In the United States the word “socialism” provokes negative connotations of Stalin and the Cold War despite the surprising success of Eugene Debs of the Socialist Party of America at the beginning of the 20th Century where the gerry-mandering of the franchise excluded many blacks, poor whites and immigrants, yet he achieved almost a million votes when he stood for president, 12% of the vote. Still, the word “socialism" conjures up a vision of the Soviet Union’s authoritarian one-party state and its centrally planned economics, controlled by Big Brother bureaucrats and the gulags for any dissenters.
An alternative term for the society socialists aspired towards has been “cooperative commonwealth”. This sounds more positive to an American public. After all, the states Massachusetts, Kentucky, Pennsylvania or Virginia, all call themselves commonwealths in their constitutions. The idea of an economic system based on cooperatives has also found a more receptive hearing. America has known many utopian schemes that had co-operatives as its basis. There has been political parties that have promoted co-operatives as policy. In the 1930s, the populist Farmer-Labor Party could issue a radical platform:
“We declare that capitalism has failed and that immediate steps must be taken by the people to abolish capitalism in a peaceful and lawful manner, and that a new, sane, and just society must be established, a system in which all the natural resources, machinery of production, transportation, and communications shall be owned by the government and operated democratically for the benefit of all the people, and not for the benefit of the few. Palliative measures will continue to fail. Only a complete reorganization of our social structure into a cooperative commonwealth will bring economic security and prevent a prolonged period of further suffering among the people.”
In Washington state the Washington Commonwealth Federation, based on similar ideas, won control of the state Democratic Party during the late 1930s and early 1940s. In a parallel development in Canada, the Cooperative Commonwealth Federation (CCF) was formed with some prominent Socialist Party of Canada members joining.
Today, having fleshed-out their own visions of the Cooperative Commonwealth, Richard Wolff and Gar Alperovitz have been getting a lot of exposure on the alternative media websites for their own “radical" models for a co-operative economy. But exactly what is there in their proposals to get excited about? They insist that they are challenging capitalism by presenting alternatives to capitalism, but in the end all they offer are prescriptions for curing capitalism. In their mythical “market-socialism” workers would be self-exploited.
The socialist case against capitalism is not whether there exists 'good' or 'bad' capitalism, or that there are 'fair' or 'unfair' capitalists. Our opposition is to the capitalist system in its entirety. Whether someone works for an employer or works as part of a co-op is neither here nor there. It's all just a job. Co-operatives are still capitalist institutions i.e. capital - even if it's "collective" or "democratic" or "social" capital - is invested to make more capital. Co-operatives that exist under a market economy inevitably replicate the problems of capitalism due to market pressures as Chomsky points out, as well as Marx’s criticisms of them.
"First, you can’t “out-compete” capitalism. Corporations will always have larger capital to invest in research, technology, and their willingness to cut costs through lower wages, less environmentally sounds practices, out-sourcing, etc, will give them an advantage.
Second, is that co-operatives are subject to market pressures to compete just the same as capitalist enterprises and this lends itself to pressures to create the same practices of corporations."
Third, is that many cooperatives face the same issues as small business owners face. Often worker co-operatives are in the service, food or other specialty industries with lower profit margins and because they are smaller and do not have the advantages of scale which larger companies do.
Lastly is the tendency of worker co-operatives to see their needs and interests as an entity apart from and/or above other workers. After all, as cooperatives exist within a market system, their interests are to compete with other companies and expand their market share."
https://machete408.wordpress.com/2013/03/28/self-managed-capitalism-criticism-of-richard-wolff-and-workers-cooperatives/
Firms in a competitive market have to compete. That doesn't have to be on price, but they do have to be profitable (even non-profits need to turn a surplus to cover unforeseen costs, reinvestment, downturns). That means that if you want to pay better wages and/or work shorter hours/with less intensity than rival firms, you've got to make up the difference somewhere to remain competitive to continue to exist.
Savings on managerial salaries make up a bit. Maybe you can charge a bit more for your product due to the goodwill of a co-op. But that's a niche strategy, not one for market domination. Hence many existing co-ops are operating in premium-priced niche markets (fair trade coffee, organic food etc).
Another route is to pay less and/or work longer hours. Lots of co-ops go this route, and use co-op ideology to justify the sacrifices 'for the cause'. But this undermines the original objective of an anti-capitalist alternative. Typically as these co-ops grow, newer workers don't share the ideological work ethic, and you get the (re-)emergence of managerial hierarchy and a two-tier workforce. There have even been strikes at co-ops over issues like this. Mondragon frequently hailed as a model to follow is a normal capitalist business as they hire workers and exploit them. The Mondragon collectives are the seventh largest company in Spain and in 1965 the fascist regime of Franco awarded Father Arizmendi, the founder of Mondragon, with the Gold Medal for Merit in Work. In Mussolini’s fascist Italy by 1927 there were 7,131 co-ops and by 1942 the number had swelled to 14,576. There was little fear that these “alternative” modes of production threatened the economic system. So it can hardly be claimed as subversive. As Sharryn Kasmir’s “The Myth of Mondragon” explains they “embodied worker participation, non-conflictual relations between labor and management, and the withering away of class identifications.” The Basque Workers Council in their magazine, charged the cooperatives with:
“Becoming like any private firm, from the point of view of daily work, the cooperative member is exploited in his/her job in a capitalist firm by increased production, mobility, schedule changes, etc. We don’t understand why the managers don’t present a proposal to lower the age of retirement in the cooperatives…Instead, they opted, just like owners of private firms, to achieve profitability by the same methods as capitalist firms: lay-offs, increasing productivity, temporary contracts, etc.” In 2008-2009 period, the group fired thousands of workers, mainly people with temporary contracts, exactly the same politic as other ‘fully capitalist’ corporations.
Socialists are anti-capitalists - we don't want markets or private/ state owned means of production. Co-ops can't bring about the revolutionary change we desire. Even if all businesses in the world were workers' co-ops, we'd still have inequality (some would compete more successfully than others), we'd still be destroying the environment (market economy means it's profitable to externalize costs), we'd still have unemployment (taking on more workers means splitting the profits with more people, so low incentive to hire), we'd still have alienated work conditions as a norm (exploit yourselves to be more competitive).
It is accurate as Woolf says unions are “reduced to improving the terms of the employer-employee relation for the workers. There was no strategy to eliminate that relation in favor of something better. It was the modern equivalent of struggles during the time of slavery that aimed for better food, clothing, housing, etc. for slaves rather than demanding the end of slavery.” http://www.democracyatwork.info/articles/2013/03/a-new-strategy-for-labor-and-the-left/
But he fails to perceive that his solution is akin to allowing small groups of slaves on a small number of plantations to self-manage themselves. It makes life better for some, but it doesn’t end the system of slavery. Workers at a capitalist enterprise facing pay cuts can take direct action such as strike action against it. But workers at a co-op cannot do this as they would just be striking against themselves!
Seeing co-operatives as anything other than a temporary and partial solution at improving your working lifestyle is definitely a mistake. If co-ops are to be taken as something more than a palliative measure to problems at work, then those involved would be in for a disappointment. Although co-ops are not a means to replace capitalism, worker co-operatives can have some uses for ourselves such as a non-hierarchal way to run socialist movement infrastructure like bookshops, cafés etc
Included are some contributions from the Libcom forum
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