Monday, 22 March 2010

Two Books on Co-ops

The Trotskyist left in this country is good when it comes to thinking and theorising about the Labour party and the trade unions, but very often the third wing of the labour movement - cooperatives - tends to be neglected. For example, the Socialist Party has these two recent pieces on how co-ops fit into Labour and Tory schemes for privatising sections of the NHS and welfare services. This article in Socialism Today does an excellent job at critiquing the Tories' sudden conversion to co-ops, but lacks an appreciation of the co-op movement today - strongly implying it is an historic relic of when the labour movement had to provide its own welfare services.

This attitude is mistaken. In a lengthy but excellent four part post, Arthur Bough unearths what the classical Marxists have to say about co-operatives, showing they were far from hostile or indifferent to them. He argues that socialists should be as active in them as they are in the other wings of the labour movement, arguing for their democratisation and extension (where appropriate). Co-ops are not a panacea or substitute for class struggle but they are an important front in the struggle against capital.

This in mind, there are two short books on co-ops I've read recently. The first is Co-ops to the Rescue, edited by Alan Thomas and Jenny Thornley. It is dated (published in 1989) but is an excellent introduction and case study of 'rescue co-ops', where a co-op is formed to take over a failed or failing business. This is particularly relevant in a Stoke context as upcoming cuts are likely to dispense with some of the city council's leisure provision. While it is preferable the council keeps them open, possible co-op solutions are better for workers and service users than outright closure.

In his introduction, Alan Thomas notes the majority of co-ops (then) were common ownership enterprises. Capital is limited to the nominal membership of the co-op and reserves and profits are held in common - a member cannot sell their stake for a profit and withdraw. Unlike capitalist firms management is delegated authority on the part of the membership. They have the final word through the general meeting of members.

Co-ops can find support across the political spectrum for a variety of reasons. The Tories' current enthusiasm for co-ops is nothing new. Under Thatcher the government treated them as any other (small) business and were left to the vagaries of the market to determine whether they would sink or swim. Tories did see co-ops as a way of inculcating market discipline (and therefore conservative values) in workers, but not enough to amend the law to favour co-op formation or provide them some of the tax breaks available to conventional small businesses (common ownership was incompatible with relief on employee profit share schemes).

Whereas the co-op movement has been closely allied with Labour from more or less the beginning (the Co-op Party is affiliated to Labour and currently has 29 MPs sitting as Labour MPs), co-ops have had to compete inside the party with other models of ownership - particularly nationalisation, and in more recent years privatisation (though mutualism is, apparently, due to be at the heart of the next manifesto).

The rescues studied in Co-ops to the Rescue are very different. They involved a construction firm, grocers, a shirt factory, two engineering companies, and English language teachers. Two had folded by the time the book went to press, but as far as I can tell the remaining four are still trading today (websites here and here). The lessons drawn from the six studies are typical of others - they often require policy backing and direction, be that from involved trade unions, local councils/government, and/or the wider co-op movement, long-term support from the same sources, and the inculcation of a high degree of internal commitment. They shouldn't be regarded as a quick fix. Left Labour councils of the 1980s such as Sheffield City Council and the GLC were very keen to see co-ops formed under their watch (and with their backing) quickly succeed. Like any other business they take time to find their feet.

In all, Co-ops to the Rescue is a very good introduction. Unfortunately, the same cannot be said of Serving the People by Greg Rosen - the book that comes with your Co-op Party membership pack. This is less a history of the Co-Op Party and more one of its prominent members. That said you do get a sense of the (not always unproblematic) influence it has had in Labour.

The biggest problem with Serving the People is its unacknowledged ideological bias. It fits firmly in the tradition - if it can be called that - of Blairist 'Third Way' thinking. Capitalist society as is is taken for granted, and co-ops are presented as the passage through the Charybdis of free market fundamentalism and the Scylla of nationalised industry. Except that the position Rosen takes is not equidistant - there is very little critique of private ownership, but a lot of state, left, and trade union bashing.

If for a moment we regard the trade union movement as the voice of working class interests in the workplace, and the co-op movement its expression as consumers, what Rosen consistently does throughout the book is oppose the latter to the former. Co-op Party politicians in the Labour party are forever favourably contrasted with those (nine times out of ten on the left) who are wedded to "producer-dominated politics". For Rosen the unions and the left represented vested and particularistic interests. The Co-op Party and movement on the other hand crystallised a universal interest.

There is certainly a contradiction between these two wings of the labour movement, but to prise them apart and present co-ops as a post-class alternative for progressive politics as Rosen does is to perpetuate the contradiction. Instead, socialists in both wings should be working to bind the two more closely together in an attempt to unify and politicise the working class simultaneously as producer and consumer.

Another key problem is the absence of strategic thinking or any sense of the state of the Co-op Party today (Serving was published in 2007). Yes, it might be near the ceiling of its number of MPs but what about the membership? How is cooperative activism on the ground? Rosen does not address this at all.

Here we have two books from the centre left and right wing of the co-op movement. They are good entrées into co-ops for very different reasons - Co-ops to the Rescue because of the challenges start up co-ops have to face, and Serving the People as a guide to how the powers that be see them.


Red Mike said...

Aye it is good to see the Co-op movement get a bit more coverage. I was a little surprised to read an article in the New Statesman by the head of the Conservative Cooperative group. But not surprised to see it was poorly written and didn't make any sense, it involved "a hilarious" Tory response to the complaint that they nicked there policy on Co-ops from Labour which was and I quote " are you going to call these Soviets?" which apart from not making sense is an extremely stupid thing to say as anyone who actually knows what the word Soviet translates to can attest.

james said...

Comrade, I agree with your criticisms of Rosen's book - it's very pre-crisis in outlook and rather revisionist in its omission of the explicit anti-capitalism inherent in the cooperative movement from the start.

I suspect that at the time the book was written there was some hope - based on reports from insiders - that Brown as PM would adopt co-operativism as his "vision thing". Hence the lack of focus on the party of the time, and perhaps some of the language used in the book.

There's been much talk of a John Lewis model for public services - but what about the private sector? During the Vestas dispute, a proposal for the establishment of a workers' co-operative was made - alas, nothing has come of this, but it shows how our class is beginning to reconnect with the methods of struggle used in the past.

The model of supporters direct - which has seen football supporters' trusts attempt to build up stakes in clubs - should be adopted by the broader labour movement. I actually suggested this to Harriet Harman at a public meeting and she looked a little puzzled. Hopefully if we keep making the argument, it'll be grasped by more people across our movement.

andy newman said...

There is an interesting aspect of the co-op movement in suggesting a way of abolishing the capitalist class as a social class, as a seperate aim from abolishing capitalism as a social and political system

There was a Norwegian proposal some years ago that public companies over a certain size would be obliged to make an annual share issue proportionate to their pre-tax surplus that would be granted to a worker co-op and that would gradually dilute the holding of indivdual capitalists

james said...

I thought that was Sweden, Andy?

On abolishing the capitalist class as an elite of investor-owners, that's certainly a good way to formulate it - there's always a stale state vs. market debate, and we need to avoid that and frame the argument so that when we discuss the issue with people, it's about the extension of democratic participation.

I thought this model interesting:

Anonymous said...

Co-Ops are important because they can rally workers to take action in defence of their jobs over a protracted period.
They abolish the divisions between manager and worker and are schools of workers control.
But they usually fail because they're too small and starved of capital to compete with the large capitalist firms.
Now we have some large banks which are effectively state owned, the demand to fund coops becomes relevant in struggles against redundancy.
Had the Vestas workers secured funding from RBS, they could have re-launched production as a co-op.
To do so would have required breaking EU laws on competition, which is why New Labour would never agree to this solution.
But it should be pushed for in resolutions to union conferences, within the L.P. and elsewhere.


james said...

Prianikoff - if loan finance from RBS, or any other lender, was on commercial terms, there's no reason why a co-op at Vestas IoW would have broken EU competition law.

james said...

Here's an inspiring story from Preston:

Phil said...

What I find interesting is Alun Michael - a Co-op Party MP - has one of the most illiberal and authoritarian voting records in the House. I wonder how he squares his contradictions.

Arthur Bough said...


Thanks for the plug, which I have only just seen as a result of my long separation from Internet access. There are a few points I'd like to stress.

Its necessary to get away from the idea of "rescue co-ops". That is necessarily the usual context, but we need to build models with a good chance of success. I've found Paul Mason's recent Newsnight pieces quite interesting in putting forward something of the ideas I have proposed, which is that much of the "new manufacturing", like computer games production etc., is not subject to the same arguments in relation to economies of scale that led Marxists to point to the problems of small firms. It is quite possible to envisage a wide range of such co-ops, employing very highly skilled, very highly paid workers in high-value added, low organic composition of Capital firms, with corresponding very high rates of profit.

I think its a disgrace that the many so called marxist and leftist people who work in the media industry, for example, do not get together with their not inconsiderable resources to form such a Co-op to challenge the bouregois media monopoly. Perhaps their marxism only goes so far.

Secondly, I have given a whole host of sites and resources on my blog that demonstrate that far from being something peripheral Co-ops are significant. Wordwide they employ more people than do multinationsal, and in quite a few countries they dominate production in some areas.

Finally, I have argued in similar vein to other comrades above that we can use a version of the Swedish model on Pensions to demand that Workers pension funds be brought under workers control, as part of a general struggle for the extension of workers ownership and control. The £500 billion in those fudns would be a significant step forward.

I've been able to post this comment because SKY have eventually hooked me up several weeks afdter they should have done. However, I'd got fed up of waiting and cancelled my subscription with them, so this might be short-lived until I get cut off again.

james said...

Arthur, I recommend The Phone Co-op (

Phil said...

Cheers, Arthur - your points are appreciated as always.

Re: rescue Co-ops, I dwelt on them especially as there are a couple of folk I know (one a Labour cllr, another a trade union official) who are interested in looking into them.

I don't think we should be content with limiting demands for co-ops to bits and pieces of industry capital and/or the state has cast aside - in the first phase of socialist transformation co-ops need extending across the economy - but right now rescue co-ops have a place in trying to prevent the loss of jobs and services.

Arthur Bough said...


I did investigate using the Phone Co-op, but due to my current circumstances it wasn't a viable option for now.


I agree. Even with rescues the principles I have outlined can be used. For example, I wrote a blog during the Vestas sit-in arguing that if Bob Crow and other unions beleived what they said about it being a very profitable business then the last thing the workers should demand is that the bosses state take it over. Instead, it seemed obvious to me that from Occupation you move to organising production on a Co-operative basis. The Trade Unions and labour and Co-operative Movement should provide all the support to make that possible. Having done that, then as engels suggested, you demand that the business be given all the same favours that private firms receive from the State.

I've recently been interested in the fact that the tories have taken up the ideas of Philip Blond in relation to Co-ops - Labour too are making Mutualism an important part of their election campaign. My general attitude is - "Beware of Greeks Bearing Gifts" - whether they are Social democratic or Conservative Hellenics. However, as I have written in my bog Red Tories that doesn't mean we should be wary of advocating Co-ops, just because the Tories and new Labour have taken up the idea. It DOES mean that we should kick wide open the door they have opened, and fill the opening with our own class content.