Tuesday, November 29, 2016


Co-ops - a model for self-exploitation

On platforms to-day perorations shadow forth the old ideal; but practically cooperatives are run on purely business lines, apart from the funds devoted to educational and charity purposes. Whilst of itself it is impotent to evolve into a non-plunder society, we have to settle with ourselves whether it is not a force working inside modern society that makes for our goal

In the same way that trusts, municipalities and States make for the unification, the centralisation, of production and distribution, so also does co-operation. That no one would deny. But it can well be urged that multiple shop companies are doing exactly the same, and hence are as valuable from our point of view as co-operative societies. In so far as the latter are working-class organisations, we must undoubtedly see in them weapons of defence in the class war, and of aggression in the expropriation of the capitalists, apart altogether from the training in business methods afforded to so many workers.

Of greatest value to us, distribution is a field where the class war is beginning to break out with a virulence equal to that experienced in the economic and the political fields. Economic necessity drove the weavers of Rochdale into cooperation, and the same cause led to its expansion. Conflicts with the interests of private traders arose, and this, inevitably, produced the boycott and other forms of guerilla warfare. That the traders got the worst of it was a foregone conclusion, as they represented a more primitive system of retailing goods. Some twenty-five years ago, optimistic co-operators anticipated that soon they would monopolise the trade of the working class; but within the last twenty years there has arisen the multiple system alongside a tremendous expansion of the huge emporium system, and these separately (and in the near future, perhaps, conjointly) are beginning to threaten the very existence of the cooperative movement.

The cooperative movement started with a noble ideal: the overthrow of the commercial system by the self-employment of the workers. This has been found impossible, and the co-operators have degenerated into mere joint stock companies or distributive agencies, with agents in all parts of the world buying in the cheapest market, which means beating down the wages of the producer for the benefit of those with capital to spare to invest in these societies and, like Building Societies, are a very good investment for those better off, but for the poverty-stricken proletariat this co-operation is not only useless, but often used for their exploitation. The early pioneers of cooperation had the ideal of a commonwealth of communities more or less self-sacrificing and entirely free from the disbursement of surplus value.

Our duty, then, is, while always advocating cooperative effort to show these people that their movement, so far as it effects the condition of the people as a whole, has been a failure, and must be so as long as they attempt to plant it down in the midst of a competitive commercial system, and that until usury and monopoly of every description is destroyed there can be no real cooperation that shall benefit the workers, and unless they are prepared to do their duty and assist in this destruction, they, in the times coming, will be swept away as part and parcel of the old system of society.

It is be suggested that an enterprise can go from capitalist to socialist by changing the legal structure of ownership and by determining the number of shares assigned to each person. A cooperative may do away with exploitation internally, but it still has to go out onto the market in search of a slice of the profit pie, and that slice will have been extracted from other workers. Common ownership over the means of production cannot be limited to competing cooperative groups where each worker's cooperative fights with the others. That is not common ownership. The fundamentals upon which the economy flows and operates must be changed and reshaped in the rise of socialism following a revolutionary overthrow.

Producers’ cooperatives were voluntary groupings for self-employment and self-government with respect to their own activities. Some of these cooperatives developed independently, others in conjunction with the working class movements. By pooling their resources, workers were able to establish their own workshops and produce without the intervention of capitalists. But their opportunities were from the very beginning circumscribed by the general conditions of capitalist society and its developmental tendencies, which granted them a mere marginal existence. Capitalist development implies the competitive concentration and centralisation of capital. The larger capital destroys the smaller. The cooperative workshops were restricted to special small-scale industries requiring little capital. Soon, the capitalist extension into all industries destroyed their competitive ability and drove them out of business.

Consumers’ cooperatives proved to be more successful and some of them absorbed producers’ cooperatives as sources of supply. But consumers’ cooperatives can hardly be considered as attempts at working class control, even where they were the creation of working class aspirations. At best, they may secure a measure of control in the disposal of wages, for labourers can be robbed twice – at the point of production and at the market place. The costs of commodity circulation are an unavoidable incidental operating expenses incurred in capital production, dividing the capitalists into merchants and entrepreneurs. Since each tries for the profit maximum in its own sphere of operation, their economic interests are not identical. Entrepreneurs thus have no reason to object to consumers’ cooperatives. Currently, they are themselves engaged in dissolving the division of productive and merchant capital by combining the functions of both in the single production and marketing corporation.

If workers reformed capitalism initially so that all firms were based on a cooperative model, exploitation -- inherent to capitalism -- would still exist and eventually destroy the benefits that come out of such a model of 'market socialism'.  Competition between firms, and the tendency of capital to concentrate, would destroy smaller firms. Eventually, monopolies would be built up and slowly workers would lose power as greater companies rise. Cooperatives on a market remain capitalist.

Cooperative worker-ownership schemes resolve none of the basic problems facing workers under capitalism. All the basic relations of capitalist production, exploitation of wage labour, production for sale and profit, and the like remain in effect. A "worker-owned" company run collectively and democratically by its workers, would still function within the overall context of a capitalist economy. Being a co-op does not miraculously free a business from the anarchy of the marketplace, competition, and the effects of capitalism's recurrent economic crises. In order to compete "worker-owned" enterprises have little choice but to intensify exploitation just as much as their capitalist-owned competitors do. They must cut wages, close old factories, modernize outmoded equipment and lay off workers made superfluous by automation although they may do so with a bit more compassion than conventional companies. To make such schemes "succeed" in a capitalist context, workers must make more self-sacrifices and intensify their own exploitation.

This is worker capitalism. Yet, it does demonstrate that production in no way depends on a capitalist class. But, if the concept of worker ownership is to truly benefit workers, it must be effected on a society-wide basis not in niche corners of the business world. To do that, a socialist revolution is needed to abolish the entire system based on private ownership and control of the means of production by a parasitic capitalist class. The potential of worker ownership can be fully realized only by replacing an economic system based on exploitation, competition, the market and the profit motive with one based on social co-operation for the common good. What workers must gain is not nominal ownership of individual plants, but real control of the entire economy.

Capitalism also affects co-ops in other ways. In Argentina, for example, some capitalist-dominated companies simply refused to do business with worker-owned cooperatives. Obviously, if almost all other businesses were coops, then the conventional companies wouldn't be able to survive. However, capitalist companies dominate and have the support of the state. Capitalists control the government so policies would be enacted to try as much as possible to prevent workers from asserting an increased degree of independence as long as the plutocrats hold the reins of power and fear the spread of increasing workers’ consciousness.

But surely the cooperative movement is essentially socialist? The former Tory prime minister, David Cameron stole the clothes of Robert Owen by using the title Pioneer Schools - after the Rochdale Pioneers - for his first proposals for a new “co-operative” approach to education and “free” charter schools.  He explained that "The co-operative principle captures precisely the vision of social progress that we on the centre-right believe in - the idea of social responsibility, that we're all in this together, that there is such a thing as society, it's just not the same thing as the state," he said, adding that the conservative cooperative movement campaign for "public ownership of public services and public facilities" does not mean he believes in state ownership of those services. He was following in the foot-steps of such radical agencies as the American Peace Corp and USAID who promoted that miners in Bolivia form cooperatives who are currently now in dispute with the Leftist government of Evo Morales.

In the Soviet Union the state used to own most industry and agriculture, the ‘people’ were legally the owners, but it was the bureaucracy which had exclusive control of the means of production and therefore it was they who in PRACTICE owned the means of production. Equally, a workers cooperative whilst instituting common ownership amongst its members is a form of private ownership as against the rest of society. Cooperatives are not the means to socialism but the end. Only in socialism can we really achieve cooperative equality. So long as the relationship between workers cooperatives is governed by the market or indeed by any means of equal EXCHANGE, then so long will people as a whole fail to exert conscious social control over society as a whole. So long as production remains primarily geared towards exchange on the market rather than towards directly satisfying peoples self-expressed needs them ‘common ownership of the means of production and distribution’ will not have been achieved. You can’t exchange that which is held in common or the products of that held in common.

Right now, and as long as the capitalist system exists, we all have to live within it. Capitalist relations affect and dominate every aspect of life. The world-wide social order of production for profit can’t be changed by opting out of it. We cannot escape the system.

For example, if you form a cooperative to manufacture shoes, you still have to buy the materials and sell the shoes in an international market. Buyers want the shoes as cheaply as possible. How can you compete successfully against companies that produce similar shoes using exploited labour without driving down the cost of your shoes by exploiting yourself? There cannot be socialism in one country, much less in a single cooperative or network of cooperatives. Even if the members of a m cooperative or network of cooperatives are nominally their own bosses, it follows from the continued existence of the capitalist relations that “the process of production has mastery over [human beings], instead of the opposite…” as Marx pointed out, Thus as long as “…The co-operative factories run by workers themselves [exist within capitalism]…they naturally reproduce in all cases, in their present organization, all the defects of the existing system, and must reproduce them…the opposition between capital and labour is abolished here…only in the form that the workers in association become their own capitalist, i.e., they use the means of production to valorize their own labour.”  What was crucial to Marx wasn’t which human beings were nominally in control, but whether the process of production had mastery over human beings, or the opposite. We cannot endorse a system of worker-run cooperatives where “the workers in association are their own capitalist.” That is, in order to compete effectively, they pay themselves the minimum and extract from themselves the maximum output. Even within capitalist-owned firms, the cooperative labour process is a harbinger of socialism. And capitalism’s creation of a socialized labour force is the creation of a new social power that can bring it down. But as long as capitalism exists, cooperative labour is neither self-directed activity nor the partial emergence of the new society within the old one. Labour can become freely associated only by breaking with the enslaving laws of capitalist production. There is no in-between. The system must be uprooted and replaced with a wholly different way of working, not just distributing. And we need a system in which it’s possible to produce for human needs, not for the sake of accumulating more capital. The ideal of worker-owned and -operated production neglects the fact that, as Marx observed, the conditions for industrial production are not essentially the workers’ own labour, but rather more socially general: production has become the actual property of society.

The ideal of worker-owned and -operated production neglects the fact that, as Marx observed, the conditions for industrial production are not essentially the workers’ own labour, but rather more socially general: production has become the actual property of society.