Magazine of Socialist Action in Australia

What role for cooperatives in changing the world?

Reading Time: 5 minutes

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.

Should socialists embrace cooperatives as a way to fundamentally transform the world, or should they be crudely dismissed as pure fantasy? Discussion and debate on the topic has taken place over hundreds of years and has been a common feature of the socialist movement since its very beginning.

Robert Owen – a mill owner in Scotland during the late 1700s and early 1800s – is considered to be the original advocate and theorist of cooperatives. Owen’s ideas were amongst the dominant trends of pre-Marxian utopian socialism. Owen dreamed of self-contained cooperative villages, built outside and away from capitalist society. He conducted several real life experiments. Unfortunately Owen’s experiments failed and his movement collapsed, but his initial ideas continued to inform theory, practice and debate for decades to follow.

In the years following Owen’s experiments a whole movement of workers across Europe began to organise cooperative stores to cut out retail capitalists and reduce prices. Workers also pooled resources to start cooperative factories without capitalist masters although these were not as popular or numerous as the stores. It was in this context that cooperatives were discussed, debated and written about in the socialist movement. Giants of socialist theory such as Marx, Lenin and Luxemburg all wrote on the subject.

High food prices, looming environmental disaster and manufacturing job losses in advanced capitalist countries are bringing the idea of cooperatives back in some sections of the labour movement today. The Earthworker project to establish a green manufacturing workers’ cooperative in Victoria is an example. According to one of its leading organisers, the Earthworker project aims to be “a practical, innovative and visionary attempt to begin the construction of a new economic system that respects the environment and workers at the same time”.

The current batch of trade union leaders have failed to drive any real discussion on the pressing issues of jobs, the economy and the environment. For the last 25 years or so, discussions about an alternative way of running society have been choked by the domination of the ALP and ‘free market’ ideology in the movement. Socialists welcome and encourage any opportunity to analyse and discuss the problems facing workers, with a view to organising and taking action. Socialists see debate around the question of cooperatives as a healthy way to explore these very important issues.

Cooperative movements will almost certainly find new life as the global capitalist crisis rolls on. The working class will instinctually seek ways to patch over social wounds to improve their quality of life. In recent years the media has been filled with a constant rumble of discontent against the Woolworths-Coles supermarket duopoly. It is possible to imagine that cooperative grocery stores – where consumers pool their resources to set up their own stores and purchase groceries at near wholesale from the manufacturers – could gain popularity in an attempt to answer to this problem.

Both producer and consumer cooperatives have their positives. The first is that they can provide some immediate relief from the various symptoms of capitalism, like price gouging and super-exploitation. If successful, cooperatives can also have the potential to provide finances and other support to strike funds, unions, campaigns or political organisations that benefit the working class as a whole.

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.

On the other hand, there are also ideological dangers for workers in cooperatives. 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.

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.

Via this process many of the old consumer’s cooperatives across Europe have ceased to be cooperatives except by name. Many are out and out capitalist enterprises now. In Australia many cooperatives, for instance the growing chain of cooperative book stores across universities, are also thinly veiled capitalist ventures.

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 short answer is no.

Producer’s cooperatives under capitalism are a hybrid. They 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’.

This makes producers cooperatives dependent on consumer’s cooperatives, or on notions like ‘ethical consumerism’. In this way cooperatives are locked out of the most important spheres of heavy industry which must be taken account of if we are to really effect lasting social and economic change.

There are real limitations to which cooperatives can challenge the fundamental basis of capitalism – the way goods and services are produced – on any serious scale.

Capitalism is maintained by the capitalist classes’ control of the state, their control of finance and their control of the majority of industry, particularly primary and heavy industry. A threatening cooperative movement could easily be sabotaged commercially, or in other ways, from these bases of capitalist power. Conversely, 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. As the German Marxist Rosa Luxemburg put it cooperatives are “an attack made on the twigs of the capitalist tree”.

At this point in time the key task for socialists is to rebuild the organisations of class struggle. We need to rebuild workers’ parties and transform our unions into fighting forces. There is a desperate need to reinject the ideas of Marxism into the movement. Having a scientific understanding of how capitalism works is key if you are going to effect real social change.

As cooperative movements re-emerge socialists should promote the policies of class struggle and solidarity within them. For example alongside building cooperatives the labour movement needs to campaign for the nationalisation of big industry. Cooperatives can be an auxiliary to the class struggle but always need to be linked to a broader strategy to take economic, political and social power out of the hands of the capitalist class.

At the end of the day real social change will only be possible if we take the major sectors of the economy away from the capitalists and place them into public ownership under the democratic control of workers and the community. In this way the concept of cooperatives can be implemented across society as a whole, with the necessary planning that can ensure wealth is distributed equally and unemployment and environmental destruction are made a thing of the past.

By Kirk Leonard


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