Small is … small

From the May 2025 issue of the Socialist Standard

LETS, or local exchange trading systems, boil down to being localised barter clubs each of which has its own purely digital or recorded currency or credit system. Participants keep their own individual accounts which are, in effect, a register of the credits they earn or spend depending on the goods or services exchanged.

An important difference between this and a conventional money system is that we are not talking about a quid pro quo exchange being effected between participants. In some ways it resembles or aligns with a model of generalised reciprocity which lies at the heart of a socialist society but there are important differences as well.

Timebanks, unlike LETS schemes, do not have their own local currencies as a metric for keeping tabs on transactions. The only metric used is time spent in making a labour contribution. Moreover, and again unlike LETS schemes, the way in which labour time is evaluated is strictly egalitarian. Thus, one hour of labour performed will equal one ‘time credit’, regardless of the type of service performed.

By contrast, in the case of LETS schemes, there is some scope for negotiation over the price of the service or good offered in terms of the local currency (and hence, also, the possibility of a degree of transactional inequality). This makes such an arrangement somewhat closer in certain respects to a conventional market economy than is true of Timebanks.

Both LETS schemes and Timebanks are examples of highly circumscribed, or localised, ‘exchange rings;’ by their very nature they cannot be implemented on the large-scale society-wide basis. What that means, in the case of both LETS schemes and Timebanks, is that they will be rather restricted with regard to the range of activities individuals can engage with these arrangements.

Since they basically involve face-to-face interactions, this suggests that the forms of activities this might entail would be more along the lines of some form of personal service such as repairing someone’s car or computer or tidying up their garden. Obviously, you could not really operate a modern railway system or a power station on the basis of a LETS-type arrangement.

However, this is not to detract from the value of such arrangements as a means of coping within existing capitalist society. There are also certain benefits to be gained in terms of fostering a kind of outlook more conducive to a post-capitalist society. In these cases, the emphasis is very much on forging relationships with other individuals and building local communities. Thus, the underlying logic is radically different from that pertaining to market transactions which are quid pro quo by nature and socially atomising in their consequences.

Workers’ co-ops

Most of the advocates of so-called ‘market socialism’ have seen its basis as the state ownership of the means of production. However, that particular version needs to be distinguished from earlier versions, such as ‘Proudhonian socialism’ or ‘mutualism’, that go back to the 19th century and which have enjoyed somewhat of a revival following the collapse of Russian state capitalism

These versions envisage a role for the market in ‘socialism’ but emphasise, instead of state ownership, various kinds of worker-owned institutions – such as co-operatives and credit unions – as the instruments through which such a system of ‘market socialism’ would operate.

Nevertheless, it is difficult to see quite how they connect with the basic ideas of socialism as a post-capitalist society. The classical or Marxian concept of socialism derived from the observable fact that the process of production was becoming increasingly socialised. There is nothing that is produced today that does not involve, directly or indirectly, the labour inputs of countless numbers of workers right across the world. Hence socialism – at least as it was traditionally conceived – entailed bringing the pattern of ownership of society´s productive resources into line with the character of modern production itself.

In other words, social ownership of the means of production is the logical expression of the social character of production. But social (or common) ownership also, of course, logically entails the complete exclusion of buying and selling since the latter implies private, or sectional, ownership of these means.

It does not matter that the members of a co-operative, say, might own it in common amongst themselves (and hence, to the exclusion of everyone else). It is still a form of sectional ownership. The relationship of such a co-operative to the world around it is, essentially, a capitalist one since it has to purchase its inputs and sell its outputs – not to mention, generate profits in order to effectively compete as well as compensate its workforce in the form of wages. These are all, needless to say, the tell-tale indicators of a capitalist mode of production.

In effect, what the exponents of this form of ‘market socialism’ advocate is the continuation of private, or sectional, ownership of the means of production as far as the wider world is concerned — even if one might grant that, internally, the set-up pertaining to a co-operative, say, may well be a lot more equitable compared to a conventional business and that working for such an institution may likewise be a lot more congenial.

There is also the point to consider that the scope for co-operatives is quite limited in the context of the pattern of capital ownership within the larger capitalist society and may even diminish should the increasing concentration of capital in the hands of a few giant corporations become more pronounced than it already is.

Robin Cox

Worker co-operatives in the capitalist system (2024)

From the May 2024 issue of the Socialist Standard

Proponents of capitalism would have you believe that there is no alternative, that the free market provides the most efficient system of exchange and that any deviation risks endangering freedom and prosperity. This is a falsehood, for humans have demonstrated throughout history a remarkable capacity to co-operate without private ownership and the insatiable need for profit. Closer examination of worker co-operatives, despite their long-standing orientation towards generating wealth within the capitalist system, offers a glimpse at how humanity may one day succeed in recasting incentivisation to meet people’s needs rather than to make a profit.

The history of worker co-operatives and self-management is deeply rooted in the 19th-century efforts to address the socio-economic challenges brought about by the Industrial Revolution. Robert Owen, a visionary social reformer and industrialist in the early 1800s, laid the groundwork for the co-operative movement. Owen championed the idea that workers should collectively own and manage the means of production to ensure fair wages and better working conditions. His experiments at New Lanark in Scotland and later at New Harmony in the United States provided early models of co-operative living and working. Others like Charles Fourier, a French social theorist, contributed to the co-operative movement by proposing the concept of phalansteries—self-sustaining communities where individuals could live and work co-operatively. Although Fourier’s ideas were not widely implemented, they inspired later developments in the co-operative movement.

Elsewhere, the Rochdale Society of Pioneers, formed in 1844 in England, played a pivotal role in shaping the co-operative principles that persist today. They established a successful consumer co-operative, emphasising open membership, democratic control, and distribution of surplus based on patronage. Indeed, the so-called ‘Rochdale Principles’ became a blueprint for subsequent co-operative endeavours.

The modest successes of the co-operative movement led Marx to pronounce that worker self-management proved the superfluousness of capitalist managerialism; a statement ostensibly corroborated decades later during the Spanish Civil War (1936-1939). Worker co-operatives and self-management gained prominence across the Republican zone as a means for labourers to assert control over their workplaces. In Catalonia, particularly in the city of Barcelona, workers took over factories and implemented self-management practices. Notable examples include the textile industry with enterprises like Fabrica de Hilaturas Fabra i Coats and the metal industry with companies like Talleres Roca. These initiatives were characterised by worker assemblies, decision-making through consensus, and the elimination of hierarchical structures. The success of these worker co-operatives during the Spanish Civil War was evident in increased productivity and improved working conditions. The textile co-operative, Fabra i Coats, for instance, not only maintained production levels but also witnessed enhanced efficiency under worker control. Similarly, in the metal industry, Talleres Roca thrived under self-management, showcasing the viability of co-operative principles in sustaining economic activity during a tumultuous period.

Contradictions

However, the existence of worker co-operatives within a capitalist system has inevitably led to certain contradictions. Notwithstanding the inculcation of workplace democracy and equality, the necessity to compete and accumulate in the broader system persists, and in face of these structural demands, worker co-operatives have often proven ineffective and unreliable.

Despite his visionary ideals, Owen’s experiments at New Lanark and New Harmony faced internal strife and financial difficulties. The co-operative model struggled with issues of governance, as decision-making by consensus often led to slow and inefficient processes. In New Harmony, the lack of a clear organisational structure and the imposition of Owen’s communal ideas contributed to the ultimate failure of the experiment.

Similarly, during the Spanish Civil War, worker co-operatives in Barcelona faced both internal and external challenges. While some co-operatives thrived, others struggled with management issues, as decision-making by assembly sometimes hindered effective responses to rapidly changing circumstances. Even the relatively successful Fabrica de Hilaturas Fabra i Coats faced difficulties due to disagreements among workers on key decisions, highlighting the challenges of implementing democratic practices in high-stakes situations. External factors too, such as wartime pressures and political instability, also impacted the sustainability of these initiatives. The Barcelona co-operatives, despite notable successes, faced challenges in the broader socio-political context of the Spanish Civil War, ultimately contributing to their limitations and demonstrating the complexity of implementing worker self-management in tumultuous times.

Mondragon

That said, worker co-operatives endure today. The Mondragon Co-operative Corporation, based in the Basque region of Spain, is an often-cited example. Founded in 1956 by a group of visionary individuals led by Father Jose Maria Arizmendiarrieta, Mondragon has grown into one of the world’s largest and most successful co-operative networks. Proponents point to the active participation of employees in decision-making processes through a system of co-determination, where major decisions are made collectively by the workers and management, as well as the commitment to equality of income. While wage differentials exist based on skills and responsibilities, the ratio between the highest and lowest-paid worker is significantly lower than in traditional corporations. This approach promotes a more equitable distribution of wealth among the co-operative members. In terms of profit distribution, a portion of the profits is reinvested in the co-operative, another portion is allocated to social and cultural activities, and the rest is distributed among the members.

Critics, however, argue that Mondragon, while often lauded as a successful worker co-operative, still operates within the broader capitalist system, raising concerns about its limitations and contradictions. One major criticism is that, despite its co-operative structure, Mondragon has adopted certain hierarchical elements, resembling a conventional corporation. While the co-operative members elect management, there exists a professional managerial class that holds considerable decision-making power, potentially diluting the essence of true workplace democracy.

Additionally, Mondragon’s global expansion has led to accusations of replicating conventional corporate practices, including outsourcing and wage differentials, especially in its international subsidiaries. Critics contend that this compromises the co-operative’s commitment to equality, as the wage gaps between the highest and lowest-paid workers have widened in some instances.

Furthermore, the co-operative has faced challenges in maintaining its founding principles as it expanded. In certain situations, Mondragon has implemented cost-cutting measures and layoffs, contradicting the ideal of job security within a co-operative framework. The co-operative’s financial structure has also been a subject of scrutiny, with some arguing that it still operates within the capitalistic framework, reliant on traditional banking and financial institutions. These criticisms highlight the complexities and challenges of attempting to establish a fully co-operative model within the capitalist system, revealing that Mondragon, despite its successes, does not represent a complete departure from capitalist structures and practices.

World co-operative commonwealth

Thus, it is evident that simply introducing a system of worker co-operatives cannot expunge capitalism. The worker co-operative in its current form is not a panacea. Like other workplaces it is geared towards the generation of wealth within the capitalist system. However, the worker co-operative endures as an ideal, an alternative framework where decision-making is collective and understanding one’s role in a larger societal context becomes paramount, fostering a spirit of co-operation and shared responsibility.

If humans across the globe were to adopt worker co-operatives within the confines of capitalism, it would likely serve to mitigate some of the exploitation associated with the current economic system by redistributing wealth and cultivating workplace democracy. That said, an integral component of the capitalist system would remain in the form of surplus value and money exchange, and so there would persist a means to profit through the exploitation of workers. The ideal of a global system of co-operatives could only reach its full potential on the basis of world socialism, a system in which production is geared not towards sale and the accumulation of private wealth but towards using one’s abilities to meet both individual and community needs.

John Elliston

Letter: Common-Ownership? (1961)

Letter to the Editors from the April 1961 issue of the Socialist Standard

Common-Ownership?

I thank you for the interesting reply you give to my letter. It is the more welcome because it does meet the principle points of difference between us. even if I am right in my submission that it promptly runs away from them again. For example.,"common-ownership" is accepted by both of us, but in whom is it to be vested, and how? The term covers a multitude of possibilities unless closely defined. President Nkrumah of Ghana lists four "sectors" of his country's proposed economy, “state-owned, joint state-private enterprise, co-operatives, and purely private." You would, of course, reject two of these, but what of the other alternatives, or have you one of your own? Again, you postulate "assessment of needs and the means to fulfil them," but who is to assess? I am not arguing, mark, that assessments cannot be made. They obviously can be made about many things. But I want to know about it and I feel that a means-test of any variety should be repugnant to both of us. Of course, you do not mention anything of the kind, but what do you mean?

These are not trivial points for they involve the tremendous issue of administrative tyranny against communal freedom, state-ism against decentralisation; indeed, syndicalism versus the commune. Where do you stand? Arc you for high-powered mass-production run by trades-unions on Fascist lines with Coventry and castor-oil complete for "deviationists," a vast factory system with "scientific" direction of labour in a monstrous mechanism under an ultimately totalitarian though differently labelled state, or for the comely life of production for use in free cooperative groups for the most part, and under only the most resilient form possible of overhead government? Arc you for mass-production of everything despite the fact that, as every good farmer knows, mass farming it bad farming, and the other fact that quality craftsmanship beats factory products in length of life four or five times over. Mass-production is for the masses; who but they would touch it? In food products and manufactures alike it is recognised (by the advertising world) that it costs six limes as much to sell an article at it does to make it. The difference is in transport costs, insurances, marketing charges, multifarious agency profits, wholesale and retail percentages—all arising from remote and competitive marketing, and all to be avoided, as Socialism would avoid them (or largely so), by leaving production and consumption to loosely articulated small units wherever possible.

There are hundred upon hundreds of successful co-operative groups in Britain today producing for use. sharing small machinery socially and employing expert advice. The point I wish to make here is that there is nothing to stop such development except the fact that the workers are in the main indifferent. There are the orthodox co-operative societies, of course, numbering in membership ten millions, a quarter of the population, owning the meant and instruments of production and distribution. They are run as capitalist concerns and the excuse of socially conscious members is that they have to meet capitalist competition! "We have to beat the band!". What rubbish! The business of any genuine co-operative group is not to beat anything or anybody, but to co-operate. Of course, big business can “beat" the workers on its own ground, but how shall it beat the co-operative will? Above all, how beat production for use?

As it stands, however, the co-operative societies, after a-century-and-a-half's dedicated (so it is alleged) membership rise to the giddy height of "save up for summer holidays" but fall lamentably short of any co-operative commonwealth whatever. Why? Not because there is anything at all in the way unless the competitive rat-race is still held sacred. It is because the workers neither understand Socialism nor want it.

The choice before us between freedom and slavery. The one is possible only where control of the means of production is direct and immediate, just as democracy is possible only where the people are in direct and effective touch with public affairs. The other cannot be more than an impersonal power process to be rendered quite ghastly by modern automation and atomic energy.

We who claim to be Socialists used to acclaim freedom. With the present drift towards a totalitarian economy, and in trades-union politics the one-party state, your own utopian belief in a miraculous “dawn ” upon the morrow of an equally miraculous release of pent-up proletarian virtue is as abstract and full of holes as a Henry Moore sculpture.

Amwell.

Belsize Park. N.W.3.

Reply:

Lord Amwell wants to know in whom common ownership is vested, and how?

The definition we gave was that everything that is in and on the earth would be the common possession of all mankind. In our property and privilege ridden society it is not easy to give a helpful illustration of what we mean, but we will try.

Air is the common possession of all mankind. you can breathe as much of it as you like without anyone raising an objection. Similarly you can drink as much water as you like at a public fountain. In both instances each person determines what he or she needs. The same process will operate in the future with food, clothing, shelter and everything else. The people with the intelligence to build up the new society will also have the intelligence not to expect the impossible.

In the Socialist Party of Great Britain different members, and groups of members, are appointed to perform the necessary work in the organisation and propaganda of the Party. For example, the Literature Committee finds out from branches what literature they require—the local branches do the assessing. They make an estimate from experience of what further supplies are required. They then obtain from the printer the total amount they have arrived at and proceed to fulfil the needs of branches and individuals. There is no administrative tyranny in this, it is purely a technical problem. While it is true that the Socialist Party is small, and therefore the problem is not a great one, yet in the future a similar procedure will be adopted in harmony with the size and complexity of society's needs.

Production in each area will be based on what individuals in that area need—they will make their own assessment of what they need. Experience will enable the production assessors to have available sufficient in quantity and variety to fulfil these needs. The articles will be available in suitable places in the area and all that people will have to do is to go there and take what they want. We used the example of a self-service store in the limited sense that people can go there and take what they want of what is available. In that instance, of course, they nave to pay for what they take—in the future they will just take.

While the new society is getting on its feet there may be people who, still affected with the possessive inclinations of the past, may want to load themselves up with more than they need. Well, whal of it? They will soon get tired of their stupid and unnecessary efforts.

In our view each community will Ik as self-supporting as possible Some things, however, will need extra community arrangements: like raw material, travel, correspondence, and so forth. These arrangements are just technical questions which can be dealt with by groups of people at given centres who are interested in this kind of work. In the future society there will be no isolated communities, split off from the rest of the world. They will all be part of a world Socialist system, decentralised but each working in harmony with the rest, without statism or tyranny, to enable everyone to live a useful, interesting and satisfactory life. If there are occupations that are necessary but uninteresting then some method of sharing will be devised.

This brings us to the question of mass production. Whether or how far there will be mass production we cannot say now. A great deal that is mass produced nowadays will be unnecessary in the future—armament production is one example. The mass produced article is as a rule the cheap, the short-lived and the lacking in variety. Whether mass production saves a really appreciable amount of labour in the long run is questionable. But what is not questionable is that it is soul-destroying work. Obviously the aim will be to limit that kind of work as much as possible. The accent will be on craftsmanship. and if mass production still operates it will only be in operation in instances where it is essential for the benefit of tho community. More than this we cannot say.

We agree with Lord Amwell’s description of orthodox co-operative societies as just capitalist concerns in which petty investors have neither control nor influence, though they can make a lot of noise at times.

Finally, we do not believe in any miraculous dawn. We believe in the development of understanding, which will be transferred into action by the mass of the population who suffer the present system. Socialism can only be established when the majority of society understand it, want it, and take action to bring it about. There is no other way, but there are plenty of roads into the morass of confusion and disillusion.

Editorial Committee.

Blogger's Note:

I'm not 100% sure which previous letter Lord Amwell (Fred Montague) was following up on but it may have been this one from the October 1960 issue of the Socialist Standard.

Letter: Co-operatives and capitalism (1989)

Letter to the Editors from the March 1989 issue of the Socialist Standard

Co-operatives and capitalism

Dear Editors

R. Lloyd in the November 1988 issue asserts as an absolute dogma that "Cooperatives do not give workers security of employment; do not free them from exploitation; and do not allow the luxury of producing goods outside the parameters of commodity production. Co-operatives under capitalism cannot be organised in any other way".

Accepting with certain reservations, that "cooperatives under capitalism cannot be organised in any other way", I should like to know how the Socialist Party envisages cooperatives could function in the circumstances where there is a considerable degree of socialist consciousness. It seems to me quite ludicrous to suggest that a significant growth of socialist consciousness will not bring about a concomitant reduction in the scale and extent of capitalist economic relations. Surely, both the desire and the opportunities, to transcend the market place and produce things directly for need, starting with small scale and localised activities, are bound the grow with the growth of the socialist movement itself? It seems to me wholly reasonable to suggest that cooperatives represent one particular form, amongst many, through which these expanding non-market productive relationships will be able to take hold at the expense of capitalist relations. This is not at all the same as saying that co-ops can produce for need within the framework of capitalism. Rather, it means they can only do so outside that framework, which would be possible because the framework itself would have contracted. Nor does this mean that socialist should not still aim for the political abolition of capitalism but only that these two approaches are not mutually exclusive. They are complementary, production, which only operates through the prospect of profit, can possibly operate prior to the political capture of power when the socialist aim to abolish the profit system becomes itself a serious prospect?

Louise Cox

Haslemere

Reply:

We are not in the habit of asserting absolute dogmas. The passage our correspondent quotes was based on hard evidence of the experience of co-operatives under capitalism. She in fact more or less accepts this conclusion, but questions whether it must always be so, suggesting that “where there is a considerable degree of socialist consciousness” co-operatives will be able to "transcend the marketplace and produce things directly for need”.

When there is a "considerable degree of socialist consciousness" (when, that is, millions of people are against the money-prices-wages system and want to replace it with a world of free access and production for need), we can indeed “envisage" a lot of things. That, for instance, capitalist politicians and governments will lean over backwards to offer reforms; that trade union will become more democratic and more militant; that the capitalist state will have an increasing problem to recruit workers to serve in its armed forces, to mention some things have long been a subject of speculation among socialists. We can also envisage the co-operative movement too being affected by this ferment of ideas, by becoming more democratic and even by expanding to a limited extent. Why not? After all, who knows?

Our correspondent, however, is asking us to envisage much more than this. She sees the co-operatives as representing "one particular form, amongst many, through which expanding non-market productive relationships will be able to take hold at the expense of capitalist relations".

We can't agree that this is at all a reasonable assumption. Remember, we are talking about a time when there is to be a considerable number of socialists but not yet a majority. This means that the capitalist class, basing themselves on the non-socialist majority, will still control political power and so still monopolise the means of production. How, in these circumstances. could any co-operative detach itself from the rest of the economy, which would remain geared to producing goods for sale on a market with a view to profit, and begin producing goods to consumers could have free access according to need? Where, to get down to the bottom line, would the money come from to acquire the raw materials and power needed to produce the goods that are to be given away free? Surely our correspondent doesn't imagine that capitalist firms would generously agree to supply these free of charge! The fact is that, 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 relationships (commodity production, wage- labour, production for profit will be bound to prevail, however large the minority of socialist might be.

Of course some might regard all this as speculation and they would be right to a certain extent, but such theoretical questions are important since to have a correct practice now it is necessary to have a correct theory. Our correspondent's theoretically unsound views lead her to advocate an unsound practice now. namely, encouraging present-day co-operatives, despite their capitalist character, as a potentially "socialistic" form in the future. She thereby places herself in the same camp as those we criticised in our original article, who she must regard as being right if for the wrong reasons.

Finally, our correspondent has misunderstood our position. We have never said that "the only approach available is the capture of political power". Certainly this is the main goal which the socialist movement must set itself, since until political power has been taken out of capitalist hands the socialist transformation of society cannot be carried out. We note, in passing, that our correspondant too regards winning control of political power as necessary.

There are indeed other things which a considerable number of socialists can do within capitalism apart from the propaganda and electoral activity that any movement seeking to win political control by democratic means must engage in. We have always recognised "the need for the growing socialist movement to formulate its general plans in advance of the capture of political control, so that society might be transformed in a smooth and speedy manner" (as we put it in the Introduction to our pamphlet Socialism as a Practical Alternative). This would no doubt involve the socialist movement, and workers generally, preparing programmes of action for immediate implementation at workplaces and in such fields as education and health once political control has been taken out of capitalist hands. Needless to say. today we cannot do much more than say this will be necessary, since the exact details of such plans will have to be left to the time when the socialist movement will be very much stronger than it now is.

Editors.

50 Years Ago: Rosa Luxemburg on the Co-operative movement (1989)

The 50 Years Ago column from the March 1989 issue of the Socialist Standard

Co-operative Societies are no more able than trade unions to end capitalism. As Rosa Luxemburg points out (pp. 35-6) they can survive within the present system only if they become pure capitalist enterprises. They have to compete with capitalist firms, and to do so successfully they must adopt capitalist methods of production.

  “Labour is intensified. The work day is lengthened or shortened, according to the situation of the market. And, depending on the requirements of the market, labour is either employed or thrown back into the street. In other words, use is made of all the methods that enable an enterprise to stand up against its competitors in the market. The workers forming a co-operative in the field of production . . . are obliged to take toward themselves the role of the capitalist entrepreneur—a contradiction that accounts for the usual failure of production co-operatives, which either become pure capitalist enterprises or, if the workers’ interests continue to predominate, end by dissolving”.

How capitalist the co-operatives have become in England may be seen from the fact that their employees, like employees in any capitalist concern, have frequently had to strike against their conditions of work.

[From a review of Rosa Luxemburg's "Reform or Revolution". Socialist Standard, March 1939.]

Argentina’s Worker-Run Factories: What Next? (2005)

From the December 2005 issue of the Socialist Standard

“cooperatives will never be able to outcompete ordinary capitalist enterprises”

In November anti-capitalists were urged, via email, to send a letter of protest to the President of Argentina about the threat to evict the workers cooperative, set up by former employees, that took over the bankrupt Bauen Hotel in the centre of Buenos Aires two years ago and has been running it ever since.  When in December 2001 the Argentine economy and currency began a melt-down many small and medium-sized enterprises went bankrupt or were simply abandoned by their owners. Faced with joining the already huge and growing army of unemployed, workers in some of these businesses took matters into their own hands. They occupied the workplace and resumed production on their own account.

At the time some saw this as the beginning of a social revolution in which the  workers take over the factories and organise production without the bosses. A more sober assessment was that this was workers, in a crisis situation, reacting in a pragmatic fashion to try to ensure that they had some source of income to maintain themselves and their families. But it did at least show, to any who might not have realised it, that workers can organise production without bosses.

This was not really a mass movement, but it currently involves some 200 enterprises employing in total a maximum of 10,000 people, i.e. the average “recuperated enterprise” as they call themselves (recuperated, that is, from bosses regarded as undeserving or even thieving) is one employing about 50 workers. And 10,000 less unemployed is a drop in the ocean compared with the total number of unemployed in Argentina which, even today, is still over 2 million.

The authorities, not wishing to aggravate an already disastrous economic and financial crisis, accepted this situation as a fait accompli and passed a law allowing workers cooperatives to play a part in rescuing failed businesses. Under this law, local and regional authorities were empowered to compulsorily acquire a failed business and authorise it to be run by a workers cooperative for up to two years pending a settlement with other creditors (the workers themselves were often also creditors in respect of unpaid wages) or the former owners. Some recuperated enterprises went down this road. Others negotiated a lease with the former owners, which of course involved paying them a share of any profits. Others continued to operate outside the law.

The two years are now coming up, and with the Argentine economy having recovered a little and the social and political situation stabilised, the authorities are beginning to enforce the law, which gives property rights over a business either to the former owners or their creditors. A number of businesses taken over by the workers in 2002 have already been recuperated back from them. Now, it appears, it is the turn of the Bauen Hotel. 

Evicting the bosses and organising production without them is one thing; escaping from the economic laws of the market is another – as, within capitalism, it is not just a question of organising production, but also of selling what is produced. Because of their precarious legal position, the workers cooperatives running a recuperated enterprise have been at a competitive disadvantage. They can’t get proper bank loans and, because ordinary capitalist businesses are not too keen to deal with them, often have to sell to them via a go-between (who naturally demands a share of the profits).

What the workers cooperatives, some of which  are organised in a Movimento Nacional de Empresas Recuperadas, are now demanding is a stable legal framework; basically, that the state or regional or local authorities compulsorily purchase the business they are running and legally hand it over to them. Thus, the petition to the President of Argentina on behalf of the Bauen Hotel cooperative calls upon “the Argentinian government and its legislators to act  immediately to . . . pass a law of definitive expropriation in favour of the Workplace cooperative B.A.U.E.N.”

Apart from wanting to secure their own position, the broader vision of those behind the Bauen cooperative seems to be an economy based on a network of worker-owned businesses. Even anarchists in Argentina, who might be expected to look favourably on this, have criticised it:

“Cooperativism does not provide a real solution to the workers’ situation. It is incapable of providing an answer in the interests of all workers. At no time does it question the capitalist production relationships – it questions only superficial features (monopolies, competition, etc.). Even less can a network of cooperatives create a parallel subsystem to capitalism” (www.zabalaza.net/phorum/read.php?f=2&i=156&t=156).

Yes, cooperatives can only ever involve a minority of workers, and the more they are integrated into the capitalist economy and its profit-seeking, the more their members will have to discipline and pressurise themselves in the way the old bosses did – what used to be known as “self-managed exploitation”.

The Trotskyists have another solution. According to an article in the October Le Monde Diplomatique:

“During 2002 there was a lively debate on whether revived businesses should get involved in capitalist markets. A Trotskyist minority called for nationalisation under worker control. It took over four businesses, including Brukman, a garment factory in Buenos Aires, and Zenon, a tile manufacturer in Neuquén. The workers involved saw the rescue as a first step towards a socialist system in which the state would control economic planning. The hard-left parties associated with them did not believe that cooperatives could survive in a capitalist market” (mondediplo.com/2005/10/13survey).

It is certainly true that cooperatives will never be able to outcompete ordinary capitalist enterprises, but the Trotskyists’ alternative of the state subsidising the recuperated enterprises, without requiring them to compete in the marketplace, just to provide jobs is even more unrealistic – and has nothing to do with socialism. (It is more than likely, however, that this is just another of the Trotskyists’ dishonest “transitional demands” which they know can’t be achieved under capitalism but offered as bait to obtain a following for their vanguard party.)

The fact is that there is no way out for workers within the capitalist system. Not cooperatives, not reforms, not trade unions. At most these can only make their situation a little less unbearable. As long as capitalism lasts workers will have to find a source of money one way or another and so will always be in a dependent and precarious position. 

But a number of lessons can be drawn from the recuperated enterprises movement in Argentina.

Firstly, that built into capitalism is a class struggle between those who own the means of wealth production and those who don’t and who are therefore forced by economic necessity to sell their ability to work to those who do. This class struggle is not just over the price and conditions of sale of the commodity workers are selling.

Ultimately, it’s about control over the means of production.  If, as happened in Argentina after the economic melt-down of December 2001, capitalists abandon their factories or, as happened in Russia in 1917, Spain in 1936, and Hungary in 1956, the capitalist state is temporarily incapable of protecting capitalist property, then the workers more or less spontaneously take over their workplaces and keep production going.

Workers are not going to let themselves starve: if the means of production are there, and there’s no state to stop them using them, they’ll go ahead and use them, even if they have no revolutionary pretensions. However, as soon as the state has got its act together again, then it is in a position to confront the workers and re-impose access to the means of production only on its terms.

Which leads to the second lesson: the importance of who controls the state. At the moment, in Argentina as elsewhere, this is in the hands of people favourable to the continuation of capitalism, itself a reflection of the fact that most workers too don’t see any alternative to capitalism. The state, therefore, upholds legal private property rights. The importance of political power is in fact fully recognised by the recuperated enterprises movement.  This is why they are calling for the law on property rights to be changed so as to recognise the property rights of the workers cooperatives which are running recuperated enterprises; which will only happen if they can get the elected law-makers to do so, either by pressuring them from outside or by electing ones  favourable to a change in the law. This is why, too, they want people to petition the President of Argentina.

The end of capitalism can only come as a result of a consciously socialist political movement winning control of political power with a view to abolishing all capitalist property rights and ushering in the common ownership and democratic control of the means of production. The preconditions for ending capitalism are a majority socialist consciousness and workers democratically self-organised in a large-scale socialist party. Neither of which, unfortunately, existed in Argentina.

Which is why the recuperated enterprises movement there has proved a dead-end and why the workers cooperatives it gave rise to are now forced to compromise and integrate themselves into capitalism to survive.

Adam Buick

The “Co-operative” Cure. (1905)

From the December 1905 issue of the Socialist Standard

As the “pure and simple” unions have had rather a bad time lately, owing to the large number of members seriously depleting their funds through unemployment, certain of their members have considered the unemployed, problem, and found a “cure” for it. It is not “back to the land,” “reafforestation,” nor yet “reclaiming the fore-shores,” but it is the brand new “co-operative cure” à la Crooks. Seeing larger sums that would be jeopardised were they to strike, they have come to the conclusion that if all these sums of the various unions were pooled, they would have sufficient money to start a co-operative concern and employ the unemployed workers, and so solve the unemployed problem. This sounds very well in theory, but its proposers seem to have forgotten that they are living under the capitalist system, and that no matter how they may attempt it, they cannot evade the conditions that control that system. The capitalist method of production demands that a profit must be made out of the product of labour. As the amount of wealth in all capitalist countries is continually growing, it is obvious that there is an increasing sum waiting to find a reproductive outlet, i.e., a constantly growing amount of wealth in the hands of the capitalist-class, available for profitable investment.

With these facts in mind, let us examine the “co-operative cure.”‘ Let us suppose, for example, that the Operative Bricklayers’ Society decide to start a co-operative building concern. In the first place there would have to be a quick return on the money or the unemployed bricklayers would not benefit much. That is to say, they would have to find a piece of land that was situated where there was actually, or soon would be, a demand for housing accommodation. Here in the open market they would be subjected to a severe competition with the speculative builders at once. But supposing them to have secured the land in the face of competition, and to have proceeded with the erection of their houses. Within the London district such firms as Patman and Fotheringlmm, or Lovett, could buy land and erect houses cheaper and quicker than the union could. Their houses would be ready to let sooner, and unless the demand was very large indeed, the union co-operative concern would not stand at all.

The same difficulty would present itself in any other trade along these lines. If the unions had their co-operative concerns running and began to seriously compete with the capitalists, it would only be necessary for the large capitalists to flood the market at cutting rates, and prices would soon be depressed below the level at which the union could work, and the scheme would be killed. The co-operative slate quarries which were started by Lord Penrhyn’s locked-out men have practically reached this point. They may pick up the crumbs of commerce, like the non-trust firms of the United States, but as soon as they get troublesome they have to go.

If the case of the ordinary co-operative society (which is simply a kind of joint-stock company) is taken it will be found that in a large number of cases prices are higher than the usual shop prices. As more and more machinery is introduced, and the army of the unemployed is increased, the wages of those in work fall. The worker has a still smaller purchasing power, and has to buy goods, knowing them to be inferior, because he cannot afford any other, even though the co-op. charges were but a little higher than those of the outside dealer. There has been no great improvement in the workers’ condition through, co-operative concerns in any country where capitalism is well advanced to the trust stage. The only concerns that have paid well are those run on approved capitalist lines,—sweating and violation of the Truck Act included. The workers cannot fight capital with capital, because the larger capital is bound to win, and the workers do not control it. The Socialist Commonwealth is the only cure for the unemploted roblem. Help us then to realise it.

E. J. B. Allen

The failure of the “Co-operatives”. (1923)

From the October 1923 issue of the Socialist Standard 

A writer in the Co-operative News (28/7/23), signing himself “Vigilant,” offers what pretends to be a criticism of an article on co-operation appearing in our July issue.

This critic endeavours to take a “safe” line. He ignores what is essential in our article, and aims his criticism at three particular points.

In our article we made clear the present position of the worker, and showed how he was limited by his enslavement. That his funds for investments were practically nil; that he is forced to buy in the cheapest market regardless of “ideals” ; that, as a preliminary step, he must obtain control of political power before he can abolish slavery ; that once in control of the political machinery, he can alter the economic basis of society to suit his requirements.

These points our vigilant critic ignored, preferring to “pass by on the other side.”

He opens his criticism with a false statement, and winds up with two lies.

He writes :

“An editorial article in the July issue of the ‘Socialist Standard,’ an organ of the Socialist Labour Party.”

The Socialist Standard is the organ of the Socialist Party of Great Britain; a political party that is opposed to the Socialist Labour Party. The latter is a body professing to overthrow capitalism by “Industrial Action.”

This opening’ error of “Vigilant” speaks volumes for his vigilance, and suggests how similarly “reliable” his succeeding statements may be.

He endeavours to prove that the Co-operative movement has “enormous” capital at its disposal, but admits how small “its financial resources seem in comparison with the capital holdings of great trusts and combines.” Then he inserts figures to show the large amount of money belonging to working men that is in the hands of industrial insurance societies, but handily omits either the source of his figures or information of what the figures represent—whether money paid in or the amount of the policies.

Co-operation is indeed in a bad case when its advocate has to drag in such matters as the above to try to build up capital “in the air.” Even giving him the benefit of his figures, such capital is still small in comparison with that which the trusts and combines control. And the latter also control the sources of raw material which, together with political power, gives them the key to the situation.

Here is a sample of “Vigilant’s” method of arguing :

  “If the working people are determined to obtain their supplies through the co-operative stores, the powerful capitalists are more likely to suffer than the co-operators should they precipitate a struggle.”

It is easy to demonstrate the absurdity of the above. Taking things as they are at present the working people can “determine” what they like, but their wages determine what they can spend and how they can spend. Wages in general are at such a low level that the workers are compelled to buy in the cheapest market, and that market is where the trusts control; they only go to the co-operative for the dividend dangled before them, and when that fails co-operative sales drop.

  “Practically every society in the country is crying out for more and yet more trade, yet many members have stopped purchasing at their own stores because there is no dividend or there has been a reduction in the amount of dividend, arid they take their trade—the life blood of the movement—to establishments where no dividend is ever paid.”—(“Co-operative News,” 18/8/23.)

Farther on “Vigilant” completely smashes the co-operative position. He points to the fact that the Co-operative movement is now taking political action. If they could extend their business so as to beat the capitalist in the economic struggle, why bother about political action? Have they at last obtained a glimmering of the fact that political power gives its controllers the means to smash any opposition?

As a prop to his contention that the capitalists cannot smash the Co-operative movement if they wish, “Vigilant” makes the following remarks :

  “Twenty-five years ago private capitalists banded themselves together to launch their offensives on the co-operative movement. Co-operators were dismissed from private employment, and the flow of goods from private producers to distributive societies was checked. Backed by public opinion, co-operators then beat the boycott, and have since adopted an even more menacing attitude towards the meat, soap, tea and tobacco trusts, their efforts becoming more effective as their control of the productive processes has tightened.”

So menacing has been the attitude of the Co-operatives and so effective their control that at the present moment the above-mentioned trusts control the market in their respective spheres and the Co-operative is nowhere ! Moreover, “Vigilant’s” little fairy tale is shattered by evidence from his own side :

  “In reality, the big financiers and captains of industry did not discover that the co-operative movement was really what it was until the war was well on and they found it nipping in the bud here and there their well-devised schemes for plundering the people through the necessities of the war. In all former wars it had been recognised that, contracting for the Government was a sure means of securing a quick rise to fortune by the supply of shoddy materials at treble prices, and one can imagine the chagrin of those firms who found the two Co-operative Wholesale Societies insisting on charging the Government reasonable prices and supplying goods which were value for the prices charged. This was the beginning of the awakening of capitalism to the co-operative menace, but when once they became thoroughly awake it did not take them long to devise means for clipping the movement’s wings.” —(Editor article in “The Scottish Co-operator,” 23/6/23.)

The above admission proves our contention that the capitalists can smash such an organisation as the Co-operative when they consider the latter a menace. The entrance of the Co-operative into the political arena is further proof that they recognise their own weakness economically.

“Vigilant” scouts our contention that the Co-operatives exploit their workers and makes the curious remark :

  “Theoretically, there can be no exploitation in a co-operative system of society.”

In the first place we are dealing with the Co-operative movement and not a co-operative system of society. We pointed to the frequent strikes of co-operative employees, and particularly the recent one in the C.W.S. Our wily critic, however, carefully ignored these facts, although the columns of the Co-operative News (even the one in which his criticism appears) are full of these subjects.

The President of the N.U.D.A.W. wrote to the Co-operative News (18/8/23) pointing out that the wages in the C.W.S. are lower than those of a private firm doing a similar trade to that at Pelaw and quoted’ the following figures :

  “The flat rate for all women at the C.W.S. is 27/3. In the private firm they are graded into four classes and even the least skilled receive 4/3. per week over the C.W.S. rate.”

The above figures were printed and have neither been questioned nor denied by the Co-operative News.

The same issue of the Co-operative News states that notices of wage reductions have been posted in the various jam works of the C.W.S.

From the above it will be seen that the Co-operative concerns carry on business in. the same way as any ordinary capitalist concern, so far as their workers are concerned.

We now have an illustration of “Vigilant’s” knowledge of economics :

  “An elementary knowledge of economics disposes of ‘Gilmac’s’ final point. To increase co-operative production is to reduce prices, and at the same time increase the purchasing power of the common people by distributing higher ‘surpluses.’ Consequently, demand is stimulated, production booms, and more and more workers are absorbed into the co-operative industry.”

An “elementary knowledge of economics” will very easily dispose of these early nineteenth-century free-traders’ slogans.

The Co-operative obtains its “surpluses” by conducting business on strictly capitalist lines—cutting down expenses by reducing wages and sacking workers. Carrying on their work more economically, i.e., by saving labour wherever possible, Unemployment will therefore increase. If a worker has less wages, and even, in some cases, no wages at all, lower prices (if the latter did come about !) would not increase their buying power beyond its present state.

It may, perhaps, be news to many admirers of the Co-operative movement to learn that a considerable amount of the Co-operative funds are invested outside the Co-operative movement. For instance, in 1915 they had “between four and five millions in bank balances and non-co-operative undertakings, of which the railways claim a fair share” (Labour Year Book, 1916, page 391), and “the investment for the movement in the War Loan of July last reached £1,500,000” (same source, page 389).

Here is further evidence that the Co-operative funds are used to exploit workers.

They also were not above “turning an honest penny” out of the slaughter of working men in the European shambles.

It is unnecessary to labour these points further, as they have already been covered in the last two issues of our paper, and “Vigilant” has not met the arguments therein set out.

Before concluding, we cannot pass un-mentioned the last paragraph in “Vigilant’s” alleged criticism. It reads as follows :

  “We note that ‘Gilmac’ refers proudly and often to history in the course of his dissertation. When next he treats of co-operation we hope he will offer more than one historical fact, and that he will take it from a more authentic source than a current issue of the ‘Daily News.'”

In the first place the source of an historical fact is immaterial, provided such a fact is a fact. The “fact” in question was the strike of 15,000 employees of the C.W.S. against a reduction in wages. Significantly enough “Vigilant” sneers at the source, but makes no comment on the fact.

In the second place there are lengthy quotations from G. J. Holyoake; an examination of the workers’ present position under capitalism (which “Vigilant” again completely ignores) ; a statement of the ideas of Robert Owen, which can be verified by anyone from Owen’s short Autobiography; and much more, all of which are historical facts, and not taken from a current issue of the “Daily News.”

To conclude, after all the fairy tales and superficial statements of “Vigilant,” the present position of the Co-operative movement is as follows :

  “The net result of the change is that, relatively to its rivals and enemies, co-operation is weaker than it was nine years ago ; weaker financially and weaker administratively.”—(“The Scottish Co-operator,” 23/8/23.)

Gilmac.

Co-operation—A hopeless experiment. (1923)

Editorial from the July 1923 issue of the Socialist Standard 

There are many who believe that the Co-operative movement will provide an easy and painless means of transforming present competitive production into production upon a basis of common property. There are others who oppose the Co-operative movement on the ground that it is Socialist. Those who advance these views have not given sufficient consideration to fundamental matters.

The means of production to-day are in the hands of a small but tremendously wealthy class; a class that is powerful because it controls the State machinery. The means of production are operated by a large but poverty-stricken class of wage workers ; a class that is in slavery because it leaves the State machinery in the hands of its oppressors.

Production is on a gigantic scale, based upon sale for profit. The increase in quantity and complexity of the machinery used makes necessary ever less and less workers to turn out the things required by society. The big capitalists undersell the small, and eventually drive increasing numbers of the latter out of business. Only a short time ago the Small Traders’ Association was complaining bitterly that their members were being rapidly wiped out of trade. In fact, the small traders are becoming little more than salesmen for the powerful trusts.

Assuming the continuance of present production for sale, the large capitalists can only be driven out of business by a still larger type. Any organisation that is going to offer serious opposition to the present owners of wealth must have an enormous capital at its disposal. Imagine the size of capital an organisation would require to, compete successfully with, say, the Steel, Oil, or Meat Trusts, or similar gigantic corporations ! Further, such an organisation to live and flourish would have to adopt the same methods as its competitors—exploit its workers.

Over a hundred years ago Robert Owen conceived the idea of organising a new society in the midst of the old. He thought the workers could band themselves together into producing and distributing groups, spread over the whole of society, and eventually freeze the capitalist out. Subsequently he had to modify his ideas somewhat, owing to the strength of the opposition, and tried experiments by establishing co-operative colonies on comparatively virgin soil—but, of course, with people brought up in capitalist surroundings. These experiments all ended in disaster; they ultimately ruined him and demonstrated the futility of attempting to found ideal societies in a capitalist world.

There was an excuse for the dreams of the heroic and good-intentioned Owen. In his time knowledge of the organisation and development of society was comparatively small; and he was one of those by whose disastrous experiments later generations were to acquire a sound understanding. Since his time social investigators have piled up literally mountains of information, showing how one form of society grows out of another, owing to the operation of forces that already exist in the old society; and that a new society is never grafted on to the. old, as it were, from the outside.

In Owen’s day the capital required to start an important industry was but a tiny fraction of what is required to-day; and the power that lies in the hands of those controlling the State was not yet sufficiently realised by the oppressed class or its would-be deliverers. The powerful capitalists have it in their hands to smash to pieces, whenever they wish, any rising productive or distributing organisation that challenges their existence, long before such an organisation could reach any serious proportions. The very fact that they make no serious effort to interfere with the development of the various Co-operative Societies shows that they expect no dangerous opposition from these societies.

In his “History of Co-operation,” the late G. J. Holyoake, one of the best-known advocates of Co-operation, defined it as follows :

  “The equality sought is not the mad equality of equal division of unequal earnings, but that just award of gains which is proportionate to work executed, to capital subscribed, or custom given. . . and there is equality in a co-operative society, when the right of every worker is to a share of the common gain in the proportion to which he contributes to it, in capital, or labour, or trade—by hand or head ; and this is the only equality which is meant, and there is no complete or successful co-operation where this is not conferred, aimed at, and secured.”—(Vol. I., page 4.)

From this it will be seen that he who subscribes most capital will gain most; in other words, those who “have not,” who are the ones that most require aid, will remain as they were before—without. Inequality in the means of living, and hence private property, is at the root of the Co-operative movement—that is, the very opposite to Socialism.

On page 5 of the same volume the author states :

  “It touches no man’s fortune ; it seeks no plunder ; it causes no disturbance in society ; it gives no trouble to statesmen.”

Here the death knell of Co-operation is sounded, from the point of view of any advantage it offers to the workers. If those who own the means of production are not to have their fortunes touched, from whence are to come the productive powers of tomorrow? If there is to be no disturbance in society, then the slaves are to remain as they are—slaves. If it is to give no trouble to statesmen, then the capitalist can rest content that, so far as the Co-operative movement is concerned, the parasite will be kept for ever.

At present the mass of the people obtain, on the average, barely sufficient to keep themselves and their families from starvation; consequently they have no appreciable sum to invest in Co-operative shares. Their wages are so small that as a general rule they must buy in the cheapest market. The wealthy Trusts have demonstrated again and again that, when necessary, they can undersell and bankrupt their smaller opponents.

The Co-operative concern can only flourish by adopting up-to-date methods, employing as few as possible workers to obtain a given output. If, therefore, we were to assume a growth of the Co-operative concerns to an important size it would mean a parallel growth of unemployment. There would be less who could buy shares and more who wanted bread. The problem facing the workers of obtaining the wherewithal to live would be intensified instead of being abolished.

The soundness of this position is borne out by the history of the Co-operative movement. It has adopted capitalist methods and exhibits capitalist evils. At the moment of writing, 15,000 employees of the Co-operative Wholesale Society are out on strike against a reduction in wages. (“Daily News,” 11/6/23).

Co-operation offers no easy road to emancipation. Those who suport the movement,, such as the Communist Party and the Labour Party, are inviting the workers into that alley where they become temporarily disillusioned and apathetic.

The abolition of wage slavery necessitates recognition of the fact that the workers are robbed of the wealth they produce; that the capitalists are the robbers; that the workers can produce for their own consumption more easily than for an idle class ; that the robbery can only be prevented by the producing class owning the wealth it produces ; that such ownership can only be attained by taking from the capitalists the control of the political machinery and converting private ownership into social ownership.

The new society will therefore grow out of the old and not be imposed upon it. All that is valuable in the old society will be retained, and all that is harmful will be abolished. The central idea of present production—profit, with its basis private property—will give place to production for use on the basis of common property.

Gilmac.

Working together (2010)

Book Review from the April 2010 issue of the Socialist Standard

The Social Economy. Ash Amin, ed: Zed Books £19.99.

The concept of social economy is a rather vague one, and is not helped by the use of other terminology (such as ‘solidarity economy’ or ‘third sector’) to refer to the same or similar notions. Broadly, though, it describes the provision of goods and services by organisations which are neither profit-making and privately-owned nor run by the state, whether national governments or local authorities. It covers, then, at least workers’ co-operatives and various voluntary groups.

Amin argues that the present recession is an opportune time to consider alternatives to the profit system. With case studies from Italy, Poland, the Philippines, the US, Canada, Argentina and Brazil, this volume presents a spectrum of different examples, from workers taking over bankrupt companies to housing co-ops and small farmers getting together to market their own produce. The question which arises, though, is the extent to which what is described here really does constitute a ‘third way’.

It is a widespread finding that wages are lower in social enterprises than in others. A survey from Italy, however, suggests that employees in the social economy are on the whole more satisfied with their work than other workers, largely because of the importance they assign to social usefulness and helping disadvantaged people. On the other hand, social enterprises have to behave like ordinary capitalist concerns in many ways: there is still wage labour, those who arrive late for work can have their pay deducted, and enterprises may close if trading conditions are not favourable.

But many social enterprises do show that workers can organise themselves and run production without bosses and employers telling them what to do and ordering them around. It must be acknowledged, though, that this does not mean leaving capitalism behind, since they function within the capitalist economy and indeed are often supported by governments. The editor writes of ‘making money, markets and the productive system work for human development, ecological preservation, spatial equality and collective fellowship’. Noble goals, but only achievable without money and markets.

Paul Bennett

Three pamphlets (1927)

Pamphlets Review from the April 1927 issue of the Socialist Standard

Published by the Labour Research Department, 162, Buckingham Palace Road.

“Rivals of the Co-operatives” (price 1d.) contains figures of the large profits made by the Maypole Dairy Co., Ltd., and various other big grocery concerns. Apart from these figures, the leaflet is grossly misleading. It assumes (without a shadow of proof) that working-class poverty is due to high prices, with the implication that low prices and working-class prosperity go hand in hand. Secondly, it admits that the Co-operative Societies have made profits of £220 million between 1913 and 1925, but does not attempt to explain in what respect Co-operative profits—drawn from the exploitation of Co-operative employees—differ from Maypole’s or Peark’s profits drawn from a similar source.

The Co-operative movement is part and parcel of the capitalist economic system, and as such is opposed by Socialists and should be exposed, not defended, by the L.R.D.

“Co-Partnership and Profit-Sharing” (price 1d.) is a handy little summary of the progress of profit-sharing and co-partnership devices intended to obscure the class struggle. It presents a table showing how little of the income of certain well-known firms actually reaches the workers under the guise of a “share in profits.”

“The Reform (!) of the Poor Law” (price 1d.), by John Scurr, is a denunciation of Conservative proposals to hand over the functions of Boards of Guardians to County Councils and County Boroughs, although he has to admit that “Labour policy has been directed in the same pathway” (page 12). The whole discussion reveals the barrenness of Labour Party reforms and the unsoundness of their theories. Does it really matter the least little bit to the working class whether property owners pay certain sums locally as rates or nationally as taxes? And is it not time to recognise that it is not the form of administrative machinery which counts, but the class interests of those who control it? While the capitalist class are in political control, no amount of words or parish council debating ability shown by Mr. Scurr and his party will prevent the capitalist class from using their administrative machinery to carry out their policies as they think fit. Mr. Scurr ends with the very revolutionary slogan. “Let our cry be, No further starvation of the poorest of the poor.” It is a pity he does not explain what degree of starvation is permissible, and why the rest of the poor are to be thrown to the lions. Will it ever dawn on these professed Socialists that Socialism really is the only remedy?

Edgar Hardcastle

Cooking the Books: Socialism in one enterprise? (2020)

The Cooking the Books column from the October 2020 issue of the Socialist Standard

In an article in Counterpunch (28 July) Richard D. Wolff, of ‘Capitalism hits the fan’ fame, criticised the widespread definition of capitalism as ‘private’ or ‘free’ enterprise on the grounds that it ignores state enterprises and that ‘free’ is a loaded term that in any case only applies to those who own enterprises. He offered instead:

  ‘A key unique quality of capitalism is the employer/employee relationship between two different groups of the people engaged together in the economic system. That relationship entails an exchange of wages or salaries for labor power (the ability of an employee to work). A contract between employer and employee covers that exchange plus the employee’s exertion of brains and muscles over lengths of time and to ends specified by the employer. ’.

A defining feature of capitalism is indeed the wages system. Ending capitalism does involve the ending of this employer/employee relationship. Wolff, however, sees this as being implemented at enterprise level, describing as ‘instances of communist enterprises’ worker co-ops where ‘one and the same community designs, directs, and performs the work of an enterprise such that each community member has one vote and enterprise decisions are made democratically.’

His justification for calling worker co-ops ‘communism’ is that they are commonly owned by those working in them and end the employer/employee relationship as far as their members are concerned. But if the common ownership of something by a group is ‘communism’ then there are many other examples of it within capitalist society. What socialists aim at, however, is the common ownership of the means of life by society as a whole – a communist society.

Marx wasn’t opposed to workers forming co-operatives. In fact he saw their emergence as one of the signs that society was becoming ripe to move from a capitalist to a communist society; they showed that the individual private owner/employer was redundant and that workers were quite capable of organising production without them. He was, however, opposed to the reformist demand that the state should subside them. In his own words:

  ‘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’ (Capital, Volume III, Chapter 27).

In other words, under capitalism, workers co-ops had to function like a capitalist enterprise with all the shortcomings this involves such as, we can specify, having to make a profit to re-invest in up-to-date methods of production so as to remain competitive and stay in business.

Wolff’s conception of the role and significance of ‘co-operative factories’ is different. He envisages them as producing for the market alongside private and state enterprises both under capitalism and in ‘socialism’ (by which, going completely off the rails, he seems to mean places like the old USSR). He advocates co-operative enterprises as a way forward for workers within capitalism in the same way that other reformists used to advocate state enterprises.

This brings out that his definition of capitalism is incomplete. It needs to include as well as the employer/employee relationship that production is carried on for sale with a view to profit. Capitalism is a market society in which everything is bought and sold, not just labour power.

Common ownership on a society-wide scale implies that the democratically-run productive units would not be producing for a market, precisely because what they produced would belong to society and be available to be distributed in non-market ways, whether free distribution, free use or taking according to need.

Letters: Will capitalism collapse? (1989)

Letters to the Editors from the May 1989 issue of the Socialist Standard

Will capitalism collapse?

Dear Editors.

The sense of the last paragraph of my letter (March Socialist Standard) was completely lost because of your typographical error. I repeat the question I asked you which I notice you did not answer. How can capitalist production which only operates through the prospect of profit, continue to operate prior to the political capture of power when the socialist aim to abolish the profit system becomes itself a serious prospect once the socialist movement reaches a significant size? I think it is important that your readers should have an explanation so that they may judge for themselves the feasibility of obtaining an entirely new economic system more or less overnight without some change in economic relationships having occurred prior to this apocalyptic event.

Louise Cox

Haslemere

Reply:

Sorry about the error that made the last sentence of your letter incomprehensible. As to the point you wanted to raise, you appear to be saying that the growth of the socialist movement will bring about the economic collapse of capitalism before a socialist majority has come into being.

We have heard this sort of argument before. but we don't see why the socialist movement merely growing to a “significant size" should make profit prospects disappear. An analysis of the way capitalism works discloses, perhaps unfortunately, that the capitalist system will be able to stagger on, even if this involves increasing government intervention, until it is abolished by the conscious political action of the working class.

In any event, the socialist mode of production and distribution, i.e. production geared exclusively to meeting human needs and free access for all to goods and services according to their self-defined needs, cannot gradually evolve within capitalism. Whatever may be the political, economic and social effects within capitalism of the growth of the socialist movement, production for use — and the consequent disappearance of money/commodity relations and wage labour — cannot begin until after the socialist movement has democratically won control of political power and established the common ownership of the means of production by the whole community.

Editors.

Independence and Culture

Dear Comrades,

The brutal history of capitalism has often involved invasions from abroad as part of the process of its local development. Cromwell's occupation of Ireland, with all its savagery, was an early instance. In Marx's day, when capitalism was still young and insufficiently widespread in its establishment, it might have been valid to argue (and he did) that its further extension was a progressive necessity. Indeed at the time of the Crimean War Marx regarded the possibility of a Tsarist victory as such a retarding factor in historical development that he felt able to look favourably upon the opposing Anglo-French and Ottoman Turkish forces. By the twentieth century the world dominance of the capitalist system was no longer in the balance even if to this day large areas of the under-developed world have yet to undergo their own thoroughgoing changeover to commodity production and wage- slavery.

This means that the world-wide establishment of socialism no longer hinges upon the yet further spread of the iron heel of capital. But the state-capitalist bureaucrats of Moscow and Peking have not let this inhibit them where the extension of their control over Afghanistan or Tibet has been concerned. It is true that as the harbingers of industrial society the Russian imposed regime in Kabul and the Chinese colonial administration in Lhassa represent modernising trends as did British and French imperialism in their day. But in recognising this and in our repugnance for the superstitious, women-oppressive and backward-looking old orders we must not ignore, as I feel the article "Independence no benefit" in the April issue did, the harshness of imposed foreign ways and language by the latest conquerers. So whilst the notion of “national independence" is rightly shown as being, from the working-class point of view, merely a change of rulers imagine how any of us would feel if the purchase of a postage-stamp, the reading of a "news" paper or our kids' schooling required the use of Chinese! Our rejection of nationalist delusions ought never to show insensitivity to the valid concerns of oppressed people. Moreover. it strengthens the appeal of Socialism to show that in contrast to the imposed uniformity and centralisation of commodity production we aim for a way of life which, of its nature, fosters cultural freedom and diversity.

Yours for the revolution 

Eddie Grant 

London NW4