of humanity, proposes merely measures which he thinks good for a period of transition between existing society and a community regime”

Poverty of Philosophy p64.

Poverty of Philosophy

That was in 1846, when Marx and Engels were still to some extent captive to the statist notions of Hegelianism, still to be seen a year later in “The Communist Manifesto”. Twenty years later, in “Capital”, Marx was to write in similar terms to those used here, of the fact that Co-operatives were that “transitional form” between current society and socialist society. But, through the “Grundrisse” he had worked out the means by which the working class could bring this about, and through historical experiment in the form of the Lancashire Co-operatives could verify that concept; that although, workers could not simply buy up Capital from their wages, workers savings combined could be turned into Capital, and more importantly the factor that made the modern enterprise possible, Credit, could itself be utilised by workers for that task, for the development of workers Co-operative enterprises.

So it is not the idea of Co-operatives which Marx finds to be Utopian, rather it is the failure to locate the working class at the centre of the programme to develop such Co-operatives, the idea that these Co-operatives cannot be developed without the support of the bourgeoisie, the idea that they can operate as single ventures, or islands of socialism, and that they are not seen as an integral aspect of the class struggle, which for Marx makes the followers of the early Utopians into reactionaries. Indeed, that charge can hardly be levelled at Owen himself. Owen it was who proposed the establishment of the Grand National Consolidated Trade Union, whose basic idea of one big union, predates the IWW by some decades. And Owen himself, as I have written elsewhere, was active in supporting actual Trade Union struggles such as that of the Potters Union. See: here .

And, although the division is often made, between the Owenite Utopians, and the Chartist revolutionaries, the fact is that the Chartists themselves promoted the ideas of Co-operatives, most notably in the Chartist Land Co-operative, through which draws were made for parcels of land on which to settle urban workers. See: Chartist Land Plan .

And in what is a most remarkable document Ernest Jones A Letter to the Advocates of the Co-operative Principle, AND TO THE MEMBERS OF CO-OPERATIVE SOCIETIES a leading Chartist, an associate of, and deeply influenced by Marx and Engels, writes lambasting the basis of the Co-operative movement as it existed, but writes,

“In accordance with the prejudice above alluded to, some may say, indeed some have said, that I am opposed to co-operation: on the contrary, I am its sincere tho' humble advocate, and, from that very reason feel bound to warn the people against what I conceive to be the suicidal tendency of our associative efforts as conducted now.”

Having, set out in the clearest terms what that suicidal tendency was Jones continues,

“Then what is the only salutary basis for co-operative industry? A NATIONAL one. All co-operation should be founded, not on isolated efforts, absorbing, if successful, vast riches to themselves, but on a national union which should distribute the national wealth. To make these associations secure and beneficial, you must make it their interest to assist each other, instead of competing with each other—you must give them UNITY OF ACTION, AND IDENTITY OF INTEREST.

To effect this, every local association should be the branch of a national one, and all profits, beyond a certain amount, should be paid into a national fund, for the purpose of opening fresh branches, and enabling the poorest to obtain land, establish stores, and otherwise apply their labour power, not only to their own advantage, but to that of the general body.

This is the vital point: are the profits to accumulate in the hands of isolated clubs, or are they to be devoted to the elevation of the entire people? Is the wealth to gather around local centres, or is it to be diffused by a distributive agency?”

We have here I think one of the best expositions of, perhaps, how Marx and Engels themselves saw both the critique of the Co-operative movement, and at the same time how they saw that this movement could and should progress the interests of workers. I’d also suggest comrades read the Biography of Jones from the link above to see how close his ideas probably were to those of Marx and Engels on this issue. Jones, considered himself not just a Chartist, but a socialist. He was a member of the First International, and the argument put forward here seems a more detailed analysis, and conception, a development on the basic idea put forward by Marx in his address to the First International where he said,

“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 kept 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 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. 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.”

See: Marx’s Address

And in the “Instructions for the Delegates of the Provisional General Council”

“5.
Co-operative labour

It is the business of the International Working Men's Association to combine and generalise the spontaneous movements of the working classes, but not to dictate or impose any doctrinary system whatever. The Congress should, therefore, proclaim no special system of co-operation, but limit itself to the enunciation of a few general principles.

(a) We acknowledge the co-operative movement as one of the transforming forces of the present society based upon class antagonism. Its great merit is to practically show, that the present pauperising, and despotic system of the subordination of labour to capital can be superseded by the republican and beneficent system of the association of free and equal producers.

(b) Restricted, however, to the dwarfish forms into which individual wages slaves can elaborate it by their private efforts, the co-operative system will never transform capitalist society. to convert social production into one large and harmonious system of free and co-operative labour, general social changes are wanted, changes of the general conditions of society, never to be realised save by the transfer of the organised forces of society, viz., the state power, from capitalists and landlords to the producers themselves.

(c) We recommend to the working men to embark in co-operative production rather than in co-operative stores. The latter touch but the surface of the present economical system, the former attacks its groundwork.

(d) We recommend to all co-operative societies to convert one part of their joint income into a fund for propagating their principles by example as well as by precept, in other words, by promoting the establishment by teaching and preaching.

(e) In order to prevent co-operative societies from degenerating into ordinary middle-class joint stock companies (societes par actions), all workmen employed, whether shareholders or not, ought to share alike. As a mere temporary expedient, we are willing to allow shareholders a low rate of interest.”

See: Instructions for the Delegates of the Provisional General Council

I’m not sure that I agree entirely with Jones’ formulation expressed here. It seems to me that the general line of argument is correct, and the concept of these Co-operatives needing to be linked together into a national – indeed I would argue international – federation is central to the argument I am presenting here. It is also the concept that Engels set out some time later of the idea that in the first stage of socialism the property deeds of such Co-operatives should be vested with the Workers’ State – though different to the ideas put forward by Statists - the day to day control of the individual Co-operatives would remain with their workers, and there is no concept of this State dictating to them. But, the question is how is this to proceed. There is a danger of seeing this itself in statist terms, of seeing the development of this national federation of co-operatives as something, which develops ONLY from the top down. Indeed, Jones himself didn’t apply that method in practice. Jones was a leading member of the Chartist Co-operative Land Company, although he did at the same time maintain his Critique of it, and indeed argued that its basis of returning urban workers to the Land was in many ways utopian and reactionary.

The point I think that Marx is making is that to be successful these Co-operatives need to be developed on a national basis. He is also making the point that just as the feudal aristocracy used its political power to frustrate as far as possible the development of bourgeois production, so the bourgeoisie will use its political power to frustrate as far as possible co-operative production, so that is why workers have to build alongside these Co-operatives their own Party, and to struggle against the bourgeoisie on the political plane counteracting its attempts to frustrate their development. But, this should not mean that individual groups of workers creating co-operatives should itself be seen as something to be avoided. It was the job of the Workers Party, and of its members in those Co-operatives to show why they needed to join with others if they were to succeed. To the extent that a national federation of co-operatives could be established, which could perform the functions Jones sets out here that process would be all the more facilitated.

After all its clear that, although Marx recognised that the Political Revolution itself, which would, ultimately, be necessary, in order to put down the slaveholders revolt the bourgeoisie would launch, to hold on to power, would be a sudden violent act, the social revolution itself, the transformation of the economic and social relations, would be a slow process going through advances and retreats. In the Grundrisse he wrote,

"As the system of bourgeois economy has developed for us only by degrees so too its negation, which is its ultimate result." p712.

Go to Part 2