Cooperatives, Workers Control and Capital Accumulation
The real solution had been provided by Marx long before, in Capital III, Chapter 27. A worker-owned cooperative can expand out of its own profits, but it can also expand using credit. A cooperative federation can utilise the profit from all of the companies within it to expand. Each cooperative enterprise acts to improve its own efficiency and profits, but has also an incentive for every other cooperative within the federation to succeed, so they share best practice, and so on. Nor is such a cooperative federation limited within nation state borders, as occurs with the nationalistic, reformist solution of nationalisation.
The cooperative may have to also utilise bank loans and other financing, but that does not give those money-lenders control over the cooperative's capital. That is the difference with a joint stock company. The capital of a joint stock company, as with a cooperative, is mostly provided by its own workers. In other words, the capital is increasingly comprised of the reinvested surplus value/profits created by the workers. When the company is started, it may use borrowed money-capital, which it raises by selling shares or bonds, or by obtaining a loan from a bank, and at various times, when it does not have adequate internal resources for expansion, it may again resort to such means. But, the longer a company is in existence, the more its accumulated profits are the real source of its productive-capital. The difference here is that a specific type of money-lender, the shareholder is enabled, by law, not only to exercise property rights over their own property, i.e. the share certificates they have bought, and to receive interest/dividends, in return for the use of the money-capital they have loaned, but is also enabled to exercise control over capital/property they do not own, i.e. the productive-capital bought with the loaned money-capital.
The simple basis on which to proceed, therefore, was to remove, in law, that privileged and unjustified position held by shareholders. In line with the demands for industrial democracy, such as those contained in the strategy of the Welsh Miners, it was simply necessary to remove the voting rights of shareholders, and to change company law so that Boards of Directors were elected by all of the workers employed in the company. The existence and example of the worker-owned cooperative could have acted as a powerful lever in pushing that forward. It is also the simple and straightforward answer to the grotesque current overpayment of company executives, whose remuneration stands in inverse relation to the amount of labour they provide, and value they add to production.
The benefit of this ground up approach was spelled out by Marx in The Critique of the Gotha Programme.
“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.”
It requires, in any enterprise, or group of enterprises, that the workers themselves feel prepared, and willing to undertake the management and control. Some may fail, but the more who succeed are able to grow rapidly and to spread their knowledge and experience to others.
Paul describes, however, the reality of what happened in the period after 1916 and into the 1920's. The drive for workers' control of production broke out in a rash of revolutionary struggles across Europe, with strikes and factory occupations. But, in many cases, the workers involved had no real concept of what running the business involved. The demands for workers control arose more as a defensive response from workers to lock-outs or a shutdown of production, in much the same way as happened in May '68, and at UCS. And, that is not surprising, because both periods are within the crisis phase of the long wave cycle, when the ability to easily grant reforms, or improvements in pay and conditions becomes more difficult. But, for that reason, the ability of workers then to resolve their problems simply on the basis of workplace solutions, also becomes more difficult. Either a society wide solution was imposed, as in Russia in 1917, or else the workers were defeated, atomised and reaction triumphed.
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