Thursday, 10 March 2011

Workers' Power Manifests Its Superiority Once Again

The John Lewis Partnership, has just shown once again the superiority of worker owned property over Private or State Capitalist property.
In a year when most private capitalist firms have been struggling, when wages have been cut or at best frozen as those firms struggled for sales, in a year when once again the State Capitalist sector has been shown in the Health Service and elsewhere to be unfit for purpose, despite the grinding down and brutal exploitation of its workforce – and in part is unfit for purpose BECAUSE of the way it treats its workers – John Lewis, which is owned by its workers has had a stellar year, once again. Its profits are up by 20%, and after using some of those profits for new investment, it has been able to announce that all of its workers are to benefit accordingly by receiving a bonus equal to 18% of their wages!

This just a day before workers in the State Capitalist sector are told that in addition to seeing their jobs go, their wages frozen yet again, they are to see their Pensions slashed too. And, as the pensions received by workers at the Mondragon Co-operative in Spain show, its not as though those Pensions for workers in the State Capitalist sector in Britain were very good to start with.
It is just another example, if any were needed of why workers need to reject the idea perpetrated by the bosses and their agents in the Labour Movement that workers have no alternative but to rely on either Private or State Capitalists to provide them with work.

In the 19th Century, Karl Marx and Frederick Engels identified the power of the working class, and analysing the worker's co-operatives that were the spontaneous creations of the workers, formulated their views about how such Co-operatives would both form the basis of the future socialist society, and how those existing co-operatives represented the means, and the form by which workers would transform property relations within existing Capitalist Society.
Analysing the workers co-operatives established by workers in the textile factories in Lancashire, Marx in Capital identified the basis upon which these Co-operatives were more efficient than private Capitalist companies. It was no just that the Co-operatives did not have to pay out profits to private owners of Capital. Nor was it that workers exercising control over the hiring of Managers were able to obtain the necessary skills for a fraction of the salaries that private companies were paying. It certainly was not because the Co-operatives received any favourable treatment.
On the contrary, as Marx sets out, and as James Connolly described in relation to the workers agricultural Co-op at Ralahine, the workers faced opposition from private companies who were supplying them, and higher rates of interest on money borrowed.

The reason that the workers' co-operatives were more efficient was that they unleashed all of the talent, and enthusiasm of the workers in a way that Private or State Capital never can do, because Private and State Capital is always concerned with the maximisation of profits by the exploitation of the workers. Once they are freed from that Capital-Labour relation, workers are freed to bring all of their dynamism, their inventiveness to bear on the work process in their own immediate interests.
If they can find a better, more efficient way to carry out their work, the workers in a worker owned enterprise will do it, because it can both save them their own labour-time, make their work easier, and also make their enterprise more efficient, thereby guaranteeing their future employment, and their potential for growing the business and their incomes. As Connolly showed in relation to Ralahine, this meant that the workers had a direct interest in ensuring that any new machines that could facilitate this were introduced rapidly, and Ralahine introduced such new machines way ahead of private farms.

Moreover, a worker owned enterprise will be more considerate about how, and to what extent it expands. It will take a longer term view than a private or State Capitalist enterprise. Both Private and State Capitalism is happy to cut back on production or service provision when the needs of Capital dictate it.
As we see now in the State capitalist sector in Britain, the State is seeking to reduce service provision, and to slash jobs and wages. A Private Capitalist who sees the potential for immediate profits will seize it, taking on new workers if necessary, confident that when the immediate upsurge has passed, he can simply throw those workers back on the scrap heap. But, where workers own their own enterprise or service, they will want to ensure that they not only maximise their short term situation, but that they maximise their long term interests too, which means ensuring they have a job tomorrow as well as today. They will have an incentive in not over investing and expanding, but in utilising any short term boom to build up reserves, as well as investing in new and more efficient capacity. That way, when the boom is over, they will have reserves to use to see them through a slower patch, to use to retrain and so on.

Workers ownership of their means of production via a Co-operative, means that they autoatically have control over those means of production, and over their work process.
That means that should the worst happen, they can immediately implement the idea describe in Trotsky's “Transitional Programme”, of a Sliding Scale of Hours, maintaining their class solidarity, by sharing out the available work between them, so that everyone is treated equally. That places the worker owned enterprise in a much better position to take advantage of the next upturn.

Marxists would have some disagreements with the set up of John Lewis. It is a Partnership of all its workers rather than a Workers Co-operative in the true sense.
But, Marx and the First International were keen not to impose any rigid formulas as to how the workers would organise their own enterprises, feeling that the workers themselves in each instance would be far more inventive than any prescription could ever be. Marxists would argue that in order to obtain the maximum benefits, and to protect again the competition of the huge Capitalist Trusts and Monopolies, the workers at John Lewis should look to bringing their enterprise within the remit of a national Co-operative federation, that could help defend them, provide greater economies of scale and so on. It would be logical to link John Lewis with the Co-op itslef, and with the Co-op Bank, especially if such a relation led to workers in the latter Co-ops adopting the principle of worker ownership, in place of being Consumer Co-ops.
It would also be a good idea, if they could link up, and promote Co-operative production, joining with the very many worker owned producer Co-ops around the globe, such as that of the Mondragon Co-ops. Better still would be to take advantage of the Workers University established by the Mondragon Co-op.

But, even without those further developments it shows the superiority of workers onership, and of workers power. At a time when the workers at the Post Office look set to take part in a struggle that seems doomed to defeat as the Capitalist State has numerous options for transferring their business into the private sector,
it provides a powerful example of the direction workers should be focussing their efforts, rather than fighting rearguard actions which in any case amount to nothing more than defending their continued exploitation at the hands of Capital.


Jacob Richter said...


"For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods and avoid investment and liability over a chain. The franchisor's success is the success of the franchisees. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business."

ome on this board advocate a cooperatives road to socialism. Would it be progressive, then, to have the state act as a franchisor and the relevant cooperatives act as franchisees? That way, there's avoidance of the caricature Government Store #160, with no trademark and business model upon which to collect substantive "brand" monopoly rent. Or would this resemble the very turnover tax model that Paul Cockshott critiqued with regards to Soviet state enterprises?

Boffy said...

No this would not be a good idea. In fact, its the basis on which the Liberal-Tory Government is proposing to allow worekrs co-ops to take over services from the Capitalist State. By retaining control over the purse strings, it means that the Capitalist State essentially does what Capital started to do in the 1980's. It means decentralising operations, and shifting out the non-core operations via outsourcing. The central control that is then exercised by the Capitalist State enables it to act as a Monopsonist buyer, extracting Surplus Value from Workers in the Co-operatives via unequal exchange relations.

Jacob Richter said...

I was not referring to franchising in the context of privatization at all. I was referring to public seizures of as many franchisor companies and their "brands" as possible. Then there can be state aid to the existing franchisees for the purpose of turning them into coops.