Alternatives in the Transition from Capitalism

Sumanasiri Liyanage (“Transcending Capital-Labour Relation:A Note on Social Entrepreneurship”, 10 November) makes an interesting point about “social enterprises”, co-operatives, worker-co-operatives and the like.

He argues that structurally, many of these enterprises are bureaucratic, and that “many social enterprises, having failed to make sociality their ‘inner’ and ‘outer’ characteristics, show a tendency for degeneration, putting aside their social characteristics and creating a strong permanent bureaucratic apparatus. The main concern of this bureaucratic apparatus is not profit, as in private enterprises, but ‘income’ as a revenue.”

There is a great deal of truth in what he says. In a capitalist system, social enterprises, by their very need to exist in that milieu, must look to profit. Indeed, as one participant in a recent online conference of worker-co-ops in the USA commented to me, they seem to be more concerned in their engagement with the capitalist system, rather than with expanding a socially-owned economy.

“Yes, I see the emphasis on ‘income’,” my informant tells me, “especially here as initial funding for co-ops,etc., comes from non-profit foundations that emphasise ‘entrepreneurship,’ also ‘social enterprise’ is just seen as for profits with some social mission, either corporate ‘responsibility’ or community contributions, or a social service abandoned by the State.”

However, exceptions to this rule do exist. My informant, who consults for worker-co-ops in the US, thinks that these are more concerned with social issues than with mere profit, although they do realise the need for surplus income, in order to survive and expand. Exemplifying this attitude, the newly-formed Rhode Island Political Co-operative, which won democratic primaries, as well as seven seats in the state’s General Assembly, and two city council seats, campaigned on socio-economic issues, such as a $15 minimum wage, the Green New Deal, single-payer healthcare, criminal justice reform, affordable housing, quality public education, immigrant rights, and getting money out of politics.

Liyanage should look at the problem as a Marxist. Historically, social change has taken place through the resolution of internal contradictions, but has been accompanied by the establishment of institutions which pre-figure the next social stage. In Hegelian terms, the transformation of quantity into quality.

In Europe, the transition from slavery to serfdom did not take place in a vacuum. For example, serf-based production emerged within the slave-holding Roman Empire, the collapse of which caused the transition to feudalism. Similarly, bourgeois institutions, such as banks and manufacturing concerns emerged in feudal society: joint-stock companies appeared (stillborn in the first millennium in China) in the 13th century in Europe. These proliferated within pre-capitalist societies, laying a transformative foundation until a cusp was reached, and the bourgeoisie seized power, carrying out a metamorphosis of economy, society and polity.

One could, realistically, expect a similar mechanism to occur prior to a transition to socialism. Indeed, the USSR, during the “New Economic Policy” period, encouraged the establishment of worker-co-ops and farmer-co-ops. Lenin believed that co-operatives, particularly producer-co-ops, held the key to building a socialist society. He wrote in 1923 (“On co-operatives”, Pravda, 26-27 May 1923) that the only task left was “to organise the population in co-operative societies.”

Apart from farmer collectives, Lenin also encouraged “Big Bill” Haywood, the US trade unionist, to set up the Kuzbass Autonomous Industrial Colony, which brought together American and European workers with Soviet ones in a giant worker-co-op: dissolved, unfortunately, in 1926. Hence, co-operatives, and particularly producer co-operatives, are part of the practical Marxist tradition.

The “father of socialism in Sri Lanka”, Philip Gunawardena, encouraged the creation of multi-purpose co-operative societies (MPCSs), both for the promotion of collective activity, and as potential units of rural democracy. During the 1970-75 United Front Government, several farmer co-operatives emerged in Sri Lanka, as well as a handful of worke-co-operatives (notably a steel-making co-op in Moratuwa). So the tradition exists on the Sri Lankan Left as well.

Of course, producer-co-ops by themselves cannot, as utopian socialists such as Robert Owen and Charles Fourier imagined, guarantee the transition to socialism (any more than the emergence of capitalist enterprises in pre-capitalist societies ensured the success of the bourgeois revolution). As both Marx and Lenin pointed out, the necessary condition for this transition lies in the class struggle.

However, these institutions may prove to be essential allies in the class struggle – their very existence contradicts the bourgeois idea of private property, as against collective property. “Under private capitalism,” Lenin pointed out, “co-operative enterprises differ from capitalist enterprises as collective enterprises differ from private enterprises.”

Marx (in his ‘Inaugural Address of the International Working Men’s Association”) had this to say about workers’ co-operatives:

“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 labour need not be monopolised as a means of dominion over, and of extortion against, the labouring man himself; and that, like slave labour, like serf labour, hired labour is but a transitory and inferior form, destined to disappear before associated labour plying its toil with a willing hand, a ready mind, and a joyous heart.”

On a practical level, the burgeoning Latin American “Solidarity Economy” movement has attempted to build alternatives to capitalist institutions, challenging capitalist property relations, as part and parcel of a class-based revolutionary process. Hence, rather than merely condemning actually existing worker co-ops as bureaucratically degenerated, commercialised enterprises, it may be more constructive to regard them as part of the solution to a transition from capitalism, and consider how these institutions may be reformed, structurally and ideologically, from within.

SAVITHRI GURUGE