Bakunin’s Advocacy of Worker Co-operatives

The Russian anarchist Mikhail Bakunin had a strange, contradictory attitude towards co-operatives. In his article ‘On Co-operation’, Bakunin argued that they could actually harm the workers’ movement. He was highly critical of those founded on what he considered to be bourgeois principles for two reasons. Firstly, they could collapse, leaving the workers involved demoralized and poorer than before. And secondly, if they were successful, they elevated a small group of workers to the bourgeoisie while other workers, what he called a fifth estate, were exploited by them. At the same time, he passionately supported co-operatives as a means of empowering the workers and as the beginning of the future socialist society he looked forward to.

In his article ‘Geneva’s Double Strike’ he wrote

Let us organize and enlarge our Association, but at the same time let us not forget to consolidate it so that our solidarity, which is our whole power, may become daily more real. Let us build our solidarity in study, in labour, in public action, and in life. Let us become partners in common ventures to make our life together more bearable and less difficult. Let us form as many cooperatives for consumption, mutual credit, and production as we can, everywhere, for though they may be unable to emancipate us in earnest under present economic conditions, they prepare the precious seedes for the organization of the future and through them the workers become accustomed to organizing their own affairs.

In Robert M. Cutler, ed. and trans., Mikhail Bakunin: From Out of the Dustbin: Bakunin’s Basic Writings 1869-1871 (Ann Arbor: Ardis 1985), p. 148.

And after laying out his criticisms of ‘bourgeois’ cooperatives and their advocates in ‘On Cooperation’, Bakunin then turns to promoting them. He wrote

We want cooperation too. We are even convinced that the cooperative will be the preponderant form of social organization in the future, in every branch of labour and science. But at the same time, we know that it will prosper, developing itself fully and freely, embracing all human industry, only when it is based on equality, when all capital and every instrument of labour, including the soil, belong to the people by right of collective property. Therefore before all else, we consider this demand, the organization of the international strength of the workers of all countries, to be the principal goal of our great International [Working-Men’s] Association.

Once this is acknowledged, we hardly oppose the creation of cooperative associations; we find them necessary in many respects. First, and this appears to us even to be their principal benefit at present, they accustom the workers to organize, pursue and manage their interests themselves, without any interference either by bourgeois capital or by bourgeois control.

It is desirable that when the hour of social liquidation is at hand, it should find many cooperative associations in every country and locality; if they are well organized and above all founded on the principles of solidarity and collectivity rather than on bourgeois exclusivism, then society will pass from its present situation to one of equality and justice without too many great upheavals.

Cutler, Mikhail Bakunin, p. 150.

I don’t believe in a radical transformation of society like Bakunin, who was an ardent revolutionary. But I would like more cooperatives to be founded, and this to become, with various other forms of industrial democracy, the dominant form of industrial organization. Working people should be able to organize and empower themselves so that they can resist the power of big business and Conservatism, which has stripped them of rights at work and even the promise of secure, well-paid jobs. There is a problem in that cooperatives can be less economical than capitalist enterprises, but the success of the Mondragon cooperatives in Spain shows that this is not necessarily the case. And cooperatives and industrial democracy, if done properly, will empower the workers and help break down the current class system and the increasingly oligarchical nature of business and politics.

The Operation of Worker-Owned Companies in Martian SF

A week or so ago I put up a few passages from Kim Stanley Robinson’s Blue Mars (London: HarperCollins 1996), a science fiction book about the colonization and terraformation of the Red Planet. In Robinson’s book, on breaking away from terrestrial domination the Martians establish a constitution which makes all the companies not owned by the global Martian state or its constituent cities worker-owned cooperatives, partly modelled on the Mondragon cooperatives in Spain. On page 301 Robinson describes how Nadia, the new Martian president in the capital, Sheffield, works to transform the planet’s industries, including those formerly owned by terrestrial metanats – vast multinationals that now dominate the industries of whole countries – into the new system. Robinson writes

Nadia, however, never made it to this conference. She got caught up by affairs in Sheffield instead, mostly instituting the new economic system, which she thought important enough to keep her there. The legislature was passing the law of eco-economics, fleshing out the bones drawn up in the constitution. They directed co-ops that had existed before the revolution to help the newly independent metanat local subsidiaries to transform themselves into similar co-operative organisations. This process, called horizontalization, had very wide support, especially from the young natives, and so it was proceeding fairly smoothly. Every Martian business now had to be owned by its employees only. No co-op could exceed one thousand people; larger enterprises had to be made of co-op associations, working together. For their internal structures most of the firms chose variants of the Bogdanovist models, which themselves were based on the co-operative Basque community of Mondragon, Spain. In these firms all employees were co-owners, and they bought into their positions by paying the equivalent of about a year’s wages to the firms equity fund. This became the starter of their share in the firm, which grew every year they stayed, until it was given back to them as pension or departure payment. Councils elected from the work-force hired management, usually from outside, and this management then had the power to make executive decisions, but was subject to a yearly review by the councils. Credit and capital were obtained from central co-operative banks, or the global government’s start-up fund, or helper organisations such as Praxis and the Swiss. On the next level up, co-ops in the same industries or services wer associating for larger projects, and also sending representatives to industry guilds, which established professional practice boards, arbitration and mediation centres, and trade associations.

I can’t say I’m happy about the idea of worker managers buying their share of management with the equivalent of a year’s pay. This seems far too easy for someone to exploit to me. And I’m also not sure how practical it would be to turn all companies into co-operatives. However, we do need industrial democracy, if only to overturn the massive exploitation of working people that has gone on under Thatcherism. Under the current Thatcherite orthodoxy, wages are frozen, jobs insecure and the welfare system undermined and destroyed. A quarter of a million people have been forced to use foodbanks to save themselves from starvation, and 330,000-odd people are homeless. And the number of people dying on our streets, and the elderly in their homes due to Tory cuts in the cold weather payments, has shot up. And this has all been to give the rich tax cuts and provide employers with a cheap, cowed workforce.

Enough’s enough. We need a proper government with a proper vision that treats working people decently, with proper wages and rights at work, invigorates trade unions, restores a strong and health welfare state, builds properly affordable homes and reverses the privatization of the NHS. Only Corbyn’s Labour promises all that. And part of this promise is to put workers on the boards of all firms with over a certain number of employees.

Corbyn is the person we need to have in No.10. Not Tweezer and her gang of crooks and profiteers. Get them out, and Labour in.

An Argument for Industrial Democracy from the Mars of SF

I’m currently reading Blue Mars, the last of a trilogy of books about the future colonization of the Red Planet by Kim Stanley Robinson. Written in the 1990s, this book and the other two in the series, Red Mars and Green Mars, chronicle the history of humans on Mars from the landing of the First 100 c. 2020, through full-scale colonization and the development of Martian society to the new Martians’ struggle for independence from Earth. In this future, Earth is run by the metanats, a contraction of ‘metanational’. These are the ultimate development of multinational corporations, firms so powerful that they dominate and control whole nations, and are the real power behind the United Nations, which in theory rules Mars.

As the Martians fight off Terran rule, they also fight among themselves. The two main factions are the Reds and the Greens. The Reds are those, who wish to preserve Mars in as close to its pristine, un-terraformed condition as possible. The Greens are those on the other side, who wish to terraform and bring life to the planet. The Martians are also faced with the question about what type of society and economy they wish to create themselves. This question is a part of the other books in the series. One of the characters, Arkady Bogdanov, a Russian radical, is named after a real Russian revolutionary. As it develops, the economy of the free Martians is partly based on gift exchange, rather like the economies of some indigenous societies on Earth. And at a meeting held in the underground chamber of one of the Martian societies – there are a variety of different cultures and societies, reflecting the culture of various ethnic immigrant to Mars and the political orientation of different factions – the free Martians in the second book draw up their tentative plans for the new society they want to create. This includes the socialization of industry.

Near the beginning of Blue Mars, the Martians have chased the Terran forces off the planet, but they remain in control of the asteroid Clarke, the terminus for the space elevator allowing easier space transport between Earth and Mars. The Martians themselves are dangerously divided, and so to begin the unification of their forces against possible invasion, they hold a constitutional congress. In one of the numerous discussions and meetings, the issue of the socialization of industry is revisited. One member, Antar, is firmly against government interference in the economy. He is opposed by Vlad Taneev, a biologist and economist, who argues not just for socialization but for worker’s control.

‘Do you believe in democracy and self-rule as the fundamental values that government ought to encourage?’
‘Yes!’ Antar repeated, looking more and more annoyed.
‘Very well. If democracy and self-rule are the fundamentals, then why should people give up these rights when they enter their work place? In politics we fight like tigers for freedom of movement, choice of residence, choice of what work to pursue – control of our lives, in short. And then we wake up in the morning and go to work, and all those rights disappear. We no longer insist on them. And so for most of the day we return to feudalism. That is what capitalism is – a version of feudalism in which capital replaces land, and business leaders replace kings. But the hierarchy remains. And so we still hand over our lives’ labour, under duress, to fee rulers who do no real work.’
‘Business leaders work,’ Antar said sharply. ‘And they take the financial risks-‘
‘The so-called risk of the capitalist is merely one of the privileges of capital.’
‘Management -‘
‘Yes, yes. Don’t interrupt me. Management is a real thing, a technical matter. But it can be controlled by labour just as well by capital. Capital itself is simply the useful residue of the work of past labourers, and it could belong to everyone as well as to a few. There is no reason why a tiny nobility should own the capital, and everyone else therefore be in service to them. There is no reason they should give us a living wage and take all the rest that we produce. No! The system called capitalist democracy was not really democratic at all. That’s why it was able to turn so quickly into the metanational system, in which democracy grew ever weaker and capitalism every stronger. In which one per cent of the population owned half of the wealth, and five per cent of the population owned ninety-five per cent of the wealth. History has shown which values were real in that system. And the sad thing is that the injustice and suffering caused by it were not at all necessary, in that the technical means have existed since the eighteenth century to provide the basics of life to all.
‘So. We must change. It is time. If self-rule is a fundamental value. If simple justice is a value, then they are values everywhere, including in the work place where we spend so much of our lives. That was what was said in point four of the Dorsa Brevia agreement. It says everyone’s work is their own, and the worth of it cannot be taken away. It says that the various modes of production belong to those who created them, and to the common good of the future generations. It says that the world is something we steward together. That is what it says. And in our years on Mars, we have developed an economic system that can keep all those promises. That has been our work these last fifty years. In the system we have developed, all economic enterprises are to be small co-operatives, owned by their workers and by no one else. They hire their management, or manage themselves. Industry guilds and co-op associations will form the larger structures necessary to regulate trade and the market, share capital, and create credit.’
Antar said scornfully, ‘These are nothing but ideas. It is utopianism and nothing more.’
‘Not at all.’ Again Vlad waved him away. ‘The system is based on models from Terran history, and its various parts have all been tested on both worlds, and have succeeded very well. You don’t know about this partly because you are ignorant, and partly because metanationalism itself steadfastly ignored and denied all alternatives to it. But most of our micro-economy has been in successful operation for centuries in the Mondragon region of Spain. the different parts of the macro-economy have been used in the pseudo-metanat Praxis, in Switzerland, in India’s state of Kerala, in Bhutan, in Bologna, Italy, and in many other places, including the Martian underground itself. These organization were the precursors to our economy, which will be democratic in a way capitalism never even tried to be. (pp. 146-8).

It’s refreshing to see a Science Fiction character advocate a left-wing economics. Many SF writers, like Robert A. Heinlein, were right-wing. Heinlein’s The Moon Is A Harsh Mistress, about a rebellion on the Moon, contains several discussion in which Heinlein talks about TANSTAAFL – his acronym for There Ain’t No Such Thing As a Free Lunch.

Praxis is the fictional metanational corporation, which supplies aid to the colonists against the rest of the terrestrial super-corporations. I don’t know about the references to Switzerland, Kerala, Bhutan or Bologna, but the Mondragon co-operatives in Spain certainly exist, and are a significant part of the country’s economy. They were set up by a Spanish priest during Franco’s dictatorship, but managed to escape being closed down as he didn’t recognize such enterprises as socialist.

I don’t know how practical it would be to make all businesses co-operatives, as there are problems of scale. Roughly, the bigger an enterprise is, the more difficult proper industrial democracy becomes. But co-operatives can take over and transform ailing firms, as was shown in Argentina during the last depression there a few years ago, when many factories that were about to be closed were handed over to their workers instead. They managed to turn many of them around so that they started making a profit once again. Since then, most of them have been handed back to their management, however.

But the arguments the Vlad character makes about democracy being a fundamental value that needs to be incorporated into industry is one of that the advocates of industrial democracy and workers’ control, like the Guild Socialists, made. And we do need to give workers far more power in the work place. Jeremy Corbyn has promised this with his pledge to restore workers’ and union rights, and make a third of the directors on corporate boards over a certain size elected by the workers.

If Corbyn’s plans for industrial democracy in Britain become a reality, perhaps Britain really will have a proper economic system for the 21st century, rather than the Tories and Libertarians trying to drag us back to the unfettered capitalism of the 19th.

Book Review: G.D.H. Cole’s A Century of Co-Operation

(George Allen & Unwin Ltd. for the Co-operative Union Ltd 1944).

Many of us of a certain age still remember the Co-op before it became a regular supermarket chain. It was a store in which regular shoppers – the co-op’s members, were also it’s owners, and entitled to receive a share of the profits. This meant that you were paid a dividend. This was later issued in the form of ‘Green Shield’ stamps, which could be used to buy further goods in the stores. The co-operative movement was founded way back in the 1840s by the Rochdale Pioneers, former members of Robert Owen’s socialist movement. After this had collapsed, the Pioneers then went on to apply his socialist principles to running retail stores. The movement rapidly caught on and expanded, not least because, unlike ordinary shops, the co-ops sold pure food without the poisonous substances added elsewhere. For example, many bakers added arsenic to their bread to make it whiter, and more attractive to the purchaser. The co-ops didn’t, and so their food and goods was healthier, and thus more popular. Unlike their competitors, you could be fairly sure that what you bought from the co-op wouldn’t kill you in the name of making it appear more tasty. By 1942 there were 1,058 co-operative retail societies, with a total membership of 8,925,000 – just shy of 9 million people.

I found this book on the history of the movement in one of the charity bookshops in Bristol. It’s by the great socialist and writer, G.D.H. Cole, who was one of the leading members of Guild Socialism, a British form of syndicalism, which recommended the abolition of the state and its replacement with a system of guilds – trade unions, which would include all the workers in an industry, and which would run industry and the economy. Instead of parliament, there would be something like the TUC, which would also have administrative organs to protect the consumer.

The book’s chapters include:
I: “The Hungry ‘Forties'”,
II: Co-operation before the Pioneers
II. Rochdale.
IV. The Rochdale Pioneers Begin.
V. The Rochdale Pioneers to 1874.
VI Christian Socialists, Redemptionists, and Trade Unions
VII. Co-operation and the Law.
VIII. The Origins of the Co-Operative Wholesale Society
IX. Co-operative Growth in the ‘Sixties and ‘Seventies.
X. The Second Revolution.
XI. The ‘Eighties and ‘Nineties.
XII. The Women’s Guild.
XIII. Co-operators and Education.
XIV. Co-operation in Agriculture – Ireland: The Beginning of International Co-operation.
XV. Co-operation before and during the First World War.
XVI. From War to War.
XVII. Guild Socialism and the Building Guilds
XVIII. Co-operative Development between the Wars.
XIX. Co-operators in Politics.
XX. Co-operative Employment.
XXI. International Co-operation.
XXII Co-operation Today and Tomorrow
I. the Growth of Co-operation.
ii. The Development of Co-operative Trade.
iii. Large and Small Societies.
iv. Democratic Control.
v. Regional Strength and Weakness.
vi. Co-operative Education.
vii. The producers’ Societies.
viii. The Wholesales and Production.
ix. The Next Steps.

Appendix: Who Were the Pioneers?

Cole notes that some forms of what became known as co-operation existed in various trades and businesses before the Rochdale Pioneers. Some of the capital used to set up businesses in the early 19th century, came from the workers. They tended to invest in other businesses’ than their employers, so that if their wages were cut during a recession or dip in trade, the dividends they would receive from their shares would not also suffer. Although not remarked on in the book, you could say that this shows how the working class has been disinherited. In many cases, they contributed their savings and money to the development of capitalism, but despite the existence in some firms of profit-sharing schemes, they have been and are being excluded from the profits of the modern, industrial economy.

From industry, co-operation also entered politics, with the establishment of a Co-operative Party, which is now part of the Labour party. The movement spread across Europe, to Germany and as far as Russia. Lenin was greatly impressed by the value of the co-operatives as a form of socialism. According to Aganbegyan, Gorbachev’s chief economist for perestroika, before 1950 47 per cent of all industries, including farms in the USSR were co-ops. Industrial democracy and co-operatives were a central plank of Gorbachev’s perestroika. Unfortunately, Gorby’s attempts to revive Communism failed, and Yeltsin turned them into bog-standard capitalist companies through the voucher system. Other thinkers and politicians in other countries saw co-operation as the solution to their countries’ social and economic problems. One of these was the Bulgarian Stambolisky, the leader of a peasant’s party before the First World War. He wished to organise the peasant farms into a system of co-operation, which would modernise the country by allowing them to acquire electricity and improve production and conditions. More recently, the Mondragon co-operatives, set up in Spain by a Roman Catholic priest in the 1950s, has become an industrial giant, involved in just about all areas of the Spanish economy.

Cole’s book understandably concentrates on the history of the co-operative movement from its emergence to the middle of the Second World War, and is an immensely detailed and thorough work of scholarship. Although not as prominent as they once were, co-operative businesses still exist in Britain. They were supported in the 1970s and ’80s by politicos like the great Tony Benn and Ken Livingstone, and may once again become a major force in British society and the economy.