In the Communist Manifesto Marx and Engels set out their critique of Utopian Socialism the islands of socialist co-operation put forward by people like Robert Owen. The experience of co-operatives in Britain during the 1970’s such as that at Meriden have consolidated this view in the minds of Marxists of co-operatives as utopian ventures doomed to failure in a hostile sea of capitalism. Instead for revolutionary Marxists the alternative view of Lenin has dominated, that of a violent overthrow, capture of the state, demolition of the aspects of the state designed to oppress the working class, the bodies of armed men – Lenin did not call for other aspects of the state to be smashed – and the wholesale transformation of property relations under the domination of a revolutionary proletarian state, acting as the Dictatorship of the Proletariat.

Unfortunately, of course that model didn’t turn out too well, and Marxists should learn from history. Whilst far from advocating the kind of Utopian Socialist perspective of Owen, I think it is, however, useful to look at what Marx actually said about co-operatives, what he saw as their relationship to socialist construction, and also to look at other examples of co-operatives that perhaps challenge the received wisdom. I start also from a position which is perhaps not usually stressed in Marxist thought – the idea that the most important aspect of socialist transformation is not the replacement of the market, and commodity production, not the introduction of planning, but is the ending of the position of the working class as a slave class, and its transformation into the owner and controller of the means of production.

We seem to have adopted the idea that Co-operatives are bound to fail within the confines of Capitalism. The argument is somewhat akin to the objection to the Theory of Socialism in One Country. That is socialist construction can only occur within the confines of a world economy or at least a significant part of it, for the simple reason that capitalism operates on that scale of the division of labour, and socialism which seeks to develop production beyond what capitalism achieves cannot start from anything less. This is not the place to discuss the dogmatic nature in which Trotskyists have argued the case over Socialism in One Country, but in dealing with the question of Co-operatives at least some of that argument is necessarily addressed.

The Stalinist response to the Trotskyist argument was – “Do you not have faith in the superiority of socialist production?” It seems to me a reasonable argument to put forward. Yes the full advantages of socialism cannot be achieved outside the confines of a socialist world economy, but that is not at all the same thing as arguing that the superiority of an economy based on workers ownership and control of the means of production, and on co-operation cannot of itself be innately superior to capitalist production, cannot out compete other capitalist states, and thereby act as a beacon for workers elsewhere. And indeed by the mid thirties with capitalism throughout the western world in deep crisis, and the Soviet Union growing at a rapid pace that seemed even more a vindication of that line of argument. But a similar line of argument can be put in relation to Co-operatives within the confines of a national capitalist economy. The fact is that the Co-op established by the Rochdale Pioneers over 150 years ago has survived all that time, and not only survived but branched out into banking and finance, and other areas, such as Travel Agents, Undertakers etc. Clearly, there is no absolute economic law that says that co-operatives are doomed to failure within an overall capitalist environment, anymore than that an attempt to build wider socialist economic relationships in the Soviet Union was necessarily doomed to failure.

Its true that the Co-op in many respects bears no relationship to socialism, in fact in many respects it bears more similarity to Stalinism, but we should ask why that is. Unlike a capitalist company anyone can become a shareholder in the Co-op for a nominal sum, and unlike a capitalist company every shareholder has an equal vote in the running of the Company. But how many socialists actually do so? I know I don’t. Shouldn’t that perhaps be a warning to us about the possible problems of constructing a socialist society, if we all have opportunity to have a say in a large enterprise that we can collectively own and control, and yet don’t why do we assume that workers will do so in the future? And yet as I have argued elsewhere New Thinking [1] if workers mobilised their financial resources amassed in their pension funds they could if the resources of the Co-op, Co-op Financial Services and Unity Trust were combined have significant power. Instead of carping about Tecopoly the Co-op could become a model employer setting the standard that others have to meet, and could challenge the market power of private companies, both other supermarkets, and suppliers.

And in contrast to the failed worker co-operatives such as that at Meriden let me cite these others.

This is from James Connolly,

“In 1832 the great English socialist, Robert Owen, visited Ireland and held a number of meetings in the Rotunda, Dublin, for the purpose of explaining the principles of Socialism to the people of that city. His audiences were mainly composed of the well-to-do inhabitants, as was, indeed, the case universally at that period when Socialism was the fad of the rich instead of the faith of the poor. The Duke of Leinster, the Catholic Archbishop Murray, Lord Meath, Lord Cloncurry, and others occupied the platform, and as a result of the picture drawn by Owen of the misery then existing, and the attendant insecurity of life and property amongst all classes, and his outline of the possibilities which a system of Socialist co-operation could produce, an association styling itself the Hibernian Philanthropic Society was formed to carry out his ideas. A sum of money was subscribed to aid the prospects of the society, a General Brown giving £1,000, Lord Cloncurry £500, Mr. Owen himself subscribing £1,000, and £100 being raised from other sources. The society was short-lived and ineffectual, but one of the members, Mr. Arthur Vandeleur, an Irish landlord, was so deeply impressed with all he had seen and heard of the possibilities of Owenite Socialism, that in 1831, when crime and outrage in the country had reached its zenith, and the insecurity of life in his own class had been brought home to him by the assassination of the steward of his estate for unfeeling conduct towards the labourers, he resolved to make an effort to establish a Socialist colony upon his property at Ralahine, County Clare. For that purpose he invited to Ireland a Mr. Craig, of Manchester, a follower of Owen, and entrusted him with the task of carrying the project into execution.

Though Mr. Craig knew no Irish, and the people of Ralahine, as a rule, knew no English – a state of matters which greatly complicated the work of explanation – an understanding was finally arrived at, and the estate was turned over to an association of the people organised under the title of The Ralahine Agricultural and Manufacturing Co-operative Association.

In the preamble to the Laws of the Association, its objects were defined as follows: –
· The acquisition of a common capital.
· The mutual assurance of its members against the evils of poverty, sickness, infirmity, and old age.
· The attainment of a greater share of the comforts of life than the working classes now possess.
· The mental and moral improvement of its adult members.
· The education of their children.
The following paragraphs selected from the Rules of the Association will give a pretty clear idea of its most important features: –
BASIS OF THE SOCIETY
That all the stock, implements of husbandry, and other property belong to and are the property of Mr. Vandeleur, until the Society accumulates sufficient to pay for them; they then become the joint property of the Society.

PRODUCTION
We engage that whatever talents we may individually possess, whether mental or muscular, agricultural, manufacturing, or scientific, shall be directed to the benefit of all, as well by their immediate exercise in all necessary occupations as by communicating our knowledge to each other, and particularly to the young.

That, as far as can be reduced to practice, each individual shall assist in agricultural operations, particularly in harvest, it being fully understood that no individual is to act as steward, but all are to work.
That all the youth, male or female, do engage to learn some useful trade, together with agriculture and gardening, between the ages of nine and seventeen years.

That the committee meet every evening to arrange the business for the following day.

That the hours of labour be from six in the morning till six in the evening in summer, and from daybreak till dusk in winter, with the intermission of one hour for dinner.

That each agricultural labouring man shall receive eightpence, and every woman fivepence per day for their labour (these were the ordinary wages of the country, the secretary, storekeeper, smiths, joiners, and a few others received something more; the excess being borne by the proprietor) which it is expected will be paid out at the store in provisions, or any other article the society may produce or keep there; any other articles may be purchased elsewhere.

That no member be expected to perform any service or work but such as is agreeable to his or her feelings, or they are able to perform; but if any member thinks that any other member is not usefully employing his or her time, it is his or her duty to report it to the committee, whose duty it will be to bring that member’s conduct before a general meeting, who shall have power, if necessary, to expel that useless member.

DISTRIBUTION AND DOMESTIC ECONOMY
That all the services usually performed by servants be performed by the youth of both sexes under the age of seventeen years, either by rotation or choice.

That the expenses of the children’s food, clothing, washing, lodging, and education be paid out of the common funds of the society, from the time they are weaned till they arrive at the age of seventeen, when they shall be eligible to become members.

That a charge be made for the food and clothing, &c., of those children trained by their parents, and residing in their dwelling houses.
That each person occupying a house, or cooking and consuming their victuals therein, must pay for the fuel used.

That no charge be made for fuel used in the public room.

That it shall be a special object for the sub-committee of domestic economy, or the superintendent of that department, to ascertain and put in practice the best and most economical methods of preparing and cooking the food.

That all the washing be done together in the public washhouse; the expenses of soap, labour, fuel, &c., to be equally borne by all the adult members.

That each member pay the sum of one half-penny out of every shilling received as wages to form a fund to be placed in the hands of the committee, who shall pay the wages out of this fund of any member who may fall sick or meet with an accident.

Any damage done by a member to the stock, implements, or any other property belonging to the society to be made good out of the wages of the individual, unless the damage is satisfactorily accounted for to the committee.

EDUCATION AND FORMATION OF CHARACTER
We guarantee each other that the young children of any person dying whilst a member of this society, shall be equally protected, educated, and cherished with the children of the living members, and entitled, when they arrive at the age of seventeen, to all the privileges of members.

That each individual shall enjoy perfect liberty of conscience, and freedom of expression of opinion, and in religious worship.
That no spirituous liquors of any kind, tobacco, or snuff be kept in the store, or on the premises.

That if any of us should unfortunately have a dispute with any other person, we agree to abide by a decision of the majority of the members, or any person to whom the matter in question may be by them referred.
That any person wishing to marry another do sign a declaration to that effect one week previous to the marriage taking place, and that immediate preparations be made for the erection, or fitting-up of a suitable dwelling house for their reception.

That any person wishing to marry another person, not a member, shall sign a declaration according to the last rule; the person not a member shall then be balloted for, and, if rejected, both must leave the society.

That if the conduct of any member be found injurious to the well-being of the society, the committee shall explain to him or her in what respect his or her conduct shall continue to transgress the rules, such member shall be brought before a general meeting, called for the purpose, and if the complaint be substantiated, three-fourths of the members present shall have power to expel, by ballot, such refractory member.

GOVERNMENT
The society to be governed, and its business transacted, by a committee of nine members, to be chosen half-yearly, by ballot, by all the adult male and female members, the ballot list to contain at least four of the last committee.

The committee to meet every evening and their transactions to be regularly entered into a minute book, the recapitulation of which is to be given at the society’s general meeting by the secretary.

That there be a general weekly meeting of the society; that the treasurer’s accounts be audited by the committee, and read over to the society; that the Suggestion Book be also read at this meeting.

The colony did not use the ordinary currency of the country, but instead adopted a ‘Labour Note’ system of payment, all workers being paid in notes according to the number of hours worked, and being able to exchange the notes in the store for all the necessities of life. The notes were printed on stiff cardboard about the size of a visiting card, and represented the equivalent of a whole, a half, a quarter, an eighth, and a sixteenth of a day’s labour. There were also special notes printed in red ink representing respectively the labours of a day and a half, and two days. In his account of the colony published under the title of History of Ralahine, by Heywood & Sons, Manchester (a book we earnestly recommend to all our readers), Mr. Craig says: – “The labour was recorded daily on a ‘Labour Sheet’, which was exposed to view during the following week. The members could work or not at their own discretion. If no work, no record, and, therefore, no pay. Practically the arrangement was of great use.

There were no idlers”. Further on he comments: –
“The advantages of the labour notes were soon evident in the saving of members. They had no anxiety as to employment, wages, or the price of provisions. Each could partake of as much vegetable food as he or she could desire. The expenses of the children from infancy, for food or education, were provided for out of the common fund.

“The object should be to obtain a rule of justice, if we seek the law of righteousness. This can only be fully realised in that equality arising out of a community of property where the labour of one member is valued at the same rate as that of another member, and labour is exchanged for labour. It was not possible to attain to this condition of equality at Ralahine, but we made such arrangements as would impart a feeling of security, fairness and justice to all. The prices of provisions were fixed and uniform. A labourer was charged one shilling a week for as many vegetables and as much fruit as he chose to consume; milk was a penny per quart; beef and mutton fourpence, and pork two and one-half pence per pound. The married members occupying separate quarters were charged sixpence per week for rent, and twopence for fuel.”

In dealing with Ireland no one can afford to ignore the question of the attitude of the clergy; it is therefore interesting to quote the words of an English visitor to Ralahine, a Mr. Finch, who afterwards wrote a series of fourteen letters describing the community, and offered to lay a special report before a Select Committee of the House of Commons upon the subject.

He says: –
“The only religion taught by the society was the unceasing practice of promoting the happiness of every man, woman, and child to the utmost extent in their power. Hence the Bible was not used as a school-book; no sectarian opinions were taught in the schools; no public dispute about religious dogmas or party political questions took place; nor were members allowed to ridicule each other’s religion; nor were there any attempts at proselytism. Perfect freedom in the performance of religious duties and religious exercises was guaranteed to all. The teaching of religion was left to ministers of religion and to the parents; but no priest or minister received anything from the funds of the society. Nevertheless, both Protestant and Catholic priests were friendly to the system as soon as they understood it, and one reason was that they found these sober, industrious persons had now a little to give them out of their earnings, whereas formerly they had been beggars.”

Mr. Craig also states that the members of the community, after it had been in operation for some time, were better Catholics than before they began. He had at first considerable difficulty in warding off the attacks of zealous Protestant proselytisers, and his firmness in doing so was one of the chief factors in winning the confidence of the people as well as their support in insisting upon the absolutely non-sectarian character of the teaching.

All disputes between the members were settled by appeals to a general meeting in which all adults of both sexes participated, and from which all judges, lawyers, and other members of the legal fraternity were rigorously excluded.

To those who fear that the institution of common property will be inimical to progress and invention, it must be reassuring to learn that this community of ‘ignorant’ Irish peasants introduced into Ralahine the first reaping machine used in Ireland, and hailed it as a blessing at a time when the gentleman farmers of England were still gravely debating the practicability of the invention. From an address to the agricultural labourers of the County Clare, issued by the community on the introduction of this machine, we take the following passages, illustrative of the difference of effect between invention under common ownership and capitalist ownership: –

“This machine of ours is one of the first machines ever given to the working classes to lighten their labour, and at the same time increase their comforts. It does not benefit any one person among us exclusively, nor throw any individual out of employment. Any kind of machinery used for shortening labour – except used in a co-operative society like ours – must tend to lessen wages, and to deprive working men of employment, and finally either to starve them, force them into some other employment (and then reduce wages in that also) or compel them to emigrate. Now, if the working classes would cordially and peacefully unite to adopt our system, no power or party could prevent their success.”

This was published by order of the committee, 21st August, 1833, and when we observe the date we cannot but wonder at the number of things Clare – and the rest of Ireland – has forgotten since.

It must not be supposed that the landlord of the estate on which Ralahine was situated had allowed his enthusiasm for Socialism to run away with his self-interest. On the contrary, when turning over his farms to the community he stipulated for the payment to himself of a very heavy rental in kind. We extract from Brotherhood, a Christian Socialist Journal published in the north of Ireland in 1891, a statement of the rental, and a very luminous summing-up of the lesson of Ralahine, by the editor, Mr. Bruce Wallace, long a hard and unselfish worker for the cause of Socialism in Ireland: –

“The Association was bound to deliver annually, either at Ralahine, Bunratty, Clare, or Limerick, as the landlord might require, free of expense –
Wheat 320 brls.
Barley 240 brls.
Oats 50 brls.
Butter 10 cwt.
Pork 30 cwt.
Beef 70 cwt.

“At the prices then prevailing, this amount of produce would be equivalent to about, £900, £700 of rent for the use of natural forces and opportunities, and £200 of interest upon capital. It was thus a pretty stiff tribute that these poor Irish toilers had to pay for the privilege of making a little bit of their native soil fruitful. This tribute was, of course, so much to be deducted from the means of improving their sunken condition. In any future efforts that may be made to profit by the example of Ralahine and to apply again the principles of co-operation in farming, there ought to be the utmost care taken to reduce to a minin um the tribute payable to non-workers, and if possible to get rid of it altogether. If, despite this heavy burden of having to produce a luxurious maintenance for loungers, the condition of the toilers at Ralahine, as we shall see, was marvellously raised by the introduction of the co-operative principle amongst them, how much more satisfactorily would it have been raised had they been free of that depressing dead weight?”

Such is the lesson of Ralahine. Had all the land and buildings belonged to the people, had all other estates in Ireland been conducted on the same principles, and the industries of the country also so organised, had each of them appointed delegates to confer on the business of the country at some common centre as Dublin, the framework and basis of a free Ireland would have been realised. And when Ireland does emerge into complete control of her own destinies she must seek the happiness of her people in the extension on a national basis of the social arrangements of Ralahine, or else be but another social purgatory for her poor – a purgatory where the pangs of the sufferers will be heightened by remembering the delusive promises of political reformers.

In the most crime-ridden county in Ireland this partial experiment in Socialism abolished crime; where the fiercest fight for religious domination had been fought it brought the mildest tolerance; where drunkenness had fed fuel to the darkest passions it established sobriety and gentleness; where poverty and destitution had engendered brutality, midnight marauding, and a contempt for all social bonds, it enthroned security, peace and reverence for justice, and it did this solely by virtue of the influence of the new social conception attendant upon the institution of common property bringing a common interest to all. Where such changes came in the bud, what might we not expect from the flower? If a partial experiment in Socialism, with all the drawbacks of an experiment, will achieve such magnificent results what could we not rightfully look for were all Ireland, all the world, so organised on the basis of common property, and exploitation and mastership forever abolished?

The downfall of the Association came as a result of the iniquitous land laws of Great Britain refusing to recognise the right of such a community to hold a lease or to act as tenants. The landlord, Mr. Vandeleur, lost his fortune in a gambling transaction in Dublin, and fled in disgrace, unable to pay his debts. The persons who took over the estate under bankruptcy proceedings refused to recognise the community, insisted upon treating its members as common labourers on the estate, seized upon the buildings and grounds and broke up the Association.
So Ralahine ended. But in the rejuvenated Ireland of the future the achievement of those simple peasants will be dwelt upon with admiration as a great and important landmark in the march of the human race towards its complete social emancipation. Ralahine was an Irish point of interrogation erected amidst the wildernesses of capitalist thought and feudal practice, challenging both in vain for an answer. Other smaller communities were also established in Ireland during the same period. A Lord Wallscourt established a somewhat similar community on his estate in County Galway; The Quarterly Review of November, 1819, states that there was then a small community existent nine miles outside Dublin, which held thirty acres, supported a priest and a school of 300 children, had erected buildings, made and sold jaunting cars, and comprised butchers, carpenters and wheelwrights; the Quakers of Dublin established a Co-operative Woollen Factory, which flourished until it was destroyed by litigation set on foot by dissatisfied members who had been won over to the side of rival capitalists, and a communal home was established and long maintained in Dublin by members of the same religious sect, but without any other motive than that of helping forward the march of social amelioration. We understand that the extensive store of Messrs. Ganly & Sons on Usher’s Quay in Dublin was the home of this community, who lived, worked and enjoyed themselves in the spacious halls, and slept in the smaller rooms of what is now the property of a capitalist auctioneer.”
(Labour in Irish History)
Connolly [2]

And what of Marx’s attitude to real life workers co-operatives.

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour. 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. Without the factory system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises. into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale. The capitalist stock companies, as much as the co-operative factories, should be considered as transitional forms from the capitalist mode of production to the associated one, with the only distinction that the antagonism is resolved negatively in the one and positively in the other.” (emphasis added)

He goes on,

“The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling, and to reduce more and more the number of the few who exploit the social wealth; on the other hand, to constitute the form of transition to a new mode of production. It is this ambiguous nature, which endows the principal spokesmen of credit from Law to Isaac Pereire with the pleasant character mixture of swindler and prophet.”

(Capital Vol III pp441-2)

Marx elsewhere in Capital sets out the extent to which these co-operatives, even where established, like Meriden,out of failed capitalist enterprises made higher profits than capitalist enterprises despite being charged higher rates of interest on borrowed money. One of the main reasons Marx argues, and this is a point made by Connolly above is the more efficient use of fixed capital.

So clearly Marx does not see the idea that such workers co-operatives being extended throughout the economy is utopian, indeed he sees Credit as the means for facilitating such expansion. Such a vision of socialist construction is at extreme odds with the top down, statist approach of Lenin, and also with the statist approach taken many years earlier by Marx himself in the Communist Manifesto. In fact this gradualist approach to socialist construction of “a new mode of production naturally grow(ing) 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” is far more akin to the views of Kautsky than those of Lenin. It presupposes socialist transformation occurring in an advanced economy where the productive forces and credit have developed to this stage to enable it to develop “naturally”.

And of course if we accept the outline of socialist construction set out by Marx here, then we come back to the point I made at the beginning. Such a gradual extension of co-operative industry, whether or not accompanied by an extension of state owned industry in those sectors where this is the most practical form, implies a continuation of the market. In Marx’s words, “, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.” Marx sees this as natural, and not at all something that should necessarily be feared. And of course why not. If workers have reached the level of consciousness by which they recognise the benefit, indeed necessity, to own their means of production collectively in such co-operatives, then isn’t it the most natural thing in the world for workers in each of these co-operatives, to themselves co-operate one with another, and thereby to organically replace the market by ever closer ties, and co-operative agreements amongst them.

As I have said elsewhere that does not leave us advocating some syndicalist view of socialism, of bringing about the replacement of capitalism purely in the industrial sphere. A political struggle is required too. The gains for workers in constructing socialist bridgeheads within the capitalist battlefield require political legitimation, but that political advancement too should advance accordingly, if we accept the basis of Marxist materialism, in line with the strengthened social position of the working class, and ultimately before political power is ultimately secured will require the putting down of a slaveholders revolt, but such a task becomes much simpler the Dictatorship of the proletariat more secure on such a basis of the overwhelming social weight of the working class, and its political legitimacy than was required by the Bolsheviks in their attempt to create socialism from the top down and on the back of a very small, very weak proletariat.