Solving Unemployment through Trade Union-Run Cooperatives

The German-born anarcho-syndicalist, Rudolf Rocker, devotes a passage in his Anarcho-Syndicalism (London: Pluto Press 1989) to Robert Owen’s proposal in the early 1830s to set up a Grand Consolidated Trade Union which would include all the working people in every trade, its plans for supporting unemployed workers, and finally its gradual decline in the 1840s. See pages 57-66. The Grand National Consolidated Trade Union was intended to supersede the existing situation where the workers were divided into separate trade unions according to their different trades and industries. At the same time, the new, umbrella union would be organised into different divisions for the workers in specific branches of industry. The ultimate aim was for the workers themselves to take over production, which they would then market themselves through special shops, according to the cost of manufacturing the article. Instead of conventional currency, special labour notes, representing labour value, would be exchanged for these products. To support unemployed workers, the trade unions would also invest in land, which would be worked by unemployed workers, and co-operatives, which would also provide the unemployed with work, producing needed goods that would be purchased by the other members of the Union.

Rocker quotes the following passage from the Grand National Consolidated Trade Union’s statement of its aims.

As land is the source of the first necessaries of life, and as, without the possession of it, the producing classes were ever remain in a greater or less degree subservient to the money capitalists, and subsequent upon the fluctuations of trade and commerce, this committee advises that a great effort should now be made by the unions to secure such portions of it on lease as their funds will permit, in order that in all turn-outs the men may be employed in rearing the greater part, if not the whole, of their subsistence under the direction of practical agricultural superintendents, which arrangements would not have the effect of lowering the price of labour in any trade, but on the contrary would rather tend to in increase it by drawing off the at present superfluous supply to the manufacturers.

The committee would, nevertheless, earnestly recommend in all cases of strikes and turn-outs, where it is practicable, that the men be employed in the making or producing of all such commodities as would be in demand among their brother unionists; and that to effect this, each lodge should be provided with a workroom or shop in which those commodities may be manufactured on account of such lodge, which shall make proper arrangements for the supply of the necessary materials.

That in all cases where it is practicable, each district or branch should establish one or more depots of provisions and articles in general domestic use: by which means the working man may be supplied with the best commodities at little above wholesale prices. (Pp.61-2)

Rocker notes how this was greeted by the radical paper, The Poor Man’s Guardian

But far different from the paltry objects of all former combinations is that now aimed at by the congress of delegates. Their reports show that an entire change in society-a change amounting to a complete subversion of the existing order of the world-is contemplated by the working classes. They aspire to be at the top instead of the bottom of society-or rather that there should be no bottom or top at all. (p. 59).

Rocker then describes the mass agitation for a general strike to bring about a ten-hour working day, the denunciations and persecution of the union, trade unionists in general, and political agitators, and how the G.N.C. finally petered out. Many of its members left to join the Chartists, while the events on the Continent in the 1840s also worked against working class radicalism.

The G.N.C.’s supporters made it very clear in their debates with other radicals, who wanted the political reform of the franchise and the House of Commons, that after the G.N.C. took power parliament would be made totally redundant.

Rocker writes

If, for example, one reads The Pioneer, the organ of the G.N.C. managed by James Morrison, one frequently encounters arguments that sound thoroughly modern. This is revealed especially in the discussions with the political reformers, who had inscribed on their banner the democratic reconstruction of the House of Commons. They were told in reply that the workers had no interest whatever in efforts of that sort, since an economic transformation of society in the Socialist sense would render the House of Commons superfluous. Its place would be taken by the labour boards and the industrial federations, which would concern themselves merely with problems of production and consumption in the interest of the people. These organisations were destined to take over the functions of the present entrepreneurs; with common ownership of all social wealth there would no longer be any need for political institutions. The wealth of the nation would no longer be determined by the quantity of goods produced, but by the personal advantage that every individual derived from them. The House of Commons would in the future be merely a House of Trades. (pp. 62-3).

It’s a hopelessly utopian dream. Unfortunately the need for legislation and a democratic parliament isn’t removed by the almost complete socialisation of the land and industry, as the former USSR shows. The various shops set up to sell goods according to the labour theory of value collapsed because they didn’t take into account demand for the goods. Nevertheless, the system has been revived on a small scale by communities running various local currency schemes, in which vouchers are exchanged for so many hours of work, and these have had some success. As these schemes are locally based, they have stimulated the revival of local, small businesses.

As for the idea of the Union purchasing land, that’s very much part of the ‘back to the land’ movement of the early 19th century. It’s similar to Bronterre O’Brien’s demand at the Manchester Guardian of ’40 acres and a mule’. As many of the new urban workers either themselves had been, or were the children of migrants to the towns from the country, the idea of going back to the land to gain a livelihood, away from the horrors of urban life, was obviously attractive.

There are also links to the ideas of the French Utopian Socialist, Louis Blanc, during the Revolutions of 1848 for ‘National Workshops’. These would be stare run workshops for the unemployed, which would be managed as co-operatives. Any profits made would be put back into buying up other factories and workshops, until gradually the whole of French industry would be nationalised. Although these workshops were set up, they were deliberately run down and mismanaged so that the scheme eventually collapsed. It was given to a minister or civil servant who hated the idea, and the workers employed in them were given pointless tasks, such as digging ditches, only to fill them in again.

Despite this, I do like these ideas. And I do wonder now long workfare would last, if a trade union set up a genuine workers’ co-operative on the Owenite model, and then applied to join the government’s wretched scheme as a ‘workfare provider’. All workers receiving some form of reward for their labour beyond their jobseekers allowance, with the workshop aiming to buy out other factories, or at least, some of the other ‘workfare providers’.

Somehow, I can imagine that going down at all well with the Tories. They’d be utterly aghast, and try to find all kinds of reasons not to take it on. I sort of wish someone would try, if only to see the ‘welfare to work’ industry turned on its head to support unemployed workers, not the overpaid heads of outsourcing companies and big businesses like Sainsbury’s, Tescos, or various charities like the Salvation Army, who are just seeking to exploit an easy supply of cheap labour.

Henry Hyndman and the Democratic Federation

Henry Hyndman, founder of the Democratic Federation

One of the first Socialist parties in the latter 19th century was Henry Hyndman’s Democratic Federation, founded in 1881. Hyndman corresponded with Marx about reviving Chartism, and intended his new Federation to be a working class organisation continuing ‘the great work of Spence and Owen, , Stephens and Oastler, O’Connor and O’Brien, Ernest Jones and George J. Harney’. Beer in his History of British Socialism considered that his ideas were derived from Marx, Bronterre O’Brien and Benjamin Disraeli. At its founding conference in June 8th, 1881, the party decided on the following programme:

1. Universal suffrage.

2. Triennial parliaments.

3. Equal electoral divisions.

4. Payment of members.

5. Corruption and bribery of the electors to be punishable as criminal offences.

6. Abolition of the House of Lords as a legislative body.

7. Home rule for Ireland.

8. Self-government for the colonies and dependencies.

9. Nationalisation of the land.

They presented a more Socialist programme in their 1883 pamphlet, Socialism Made Plain. This urged working people to campaign for the following:

1. Erection of healthy dwellings by the central or local authorities and letting them at low rents to working men.

2. Free and universal education and at least one free meal for school children.

3. An eight-hour day.

4. Progressive taxation on incomes over £300.

5. Establishment of national banks and gradual abolition of private banking.

6. Nationalisation of railways and land.

7. Organisation of the unemployed under State control on co-operative principles.

8. Rapid redemption of the national debt.

Most of their programme had become law by the late 20th century. However, we’re now seeing these reforms increasingly attacked. Workers are increasingly required to work far longer than eight hours as part of their normal working day under various clauses in their contracts. Free education is under attack as the government engages on its programme of piecemeal privation of the school system. The railways were privatised by John Major. And the system of council housing was destroyed by Thatcher and her policies continued by Tony Blair. These reforms should all be revived and actively demanded.

One of the points that has not been put into practice, but which I strongly believe should, is no. 7: organisation of the unemployed under State control on co-operative principles. This was harking back to the National Workshops of Louis Blanc, which were opened and undermined through government hostility in the Revolution of 1848. They were intended to provide work for the unemployed, who would manage them and share the profits. Under the Tories, the present system of unemployment benefit is deliberately intended to be as humiliating as possible in order to drive the jobless into any kind of work, no matter how poorly paid and with poor working conditions. They are moreover seen as a source of cheap labour for the companies participating in the Workfare programmes. We desperately need a system of unemployment benefit and state provision of work that builds and empowers people. I’d like there to be ways in which the unemployed themselves can seize power so that they can force the government to treat them with humanity and dignity. The government’s lauded campaign to create a more entrepreneurial Britain by forcing the unemployed to classify themselves as self-employed in order to keep receiving benefits is woefully inadequate and doesn’t even come close.

Thomas Spence on the Aristocracy and the National Debt

Thomas Spence (1750-1807) was an 18th century radical. Born in Newcastle, he was influenced not just by the Enlightenment, but also by the radical Presbyterian minister James Murray. He believed that the parishes should become self-governing communes. The power of the landlords would be overthrown, and instead of being governed by the local squire, they would be ruled instead through a council directly elected by all members of the parish, including women and children. These communes would each take all the surrounding land into their collective ownership, to rent out to particular businesses. The rents raised would then by spent on a programme of public works, including road and canal building, schools, and medical care and hospitals for the sick and infirm, as well as supporting the unemployed. The money left over from this expenditure would be paid each quarter day to every parishioner, including women and children. The Communes would also elect a central parliament to deal with national affairs, although the Communes would still hold a great deal of autonomy, including the possession of militias for their own defence.

After his death his followers formed the Society of Spencean Philanthropists, which increasingly turned to violent revolution to transform society. They were involved in the Spa Fields riot of the 2nd December 1816 and the Cato Street Conspiracy to blow up parliament. Both Houses of Parliament had denounced them as revolutionary conspirators in 1817, and government action after the Cato Street conspiracy effectively destroyed the Society. Nevertheless, supporters of Spence’s Land Plan continued to influence working class politics. They were active in the National Union of the Working Classes and the Chartist East London Democratic Association in the 1830s.Bronterre O’Brien, one of the leading Chartist writers, was particularly influenced by Spence.

One of his writings is a question and answer session on the national debt, which he uses to attack bitterly the aristocratic government of the day and its oppression of the poor. Here it is:

For poor Johnny Bull,
Who is now so dull;
A few plain questions,
To suit his thick skull.

Questions: What is the National Debt?

Answer: Money borrowed by the rich men of the nation from the rich men of the nation and placed to the nation’s account.

Q. What is done with the money thus borrowed in the nation’s name?

A. The rich men of the nation give it to each other under pretence of places and services, civil, ecclesiastical and military.

Q. Are not those places and services absolutely and indispensably necessary to the good of the nation?

A. So far the reverse, that many of those places are fictitious and therefore called si9necure; but almost the whole are created under the specious but false pretence of war, religion and jurisprudence as a colour for distributing the public money among themselves.

Q. Is public money never given but under pretence of some place or service, real or nominal?

A. It is frequently given under pretence of former services; and frequently also under pretence of secret services; and the sums thus disposed of are called pensions.

Q. Do the rich men make the nation pay interest for the money they thus squander away among themselves?

A. Yes, certainly; for it they alone had it to pay, they would not be so ready at borrowing.

Q. Was it always the custom of those at the head of the nation to govern by running it in debt?

A. No: until our Glorious Revolution, our government, however, covetous or extravagant, never expected more than could be raised upon the spur of the occasion. They had no notion of taxing future generations before they were born.

Q. It is probably that this system of taxing futurity can continue long?

A. No. For the interest of the debt will soon be more than the revenue of the country will pay.

Q. How must the interest then be paid?

A. The rich men of the nation must borrow of each other to pay the interest as they did before to fund the principle.

Q. But when the revenue and the money borrowed are condemned before hand to pay the interst of the national debt, what must support the government?

A. Those who have got both principle and interest must then govern gratis.

Q. Will those who have all along paid themselves so liberally take the trouble at last of governing us for nothing? Surely no. We must inevitably be ungoverned! Can no way be thought of supporting our government in such unparalleled distress?

A. Let them go a-pirating with the Algirines (North African pirates from Algiers).

Q. Nay; them they have long been in league with, and far excelled in depredation, as the African coast and both the Indies can woefully witness; insolence and robbery, rapine and murder, have been fully tried in every quarter of the globe.

A. Then damn them, I’ve done with them!

Spence sees the National Debt as something that the rich have created in order to make themselves even richer, and compares them with the Barbary Pirates of Algiers, who raided and enslaved European ships and southern Europe. Indeed, he was well aware of and bitterly opposed to the way Britain had attacked and enslaved the peoples of the African coast, India and the Caribbean for the commercial gain of the ruling classes.

Although over 200 years have passed since his death, and economics has moved on considerably since his time, these views are still valid. The rich men, the commercial bankers of Britain and America, ran up massive debts for their own vast profits, and the vast, national mercantile companies of the 18th century, like the East India Company and the Royal African Company, have gone and been succeeded by the vast multinationals. Who are still exploiting people for the profit of the rich in Africa, the Caribbean, India and in the rest of the world. And these rich men now make up the government here to enrich themselves still further.

David Cameron: The type of aristocratic government minister Spencer denounced in the 18th century. Another example of the durability of British tradition.

Bloody revolution aside, it’s time some of our MPs followed Spence and showed a bit more compassion for the poor and supported the welfare state that he predicted against the government’s depredations.