Korsch on Marx on Gotha on Co-operatives

From Karl Korsch’s Introduction to the Critique of the Gotha Programme (1922)

“Equally complex and at first sight obscure motives lie behind Marx’s furious and relentless attack in section III on the one socio-economic demand the Gotha Programme makes — the demand for ‘establishing producers’ co-operatives with State aid’. Here, as with the iron law of wages, Marx’s fierce attack is not really against the call for producers’ cooperatives as such, but only against the particular role that they play in Lassalle’s system. In fact, ten years earlier Marx had actually included ‘the establishment of producers’ associations and other institutions of use to the working class’ among the practical demands of the I.W.A. statues, and in his Inaugural Address he hailed the co-operative movement, along with the ten-hour day, as ‘up to now the greatest victories of the political economy of labour over the political economy of property’. At that time he even emphatically demanded the ‘development of co-operative labour on a national scale’, aided by ‘the means of the State’. Here, too, there would superficially appear to be no real conflict between Marx’s position and the demand made by the draft Gotha Programme. In fact, however, this example of Marx’s anger is a vivid expression of a deep and substantive difference between his outlook and that of Lassalle. For Marx was only too well aware of the real nature of this scheme (amply demonstrated in any event by the rest of the Programme). The plan for associations of co-operatives conceived in the 1860s along ‘Lassallean’ lines (whatever Lassalle himself may originally have said when first advancing this demand) relied much more on State aid than on the creation of a co-operative economy itself. Its real aim was to use aid to the producers’ associations to change the ‘limited bourgeois state’ into a ‘socialist state that would fulfil the ethical idea of freedom’ — instead of seeking the necessary material preconditions for attaining a socialist society in the predominance of the political economy of the working class over the political economy of property (which may be furthered, among other things, by producers’ cooperatives). This was a flagrant violation of a major principle in the I.W.A. Declaration of Principles which stated that ‘the economic emancipation of the working class is the principle aim, which every political movement must serve to advance’. Marx in section III of the Critique seeks to demolish the key concept of ‘co-operatives based on State credit’ as a regression into crude ideological and utopian errors. (This idea has recently found its worthy successors in the equally empty notions of many German socialists about ‘socialization’ or ‘seizing real values’.) Marx reaffirms against these illusions the true materialist and revolutionary meaning of the words ‘producers’ associations on a national scale’ by saying: ‘That the workers desire to establish the conditions for co-operative production on a social scale, and first of all on a national scale, in their own country, only means that they are working to revolutionize the present conditions of production, and it has nothing in common with the foundation of co-operative societies with State aid’.”


Source: Nathaniel Dorsky (2005) Devotional Cinema, 2nd ed., Berkley: Tuumba Press, 24-25.

“For alchemy to take place in a film, the form must include the expression of its own materiality, and this materiality must be in union with its subject matter. If this union is not present, if the film’s literalness is so overwhelming, so illustrative, that it obliterates the medium it is composed of, then one is seduced into a dream state of belief or absorption that, though effective on that level, lacks the necessary ingredients for transmutation. Such a film denies its totality. It denies the fact of what it is actually made of.

The instinct to express the union of material and subject occurs at the beginning of known human expression. The devotional cave art in southern France and northern Spain often plays with the contours of the cave walls to enhance the hallucination of the bison or horse depicted on them. Egyptian sculpture is as much about the unceasing nature of stone as it is about the unceasing glance engraved on that stone. In French religious stone carving of the late twelfth century, the stone itself is luminous, as both material and expression. The stained glass of the same period was born out of a love of the elemental glory oflight, color, and glass, while at the same time relating biblical tales or the lives of saints. Similarly, Bach’s organ chorale preludes are as much an expression of skeletal fingers pressing down on ivory keys and releasing air through pipes as they are melodic evocations of prayer. Mozart, born into the age of classicism, wedded his classical style to the human metabolism in every detail. The texture of the instrumentation, the key changes, and the depiction of conversation and emotion through melodic line are the music itself and at the same time are a primordial mirror or example of what it is to be fully human. We hear ourselves at our alchemical best.

For film to partake in this luminosity and elemental glory, and thereby lay the ground for devotion, it must obey its own materiality.”

HE White Paper, the HERB, and Co-operative Higher Education

Yesterday, my colleague Mike Neary and I met with Dan Cook (who wrote a very good consultancy report for the Co-operative College on Co-operative Universities in 2013), Ian Snaith, a Lawyer and legal scholar specialising in co-operatives, and Smita Jamdar, a Lawyer who specialises in education. Our intention was to look at the new Higher Education and Research Bill (HERB) in some detail, thinking about three scenarios:

  1. The conversion of an existing university to a co-operative
  2. The creation of a new co-operative university (a so-called ‘challenger institution’ to use the aggressive new parlance)1
  3. The possibility of a foreign co-operative university (e.g. Mondragon) accrediting degrees that are offered by a co-operative in the UK.

In summary, we agreed there will be no real barriers to any of these scenarios should the HERB go through Parliament as it is.

Following our meeting, Dan has published a detailed blog post which annotates the HERB and is well worth a read. There is more work to be done on examining the new legislation and in particular making sure it will fairly accommodate all types of new HEIs, and not just private, profit-making businesses. There are likely to be small changes to the proposed legislation  that could actually support the creation of co-operative universities and this is one of the things we’ll be focusing on in the future.

  1. What to call new forms of higher education? ‘Alternative providers’? ‘Challenger institutions’? I attended a conference last week where people were avoiding the use of ‘alternative’ because they didn’t want their vision of new forms of HE to be confused with the practices of some ‘alternative providers’ and had opted for ‘heterodox universities’ as an overarching term. Personally, I think ‘co-operative higher education’ avoids all of this and benefits from being an already existing organisational form that has a long, progressive social history – longer than most universities. []

The more radical interpretation of the concept of value…

Source: Simon Clarke (1980), The Value of Value, Capital and Class, 10.

“The more radical interpretation of the concept of value gave it more than a strictly economic significance. Marx’s concept of value expresses not merely the material foundation of capitalist exploitation but also, and inseperably, its social form. Within Marxist economics this implies that value is not simply a technical coefficient, it implies that the process of production, appropriation and circulation of value is a social process in which quantitative magnitudes are socially determined, in the course of struggles between and within classes . Thus the sum of value expressed in a particular commodity cannot be identified with the quantity of labour embodied in it, for the concept of value refers to the socially necessary labour time embodied, to abstract rather than to concrete labour, and this quantity can only be established when private labours are socially validated through the circulation of commodities and of capital . Thus the concept of value can only be considered in relation to the entire circuit of capital, and cannot be considered in relation to production alone.

Moreover neither the quantity of labour embodied in the commodity, nor the quantity of socially necessary labout time attributed to it can be considered as technical coefficients. The social form within which labour is expended plays a major role in determining both the quantity of labour that is expended in producing a commodity with a given technology, and the relation of this quantity to the socially necessary labour time through the social validation of labour time. Finally, the technology itself cannot be treated as an exogenous variable, for the pace and pattern of technological development is also conditioned by the social form of production . Thus consideration of the social form of labour cannot be treated as a sociological study that supplements the hard rigour of the economist, it is inseparable from consideration of the most fundamental economic and even technological features of capitalism.”

“If we consider the production and circulation of use-values the two spheres can be defined independently of one another: a certain determinate quantity of use-values is first produced and then exchanged one for another. However as soon as we consider the production and circulation of value, which is the basis for our understanding of the social form of production, it becomes impossible to consider production and circulation independently of one another. Labour time is expended in production, but this labour time is only socially validated in circulation, so value cannot exist prior to exchange, while surplus value depends on the relation between the result of two exchanges (of money capital for labour power and of commodity capital for money) . Thus value cannot be determined within production, independently of the social validation of the labour expended within circulation: circulation is the social form within which apparently independent productive activities are brought into relation with one another and have the stamp of value imposed on them. However value cannot be determined in circulation either, for circulation is the form in which the social mediation of private labours takes place and the latter provide the material foundation of the social determination of value. Thus to isolate production from circulation, even analytically, is to isolate independent productive activities from one another, and so to deprive production of its social form. To isolate circulation from production, on the other hand, is to isolate the social relations between producers from their material foundation. It is in this sense that production and circulation can only be seen as moments of a whole, as the development of the contradictory unity of value and use-value with which Capital begins. The argument holds with added force when we turn to surplus value, and so capital, which depends in addition on the commodity form of labour power.

The idea that the circuit of capital is a totality of which production and circulation are moments is not a metaphysical idea, although Marx does say that the commodity appears to be ‘a very queer thing, abounding in metaphysical subtleties and theological niceties’ (Capital, I, p. 71, 1967 Moscow edition). The totality is not simply a conceptual totality, an Hegelian idea imposed on reality, it is real and it has a concrete existence. Its reality is that of the class relation between labour and capital, and its existence is the everyday experience of millions of dispossessed workers.”

Social Solidarity Co-operatives for Higher Education (2)

Following on from a conference paper that I wrote in late 2014, I have been thinking more about the ‘social’ (Italy) or ‘solidarity’ (Canada) or ‘multi-stakeholder‘ (UK) form of co-operative as a constitutional and organisational form for Higher Education Institutions (HEIs).

The corporation

To begin with, I have been thinking about the chapter in Marx’s Capital Vol.3 where he discussed the role of credit, and in that chapter also discusses the (relatively new at the time) form of ‘joint-stock’ companies. What we call ‘corporations‘ today are the modern day version of this form of company, characterised by the socialisation of capital among multiple capitalists, united under the single legal personality of the corporation, with limited liability for its assets. It’s Marx’s emphasis that the corporate form represents not simply the concentration of capital (tending towards monopolies), but also the socialisation of capital as it does away with the individual private capitalist.

Although the term ‘corporate’ often has negative connotations today, Marx understood incorporated joint-stock companies as a historically progressive form of association, to the extent that he thought they were evidence of “the abolition of capital as private property within the framework of capitalist production itself.” Marx gives four reasons why joint-stock companies were historically progressive:

  1. By combining their individual capital and creating a form of “social capital”, capitalists could scale up their endeavours and produce at much larger scales, even taking on some of the services that the state provided.
  2. The combination of social capital with the already social mode of production, and the concentration of the social means of production, results in a shift from private undertakings to social undertakings i.e. “the abolition of capital as private property within the framework of capitalist production itself.” Individual capitalists no longer compete with each other, but form share-holding groups of capitalists who compete as single corporate personalities.
  3.  The individual capitalist can no longer point to his or her individual capital, but becomes instead a “mere money capitalist”. The “actually functioning capitalist” is the “mere manager, administrator of other people’s capital”, who like the worker is alienated from the means of production. Marx regarded this as “the ultimate development of capitalist production” and “a necessary transitional phase towards the reconversion of capital into the property of producers, although no longer as the private property of the individual producers, but rather as the property of associated producers, as outright social property.”
  4. The means of production no longer belongs to the individual capitalist, but is rather the social capital of the “association of producers” (shareholders). As such, no individual owns the means of production as it is the “social property” of the owners of capital (the “money capitalists”). However, it is an “appropriation of social property by a few” rather than by the majority (the workers, managers, administrators, etc.) The corporate form of joint-stock companies still remains “ensnared in the trammels of capitalism”.  It may be a progressive, transitional form of association, but does not overcome the antithesis between social and private wealth.

However, Marx finishes the chapter by pointing to another new form of association: the worker co-operative.  It is better I just quote the whole paragraph here:

“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.”

The worker co-operative then, is also a transitional form of association that socialises property and goes one stage further than joint-stock companies by socialising the ownership of capital among the association of producers/workers. Within the historical limits of the 19th c. “prevailing system”, worker co-operatives represented the most progressive form of capitalist association where the ownership of, the means of, and the mode of production were social and not individual/private. Marx is clear that it is only because of the capitalist mode of production that worker co-operatives could develop and the worker co-operative, too, is a transitional form that will “sprout” something new.

The point I am trying to make in this rather long introduction, is that with the movement of time, we should expect to see new forms of association emerge, made possible by earlier forms, if only through attempts to resolve their contradictions. During Marx’s time there were ‘consumer’ and ‘producer’ (i.e. worker) co-operatives and these two types of co-operative are now widespread across the world. Neither of these forms of association have so far been adopted as the form of association for a university1, but a more recent co-operative form has been applied in higher education: the social/solidarity/multi-stakeholder co-operative (from hereon, the ‘social co-operative’).

Social co-operatives as a new, transitional form

Social co-operatives are a historically recent form of association, emerging in the 1970s, gradually obtaining legal status in some countries. In 2011, the ‘World Standards of Social Co-operatives’ was ratified after a two-year global consultation process. So we are dealing with a new form of association that was not available to Marx or to the founders of most 20th century universities. To my knowledge, only one such university exists: Mondragon, in the Basque region of Spain, where its membership is comprised of workers (academics and non-academic employee-owners), students, and ‘collaborators’ (members of the community, local business, etc.) In its current form, Mondragon University only dates back to 1997.

If you read the World Standards of Social Co-operatives, you’ll see there are essentially five defining characteristics of social co-opertives, at the heart of which is the multi-stakeholder membership structure. Social co-operatives are therefore distinct from the traditional ‘worker’ or ‘consumer’ co-operative forms, which recognise just one membership type. The ‘social co-operative’ typically incorporates three membership types: worker, user/consumer, and supporter, thereby acknowledging the different ‘stakes’ that a community of people may have in the co-operative and the shared interests of all member-types in the mission and sustainability of the organisations.2

‘Social co-operatives’ are constitutionally democratic forms of enterprise comprising two or more types of membership. Each of the stakeholder groups is formally represented in the governing structures of the organisation on the basis of one-person one-vote.  Legal recognition for social co-operatives was first achieved in Italy in 1991, and in the UK, such ‘multi-stakeholder co-operative societies’ are now regulated by the Co-operative and Community Benefit Societies Act 2014 or the Companies Act 2006. The multiple forms of membership reflect the combined interests of the organisation within its social context and not surprisingly, social co-operatives typically pursue social objectives through the provision of social services, such as healthcare and education. For example, since 2011, over 850 schools in the UK have become multi-stakeholder co-operatives. This particular model of democratic ownership and governance is an increasingly popular form of co-operative organisation and there are successful examples of different sizes and services provided, demonstrating its flexibility as a modern organisational form.

University governance: Still ‘not fit for modern times’?

A glance at the literature on university governance in the UK shows that a number of incremental policy changes have led to a more widespread corporate form of university governance, starting with the Jarratt report (1985), which established the Vice Chancellor as Chief Executive, then the Dearing report (1997), which reduced the number of members on the governing body, and the Lambert report (2003), which stated that participatory governance by a community of scholars was not ‘fit for modern times’, and recommended a voluntary code of governance for the HE sector (Shattock, 2006). Each of these government sponsored reviews and subsequent policy and regulatory changes has been conducted in response to the changing historical context of the corporate form in general, most notably the Cadbury report (1992), the Hampel report (1998), the Higgs report (2003) and the development of the current UK Corporate Governance Code (Shattock, 2006). Thus, a history of the development of university governance and management has to be seen in the broader context of changing corporate forms and the underlying dynamic of political, economic and social contradictions.

Universities have historically been established in different legal forms but since the 1988 Education Reform Act, most new universities have been established as Higher Education Corporations (HEC). This is changing yet again, as the most recent regulatory changes since the Browne review have been to  encourage the more rapid establishment of new forms of higher education providers with degree awarding powers (so-called ‘new entrants’ to the market), including for-profit private institutions.3

What we need is a clear and coherent picture of university governance from a historical perspective and to introduce the ‘social co-operative’ as a new historical form of institutional governance that appears to be compatible with collegial structures (Cook, 2013) and speaks to many of the concerns raised over increased corporate governance structures and hierarchical management of universities (Bacon, 2014) by providing an alternative for existing governors, academics and students to consider. Until recently, universities in the UK have been neither publicly or privately owned corporations. The so-called ‘public universities’ in the UK are effectively owned by their current governors.  What we need, I think, is to encourage a different way of thinking about the role, value and form of higher education institutions in society as ‘social’ organisations sustained through solidarity and co-operation among their members. We need to acknowledge that current hierarchical and undemocratic models of governance alienate and de-motivate university staff (Bacon, 2014) and that co-operative values and principles are attractive to both staff and students (Cook, 2013). We need to compare forms of governance in both higher education and social cooperatives and use this as a stimulus for critical reflection on the practical and contemporary issue of democracy in higher education. I think we need to respond to the growing ‘democratic deficit’ in higher education (McGettigan, 2014), by questioning university governance in light of constitutional innovations in cooperative organisations.

Back to Marx

As I indicated in the first section of these notes, I think a history of university needs to be undertaken from the perspective that Marx provides; that is, a view of organisations as social forms of capital that is becoming increasingly social, past the point of private property and joint stock to common forms of ownership. We are now past the point that worker co-operatives reached by reversing the relation between labour and capital because the social co-operative form has extended democratic control and common ownership of capital beyond worker members of the co-operative to include users/consumers and other beneficiaries (which could include representatives of the state/public).

Peter Hudis notes that Marx regarded worker co-ops as a new form of production, whereas joint-stock firms were the highest form of capitalist production. (Hudis, 2011, 179) The socialisation of property that the joint-stock firm represents is only that. It did nothing to change the relation between capital and labour, whereas worker co-ops turn the capital relation on its head.  Yet worker co-ops, because of their single-member character, are still limited by the fact that they are subject to value production through the exchange relation: Workers are producers who require consumers. They do not produce goods and services to directly satisfy their own needs. “In this sense”, write Hudis, “they still remain within capitalism, even as they contain social relations that point to its possible transcendence.” (180)

Does the social co-operative form represent a further progression towards the transcendence of capitalism? A social co-operative, at least in an ideal sense, is a form of association owned in common and democratically controlled by both producer and consumer members, establishing a direct satisfaction of needs between members. To what extent this overcomes the value-form relation of exchange is not entirely clear to me at this point. Value production still determines the social co-operative in its members’ relations with other firms, with whom they enter into exchange relations, but to what extent does exchange (i.e. for the purpose of exchange value) take place between members of the commonly owned social co-operative? Is the product or more often the service that the social co-op produces a ‘commodity’ as defined by Marx? Is the use value of that service being produced by workers who are alienated from the means of production for the primary purpose of exchange? It doesn’t seem like it to me. A better question might be: does the labour performed by workers in the social co-op take the dual form of concrete and abstract labour? Yes, to the extent that the wider social relations of value production in capitalist society continues to determine  their needs.

I am not suggesting that the social co-operative form overcomes the capitalist form, but that it might represent an advanced transitional form of social association between individuals. I think that the social co-op goes further than the worker co-op form in constituting a dialectical response to capital and a more socially encompassing “safe space” (Egan, 1990) against the determinate logic of value.  Egan, referring to worker co-ops, concludes that the ‘‘potential for degeneration [of worker co-ops into capitalist firms] must be seen to lie not within the cooperative form of organisation itself, but in the contradiction between it and its capitalist environment. Degeneration is not, however, determined by this contradiction’’ (1990, 81). It seems to me that the social co-op form extends the “safe space” to include direct exchange between producers and consumers (who are ultimately owners of common capital) and has greater potential to resist degeneration.

  1. Although one is not far away: UniCoop, a consumer co-op in Mexico is due to begin teaching in September 2016 []
  2. I recommend Ridley-Duff’s paper, which gives a good history of solidarity co-ops in the UK []
  3. The historical trajectory in the UK has for decades been a shift away from universities that are directly funded by public money and self-governed by member-academics, towards a system today where public money is ‘laundered’ through the student loan system and transformed into private funds that are paid by the individual student for a service regulated by consumer law. []

The treadmill of capitalism

“In a society in which material wealth is the form of social wealth, increased productivity results either in a greater amount of wealth or in the possibility of a corresponding reduction in labor time. This is not the case when value is the form of wealth. Because the magnitude of value is solely a function of the socially-average labor time expended, the introduction of a new method of increasing productivity only results in a short-term increase in value yielded per unit time – that is, only as long as socially-average labor time remains determined by the older method of production. As soon as the newer level of productivity becomes socially general, the value yielded per unit time falls back to its original level. Thus, because the form of wealth is temporally determined, increased productivity only effects a new norm of socially-necessary labor time. The amount of value yielded per unit time remains the same. The necessity for the expenditure of labor time is consequently not diminished, but is retained. That time, moreover, becomes intensified. The productivity of concrete labor thus interacts with the abstract temporal form in a manner that drives the latter forward while reinforcing the compulsion it exerts on the producers. The value-form of wealth is constituted by and, hence, necessitates, the expenditure of human labor time regardless of the degree to which productivity is developed. The treadmill effect just outlined is immanent to the temporal determination of value. It implies a historical dynamic of production that cannot be grasped when Marx’s “law of value” is understood as an equilibrium theory of the market and when the differences between value and material wealth, abstract and concrete labor, are overlooked. That treadmill dynamic is the initial determination of what Marx developed as central to capitalism: capitalism necessarily must constantly accumulate to stand still. The dynamic becomes somewhat more complicated when one considers capital – “self-valorizing value.” The goal of capitalist production is not value, but the constant expansion of surplus value – the amount of value produced per unit time above and beyond that required for the workers’ reproduction. The category of surplus value not only reveals that the social surplus is indeed created by the workers, but also that the temporal determination of the surplus implies a particular logic of growth, as well as a particular form of the process of production.”

Source: Postone and Brick (1982) Critical Pessimism and the Limits of Traditional Marxism, Theory and Society, 11 (5) 636.

Higher and higher education

“The university that we need to create is not another institutional form of higher education, the University of Knowledge. It is, rather, the unbounded limit of what we know about ourselves, that is higher and higher education, which can emerge in any number of sustainable and life enhancing forms.”

Source: Neary, Mike (2012) Beyond teaching in public: the university as a form of social knowing. In: Towards teaching in public: reshaping the modern university. Continuum. ISBN 9781441124791