Cooperatives Confront Capitalism: Challenging the Neoliberal Economy - Softcover

Peter Ranis

Softcover

ISBN 10: 1783606495 ISBN 13: 9781783606498

Publisher: Zed Books, 2016

Synopsis

Cooperatives the world over are successfully developing alternative models of decision-making, employment and operation without the existence of managers, executives and hierarchies.

Through case studies spanning the US, Latin America and Europe, including valuable new work on the previously neglected cooperative movement in Cuba, Peter Ranis explores how cooperatives have evolved in response to the economic crisis. Going further yet, Ranis makes the novel argument that the constitutionally enshrined principle of 'eminent domain' can in fact be harnessed to create and defend worker cooperatives.

Combining the work of key radical theorists, including Marx, Gramsci and Luxemburg, with that of contemporary political economists, such as Block, Piketty and Stiglitz, Cooperatives Confront Capitalism provides what is perhaps the most far-reaching analysis yet of the ideas, achievements and wider historical context of the cooperative movement.

About this title

About the Author

Peter Ranis is professor emeritus in political science at the Graduate Center of the City University of New York. His current research interests include the uses of eminent domain on behalf of the working class and cooperative movements in the US, Argentina and Cuba. He has over eighty publications in various fields of social science in such journals as Monthly Review, Journal of Politics, Studies in Comparative International Development, Desarrollo Economico, Latin American Politics and Society, Labor Studies in Working Class History of the Americas, Socialism and Democracy, Canadian Journal of Development Studies, Current History, Working USA: The Journal of Labor and Society, Situations: Project of the Radical Imagination, Journal of Caribbean Studies, Civilisations, Polity, New Political Science and America-at-Work. He has published four books, among them Class, Democracy and Labor in Contemporary Argentina (1995) and Argentine Workers: Peronism and Contemporary Class Consciousness (1992).

Excerpt. © Reprinted by permission. All rights reserved.

Cooperatives Confront Capitalism

Challenging the Neoliberal Economy

By Peter Ranis

Zed Books Ltd

Copyright © 2016 Peter Ranis
All rights reserved.

ISBN: 978-1-78360-649-8

Contents

Acknowledgments, 
1 Why worker cooperatives? The historical underpinnings and defense of worker cooperatives, 
2 The role of the state and the US social economy, 
3 Worker cooperatives in the post-Occupy digital economy, 
4 Argentina's cooperative challenges and breakthroughs, 
5 Argentina's leading edge, 
6 The proliferation and internationalization of the Argentine cooperative experience, 
7 Eminent domain: confronting the loss of jobs in the United States, 
8 Building toward worker cooperatives by the use of eminent domain in the United States, 
9 Cuban cooperatives as a gateway to economic democracy, 
10 Toward worker autonomy in the United States, 
References, 
Index, 

CHAPTER 1

WHY WORKER COOPERATIVES? THE HISTORICAL UNDERPINNINGS AND DEFENSE OF WORKER COOPERATIVES

Worker cooperatives have captured the mindset and the imagination of countless committed thinkers who have had the working class at the heart of their beings. The grounded basis of their belief systems is that working men and women can labor productively and provide for their families and communities without overlords, captains of industry, magistrates or members of the managerial or ownership classes.

Karl Marx, Eduard Bernstein, Rosa Luxemburg and Antonio Gramsci among many other theorists and political economists – some influentially writing earlier than these notables, others contributing afterwards, all coming from varying ideological principles and orientations – understood the need to confront and supersede the exploitative wage system under existing capitalist relations. It is the wage system that, after all, is at the bottom of how capital continues to achieve profits while immiserating the bulk of the working class. We need to examine the hierarchical relationship between the capitalist and the worker by reenergizing our notion of what is done with capital and by whom. Whether Marxists, neo-Marxists, utopian socialists, reformed socialists, left-liberals, they all recognized the intrinsic value and important interjection of cooperatives as a counterweight to capital–worker societal relationships. Cooperatives offered a major departure from hierarchy at work and working-class exploitation.

Marx, in Capital, vol. I, was the most notable, though not the earliest, theorist to note that workers lacked a sense of community and their aggregate social labor is manifested only at the point of exchange when commodities are purchased (Marx 1967a: 73–75). In reality the total collective labor of separate production units represents a dual narrative: workers producing as a group of individuals and workers as part of a society's achieved surplus value produced and exchanged. The product doesn't have much meaning for the worker until it is successfully accepted in the market. Any worker acknowledgement with each other only found confirmation in the sale of the product. Finally, the whole process ends for the worker at that point. Nor, of course, does the worker control what is being produced in the first place. The worker's product is bought by other workers and they, in turn, buy another product with their earnings produced by another worker producing elsewhere. It is this exchange of commodities that Marx envisioned as the lifeblood of capitalism (ibid.: ch. 3). And this exchange is critical for, as Marx noted, 'Circulation sweats money from every pore' (ibid.: 113).

Marx's keen insight was that this was a historical phase of economic development and need not be eternal. Nature has not produced forever one small group of owners and a much larger group of people possessing nothing but their labor power (ibid.: 169). Whatever Marx's critique of worker cooperatives as not spelling the end of capitalism, his many comments about the lack of worker control over what, how and for whom something is produced under capitalism make it clear that he would see cooperatives as enhancing workers' lives while presaging a supersession of this mode of production. In the Grundrisse, he clearly sees that capital needs labor, but also that labor needs capital to be productive. It is fully a question of who rules and manages the productive process and for what ends (Marx 1973: 293–310).

It is not by accident that Marx devoted a whole chapter to 'Cooperation' in Capital, vol. I. He knew the power of capital and that of labor itself increased multifold in the process of workers working together and producing what an individual worker could not. In fact it this togetherness among workers that greatly enhances their creative and productive powers manyfold (Marx 1967a: ch.13). Marx said it best when he, speaking of cooperative labor, wrote, '... it excites emulation between individuals and raises their animal spirits ... This power is due to cooperation itself. When the laborer cooperates systematically with others, he strips off the fetters of his individuality, and develops the capabilities of his species' (ibid: 329). Of course, it is the capitalist and his managers who takes advantage of worker cooperation. But it need not be because, unquestionably, the capitalist is dispensable in this scenario. Marx wrote in Capital, vol. 3,

Cooperative factories furnish proof that the capitalist has become no less redundant as a functionary ... Inasmuch as the capitalist's work does not originate in the purely capitalist process of production, and hence does not cease on its own when capital ceases; inasmuch as it does not confine itself solely to the function of exploiting the labor of others; inasmuch as it therefore originates from the social form of the labor-process, from combination and cooperation of many in pursuance of common result, it is just as independent of capital as that form itself as soon as it has burst its capitalistic shell ... In a cooperative factory the antagonistic nature of the labor of supervision disappears, because the manager is paid by the laborers instead of representing capital counterposed to them. (Marx 1967c: 387)

Marx later adds,

The antithesis between capital and labor is overcome within them, if at first only by way of making the associated laborers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labor. They show how a new mode of production naturally grows out of an old one, when the development of the material forces of production and of the corresponding forms of social production have reached a particular stage. (Ibid.: 440)

Nor is it either natural or God-given that the owner/manager be the organizer of men working and producing cooperatively, nor that it be the fixed form of organized production or relationship among workers. Marx wrote in Grundrisse, 'The transformation of labor (as living, purposive activity) into capital is in itself, the result of the exchange between capital and labor, in so far as it gives the capitalist the title of ownership to the product of labor (and command over the same)' (Marx 1973: 308).

In 1859, Karl Marx, in A Contribution to the Critique of Political Economy, wrote of new modes of production developing within old forms: 'At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters' (Tucker 1978: 4–5). Cooperatives by their organization of the workplace spotlight that inherent capitalist constriction of productive collective labor for collective ends.

And, in Capital, vol. 1, when Marx discusses the labor theory of value, he makes clear that it is labor exploitation that is the necessary ingredient of achieving surplus value. Otherwise we are just talking about money remaining constant in the hands of the capitalist. It is the combination of available labor contracted for certain number of hours per day that allows capitalism to 'spring to life' (Marx 1967a: 170). He makes the ironic comment that the worker is even advancing capital to the capitalist by the week or month by receiving wages after his production cycle is done (ibid.: 174). This fact alone demonstrates that the worker is providing his labor power to the capitalist and that, given the ongoing exploitative relationship, he can withdraw that labor power that belongs to him alone.

Marx knew so well that production and exchange are socially constructed and need not be characterized by individualized producing and consuming. In Grundrisse, he argued rather that

The social character of production is presupposed and participation in the world of products, in consumption, is not mediated by the exchange of mutually independent laborers or products of labor. It is mediated, rather, by the social conditions of production within which the individual is active ... the producers change, too, in that they bring out new qualities in themselves, develop themselves in production, transform themselves, develop new powers and ideas, new modes of intercourse, new needs and new language. (Marx 1973: 172, 494)

Marx bemoaned the workers' loss of craft and personality as the industrial revolution deepened as 'labor loses all the characteristics of art, as its particular skill becomes something more and more abstract and irrelevant, and as it becomes more and more a purely abstract activity, a purely mechanical activity, hence indifferent to its particular form; a merely formal activity, or, what is the same, a merely material activity, activity pure and simple, regardless of its form' (ibid.: 297).

Marx went on in the Grundrisse to reveal one of the most basic of the capitalist's capacities to magically separate the worker from not only the fruits of his/her labor but the very notion that the worker is the very source and creator of that wealth.

While capital thus appears as the product of labor, so does the product of labor, likewise appear as capital – no longer as a simple product, nor as an exchangeable commodity, but as capital; objectified labor as mastery, command over living labor. The product of labor appears as alien property, as a mode of existence confronting living labor as independent, as value in its being for itself; the product of labor, objectified labor, has been endowed by living labor as an alien power; ... because the whole of real wealth, the world of real value and likewise the real condition of its own realization are posited opposite it as independent existences. As a consequence of the production process, the possibilities resting in living labor's own womb exist outside it as realities – but as realities alien to it, which form wealth in opposition to it. (Ibid.: 454)

Nevertheless, despite these horrific and dispirited relationships, workers contained in themselves the potential for rebellion because of their centrality to production, which from time to time they recognized and acted upon. When work stops for whatever reasons, workers recognize it is their labor that makes capital hum and thrive. When mills and factories shut down, capital lies useless waiting for work to begin again. It is at this point that living labor has to recreate itself as independent of objectified labor. In the Grundrisse, Marx, with humor and irony, observes these contradictions. He makes the momentous connection that capitalism depends as much on societal domination of a concentrated workforce as on creating the infrastructure for enhancing wealth accumulation.

The Times of November 1857 contains an utterly delightful cry of outrage on the part of a West-Indian plantation owner. This advocate analyses with great moral indignation – as a plea for the re-introduction of Negro slavery – how the free blacks of Jamaica content themselves with producing only what is strictly necessary for their own consumption, and, alongside this 'use value', regard loafing (indulgence and idleness) as the real luxury good; how they do not care a damn for the sugar and fixed capital invested in the plantations, but rather observe the planters' impending bankruptcy with an ironic grin of malicious pleasure ... They have ceased to be slaves, but not in order to become wage laborers, but, instead, self-sustaining peasants, working for their own consumption. As far as they are concerned, capital does not exist as capital, because autonomous wealth as such can exist only either on the basis of direct forced labor, slavery, or indirect forced labor, wage labor. Wealth confronts direct forced labor not as capital, but rather as a relation of domination. (Ibid.: 325–6)

To thwart these unequal capital/labor relationships, Marx turned to worker cooperatives as a substantial alternative means of production. In his Inaugural Address to the Working Men's International Association in London in 1864, Marx made an early assessment of worker cooperatives. He said,

The value of these great social experiments cannot be over-rated. By deed, instead of by argument, they have shown that production on a large scale, and in accord with the behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labor need not be monopolized as a means of dominion over, and extortion against the laboring man himself; and that, like slave labor, like serf labor, hired labor is but a transitory and inferior form destined to disappear before associated labor plying its toil with a willing hand, ready mind and a joyous heart. (Tucker 1978: 518)

Though Marx clearly sympathized with cooperative developments, he saw the attacks by politicians tied to private capital as possibly insurmountable unless cooperatives 'developed national dimensions, and consequently to be fostered by national means' (ibid.: 518).

Finally, it was in 1871 that Marx spoke to the International Working Men's Association only two days after the last resistance of the Paris Commune had ended. In a mixture of hope and sadness Marx wrote of the potentiality he saw in working people's abilities to not only run the Parisian factories but the very centers of French political, administrative and military power (Kamenka 1983:523ff.). This they demonstrated in the few short weeks of their control over Paris before the onslaught of the overwhelming military force coming out of Versailles. Plans were afoot to restart factories and enterprises abandoned by their owners on a worker-run basis, while associating these cooperatives in one large cooperative union (Tucker 1978: 623).

To appreciate Marx's understanding of the role of cooperatives it is important to know that he was fully aware of the activities and writings of Robert Owen. As recounted by A. L. Morton in The Life and Ideas of Robert Owen, Owen was already recognized as a major reforming industrialist with the working class as the key component of British economic development. As Owen wrote, 'Manual labor, properly directed is the source of all wealth and of national prosperity ... Manual labor is of more value to the community than the expense necessary to maintain the laborer in considerable comfort ... that scientific ... aid to man increases his productive powers ... and every addition to scientific or mechanical and chemical power is to increase wealth.' Later Owen wrote 'that the natural standard of value is, in principle, human labor, or the combined manual and mental powers of men called into action' (Morton 1978: 113, 115). Marx was still a young student when he was exposed to the writings and personal commitments of Robert Owen (Marx 1977: 635). Owen's founding of the New Lanark workers' community in England created a self-reliant cooperative village of working men and their families (Morton 1978: 95). He projected a multiplicity of these associated living and working arrangements of between 500 and 3,000 people to eventually become a federation of local communities (ibid.: 45). These visions of collective working-class advancements, which included Owen's belief in the liberating impact on workers of 'eight hours of labor, eight hours of recreation and eight hours of rest,' had important reverberations. This focus on recreation and rest humanizing the worker conforms very closely to Marx's writings in the Economic and Philosophical Manuscripts (Fromm 1961: 98–9, 143–4, 168). Owen's focus on a ten-hour workday, the evils of child labor and the importance of children's education are all seen by Marx as necessary preconditions to liberating people's lives (Morton 1978: 123–6; Marx 1967a:209). Moreover, Owen's assessment of the unnecessary middlemen between producers and the consumers (Morton 1978: 44) becomes a major focus of cooperative development in nineteenth-century England and a notion that Marx understood and accepted in his affirmation of working- class capacity for emancipation. Friedrich Engels, especially in Socialism: Utopian and Scientific, lauded Owen's New Lanark experiment by relating that 'when a crisis in cotton stopped work for four months, his workers received their full wages all the time. And with all this the business more than doubled in value, and to the last yielded large profits to its proprietors.' The answer was clear: the capitalist proprietors who previously had taken the bulk of the profits were absent. Engels wrote, 'The newly created gigantic productive forces, hitherto used only to enrich individuals and to enslave the masses, offered to Owen the foundations for a reconstruction of society; they were destined, as the common property of all, to be worked for the common good of all' (Tucker 1978:691–3).

Though paternalistic in his founding of Lanark and other associated village living arrangements for usually 1,500 people, Owen had sufficient confidence that experience and training of the working class would lead to worker autonomy and efficacy (Morton 1978: 24–5). Though Owen did not accept the need to win control of the state by class struggle, he provided a potential model of a society run by socialist principles based on cooperation and not competition (ibid.: 56, 68).

(Continues...)

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Edition details

• Publisher: Zed Books
• Publication date: 2016
• Language: English
• ISBN 10: 1783606495
• ISBN 13: 9781783606498
• Binding: Paperback
• Number of pages: 181