Support for co-operatives is a common feature in anarchist writings. Indeed, anarchist support for co-operatives is as old as use of the term anarchist to describe our ideas is. So why do anarchists support co-operatives? Basically it is because a co-operative is seen as an example of the future social organisation anarchists want in the present. As Bakunin argued, “the co-operative system… carries within it the germ of the future economic order.” [The Philosophy of Bakunin, p. 385]
Anarchists support all kinds of co-operatives — housing, food, credit unions and productive ones. All forms of co-operation are useful as they accustom their members to work together for their common benefit as well as ensuring extensive experience in managing their own affairs. As such, all forms of co-operatives are useful examples of self-management and anarchy in action (to some degree). However, here we will concentrate on productive co-operatives, i.e. workplace co-operatives. This is because workplace co-operatives, potentially, could replace the capitalist mode of production with one based upon associated, not wage, labour. As long as capitalism exists within industry and agriculture, no amount of other kinds of co-operatives will end that system. Capital and wealth accumulates by oppression and exploitation in the workplace, therefore as long as wage slavery exists anarchy will not.
Co-operatives are the “germ of the future” because of two facts. Firstly, co-operatives are based on one worker, one vote. In other words those who do the work manage the workplace within which they do it (i.e. they are based on workers’ self-management in some form). Thus co-operatives are an example of the “horizontal” directly democratic organisation that anarchists support and so are an example of “anarchy in action” (even if in an imperfect way) within the economy. In addition, they are an example of working class self-help and self-activity. Instead of relying on others to provide work, co-operatives show that production can be carried on without the existence of a class of masters employing a class of order takers.
Workplace co-operatives also present evidence of the viability of an anarchist “economy.” It is well established that co-operatives are usually more productive and efficient than their capitalist equivalents. This indicates that hierarchical workplaces are not required in order to produce useful goods and indeed can be harmful. Indeed, it also indicates that the capitalist market does not actually allocate resources efficiently (as we will discuss in section J.5.12). So why should co-operatives be more efficient?
Firstly there are the positive effects of increased liberty associated with co-operatives.
Co-operatives, by abolishing wage slavery, obviously increases the liberty of those who work in them. Members take an active part in the management of their working lives and so authoritarian social relations are replaced by libertarian ones. Unsurprisingly, this liberty also leads to an increase in productivity — just as wage labour is more productive than slavery, so associated labour is more productive than wage slavery. Little wonder Kropotkin argued that “the only guarantee not to be robbed of the fruits of your labour is to possess the instruments of labour… man really produces most when he works in freedom, when he has a certain choice in his occupations, when he has no overseer to impede him, and lastly, when he sees his work bringing profit to him and to others who work like him, but bringing in little to idlers.” [The Conquest of Bread, p. 145]
There are also the positive advantages associated with participation (i.e. self-management, liberty in other words). Within a self-managed, co-operative workplace, workers are directly involved in decision making and so these decisions are enriched by the skills, experiences and ideas of all members of the workplace. In the words of Colin Ward:
“You can be in authority, or you can be an authority, or you can have authority. The first derives from your rank in some chain of command, the second derives special knowledge, and the third from special wisdom. But knowledge and wisdom are not distributed in order of rank, and they are no one person’s monopoly in any undertaking. The fantastic inefficiency of any hierarchical organisation — any factory, office, university, warehouse or hospital — is the outcome of two almost invariable characteristics. One is that the knowledge and wisdom of the people at the bottom of the pyramid finds no place in the decision-making leadership hierarchy of the institution. Frequently it is devoted to making the institution work in spite of the formal leadership structure, or alternatively to sabotaging the ostensible function of the institution, because it is none of their choosing. The other is that they would rather not be there anyway: they are there through economic necessity rather than through identification with a common task which throws up its own shifting and functional leadership.
“Perhaps the greatest crime of the industrial system is the way it systematically thwarts the investing genius of the majority of its workers.” [Anarchy in Action, p. 41]
Also, as workers also own their place of work, they have an interest in developing the skills and abilities of their members and, obviously, this also means that there are few conflicts within the workplace. Unlike capitalist firms, there is no need for conflict between bosses and wage slaves over work loads, conditions or the division of value created between them. All these factors will increase the quality, quantity and efficiency of work and so increases efficient utilisation of available resources and facilities the introduction of new techniques and technologies.
Secondly, the increased efficiency of co-operatives results from the benefits associated with co-operation itself. Not only does co-operation increase the pool of knowledge and abilities available within the workplace and enriches that source by communication and interaction, it also ensures that the workforce are working together instead of competing and so wasting time and energy. As Alfie Kohn notes (in relation to investigations of in-firm co-operation):
“Dean Tjosvold of Simon Frazer…conducted [studies] at utility companies, manufacturing plants, engineering firms, and many other kinds of organisations. Over and over again, Tjosvold has found that ‘co-operation makes a work force motivated’ whereas ‘serious competition undermines co-ordination.’ … Meanwhile, the management guru… T. Edwards Demming, has declared that the practice of having employees compete against each other is ‘unfair [and] destructive. We cannot afford this nonsense any longer… [We need to] work together on company problems [but] annual rating of performance, incentive pay, [or] bonuses cannot live with team work… What takes the joy out of learning…[or out of] anything? Trying to be number one.’” [No Contest, p. 240]
(The question of co-operation and participation within capitalist firms will be discussed in section J.5.12).
Thirdly, there are the benefits associated with increased equality. Studies prove that business performance deteriorates when pay differentials become excessive. In a study of over 100 businesses (producing everything from kitchen appliances to truck axles), researchers found that the greater the wage gap between managers and workers, the lower their product’s quality. [Douglas Cowherd and David Levine, “Product Quality and Pay Equity,” Administrative Science Quarterly no. 37 (June 1992), pp. 302–30] Businesses with the greatest inequality were plagued with a high employee turnover rate. Study author David Levine said: “These organisations weren’t able to sustain a workplace of people with shared goals.” [quoted by John Byrne in “How high can CEO pay go?” Business Week, April 22, 1996]
(In fact, the negative effects of income inequality can be seen on a national level as well. Economists Torsten Persson and Guido Tabellini conducted a thorough statistical analysis of historical inequality and growth, and found that nations with more equal incomes generally experience faster productive growth. [“Is Inequality Harmful for Growth?”, American Economic Review no. 84, June 1994, pp. 600–21] Numerous other studies have also confirmed their findings. Real life yet again disproves the assumptions of capitalism — inequality harms us all, even the capitalist economy which produces it).
This is to be expected. Workers, seeing an increasing amount of the value they create being monopolised by top managers and a wealthy elite and not re-invested into the company to secure their employment prospects, will hardly be inclined to put in that extra effort or care about the quality of their work. Managers who use the threat of unemployment to extract more effort from their workforce are creating a false economy. While they will postpone decreasing profits in the short term due to this adaptive strategy (and enrich themselves in the process) the pressures placed upon the system will bring a harsh long term effects — both in terms of economic crisis (as income becomes so skewed as to create realisation problems and the limits of adaptation are reached in the face of international competition) and social breakdown.
As would be imagined, co-operative workplaces tend to be more egalitarian than capitalist ones. This is because in capitalist firms, the incomes of top management must be justified (in practice) to a small number of individuals (namely, those shareholders with sizeable stock in the firm), who are usually quite wealthy and so not only have little to lose in granting huge salaries but are also predisposed to see top managers as being very much like themselves and so are entitled to comparable incomes. In contrast, the incomes of top management in worker controlled firms have to be justified to a workforce whose members experience the relationship between management incomes and their own directly and who, no doubt, are predisposed to see their top managers as being workers like themselves and accountable to them. Such an egalitarian atmosphere will have a positive impact on production and efficiency as workers will see that the value they create is not being accumulated by others but distributed according to work actually done (and not control over power). In the Mondragon co-operatives, for example, the maximum pay differential is 14 to 1 (increased from 3 to 1 in a response to outside pressures after much debate, with the actual maximum differential at 9 to 1) while (in the USA) the average CEO is paid over 140 times the average factory worker (up from 41 times in 1960).
Therefore, we see that co-operatives prove (to a greater or lesser extent) the advantages of (and interrelationship between) key anarchist principles such as liberty, equality, solidarity and self-management. Their application, whether all together or in part, has a positive impact on efficiency and work — and, as we will discuss in section J.5.12, the capitalist market actively blocks the spread of more efficient productive techniques instead of encouraging them. Even by its own standards, capitalism stands condemned — it does not encourage the efficient use of resources and actively places barriers in the development of human “resources.”
From all this its clear to see why co-operatives are supported by anarchists. We are “convinced that the co-operative could, potentially, replace capitalism and carries within it the seeds of economic emancipation… The workers learn from this precious experience how to organise and themselves conduct the economy without guardian angels, the state or their former employers.” [Michael Bakunin, Bakunin on Anarchism, p. 399] Co-operatives give us a useful insight into the possibilities of a free, socialist, economy. Even within the hierarchical capitalist economy, co-operatives show us that a better future is possible and that production can be organised in a co-operative fashion and that by so doing we can reap the individual and social benefits of working together as equals.
However, this does not mean that all aspects of the co-operative movement find favour with anarchists. As Bakunin pointed out, “there are two kinds of co-operative: bourgeois co-operation, which tends to create a privileged class, a sort of new collective bourgeoisie organised into a stockholding society: and truly Socialist co-operation, the co-operation of the future which for this very reason is virtually impossible of realisation at present.” [Op. Cit., p. 385] In other words, while co-operatives are the germ of the future, in the present they are often limited by the capitalist environment they find themselves and narrow their vision to just surviving within the current system.
For most anarchists, the experience of co-operatives has proven without doubt that, however excellent in principle and useful in practice, if they are kept within the narrow circle of “bourgeois” existence they cannot become dominant and free the masses. This point is argued in Section J.5.11 and so will be ignored here. In order to fully develop, co-operatives must be part of a wider social movement which includes community and industrial unionism and the creation of a anarchistic social framework which can encourage “truly Socialist co-operation” and discourage “bourgeois co-operation.” As Murray Bookchin correctly argues, “[r]emoved from a libertarian municipalist [or other anarchist] context and movement focused on achieving revolutionary municipalist [or communalist] goals as a dual power against corporations and the state, food [and other forms of] co-ops are little more than benign enterprises that capitalism and the state can easily tolerate with no fear of challenge.” [Democracy and Nature no. 9, p. 175]
Therefore, while co-operatives are an important aspect of anarchist ideas and practice, they are not the be all or end all of our activity. Without a wider social movement which creates all (or at least most) of the future society in the shell of the old, co-operatives will never arrest the growth of capitalism or transcend the narrow horizons of the capitalist economy.