Can Co-operatives Work - Part 3

Other Marxists on Co-operatives

Kautsky

In 1899 Kautsky said,

“As regards the attitude of the party towards co-operative societies, the practical advantages of the distributive co-operative societies are so great that the opposition which they have met in the ranks of the Social-Democrats is not at first sight to be understood. This, however, explains itself, when one remembers that the private co-operative societies were recommended to the working class by the Liberals to tempt them from the founding of an independent political party, and from the acceptance of Socialist ideas. Thus naturally the battle for the latter two objects led to an antagonism against the bourgeois illusions of the co-operators, which only too easily developed into hostility against the co-operative movement itself. The co-operative movement has since shown itself unable to draw away the workers from an independent political attitude, or to attract them to Liberalism, whose members therefore gave up the attempt to use it as a weapon against Social-Democracy. The Social-Democratic Party has learnt to view the co-operative movement more amiably, and begin to regard especially the distributive societies with sympathy.”

In part the reason given by Kautsky for the antagonism that was being shown towards co-operatives by this time is correct, but the other reason is that tradition of statism, along with a reaction against Proudhonism and Anarchism. It was also inevitable that at a time when within the Social Democratic movement there was an increasing tendency towards Bernsteinian Revisionism, the idea that Socialism was developing inevitably and peacefully out of Capitalism, there should be a reaction to any such idea that socialism could arise by such a gradual growing over. Ten years later Kautsky was to put that correctly in its place.

In 1909 Kautsky wrote,

The Road to Power

“Naturally there can be no proletarian politician who is satisfied with present conditions and does not strive fundamentally to conditions them. And there is no intelligent politician, of whatever faction, who possesses even a remnant of freedom of judgment who is not forced to recognize that political conditions cannot remain as they now are in the midst of the present rapid rate of economic transformation….
“It is impossible for a Socialist to share the illusion of the reconciliation of classes and the coming of social peace. That he does not share it is what makes him a Socialist. He knows that if social peace is to come it will be not by a chimerical RECONCILIATION, but by the ABOLITION of classes. When he has lost faith in a revolution, however, there is nothing left for him but to await the peaceful and imperceptible disappearance of classes through economic progress – through the growth and increased power of the working class, which gradually absorbs the other classes.

That is the theory, of the gradual growth into (hineinwachsen) the socialist society.
This theory contains a germ of truth. It is supported by facts of economic development that show an actual growth toward Socialism. It was Marx and Engels who first set forth these facts and explained the scientific laws that govern them…

“The corporation renders the person of the capitalist wholly superfluous for the conduct of capitalist undertakings. The exclusion of his personality from industrial life ceases to be a question of possibility or of intention. It is purely a question of POWER.

This preparation for Socialism through the concentration of capital is meanwhile only one side of the process of gradual growth into the future state. Along with it there is proceeding an evolution within the working class that is no less of an indication of growth in the direction of Socialism

With the growth of capital goes also an increase in the number of proletarians within society. They become the most numerous class. Simultaneously grows their organization. The labourers create co-operatives that abolish the middle men and establish production directly for their own use. They organize unions that restrict the absolute power of the employers and exercise an influence in the productive process. They elect members to the representative bodies in the municipalities and states who seek to secure reforms, to enact legislation for the protection of labourers, to make state and municipal industries model businesses and to increase the number of such industries.”

Although, clearly I would disagree with this last part, “to make state and municipal industries model businesses and to increase the number of such industries” - because not only is it statist, but it also as a consequence of that statism fails to understand the reasons why socialists CANNOT simply take hold of the bourgeois state, even the local bourgeois state, and turn it into a “model businesses” for the working class, it fails to understand the extent to which even the local state, is the state of the bourgeoisie under the direct control of its permanent, bureaucracy and not the elected political representatives, however, principled and committed they may be – I think the general thrust of Kautsky’s argument here is spot on. Capitalist development IS tending towards socialism, both in its own evolution – today we would also point to the development of long term enterprise planning, and of course macro-economic planning, etc – and the working class HAS become larger, though the positive aspects that Kautsky refers to here in terms of the development by workers of Co-operatives, the growth of trade unions etc. we would have to say have gone backwards in the 100 years since Kautsky was writing. Largely due to the sectarian, and statist politics of the Marxists in the intervening period. But, of course Kautsky is correct in situating those developments, particularly the development of the working class, and of co-operatives, in the context not of some gradual peaceful growing over, but of the necessary contradiction which that implies with the interests of Capital, the inevitable reaction to that by Capital, and the consequent heightening rather than reduction in class struggle which that implies. It is precisely, in this context, the context in which Marx advocated Co-operatives, in which far from being an alternative to class struggle they form an integral part of it.

In fact, the roots of that statism and reformism could be seen in Kautsky’s earlier work where he said,

“Our position to the distributing societies is to a large extent dependent on our attitude towards the small middleman. Not the large capitalist is expropriated by the co-operative societies, but the small middleman. The first does a good business with them, the last is ruined. Where the middleman and the proletariat stand opposed to each other, out of this conflict arises a strong impulse towards the co-operative movement, as Austria shows us. But just now must political considerations there check the foundation of distributing societies where the small dealers are a recruiting-ground for Social- Democracy. And that is often the case. The small dealers, not only for the casting of Socialist votes, but also for Socialist feeling and thinking, are much easier to win than the peasant proprietor. And it is this class we should drive into the ranks of our opponents. Now, certainly we cannot go against the stream of economical development. However much we regret the painful circumstances under which the death-struggle of the small trader takes place, we cannot prevent the founding of co-operative societies. Put at least there, where the middleman and industrial proletariat do not stand antagonistic to each other, but wage hand in hand the fight against capital, our party has no ground to identify itself with the founding of distributing societies, and it dares nowhere to encourage the belief that we are preparing the expropriation of capital when we have expropriated a pair of poor pedlars and shopkeepers.”

This is a thoroughly opportunist position. Having written that “the practical advantages of the distributive co-operative societies are so great that the opposition which they have met in the ranks of the Social-Democrats is not at first sight to be understood” and having understood that capitalist economic development inevitably meant the concentration of Capital and the squeezing of the small traders what does Kautsky’s position come down to? It comes down to “we shouldn’t advocate such Co-ops if it might cost us votes”. Its very similar to the politics of today’s “Party builders”, whose politics are geared to not pissing off their periphery for fear of losing potential recruits.

In fact, it is clear that the inherent statism of Kautsky’s position constantly led him into confusion over this matter. As Lenin was to say of him later both in “State and Revolution”, in which Lenin shows that Kautsky removed the revolutionary element of Marx’s teaching on the State, and in “The Proletarian Revolution and the Renegade Kautsky”, Kautsky misunderstood the difference between the Workers Party being elected to Government, and the Workers holding State power – though it has to be said that Lenin himself often conflates the State and governmental power.
For example, in the Erfurt Programme, Kautsky states,

“The economic activity of the modern state is the natural starting point of the development that leads to the Co-operative Commonwealth. It does not, however, follow that every nationalization of an economic function or of an industry is a step towards the Co-operative Commonwealth, and that the latter could be the result of a general nationalization of all industries without any change in the character of the state….

“If the modern state nationalizes certain industries, it does not do so for the purpose of restricting capitalist exploitation, but for the purpose of protecting the capitalist system and establishing it upon a firmer basis, or for the purpose of itself taking a hand in the exploitation of labour, increasing its own revenues, and thereby reducing the contributions for its own support which it would otherwise have to impose upon the capitalist class. As an exploiter of label, the state is superior to any private capitalist. Besides the economic power of the capitalists, ii can also bring to bear upon the exploited classes the political power which it already wields.

The state has never carried on the nationalizing of industries further than the interests of the ruling classes demanded, nor will it ever go further than that. So long as the property-holding classes are the ruling ones, the nationalization of industries and capitalist functions will never be carried so far as to injure the capitalists and landlords or to restrict their opportunities for exploiting the proletariat.”

See: Erfurt Programme

All very well and good, and a message that today’s statist socialists should take to heart, especially when they ask this capitalist state to grant workers control over such nationalised property, but when Kautsky goes on to say,

“The state will not cease to be a capitalist institution until the proletariat, the working-class, has become the ruling class; not until then will it become possible to turn it into a co-operative commonwealth.

From the recognition of this fact is born the aim which the Socialist Party has set before it: to call the working-class to conquer the political power to the end that, with its aid, they may change the state into a self-sufficing co-operative commonwealth”,

He lays bare his conception of that process. It is nothing more than his conception above where he wrote,

“They elect members to the representative bodies in the municipalities and states who seek to secure reforms, to enact legislation for the protection of labourers, to make state and municipal industries model businesses and to increase the number of such industries.”

In other words it is a thoroughly reformist view, and as such it is all about a transformation of society from the top down, not the kind of bottom up transformation described by Marx and Engels. Its no wonder that within such an atmosphere the idea of a self-active working class that takes matters into its own hands both through such gradual transformations as the establishment of co-operatives, through the day to day economic struggles of the Trade Unions, or through the sudden spontaneous outbursts of political mass strikes, comes into conflict with such a measured strategic, conception of socialism from above.

Pannekoek

Yet, a different conception was still held by other Marxists of the time. Anton Pannekoek, whose observations as early as 1920, were an accurate description of the way a bureaucracy was emerging in Russia, saw the process of social revolution more in the terms that Marx had described, unfolding behind men’s backs. He wrote,

“It is worth noting that although our analysis predicts that development in Western Europe will take a different direction from that of Russia insofar as we can foresee the course which it will follow as the revolution progresses, both manifest the same politico-economic structure: industry run according to communist principles with workers’ councils forming the element of self-management under the technical direction and political hegemony of a worker-bureaucracy, while agriculture retains an individualistic, petty-bourgeois character in the dominant small and medium-scale sectors. But this coincidence is not so extraordinary for all that, in that this kind of social structure is determined not by previous political history, but by basic technico-economic conditions – the level of development attained by industrial and agricultural technology and the formation of the proletarian masses – which are in both cases the same. [*6] But despite this coincidence, there is a great difference in significance and goal. In Western Europe this politico-economic structure forms a transitional stage at which the bourgeoisie is ultimately able to arrest its decline, whereas in Russia the attempt is consciously being made to pursue development further in a communist direction. In Western Europe, it forms a phase in the class struggle between bourgeoisie and proletariat, in Russia a phase in the new economic expansion. With the same external forms, Western Europe is on the downward path of a declining culture, Russia on the rising movement of a new culture.”

Here it is clear that Pannekoek is describing the social revolution not as some single event. He is not talking about some event yet to come after which a transitional phase towards socialism proceeds. He is talking about an unfolding concurrent process. In Pannakoek’s description here he is talking about the role of Workers Council’s not in some socialist state, but Workers Councils under Capitalism, similar to the role of the Workers Councils that had spread throughout Italy, and which were theorised by Gramsci in similar terms. He is talking about a variety of such forms of self-management from worker co-operatives to the kind of workers control that the workers councils were seeking to implement in Italy. That is why he speaks here of the continuing role of the bourgeoisie being “ultimately able to arrest its decline, whereas in Russia the attempt is consciously being made to pursue development further in a communist direction”.

Pannekoek set out these ideas clearly in a later work, in Public Ownership and Common Ownership he wrote,

“The acknowledged aim of socialism is to take the means of production out of the hands of the capitalist class and place them into the hands of the workers. This aim is sometimes spoken of as public ownership, sometimes as common ownership of the production apparatus. There is, however, a marked and fundamental difference.

“Public ownership is the ownership, i.e. the right of disposal, by a public body representing society, by government, state power or some other political body. The persons forming this body, the politicians, officials, leaders, secretaries, managers, are the direct masters of the production apparatus; they direct and regulate the process of production; they command the workers. Common ownership is the right of disposal by the workers themselves; the working class itself — taken in the widest sense of all that partake in really productive work, including employees, farmers, scientists — is direct master of the production apparatus, managing, directing, and regulating the process of production which is, indeed, their common work…

“As a correction to State-managed production, sometimes workers’ control is demanded. Now, to ask control, supervision, from a superior indicates the submissive mood of helpless objects of exploitation. And then you can control another man’s business; what is your own business you do not want controlled, you do it. Productive work, social production, is the genuine business of the working class. It is the content of their life, their own activity. They themselves can take care if there is no police or State power to keep them off. They have the tools, the machines in their hands, they use and manage them. They do not need masters to command them, nor finances to control the masters.

Public ownership is the program of “friends” of the workers who for the hard exploitation of private capitalism wish to substitute a milder modernized exploitation. Common ownership is the program of the working class itself, fighting for self liberation….”

Gramsci

It would take too long here to deal with Gramsci’s position re. Co-operatives, and I think it will justify a post devoted to it at some point. However, the following is a good discussion around some of the ideas involved - Jossa

Lenin

“It is quite clear that there are two main lines of policy here: one—the line of proletarian class struggle, recognition of the value of the co-operative societies as a weapon in this struggle, as one of its subsidiary means, and a definition of the conditions under which the co-operative societies would really play such a part and not remain simple commercial enterprises. The other line is a petty-bourgeois one, obscuring the question of the role of the co-operative societies in the class struggle of the proletariat, attaching to the co-operative societies an importance transcending this struggle (i. e., confusing the proletarian and the proprietors’ view of co-operative societies), defining the aims of the co-operative societies with general phrases that are acceptable even to the bourgeois reformers, those ideologues of the progressive employers, large and small.”

Lenin The Question of Co-Operative Societies at the International Socialist Congress in Copenhagen

The resolution put by Lenin and his comrades to the Conference I think is largely correct, except in its comments in relation to the producers Co-ops, which is in stark contrast with the position of Marx set out earlier in the Instructions to Delegates to the First International.

“The Congress is of the opinion:

“1) That proletarian consumers’ societies improve the situation of the working class in that they reduce the amount of exploitation by all kinds of commercial middlemen, influence the labour conditions of the workers employed by the supplying firms and improve the situation of their own employees.

“2) That these societies can assume great importance for the economic and political mass struggle of the proletariat by supporting the workers during strikes, lock-outs, political persecution, etc.

“On the other hand the Congress points out:

“1) that the improvements that can be achieved with the help of the consumers’ societies can only be very inconsiderable as long as the means of production remain in the hands of the class without whose expropriation socialism cannot be attained;

“2) that consumers’ societies are not organisations for direct struggle against capital and exist alongside similar bodies organised by other classes, which could give rise to the illusion that these organisations are a means by which the social question may be solved without class struggle and the expropriation of the bourgeoisie.

“The Congress calls on the workers of all countries:

“a) to join the proletarian consumers’ societies and to promote their development in every way, at the same time upholding the democratic character of these organisations;

“b) by untiring socialist propaganda in the consumers’ societies, to spread the ideas of class struggle and socialism among the workers;

“c) to strive at the same time to bring about the fullest possible co-operation between all forms of the labour movement.

“The Congress also points out that producers’ co-operatives can be of importance for the struggle of the working class only if they are a component part of consumers’ societies.”

I’m not so sure about this last point also given the current nature of those consumer societies. It seems quite likely to me that new producer co-operatives could be established in the short term by workers under a socialist leadership that could offer a way forward in bringing the existing consumer co-ops under a more democratic workers control. As Lenin says here, Marxists should in any case be actively joining those consumer Co-operatives and fighting for their democratisation, their linking to the class struggle and so on.

Lenin concludes,

“The Copenhagen Congress marks that stage in the development of the labour movement in which its growth was, so to speak, mainly in breadth and in which it began to bring the proletarian co-operatives into the orbit of class struggle. Differences with the revisionists came to light but the revisionists are still a long way from coming out with an independent programme. The fight against revisionism has been postponed, but it will come inevitably.”


And even after the revolution Lenin emphasis the importance of the Co-operatives,

“It is this very circumstance that is underestimated by many of our practical workers. They look down upon cooperative societies, failing to appreciate their exceptional importance, first, from the standpoint of principal (the means of production are owned by the state), and, second, from the standpoint of transition to the new system by means that are the simplest, easiest and most acceptable to the peasant.

But this again is a fundamental importance. It is one thing to draw out fantastic plans for building socialism through all sorts of workers associations, and quite another to learn to build socialism in practice in such a way that every small peasant could take part in it. That is the very stage we have now reached. And there is no doubt that, having reached it, we are taking too little advantage of it.

We went too far when we reintroduced NEP, but not because we attached too much importance to the principal of free enterprise and trade — we want too far because we lost sight of the cooperatives, because we now underrate cooperatives, because we are already beginning to forget the vast importance of the cooperatives from the above two points of view.”

See: Lenin on Co-operatives

But, Lenin’s comment here

“There is another aspect to this question. From the point of view of the “enlightened” European there is not much left for us to do to induce absolutely everyone to take not a passive, but an active part in cooperative operations. Strictly speaking, there is “only” one thing we have left to do and that is to make our people so “enlightened” that they understand all the advantages of everybody participating in the work of the cooperatives, and organizes participation. “only” the fact. There are now no other devices needed to advance to socialism. But to achieve this “only", there must be a veritable revolution—the entire people must go through a period of cultural development.”

Shows precisely, the problem that he had in trying bring about that “cultural revolution” after the event. It is precisely, why that development of Co-operatives has to occur BEFORE the political revolution, not as some growing over of Capitalism, but a sufficient development of Co-operatives such as to demonstrate in practice to workers both the feasibility and desirability of socialism, and to bring about that change in culture and ideology without which socialism is impossible, not to mention the practical task of creating the practical experience in such activity.
The problem had been known to the first person to propagate the idea of workers Co-ops – the bourgeois republican Buchez. He wrote,

“It seems at first glance that this type of association, where everything profits he worker, should not meet any obstacle in propagating and multiplying itself, at least on the part of those who are called to take part in it. However, just the opposite happens: and according to the forceful expression of one worker, it is easier to find 100,000 francs than to find a man who, on entering a community of this sort, would absolutely renounce the hope of becoming the boss, and of having someday other wage-earners under him….Association of work is not possible if each does not reject egoism, and does not forget himself to think of others. Before joining together in association, men need a fundamental change of spirit. Such a change is not a matter of one day, nor even of one generation. It required several centuries to make men understand the idea of national associations; will not some years be needed for them to comprehend the industrial community?”

P.J. B. Buchez “L’association ouvriere de production ou la republique dans l’atelier” quoted by R. Reibel in “Self-Management” p41.

A further discussion on Lenin’s position in respect of the importance of Co-operatives in the light of more recent developments is given in this paper Robert Dobrohoczki .



And Lenin had dealt sympathetically with the question of Co-operatives earlier.

"It goes without saying that Kautsky very emphatically maintains that communal, collective large-scale production is superior to capitalist large scale production. He deals with the experiments in collective farming made in England by the followers of Robert Owen* and with analogous communes in the United States of North America. All these experiments, says Kautsky, irrefutably prove that it is quite possible for workers to carry on large-scale modern farming collectively, but that for this possibility to become a reality "a number of definite economic, political, and intellectual conditions" are necessary. The transition of the small producer (both artisan and peasant) to collective production is hindered by the extremely low development of solidarity and discipline, the isolation, and the "property-owner fanaticism," noted not only among West-European peasants, but, let us add, also among the Russian "commune" peasants (recall A. N. Engelhardt and G. Uspensky). Kautsky categorically declares, "it is absurd to expect that the peasant in modern society will go over to communal production" (S. 129). “

On pages 124-26 Kautsky describes the agricultural commune in Ralahine, of which, incidentally. Mr. Dioneo tells his Russian readers in Russkoye Bogatstvo,[51] No. 2, for this year.

Lenin Capitalism in Agriculture page 122

Capitalism in Agriculture

The factors that Lenin outlines here required to make this possibility a reality, are, of course those same factors he spoke of in the previous quote, which required the carrying through of a cultural revolution amongst the masses, and it is precisely on this point that the disagreement with Lenin arises. That is the degree to which it is necessary to develop co-operatives within Capitalism as a means of achieving that cultural transformation within the masses. There is no disagreement with Lenin that the bourgeoisie will attempt to subvert, and indeed to destroy the workers co-operatives, and that at some point the workers will need to learn the lessons from such repeated clashes, and will need to seize power. The question is – where is that point reached? For most of Lenin’s followers – and in fact on this point even the “Trotskyists” are closer to Stalin’s position than to Lenin’s – the question does not even arise, because unlike Lenin they dismiss the role of Co-operatives, effectively altogether.

Luxemburg

In fact, the modern left’s position is more a continuation of the politics of Rosa Luxemburg than of either Marx or Lenin. A politics that has to be understood in the context in which it was taking place as a struggle against Revisionism. For example, Luxemburg comments,

“Trade unions and co-operatives are the economic support for the theory of revisionism. Its principal political condition is the growth of democracy. The present manifestations of political reaction are to Bernstein only “displacement.” He considers them accidental, momentary, and suggests that they are not to be considered in the elaboration of the general directives of the labour movement.”

To a certain degree this sums up the position of the modern Left. It disparages Co-operatives in the same terms that Rosa had given earlier,

“The workers forming a co-operative in the field of production are thus faced with the contradictory necessity of governing themselves with the utmost absolutism. They are obliged to take toward themselves the role of capitalist entrepreneur – a contradiction that accounts for the usual failure of production co-operatives which either become pure capitalist enterprises or, if the workers’ interests continue to predominate, end by dissolving.

Bernstein has himself taken note of these facts. But it is evident that he has not understood them. For, together with Mrs. Potter-Webb, he explains the failure of production co-operatives in England by their lack of “discipline.” But what is so superficially and flatly called here “discipline” is nothing else than the natural absolutist regime of capitalism, which it is plain, the workers cannot successfully use against themselves.

Producers’ co-operatives can survive within capitalist economy only if they manage to suppress, by means of some detour, the capitalist controlled contradictions between the mode of production and the mode of exchange. And they can accomplish this only by removing themselves artificially from the influence of the laws of free competition. And they can succeed in doing the last only when they assure themselves beforehand of a constant circle of consumers, that is, when they assure themselves of a constant market.

It is the consumers’ co-operative that can offer this service to its brother in the field of production. Here – and not in Oppenheimer’s distinction between co-operatives that produce and co-operatives that sell – is the secret sought by Bernstein: the explanation for the invariable failure of producers’ co-operatives functioning independently and their survival when they are backed by consumers’ organisations.

If it is true that the possibilities of existence of producers’ co-operatives within capitalism are bound up with the possibilities of existence of consumers’ co-operatives, then the scope of the former is limited, in the most favourable of cases, to the small local market and to the manufacture of articles serving immediate needs, especially food products. Consumers’ and therefore producers’ co-operatives, are excluded from the most important branches of capital production – the textile, mining, metallurgical and petroleum industries, machine construction, locomotive and ship-building. For this reason alone (forgetting for the moment their hybrid character), co-operatives in the field of production cannot be seriously considered as the instrument of a general social transformation. The establishment of producers’ co-operatives on a wide scale would suppose, first of all, the suppression of the world market, the breaking up of the present world economy into small local spheres of production and exchange. The highly developed, wide-spread capitalism of our time is expected to fall back to the merchant economy of the Middle Ages.

Within the framework of present society, producers’ co-operatives are limited to the role of simple annexes to consumers’ co-operatives. It appears, therefore, that the latter must be the beginning of the proposed social change. But this way the expected reform of society by means of co-operatives ceases to be an offensive against capitalist production. That is, it ceases to be an attack against the principal bases of capitalist economy. It becomes, instead, a struggle against commercial capital, especially small and middle-sized commercial capital. It becomes an attack made on the twigs of the capitalist tree.”

And their attitude to the Trade Unions is similar. There is little the workers can really gain from such struggle, and to believe otherwise is reformism or revisionism. Only an all-out battle against Capitalism can really change the workers position. To that end the real task is to “Build the party” – even though what constitutes this party is in reality a tiny sect – ready for the big day of the revolution, and so Trade Union work has to be undertaken for no other real reason than to win new recruits in order to build the party. This is to completely misunderstand the relationship between reform and revolution. Luxemburg in the middle of a factional battle could be excused for bending that stick, today’s left cannot. In fact, not only does Luxemburg bend the stick, but she completely misrepresents the real situation, and applies Marx’s economic analysis in a wholly mechanistic manner, that conflicts with his own writings on the subject, not to mention with reality. As I will deal with those arguments later, I will leave further discussion on that until then.

What is clear, is that, apart from Luxemburg, whose writings have to be placed in context, a wide range of Marxists, from Pannakoek to Lenin, had at the beginning of the twentieth century a far more hospitable attitude to Co-operatives than does today’s Left. That change in attitude cannot be attributed to any further empirical evidence against co-operatives in the intervening period, as I will show later. On the contrary, there are good reasons for arguing that the conditions for developing such Co-operatives are better now than they ever have been. Rather that explanation has to be located in the deterioration of the understanding of the left of Marxist principles, the consequences of Leninist principles – worse of distorted Leninist principles – of Stalinism, and the consequent strengthening of an already dominant statist politics.

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