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Title: Marx, Conflict, and Cooperatives
Author: Eric Fleischmann
Date: December 21st, 2021
Language: en
Topics: Karl Marx, Marxism, cooperatives, left-libertarianism
Source: Retrieved on 1/31/22 from https://c4ss.org/content/55583

Eric Fleischmann

Marx, Conflict, and Cooperatives

Karl Marx and Friedrich Engels argue in The Communist Manifesto that

“[t]he history of all hitherto existing society is the history of class

struggles. Freeman and slave, patrician and plebeian, lord and serf,

guildmaster and journeyman, in a word, oppressor and oppressed, stood in

constant opposition to one another, carried on an uninterrupted, now

hidden, now open fight…” The history of humanity is therefore a history

of institutionalized conflict. And in capitalism this conflict is

fundamentally between capitalists and the working class; reflected in

daily life by the struggles between workers and bosses within the

capitalist business structure and, as subsets of this more fundamental

relationship, between domestic and foreign workers brought about by

outsourcing and between workers and machines due to automation as a

consequence of technological development. As Marxian economist Richard

Wolff writes in his book Democracy at Work: A Cure for Capitalism, in

their quest toward “maximizing profits and achieving higher rates of

growth or larger market shares[,] . . . [capitalists] fire workers and

replace them with machines, or they impose a technology that exposes

workers to health and environmental risk but increases profits, or they

relocate production out of the country to exploit cheap labor.” And, as

such, perhaps the universal element to all anti-capitalist schemes is

their intent to abolish these conflicts. This is certainly true of the

worker cooperative movement and here I would like to briefly outline its

solutions for these conflicts through feminist economic geographer team

Gibson-Graham’s fantastic book Take Back the Economy: An Ethical Guide

for Transforming Our Communities and Marxist theory generally (with a

sprinkling of left-libertarianism). There is a great deal of writing on

this topic, but the essentials bear repeating.

There is always conflict within capitalist enterprises between workers

and bosses. This is because the vested interests of both parties are in

opposition. Workers aim at maximizing their interests through higher

wages and benefits like healthcare and maternity leave. Bosses

‘organize’ businesses to maximize competitive efficiency—as a secondary

consequence of trying to maximizing profits and in a manner

fundamentally limited by the knowledge problems of hierarchy—through

lowering wages, outsourcing labor, etc.[1] The defining feature of this

conflict is the exploitation of the worker through the extraction of

surplus value. As Wolff writes, this...

is the excess of the value added by workers’ labor—and taken by the

employer—over the value paid in wages to them. To pay a worker $10 per

hour, an employer must receive more than $10 worth of extra output per

hour to sell. Surplus is capitalists’ revenue net of direct input and

labor costs to produce output.

This extra value is, because of private ownership of the means of

production, stolen from the worker. And for Wolff, forwarding the

standpoint of “surplus analysis,” this is the central aspect of

capitalism—over and above the existence of markets and the exchange of

commodities. He writes that “[f]rom the standpoint of surplus analysis

what defines an economic system—for example, capitalism—is not primarily

how productive resources are owned nor how resources and products are

distributed. Rather, the key definitional dimension is the organization

of production.” And this problem elaborates itself in the mistreatment

of workers on a daily basis. As Gibson-Graham put it in one very

demonstrative case: “[W]orkers hypothesized that . . . profits had been

sent overseas or lost in financial market speculation. Owners and

managers couldn’t be trusted with workers’ jobs and livelihoods.”

Furthermore, many bosses require a body of people to stay in their

place. It’s important that the majority of workers do not rise above a

low skill level so they can do the basic labor. Wolff argues therefore

that worker-owned enterprises must replace…

the current capitalist organization of production inside offices,

factories, stores, and other workplaces in modern societies. In short,

exploitation—the production of a surplus appropriated and distributed by

those other than its producers—would stop. Much as earlier forms of

class structure (lords exploiting serfs in feudalism and masters

exploiting slaves in slavery) have been abolished, the capitalist class

structure (employers exploiting wage laborers would have to be

abolished, as well.”

And by doing so this conflict is resolved by combining the

aforementioned vested interests of workers and owners. Worker-owners

both want to improve their individual lives through benefits and high

wages while wanting to make the business as efficient as possible. This

also creates the support necessary to increase the skill and education

of workers, as can be seen—to use an example from Gibson-Graham—in the

Argentinian cooperative factory FaSinPat, where part of the surplus

produced goes towards maintaining a primary school and high school for

workers.

There is also the conflict between domestic and foreign workers. This

is, as mentioned before, a subset of the conflict between workers and

bosses because it is brought about through the search for maximized

profits. Gibson-Graham explain that “[s]ome capitalist businesses have

responded to workers’ demands for higher wages by moving to areas of

cheaper wages and unregulated working hours.” This kind of outsourcing

sometimes leads to xenophobic and chauvinistic attitudes amongst workers

in the Global North who see foreign workers as the enemies instead of

capitalists. And this misunderstanding serves to cover up the truth that

it is not the fault of foreign workers—who are simply trying to survive

and achieve basic comforts—but the fault of imperialism; what Vladimir

Lenin refers to as “[t]he [h]ighest [s]tage of [c]apitalism.” As Marx

and Engels write in The Communist Manifesto, “The need of a constantly

expanding market for its products chases the bourgeoisie over the entire

surface of the globe. It must nestle everywhere, settle everywhere,

establish connexions everywhere.” and as such, traditional national

industries are supplanted…

by new industries, whose introduction becomes a life and death question

for all civilised nations, by industries that no longer work up

indigenous raw material, but raw material drawn from the remotest zones;

industries whose products are consumed, not only at home, but in every

quarter of the globe. In place of the old wants, satisfied by the

production of the country, we find new wants, requiring for their

satisfaction the products of distant lands and climes.

These ideas form the basis of the broader Marxist theory of imperialism,

wherein class exploitation exists within nations but also between

nations for, as Lenin writes, “Society’s productive forces and the

magnitudes of capital have outgrown the narrow limits of the individual

national states. Hence the striving on the part of the Great Powers to

enslave other nations and to seize colonies as sources of raw material

and spheres of investment of capital.” And though it must be obvious

that cooperatives are not a cure-all for the far-reaching and ongoing

processes of imperialism and colonialism, once again by combining the

vested interests of workers and owners, one reduces the incentive to

shift production overseas at the cost of domestic jobs. And further,

cooperatives allow for the opportunity for collaboration instead of

competition between domestic and foreign workers. For example, the

Mondragon Cooperative Corporation in Spain has moved some elements of

production offshore. But, as Gibson-Graham explain, “this strategy is

not one that pits one workforce against another but one that secures

ongoing employment for worker-owners in one place and noncooperative

employment in another. The MCC is committed to increasing workers’

participation in the ownership and management of companies in its

network.” Additionally, worker/producer cooperatives can also partner

with consumer-owned and multi-stakeholder cooperatives to form

international supply chains that are human-centric and fair trade.[2]

Finally, there is the conflict between workers and machines—a one-sided

conflict in terms of consciousness admittedly, but a conflict

nonetheless; and this fight has led to such movements as the Luddites.

This is once again a subset of the conflict between workers and bosses.

Gibson-Graham point out that “[m]achines offer the capitalist

entrepreneur the opportunity to replace labor, drive the wage bill down,

and increase surplus value production.” And Marx, long before the advent

of contemporary automation, writes insightfully that…

[i]f, then, the capitalistic employment of machinery, on the one hand,

supplies new and powerful motives to an excessive lengthening of the

working day, and radically changes, as well the methods of labour, as

also the character of the social working organism, in such a manner as

to break down all opposition to this tendency, on the other hand, it

produces, partly by opening out to the capitalist new strata of the

working class, previously inaccessible to him, partly by setting free

the labourers it supplants, a surplus working population, which is

compelled to submit to the dictation of capital.

And not only does increased mechanization lead to both increasing

exploitation as more and more surplus value is available for extraction

and the creation of an even larger surplus population, but it also

undermines the basis of value in a society that is living labor.[3]

Under socialism/communism then, the machinery is in the hands of the

workers and so any increase in automation lends itself toward decreasing

the length of the workday but not an increase in ‘surplus population.’ I

have also pointed out, in an early article of mine, that from a

historical materialist perspective and in response to calls for UBI as a

panacea…

[e]ven if it does not cause mass unemployment—but even more so if it

does—automation will lead to the emergence of new and the exacerbation

of old social divisions. Those who have greater access to these

technologies will be able to further shape the world economically,

politically, socially, and legally for those who do not. It can be

expected that many will be barred from such ownership through

intellectual property and other such state-capitalist measures. It will

not matter if there is a universal basic income, because even with the

purchasing power provided, people must spend money on physical

commodities and within a society both defined by forces in the hands of

an ever-smaller number of capitalists.

The first issue of increased exploitation and surplus population is, in

theory, counteracted by worker cooperatives; workers could automate

large sections of processes of the businesses they collectively owned

and democratically governed and, instead of firing workers-owners,

simply increase everyone’s freetime. In practice, for now, cooperatives

are forced to compete with capitalist businesses in artificially

delocalized markets and, as such, are often excluded from the

possibility of majorly increased leisure time.[4] However, not only is

this a problem potentially resolved by limiting and, eventually,

eliminating the state (easier said than done), but, as a consequence, it

would lead to an increasingly large movement to reclaim the

social-reality-defining power of the means of production for the working

class in order to overcome capitalism.[5] And even returning to the

current reality of cooperatives: with worker cooperatives, for the

millionth time, there is a vested interest amongst owners to maintain

employment—because they are also the workers. So Gibson-Graham account

that with such organizations as the Mondragon Cooperative Corporation,

“[w]hen new state-of-the-art labor-saving machinery is introduced,

displaced workers are deployed to other jobs or to another cooperative

in the regional network. Some are encouraged to go back to technical

college to be trained in new production techniques. While doing so, they

are supported by a maintenance wage.” Thus, in worker cooperatives the

conflict between workers and machines is turned into a collaboration and

synthesis.

Many socialists—particularly Marxists—are extremely critical of the

cooperative movement, with left-communist thinker Amadeo Bordiga saying

famously that “[t]he hell of capitalism is the firm, not the fact that

the firm has a boss.”[6] And one need only look at the now defunct

r/muhcoops. And these critiques are not illegitimate; worker

cooperatives operating in a state capitalist system are not going to

save the world. Humanity is going to need to make a major shift toward a

cooperative, decentralized, and flexible mode of production to ensure

its continued existence on this planet. However, worker cooperatives can

be a part of this, and it is worth noting that Marx himself, at least at

certain points in his life, did speak favorably of worker cooperatives.

In “Instructions for the Delegates of the Provisional General Council,”

he acknowledges “the co-operative movement as one of the transforming

forces of the present society based upon class antagonism. Its great

merit is to practically show, that the present pauperising, and despotic

system of the subordination of labour to capital can be superseded by

the republican and beneficent system of the association of free and

equal producers.” And in “The Civil War in France,” he says, in

reference to the Paris Commune of 1871, that “[i]f co-operative

production is not to remain a sham and a snare; if it is to supersede

the capitalist system; if united co-operative societies are to regulate

national production upon common plan, thus taking it under their own

control, and putting an end to the constant anarchy and periodical

convulsions which are the fatality of capitalist production – what else

. . . would it be but communism, ‘possible’ communism?”[7]

[1] See Kevin Carson’s “Economic Calculation in the Corporate

Commonwealth.”

[2] My opinion is that, in the long run, international supply chains

should only be used for essentials and otherwise reduced in length and

frequency as much as possible. Localism is the future.

[3] For a contemporary rethinking of the labor theory of value, see

Kevin Carson’s Studies in Mutualist Political Economy.

[4] See Kevin Carson’s “The Distorting Effects of Transportation

Subsidies” and “Pandemics: The State As Cure or Cause?”.

[5] As Kevin Carson argues, “The current structure of capital ownership

and organization of production in our so-called ‘market’ economy,

reflects coercive state intervention prior to and extraneous to the

market.” And, in Organization Theory, he outlines how—through particular

legal frameworks, subsidies (particularly to transportation and

communication infrastructure), intellectual property laws, and

tariffs—the U.S. state established the hegemony of the

corporate-capitalist business as the default economic structure; a

phenomenon that would help lead to today’s state capitalism. Without

this historical and ongoing intervention, Anna Morgenstern makes the

points that “due to the rising cost of protecting property [without

police and military protection], there comes a threshold level, where

accumulating more capital becomes economically inefficient, simply in

terms of guarding the property” and “without a state-protected

banking/financial system, accumulating endless high profits is well nigh

impossible.” And “[w]ithout concentration of capital, wage slavery is

impossible.” And, as Gary Elkin explains, without the monopolistic

banking/financial system and “if access to mutual credit were to

increase the bargaining power of workers to the extent that [Benjamin

Tucker] claimed it would, they would then be able to (1) demand and get

workplace democracy, and (2) pool their credit [to] buy and own

companies collectively. This would eliminate the top-down structure of

the firm and the ability of owners to pay themselves unfairly large

salaries.” Much, much, much more can be written here, but this will

suffice for an endnote.

[6] I cannot find the original source for this quote but I have come

across it on numerous occasions.

[7] A more thorough consideration on the relationship between Marxism

and cooperatives can be found in David Prychitko’s book Marxism and

Workers’ Self-Management: The Essential Tension.