As Marx pointed out,
“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.”
(Inaugural Address To The First International)
The co-operatives, Marx points out, are the transitional form of property to the socialist form.
“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.”
(Capital III, Chapter 27)
The more workers develop such co-operative production, therefore, the more they can relieve themselves of the constraints of capitalist production that lead to crises of overproduction. Indeed, the more these crises erupt, the more workers find productive-capital, which they can themselves take-over collectively, at much reduced values, and operate on a co-operative basis. As Engels put it,
“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.”
(Letter to Bebel)
Moreover, as the workers become more confident in their ability to develop such property, the more their consciousness is transformed, and they develop their own forms of self-government upon it, and alongside it. If workers develop their own forms of social insurance, as they did in the 19th century, through the co-operatives, and Friendly Societies, the more they isolate themselves from dependence upon the capitalist state.
By developing their own social insurance, they can ensure that, during periods of economic decline, they can focus these funds to ensure that workers are not forced into low paying jobs. This facilitates the development of demands that all capital should pay a high level of Minimum Wage, such that all those small inefficient capitals that survive only by underpaying their workers are forced out. Their capital is then picked up by the workers, on the cheap, and incorporated into their total co-operative property. At the very least, it is picked up by other forms of larger socialised capital, that can operate it efficiently whilst paying a minimum wage.
By using these worker-owned social insurance funds, in this way, workers can ensure that the unemployed can be employed in co-operative production, with part of their wages being covered out of these funds. For example, in workers' communities, estates owned and run co-operatively, by residents and tenants, can work alongside co-operative construction companies, that ensure that the necessary maintenance and development of property is undertaken. Workers thrown out of employment in the capitalist sector, can then be employed within their community, and retrained if necessary, whilst part of their wage during this period would be drawn from the worker owned social insurance fund. In this way, the revenue, paid to the unemployed worker, from the fund, is matched by additional new value, created by them, thereby strengthening the co-operative property at the expense of capitalist property.
Unfortunately, instead of developing this kind of approach, as set out by Marx and Engels, for a bottom up transformation of property relations, social-democracy seeks merely to bring about social improvements within capitalist property relations, whilst those left social-democrats that call themselves revolutionaries have become fixated by the experience of the Russian Revolution, as its model of a top down transformation of society. It thereby places its faith not in the workers transforming society, but in such a transformation being undertaken by the state.
Rather than providing their own solutions, workers self-activity becomes nothing more than a syndicalist/reformist industrial struggle conducted both at the level of the individual workplace and of the state. As a result, the workers are badly misled, and unprepared for the periods of stagnation. The more workers are reliant on capital, including its state, the more they become disillusioned in “class struggle” as a solution to their problems. In the previous period, the reformists and syndicalists have encouraged the workers to rely on the capitalist state to provide them with dole, to meet their needs for benefits, and so on, with the argument that all these would be conceded, if only the workers were militant enough. But, now the workers see this is a lie.
Instead of paying out dole, when the workers most need it, the state cuts it; when capital least needs labour-power it reduces those measures designed to increase its supply, so it cuts state spending on health and education; when workers begin to live long enough to be able to claim a small amount of pension, they have spent a lifetime paying for, they are told to work longer; as profits decline, firms instead of conceding pay claims, close down.
Having been misled, the workers disillusion turns to apathy, atomisation and a search for easy solutions. It facilitates the work of demagogues and warmongers.
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