On Producer Cooperatives and Socialism

Abstract

Marx and Engels often declared themselves in favour of a transition furthered by worker management of firms, and one purpose of this article is to suggest that the establishment of a system of producer cooperatives would be the ideal way out of capitalism. Starting out from the Marxian definition of revolution as the transition from one production mode to another, the author expatiates on the concept of production mode and on different possible modes of transition. Another issue worth raising is whether producer cooperatives should be eligible for state support and also this subject is briefly addressed in this paper.

Keywords:

• cooperative firms
• socialism
• Marxism

Notes on Contributor

Bruno Jossa held the Chair of Political Economy from 1970 through 2007 in Naples, and now is a retired professor. He received the V ISTECOR European Culture Award (1991), the Saint Vincent Award (1998) and, in 2011, the F. Nitti gold medal of the Accademia dei Lincei. His more recent works include The Economic Theory of Socialism and the Labour Managed Firm (Elgar, 1997), The Democratic Firm (Carocci, 2008), Is There an Alternative to Capitalism? (manifestolibri, 2010), and Marxism and Globalization (manifestolibri, 2012).

Notes

¹For Marx's ideas on firms run by workers see Jossa (2005).

²Similarly, Sylos Labini (2006) stands firm on the claim that democratic firm management models have little in common with Marxism.

³Whereas the General National Consolidated Trade Union (GNCTU), the nation-wide general union for the protection of workers established in England in February 1834, had a correct appreciation of the importance of producer cooperatives “as a key factor for the prompt establishment of a completely new social order” (Cole 1953, 136), few Marxists held this view in later years (see, among others, Mondolfo 1923, 93; Labriola 1970, 271–72; Quarter 1992; McMurtry 2004; Gunn 2006, 345).

⁴The equation of socialism with democratic firm management is also in contrast with the link between democracy and reformism that Galasso (2013, 35) theorised when he wrote that the distinctive characteristic of liberal democracies and all the political forces which accept libertarian practices is the belief that there is just one road to reform.

⁵In Anti-Dühring, Engels (1878, 642) maintained that following the development of joint-stock companies and trusts, “the bourgeoisie demonstrated to be a superfluous class.”

⁶According to Engels, the enemy of trade unionism was Proudhon, “the socialist of the small peasant and master-craftsman” (Engels 1891a, 187).

⁷There is no denying that following the eradication of the misery of the proletarian class in developed capitalistic countries the issue of class consciousness has become an even more urgent one (see Fetscher [1973] 1988, 227n17).

⁸In Marx's writings, the emergence of the new mode of production is sometimes made to coincide with the point in time when growth is altogether inhibited by the older production mode and sometimes with the moment when the older production mode proves unable to lead to an optimal level of growth (for two antithetical opinions on this point, see Elster [1984, 42–43] and Miller [1984]).

⁹As pointed out by Aron (1969, 50), it is only liberals and pessimists (who are probably true sages) that tend to advise men against setting themselves tasks which they know they cannot master. From Aron's perspective, Marxists belong to a different family in that they devise their tasks based on their daydreams, not in proportion to their actual abilities. Be that as it may, Marxists resolving to work towards the establishment of worker control are setting themselves a task which is not unrealistic. The Yugoslav Marxists joined in the “Praxis Group” advocated a form of humanistic socialism and self-management. While rejecting determinism, they were confident that most socialist principles would be materially implemented at some points in time (see Crocker 1981).

¹⁰According to Hayek (1960), coercion is a social evil which turns a useful thinking individual into a tool for the achievement of another's ends.

¹¹The idea that history progresses towards the full emancipation of humankind has been called into question by numerous commentators including Colletti, who has strongly criticised the finalist and teleological component of Marxism (see the 1979 interview reported in Colletti 1979). And an expert of Marx such as Fineschi has claimed that Marx “just provided generic indications on the society of the future and not even the rough draft of a theoretical approach” (Fineschi 2007, 189; see also Fineschi 2006, 9).

¹²Anyone believing that the transition to socialism is heralded by declining frictions between opposed classes should give their best attention to the younger Marx's saying (see Rapone 2011, 169–70) that the precondition for class conflict to become an element of progress is that the two opposed actors develop an awareness of their respective roles, as well as the determination to follow them through—and this happens during the phase termed industrial capitalism and not in the decadent phase termed financial capitalism.

¹³The claim that insolvency cases are less frequent among cooperatives than among capitalistic firms is backed up by the findings of numerous empirical surveys (see, inter alia, Ben-Ner 1988; Stauber 1989; Dow 2003, 226–28).

¹⁴In an early paper entitled “The Role of the State in State Monopoly Capitalism” (published in Italian in the collection of articles Writings on Economics and Sociology), Oskar Lange further developed Hilferding's and Lenin's analyses of state monopoly capitalism in the light of the theories of a number of Austrian Marxist thinkers who were critical of the political platforms that the Social Democrats of the time were developing principally in Germany and Austria. Indeed, whereas the social democrats objected to an excessive bent for statism on the part of socialists, Adler and Bauer, as well as Lange in their wake, thought that the circumstances typical of state monopoly capitalism prevailing in those years would be the ideal springboard for a socialist revolution. An interesting remark by Lange runs that during a state monopolistic stage the class of capitalists is actually split into two groups and that the state, while enforcing laws that play into the hands of large monopolistic concerns, leaves smaller capitalistic businesses to stand up to competition and put up with much smaller earnings. This state of affairs has little to do with laissez faire politics, which does envisage government measures to protect private ownership, but no measures which would interfere with income distribution or provisions favouring one group of capitalists to the detriment of others. At this stage, it is the issue of democracy that takes centre-stage. In an attempt to retain control of the state, economic oligarchies become ever more mistrustful of democratic practices, while petty peasants, the lower middle classes and intellectuals tend to join forces with the proletariat and form a large opposition group in defence of democracy. Hence, advocates of political democracy face two options: living under state monopoly capitalism right to the end or acting as tools for the dictatorship of the proletariat (see Lange [1932] 1975, 28).

¹⁵The partial autonomy of political action implied in Gramsci's notion of hegemony doubtless makes the role of the working class less central and confers greater weight on the issue of alliances (see Forgacs 1995, 66–67). Clues for the identification of the agent of revolution may come from Ernst Bloch's pregnant reflection that hope, along with a project and a time horizon for its implementation is the strongest and by far the best reality we can conceive of. Even if hope is just a point above the horizon and this horizon can only draw nearer when knowledge is attained through practical action, it is hope and only hope that helps us reach that encouraging and reassuring understanding of our world which is the surest and tendentially most material kind of knowledge (Bloch [1959] 1972, 59). On this point, see also Genovese (2007).

¹⁶Hobsbawm (1982, 27–28) argued that while Marxism had its early social roots principally, if not exclusively, in movements and parties of manual workers, from the 1950s onwards it had especially caught on amongst intellectuals.

¹⁷In the opinion of Ben-Ner (1987), one of the causes of the relative paucity of cooperatives is the fact that an able entrepreneur does not deem it in his interests to share the prospective earnings from a newly-founded firm with third parties—as would be the case in a cooperative. In point of fact, the different distribution patterns of cooperatives versus capitalistic businesses arise in connection with a variety of different reasons (see, inter alia, Dow 2003, 17; Gunn 2006, 346; Pérotin 2006). However, in Pérotin (2006, 296) we read that the average entry rate for cooperatives in France in the years 1979–2002 was 15%, i.e., considerably higher than the corresponding average recorded for conventional businesses in the same period (12%). See also Steinherr and Vanek (1976, 340).