The Truth About the Co-operative Movement. (1932)

From the September 1932 issue of the Socialist Standard

Baillie J. P. Dollan, writing in the New Leader (27th May, 1932), sympathetically reviewed the decisions of the recent Co-operative Congress, and supplied some interesting facts and figures relating to the Co-operative movement.

Co-operation has always been presented to the workers with a double appeal. The appeal to their immediate interests, in the shape of cheaper commodities, plus dividends, and the promise of Socialism as a result of every industry being brought under Co-operative control.

If all this were true, then the very moderate success of the Co-op. after a century of effort seems to prove that the workers want neither cheap commodities and dividends, nor Socialism. For what could be more alluring than the prospect held out to them? Buy in the cheapest market, keep all profits for themselves and, at the same time, pave the way to a system where they would be free from capitalist exploitation. As a slogan it is ideal, but as a working hypothesis it will not stand a moment's logical examination.

Co-operation cannot beat capitalism at its own game, and even if all the workers spent all their wages at Co-op. stores, the latter could only employ a. very small proportion of them.

At present the total share capital of the retail business is £119,000,000, while the sales amount to £210,000,000. Baillie Dollan expresses the view that these figures show a serious weakness. He says that the turnover should be at least five or six times as great as the capital. He says further: —

  There has thus been an increase in share and loan capital and in savings bank deposits during a period of trade depression, while sales have decreased. This.is not healthy finance, because the increase in capital and the decrease in sales compels the adoption of a policy which will insure a financial return on the investment, rather than the adoption of a policy which will lead to increased sales, because of reduced prices and improved values.

Savings bank deposits, although only a small proportion of the total capital—just over £5,000,000 compared with £119,000,000—obtain their interest from the business. Both these sums are on the increase. The share capital increased by £6,500,000 and the savings increased by £114,976 during 1931. It will thus be seen that the Co-op. is already well on the usual capitalist road of over- capitalisation.

But this is not the full story of the hollowness of the Co-op. when considered as a merely capitalist business. With a Membership of 6,626,492, plus family dependents, it does a retail trade of £210,000,000, an average of £10 per member per annum. It is apparent, therefore, that the majority of the members must find it cheaper to do most of their shopping elsewhere.

Apart from its propaganda, the Co-op. does an enormous amount of advertising in the ordinary capitalist way. It issues constant appeals to trade unionists, and it returns to members, in the shape of dividends, a small percentage on every pound spent with them. Yet up to the present their success can be summed up in the statement that they have six-and-a-half million members who spend on the average sevenpence daily with them for things they require.

This would be most regrettable if there really were any principles in co-operation essentially different from those of capitalism. But as the main ideas forming the basis of co-operation have been faithfully copied from capitalist business, their lack of success does little harm to the workers.

It is, of course, only the leaders and busybodies in the movement who seriously suggest that cooperation can expand until it displaces capitalism. The rank and file do not share such long-distance views to any extent. Moreover, the leaders in the movement have never made it clear how a business run on capitalist lines can evolve into something that is the opposite of capitalism. To be fair to Mr. Dollan, his most ambitious expectations are that co-operation ought to be able to afford an economic service in the transition period between capitalism and Socialism for the lower paid grades of the working class. He even goes so far as to say that it is unable to do this because of the dividend and interest system. In other words, because of its capitalist nature.

This dependence on the owners of capital is common to many forms of Labour activity, industrial or political. Every Labour newspaper. and magazine is subject to the dictation of the shareholders who own it. The provision of capital for any form of enterprise is always conditional that control as to policy goes with it. The control may be delegated, but it is there all the same.

The workers in Co-operative stores and factories have no delusions about their employment. They are at the mercy of officials and foremen, just as other workers, and find it just as necessary to organise against reductions in wages. Their hours and wages are no better than the average for their particular calling. The fact that they are employed by the Co-op. means no more to them than if employed by a city corporation.

Co-operation bears no relation to Socialism. It no more leads to Socialism than does co-partnership or nationalisation. It may be said that the workers learn by their co-operative experiences that they cannot escape from capitalist slavery by any of these roads. But it is far easier and less painful to learn facts of this kind by knowledge and reasoning than by experience.

If we note the essential facts about any question, then weigh and compare them in the mind, we form a judgment, or reach a conclusion more or less correct according to the truth of our facts and the soundness of our reasoning.

In any case, before we can understand co-operation it is necessary to understand capitalism, of which co-operation is a part. The first essential fact about capitalism that compels our notice is the necessity imposed on every member of the Working-class of finding a job. Which, translated into exact terms means, finding a purchaser for his labour- power. This obligation stands out above everything else. It is the most outstanding feature of capitalist society, dwarfing everything else into insignificance. Because it is the greatest factor in the worker’s life, it is the starting point from which to reason towards a complete explanation of working class poverty.

How he gets his living is the most important fact of every man’s life. That he is forced to sell his energy because a class of idlers own the means of production makes him a slave to that class. In every discussion affecting his position, this should take precedence of any mere modifications of that position.

The solution to this state of things is quite obviously the exact opposite of present arrangements. The means of production and distribution, instead of being class-owned, must be made the common property of the human race, to be used by them according to an agreed plan for the benefit of the people as a whole. It is a common complaint of labour leaders and others that the workers cannot agree on a definite policy for their own benefit. That is a stupid complaint, because no one in this country, apart from the S.P.G.B., has ever presented to the workers a policy of action based on the essential facts of their existence on which can agree.

Every worker knows he must sell his labour-power in order to live. But few workers see in that fact, and the conditions behind it, the cause of their poverty. The constitution of society imposing that condition on them is the result of evolution, and appears to the individual as being quite “natural,” as well as rigidly established. Thus even when he first glimpses the truth, the only result is a feeling of helplessness, amid the forces that surround him.

Among these forces are ignorance and confusion. Innumerable organisations and parties are continually telling the workers of reforms, policies and schemes .that will bring them relief in the present or emancipate them in the distant future. Life is short, and the workers rise to the bait of “something now.” Instead of critically examining all proposals, they put their faith in those who promise, only to find, when too late, that they have merely helped a few more adventurers to place or power.

The Co-operative Societies, on their propagandist side, are among these confusionists. On the economic side they are merely capitalist concerns out for profits. As to purchasers’ dividends, they are not alone in giving something back in order to retain customers. The practice of giving coupons entitling purchasers to free gifts is quite common, and the article bought, plus the free gift, is generally the equivalent in value of the price paid. The fact that co-operators spend such a small proportion of their wages in the stores proves they are not deceived on the question of value for money. To the bulk of them the Co-op. is just a convenient place to shop.

But so far as Co-op. leaders hold out hopes to the workers that their support will help towards a new order of society, or will even provide an escalator to reach it, they are practising deceit. The only way out for the workers, is to organise politically for that special purpose. A special objective requires a special organisation for its achievement. Moreover, the objective must not be obscured by lesser things of little or no importance.

Dividends and profits can have no place within a socialist system of society. They belong to the present lop-sided arrangement of starving workers and over-fed idlers. Dividends and profits belong to capitalism, and the practice of co-operation helps to keep them alive in the minds of the workers, to the detriment of a true understanding of their real position.

F. Foan