Co-opting the co-ops

A Follow on from our previous blog

The Independent explains that "Blue Labour is an attempt to reclaim dormant traditions within the labour movement – in particular that of co-operatives...workers represented on management boards... also wants "works councils"

Co-operatives are enterprises which are nominally jointly owned and controlled by their members.The theorists of the original co-operative movement such as Robert Owen and Proudhon saw it as a movement that would eventually outcompete and replace ordinary capitalist businesses, leading to the coming of “the Co-operative Commonwealth”. Some supporters of capitalism are also supporters of co-operatives. They see them as a way of mitigating the class struggle and persuading workers that they have an interest in accepting ‘realistic’ (i.e. lower) wages. However, co-operatives do not give workers security of employment or free them from exploitation.

We know what happened. Instead of the “ethos of the Co-operative Movement” transforming capitalism, it was the other way round: the ethos of capitalism transformed the co-ops. This was because they had to compete with ordinary capitalist businesses on the same terms as them and so were subject to the same competitive pressures, to keep costs down and to to maximise the difference between sales revenue and costs (called “profits” in ordinary businesses, but “surplus” by the co-op). The co-operative movement was outcompeted and is now trying to survive on the margin as a niche for “ethical” consumers and savers, leaving the great bulk of production, distribution and banking in the hands of ordinary profit-seeking businesses.

Whether or not a production unit or distribution unit or service takes the form of a workers' co-operative can have no bearing whatsoever on the pressures which compel it to meet the economic conditions for its existence. Nor do the details of how a unit runs its affairs matter. It can be a kibbutz or a co-operative taking decisions collectively; it can be a monastery producing honey or herbs; it can be a conventional business; in whatever way they are internally structured, authoritarian or democratic, and in whatever scale they may operate, as a part of social production they are a link in the economic circuits of capitalism and can only operate within the pattern of buying and selling. It should be emphasised that the running costs of any unit include the profits made by all the other units previously involved in the production of the materials, machinery, power supplies, etc, which are being bought in. If it fails to meet these costs, which include these profits, then the unit will not be supplied, and the funds for these costs must be derived from its own sales income. In addition to this income, the individuals working in the unit must have income to cover personal living costs such as rent or mortgage repayments, food, clothes, leisure activities, and so on and on. This is inescapable.

The pressure of economic selection determining the existence and operation of all production units exerts itself as this matter of daily book-keeping. Regardless of their make-up, production or service units can only continue their existence whilst they are economically viable; that is, where income exceeds expenditure. If expenditure exceeds income, then inevitably they disappear, as the constant number of bankruptcies well attests. This is how the structure of production is maintained as an exclusively capitalist structure. These pressures of economic selection cannot be set aside within the capitalist framework, even if circumstances where there may be a substantial growth of the socialist movement.

There is only one model of capitalism: the one we’ve got, where production is in the hands of competing enterprises which are forced to reduce costs so as to maximise profits in order to have the resources to invest in further cost-cutting. Making a profit, not satisfying needs, is the aim of production, and as measures to protect the planet add to costs they are not taken.Rose Luxumburg and other socialists at the turn of the century made arguments against the co-operative movement in the same vein when they stressed that the market, that capital and the rule of profit maximization did not allow for fullcontrol by the working class. And that in the instance where there is a vestige of such control, the workers still extract surplus value, that exploitation still survives because capital dictates it. Workers cannot control capital. They can only toy with it.

The Socialist Party in 1989 passed this resolution:_
"This Conference reaffirms the Party's position on co-operatives as set out, for instance, in the chapter on "The Co-operative Movement" in the 1942 edition of Questions of the Day, that is: 'In the minds of many workers the Co-operative movement is regarded as being in some way linked up with socialism. When the co-operators take up this attitude they claim in justification that Robert Owen, the co-operative pioneer, was actively concerned for some part of his life with possible means of escape from the capitalist system. Robert Owen's solution was that small groups of workers should try to establish selfsupporting 'villages of industry', in which there would be no employer, no master. They would constitute, as it were, little oases in the desert of capitalism, owning the 'land and means of production common'. He anticipated that the movement would grown until finally the workers would have achieved their emancipation. The Co-operative Movement cannot solve the basic economic problems of the workers as a whole, or even of the co- operative societies' own members. Its success is merely the success of an essentially capitalist undertakings. Co-operation cannot emancipate the working class. Only Socialism will do that. The workers cannot escape from the effects of capitalism by retiring into Owen's 'villages of industry'. They must obtain for society as a whole the ownership of the means of production and distribution, which are the property of the capitalist class. For this they must organise to control the machinery of government. Once possessed of power they can then reorganise society on a socialist basis of common ownership. Owen's original aims can only be achieved by socialist methods." .

The only change we would possibly make to this today would be to delete the reference to co-ops being successful even as capitalist undertakings. Most co-ops have been and gone, outcompeted by other more conventional capitalist enterprises and forced to become more and more like them to survive. Even the kibbutzim in Israel, which had some sort of attraction for socialists since they didn't use money internally, have tended to become more and more capitalist enterprises, employing outside wage-labour and selling goods on the market for profit. When you think it through, the failure of co-ops to replace more conventional capitalist enterprises was (and still is) inevitable: they had to act within the constraints of the surrounding capitalist economy and aim to keep costs(including their members' incomes) down and maximise income (profits) and, being less undemocratic than a normal capitalist enterprise, couldn't do this as effectively. Workers had, as it were, to exploit and slave-drive themselves but couldn't do this as effectively as a capitalist boss could. In fact, the trend now, at least in Britain, is away from this form of organisation: mutual banks, building societies (housing loan associations) and insurance companies are all being "demutualised" ( most of their members' consent) and turned into ordinary capitalist companies. Cooperatives may serve the interests of some producer and consumer groups, and may allow them better buying privileges or take the sting out of the costs of marketing or transporting but in the long run capital wins out.

It is because we don't believe that you had have bits of socialism existing within capitalism that we are revolutionary socialists and not reformist gradualists. Co-operatives cannot be used as a means for establishing socialism. As long as the capitalist class control political power, which they will be able to continue to do for as long as there is a majority of non-socialists, capitalist economic relations (commodity production, wage labour, production for profit, etc.) will be bound to prevail and these will control the destiny of co-operatives. Co-operatives usually only flourish to the extent that they can be successfully accommodated within capitalism. The fact is that there is no solution to our problems within the framework of capitalism. Understanding this is the beginning of all wisdom.