Cooped up in Co-ops

Socialists should learn from history and experience. The idea that society can be transformed by the introduction of cooperatives is not a new one. The first cooperatives represented a peaceful attempt to build an alternative economic system by organising peoples' institutions that would co-exist alongside capitalist ones, and would gradually expand to involve the majority of the population as cooperative producers and consumers. The first American dairy cooperatives were founded in the Goshen, Connecticut and South Trenton, New York, both in 1810. A decade later a group of Ohio farmers formed America's first agricultural marketing cooperative on record. In 1822 Pennsylvania barley farmers set up the first cooperative brewery. The first cooperative wheat elevator was opened in Dane City, Illinois, in 1847. The Amalgamated Houses is the oldest non-profit housing cooperative in the country established in 1927, now with 1500 families in 11 buildings on 15 acres between Van Cortlandt Park and the Jerome Park Reservoir, New York.

In 1933, the author turned activist, Upton Sinclair, outlined a plan for ending the depression in California, in a widely-distributed pamphlet. His plan, EPIC (End Poverty In California), was to create "land colonies whereby the unemployed may become self-sustaining" in the countryside, while in the cities EPIC would procure "production plants whereby the unemployed may produce the basic necessities required for themselves and for the land colonies, and to operate these factories and house and feed and care for the workers." These two groups, in the cities and countryside, would "maintain a distribution system for the exchange of each other’s products. The industries will (constitute) a complete industrial system, a new and self-sustaining world for those our present system cannot employ." EPIC planned to incorporate the widespread "self-help" cooperatives into the program. The plan's supporters began forming EPIC clubs; in less than a year Sinclair won the Democratic Party nomination for governor, dumping out the "regular" machine. With the slogan Production for Use, Sinclair and EPIC waged an uphill campaign against both the Republicans and the Democratic machine, who joined to defeat him, spending twenty to thirty times as much and controlling virtually every major newspaper and radio station in the state. Still, Sinclair got 38% of the votes but not enough to jettison the Republican/Democratic political machine from the driver's seat and seize control of the steering wheel.

With the collapse of the campaign, numerous EPIC clubs turned their energies to organizing co-operatives, mostly stores and buying clubs, reviving the consumer movement. Consumers Cooperative of Berkeley, which became the largest consumer cooperative in the United States. But reckless expansion undertaken in closed-door sessions by a “conservative” board, without membership input or approval, brought it to ruin. The Berkeley Co-op expanded into surrounding areas where there was no base of support, simply taking over other (and already failing) supermarkets. The whole house of cards came tumbling down in 1987 when the Berkeley Co-op filed for bankruptcy and dissolution.

In the 60s, thousands of people, mostly young, moved out of the cities into rural cooperative communities and communes, and tens of thousands stayed in their own communities and worked to create a survival network outside of and against the capitalist system, with a common ideological base of working to build a new social system based on cooperation and sharing "within the shell of the old.' At first the mass media called it the "counterculture" or "alternative." Although most of its participants did not know it at the time, it was stemming from one of America's oldest and deepest traditions. Groups such as the Quakers and Mennonites have used the collective form for hundreds of years and before them the Iroquois Confederacy. The basic idea was to withdraw, (drop-out) from the system of competition and exploitation, and create a new system based on cooperation (tune-in) which could expand to embrace all of society when the old system collapsed, as many naively expected to happen imminently. Very old forms of cooperation found rebirths. The San Francisco Diggers' built a system of gathering necessities and giving them away. But the need was endless. The class problem ran through all countercultural organisations, including rural communities: since it was only people with access to money who could gather the resources to get the projects started, they usually wound up in control, at least in the beginning. Many founders never relinquished control, and those projects never became truly cooperative.

Cooperatives did about a third of the total farm production and marketing in the US in 1980, with 7500 farmer co-ops and almost six million members. But these numbers have been shrinking continually through the century. Twenty-five years previously there were 1600 more farmer co-ops with 1.6 million more members. Most rural people today are no longer independent farmers as they once were, but wage-earners, part of a fast-growing "rural proletariat."

Millions of people around the world are desperately searching for a way out of the misery inflicted by capitalism. Within the constant mass upheavals taking place in many parts of the world, many are debating new and old ideas of how to change society for the better. The idea of worker’s and consumer’s cooperatives is one issue that has regained some attention. In the United States the current popular advocates are David Schweikart, Richard Woolf and Gar Alperovitz. The problem to get around is that cooperatives are established in the context of the capitalist market and so must compete in order to survive, and if the rate of exploitation is high among your competitors, then you must match it. Co-operatives means a continuation of the market. Some cooperatives find small niche markets in which to survive, but the majority will either be driven out of business or be forced to copy the practices used by other employers. Co-operatives are bound to fail within the confines of capitalism. Cooperatives that exist within a general framework of capitalism are still subject to the laws of capitalist operation. They often must seek loans and finance from capitalist banks and they must compete on price against other privately owned capitalist businesses, amongst other restrictions. This means the cooperative workers are pushed and pulled to play the contradictory role of exploiter to themselves. If they refuse to play by the rules they face the prospect of the cooperative collapsing.

In Rosa Luxemburg’s words:

“The workers forming a co-operative in the field of production are thus faced with the contradictory necessity of governing themselves with the utmost absolutism. They are obliged to take toward themselves the role of 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.”

There is also the related argument that co–ops by themselves do not challenge the system and may divert energy away from doing so. Individual co–ops do not threaten the system, are likely to degenerate, and can absorb time and resources that could be used for other kinds of organising. Workers can potentially learn about the need to take economic and political power from the capitalist class through this process. However people tend to lean towards what seems to be the least complex or easiest solution to any problem they face. Rather than grapple with broader political, economic or social questions those involved in the cooperatives often take on the outlook of small business people or focus exclusively on commercial problems that face their own cooperative. Many of the old cooperatives around the world have ceased to be cooperatives except by name. Many are out and out capitalist enterprises now. Cooperatives under capitalism are ‘islands of socialism’ in a sea of capitalism. They are battered by the storm forces of that capitalist sea i.e. credit conditions, the price of raw materials, rent, competition, the ability to make profitable sales, etc. They can only temporarily shelter from some of these pressures by finding a guaranteed market to avoid ‘free competition’.

Co-ops are not a microcosm of a socialist society any more than socialism will be simply co-ops writ large. Worker collectives and cooperatives keep a vision of a different and feasible system alive in daily practice. Cooperatives can be a legitimate way in which workers attempt to better their circumstances. But some people go much further, arguing that establishing cooperatives is a strategy capable of fundamentally transforming the world. But is it possible that capitalism can be overcome and replaced by a critical mass of producers and consumers cooperatives? The answer is no. Cooperatives offer no ability to take this power away from the capitalist class. As such, it is impossible for a cooperative movement in and of itself to overwhelm capitalism. Luxemburg put it cooperatives are “an attack made on the twigs of the capitalist tree”.

For sure, the history of the 20th century shows that centrally planned economies don’t work.  Knowledge is too widely distributed in society for a tiny group of masterminds to be able to direct the economic activities of everybody else.  But unfettered capitalism isn’t working either.  Power has migrated into the hands of financiers and corporate executives who are rewarded for exploiting their positions. Cooperative movements will almost certainly find new life as capitalism rolls on. The working class will instinctively and understandably seek ways to patch over social wounds to improve their quality of life. Both producer and consumer cooperatives can provide some immediate relief from the various symptoms of capitalism. Cooperatives can also act as an important school for those involved. They are real-life examples that it is possible to organise production and distribution without greedy private capitalists at the helm. In doing so they help dispel the myth that working class people can’t organise or run society and go some way to showing that the capitalist class is unnecessary and parasitic. They make a vision of an alternative society seem more practical and possible.

Today the people who run this world speak about "capitalism", "freedom" and "democracy" as if they are all synonymous. Nothing could be farther from the truth. Although individuals are "free" to take a job or quit it, for the vast majority there is no viable option to taking a job. Others own all the means of survival, so the only way to survive is to get money, and the only legal way to get money is to find a job. Being an employee should be considered a form of bondage – wage slavery. Whoever controls the basic means of survival controls society. There is no such thing as democracy or equality without the people having collective control of these means, both locally and on a large scale, in the neighborhood and the workshop, and the transport and communications interlinking it all. The fortress of capitalist power is in production a widespread co-op network is by itself no real threat: for just as long as capital rules production, all gains can be taken away in a different form. If the world is ever to become truly free, the organised power of the people must be used to ensure that everyone has an alternative to wage slavery. That choice can only be through socialism. The way of capitalism and competition offers only increasing bondage, while the way of collectivity and cooperation offers real freedom. Market “socialism” is oxymoronic. These days the '99%' and 'Another World is Possible' are slogans fluttering atop many a radical social movement. Yet on those occasions activists' deliberations turn to what a post-capitalist future might look like, there will be a lot of talk about participatory democracy, community networks, the decentralisation of power and so on but at the bottom of it all, an acceptance of the basic principles of capitalist production.