Are Cooperatives Utopian?

by K. Wilson

Worker cooperatives ¹ have never occupied a central place within Marxist theories of class struggle. They have not been regarded as a revolutionary force in society, and still less has their formation been considered a worthwhile or necessary activity for revolutionaries themselves to engage in.

The usual justification for this attitude seems straightforward. Ultimately, the aim of communism is to put the whole process of social production under cooperative control. But for this it is necessary to overthrow the rule of capital, a feat that can only be achieved through the organized struggle of the great mass of workers employed in capitalist production. Until then, cooperatives are nothing more than a premature attempt to establish communist relations on a small scale. Even when these experiments do not succumb to market competition or corruption, they will never just ‘catch on’ and spread – at best they make life more pleasant for their few members (at worst they make life considerably less pleasant!). Within capitalist society, according to this argument, cooperatives are essentially utopian.

If we look more closely, however, we find that this question of cooperatives cannot be dismissed so simply. Marx himself took a more nuanced view toward the worker cooperatives of his own time. Even more importantly, our time is different from his. Here we will sketch Marx’s view, and survey the subsequent development of capitalism and of the cooperative movement (focusing on the United States), with the aim of discovering what part cooperatives have to play in the new round of class struggle opening up today.

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Worker cooperatives began to emerge in Europe in significant numbers in the second half of the 19th century. ² These cooperatives differed from the experiments of the early utopian socialists ³: rather than the pet projects of bourgeois visionaries, they were the pragmatic response of workers themselves to their exploitation by capital. Through joint ownership and self-management, workers strove to gain some degree of economic security and control over their conditions of work. Not only small enterprises of skilled craftsmen, but also large industrial factories were soon being run on a cooperative basis – either taken over by workers after being abandoned by their capitalist masters, or founded anew. Most of these cooperatives were no more revolutionary in ideology than the trade unions, which they grew up alongside.

Marx saw these cooperatives as an indication of the growing maturity of the working class, and the degree to which industrial production had already been ‘socialized’ and was therefore ripe to be seized and carried on in communistic fashion. In his 1864 Inaugural Address of the Working Men’s International Association, Marx opined:

The value of these great social experiments cannot be overrated. 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 of 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, a ready mind, and a joyous heart.

However, these cooperatives were not by themselves a revolutionary force in society:

At the same time the experience of the period from 1848 to 1864 has proved beyond doubt that, however excellent in principle and however useful in practice, cooperative labor, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries… To save the industrious masses, cooperative labor ought to be developed to national dimensions, and, consequently, to be fostered by national means…To conquer political power has, therefore, become the great duty of the working classes. They seem to have comprehended this, for in England, Germany, Italy, and France, there have taken place simultaneous revivals, and simultaneous efforts are being made at the political organization of the workingmen’s party. ⁴

As long as capital ruled, worker cooperatives didn’t stand a chance. Marx reaffirmed this judgment a decade later in his critique of the Gotha Program. The authors of the Program had proclaimed: “The German workers’ party…demands the establishment of producers’ cooperative societies with state aid.” The capitalist state, Marx retorted, could hardly be expected to finance the transition from capitalist to cooperative production. Communism would not be handed down from on high, it would be won by the class movement of the workers. Marx continued:

That the workers desire to establish the conditions for cooperative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of cooperative societies with state aid. But as far as the present cooperative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not protégés either of the governments or of the bourgeois.

Thus for Marx, cooperatives were significant as an organic outgrowth of the rising worker movement, an expression of the maturing aspirations and abilities of the industrial proletariat. But they did not themselves have a central role to play in the class struggle. Rather, the revolutionary deed would be done by the national trade union and political movements, which at that time were steadily coalescing. Of course, these movements still tended toward reformism – but, so thought Marx and later 19th century Marxists, they would soon become radical. Bitter experience would teach them that capital could not grant the worker a decent existence, that his demands could only be won by toppling the capitalist state altogether. Revolution would ensue. Then, and only then, would the working class be in a position to establish cooperative production at a large scale.

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The final confrontation that late 19th century Marxists forecast did not come to pass. Flush with the fruits of imperialism and aided by the rise of mass production, national capital proved able to provide, or credibly promise, a rising standard of living for workers after all. Marxist scenarios for revolution that centered around conquering political power within the industrialized nations looked less and less likely as the new century progressed. At the same time, as Marx had anticipated, the cooperative movement was unable to “arrest the growth in geometrical progression of monopoly.” The great bulk of the 19th century industrial cooperatives succumbed to competition or became conventional firms. The ones that persisted offered no threat to the rule of capital.

But the triumph of monopoly capitalism didn’t last long. It soon reached the limits of its ability to expand and faced the acute crisis of the Great Depression. The intense hardship of the 1930s called forth a new wave of cooperative activity – the largest in United States history. Self-help organizations sprang up among the unemployed, at first to trade labor for unharvested crops and to coordinate barter, then expanding into canning, baking, and gardening. These worker cooperatives came to rely on federal and state aid. When this aid was cut off or brought under tight government control in the late 1930s, those cooperatives that remained lost their independence and their democratic structure, becoming merely a means of stretching relief funds by putting people to work. ⁵

This was a nice demonstration, if one was needed, of the correctness of Marx’s critique of the Gotha Program. But these fragile cooperatives did not have much of a choice: faced with the powerful alliance of national capital and national government, and a union movement that was increasingly intertwined with these, there was little room for these incipient worker organizations to build up their own resources or to develop into an independent social force. As the country mobilized for war and business picked up, their members were reabsorbed into the expanding capitalist economy.

The next crop of worker cooperatives in the United States sprang up in the 1960s and 70s, this time motivated more by ideology than by economic necessity. These were mainly small enterprises in the growing service sector, pioneered by idealists who desired an alternative to the alienation of modern life and work. The fates of these experiments illustrated all the obstacles that cooperatives face within a strong market economy. The pressures of competition made it extremely difficult to run a business according to any values but the maximization of profit. Furthermore, efforts to establish democratic decision-making procedures ran up against the corrosive influence of the wider capitalist culture, which did not tend to produce individuals with the skills and the emotional maturity necessary for collective self-management. Most of these cooperatives were short lived. ⁶

This same period also saw a revival of interest in Marxism, despite the rather dim prospects for class struggle within the still-entrenched bureaucratic union movement. To the new generation of Marxists, the cooperatives of their starry-eyed contemporaries seemed little more than misguided utopian projects. Insular and counter-cultural, at best they became tiny oases in the vast capitalist desert; at worst they diverted scarce radical energies from the real work of class struggle and revolution. Of course, revolutionaries and cooperators were at this time equally impotent when it came to effecting social transformation.

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Today we are in the midst of yet another wave of cooperation, this time once again in response to economic hardship. This long wave began during the severe recession of the early 1980s, with groups of workers buying out their bankrupt employers. Since the crisis of global capitalism commenced in earnest in 2008, the interest in worker cooperatives has further intensified. ⁷ At the same time, the disintegration of the old labor movement has opened the way for a new round of class struggle. As conditions ripen for the rise of a new worker movement, it is time to reassess the role of worker cooperatives in the class struggle – because this time around, things are different.

Today we live in the era of global capitalism, characterized above all by the gigantic scale and transnational mobility of productive capital – and the consequent formation of a global proletariat. ⁸ Global capital mobility spelled the doom of the old national labor movements, and efforts to organize anew will run up against the same obstacle. The most obvious conclusion is that, to exert leverage against transnational corporations, workers must also organize on the global scale. This will indeed be necessary. But the new movement will look different from past movements in a much more fundamental respect. To see this, we need to understand how globalization has changed the political terrain on which class struggle takes place.

Capital operating at the global scale has become more and more independent of any particular nation or territory. Transnational capital is now the dominant fraction of capital within governments at all levels – in fact, de-regulation has empowered capital to deal ever more directly with the lowest layers of government. Nations, states, and municipalities all compete to grant favors to transnational capital, as they must so long as they are totally dependent on it for their economic survival. If they put up a fight, capital can simply go elsewhere.

By fracturing the old unity of capital and state, transnational capital has unwittingly opened the way for workers to develop a new kind of geographically-based political leverage. In most of the developed countries all levels of government are formally democratic, thanks to the suffrage movements of the past two centuries. These governments are now open to becoming theaters of dynamic class struggle in a way that was impossible in the past, when the tight alliance between national capital and national government was able to avert open conflict by incorporating labor as a ‘junior partner’ of capital. Today workers can organize politically, beginning at the municipal level, to force concessions and place restrictions on all capital operating within a given area. ⁹ But we will only be able do this effectively to the extent that a new movement can build up resistance to capital flight. And this is where cooperatives come in.

As the decline of global capitalism accelerates, we will increasingly see rising unemployment side by side with idle productive capacity. This is also what happened during the Great Depression. But this time around, there will be no chance of sustained capitalist recovery. Already efforts are underway to revitalize local economies on a cooperative basis. ¹⁰ As long as such efforts remain disconnected from class struggle, they are unlikely to go far – to the extent that they thrive, they are liable to be corrupted or pillaged by capital desperately chasing after the dwindling opportunities for profit. But if they are united with class struggle in the right way, and deliberately protected from encroachment, worker cooperatives will make their communities more resilient and less dependent on transnational capital. Then, workers’ struggles on a geographical basis can begin to appropriate by degrees the resources of capital, so that the cooperative economy grows as the capitalist economy contracts. This dialectical process will form the basis for a movement that can battle transnational capital on the global scale. ¹¹

In the past, Marxists have correctly viewed cooperatives at utopian insofar as they were based merely on ideals, oblivious to the constraints and movement of history. Cooperatives did not and could not play a central role in working class movements a century ago. But today, when we consider our situation in light of the historical development of the capitalist system, we are led to just the opposite conclusion. Cooperatives will be indispensable to the new movement. Their role is no longer just inspirational or educational: they are the necessary foundation for global class struggle, and the first elements of a communist system of production – “the structure of the new society in the shell of the old.”

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