As Tom Woodin points out in his Introduction to the book, Co–operation, Learning and Co–operative Values, the Rochdale Pioneers of the nineteenth century Co-operative movement aspired to ‘re-arrange the powers of production, distribution, education and government’. The original seven ‘Rochdale Principles’, internationally endorsed in 1937, included the ‘Promotion of Education’ alongside other principles such as ‘Democratic Control’, ‘Political and Religious Neutrality’ and ‘Open Membership’. Those original Principles were revised in 1966, and included the ‘Education of members and public in co-operative principles’. In 1995, following international consultation within the co-operative movement, the current Principles were revised, and Principle Five was restated as ‘Education, training and information’. I have begun this brief review by emphasising the historical centrality of education to the co-operative movement, which today has over one billion members, because it is important to recognise how the principle of education has been formally retained over the course of one and a half centuries to both support and promote the whole body of values and principles of co-operatives and their members.
Today, in most countries, a ‘co-operative’ is likely to be recognised as a legal entity and have to demonstrate that it is constituted according to the values and principles of the 1995 ‘Co-operative Identity’ statement (ICA 2016. That is to say, a ‘co-operative’, being ‘co-operative’ and extending ‘co-operation’ to others has a carefully defined meaning that should not simply be mistaken for a type of ‘collaboration’ or even ‘co-operation’ in the sense that Marx understood it as constituting ‘the fundamental form of the capitalist mode of production’. (Marx 1976). In effect, the co-operative movement has developed and retains a highly sophisticated understanding of co-operation as a set of practical and ethical values that are put into practice through seven principles that still aim to ‘re-arrange the powers of production, distribution, education and government’.
Tom Woodin, an expert on the history of co-operative education, has produced an excellent edited collection of contributed chapters that span the theory, history, practice and policy implications of co-operative education. Over 13 chapters, the authors cover a great deal of ground and for readers who are looking for a broad, informed and critical introduction to co-operative education, there is currently no better place to start.
“The state of abundance is not a Utopian vision but the real possibility of conditions already in existence.” (Kay and Mott, Political Order and the Law of Labour, 1982, 1)
What follows is a series of short letters written by a student from the University of Utopia. Although a fictional account, the letters are written with the conviction that we are actually living in a state of abundance, rather than the scarcity imposed by the market economy and that global social needs can be met by our existing capacity to co-operate with one-another rather than compete. The five letters are based on our joint research and practice of co-operative higher education which we have been undertaking since 2010. They do not reflect the breadth of the research but instead offer one imaginary account that we are hopeful for and working on. A recently completed project1 brought together many people to produce a practical and theoretical framework for co-operative higher education, features of which we have tried to embed in the epistolary form that follows. We invite you to also read a recent paper2 that we have written which discusses our ongoing research in more detail.
Mike Neary and Joss Winn, June 2016.
I am writing to you from Utopia. At least that’s what the first couple of weeks has felt like. Since you and Dad left me at the student housing co-op, I’ve learned a lot about what makes this university different and I’m pretty sure I made the right choice to come here. I know we read the brochures about what makes a co-operative different to other types of organisation but it’s only in the last few days that I’ve really started to get it. The university is made up of four Schools: Life, Machines, Letters and Property. I suppose the main thing I’ve noticed is the emphasis that members of the university place on the importance of democracy and what that means in terms of my role here. Although I’m just a first-year student, it seems that first and foremost I’m a member of the university, just like my teachers. In fact, it’s not just the students and teachers, but everyone is a member with an equal say in how the place runs. At first, I wondered how the place manages to run at all, but during orientation week I got a better sense of the long history of co-ops and how they tend to be good places to live and work and learn. It can’t always be easy, but people seem proud of their co-op and the role it has in society. Although it’s quite a new university, it’s part of an international movement of people who think that ‘common ownership’ (I still don’t really know what this means but it sounds good) and democratic control of their organisations is a good thing. It’s not just the university and my house that are co-ops either: the university canteen, the local health service and even a secondary school next to the university are co-ops, too, and they all try to work together. Oh, yes, I almost forgot… My bedroom furniture was designed and made by students from the university, too! I was told that by some second-year students in my house. They seem like good people. A few of us went out the other night and got to know each other. I met a nice girl called Ellie. She went to a co-op school so she knows much more about how everything works than I do. I’m really excited about being here. Can you tell!?!?!
Lots of love to you and Dad. X
I hope you are well? After four months, this place is starting to become less strange. More familiar.
I am made to feel like a researcher with something to offer, rather than an undergraduate student with everything to learn. There is learning, of course, lots of it and in different situations, not only in lectures, in fact there are no lectures. Last week I was having lunch and my teacher asked me to collaborate on a project about the chemistry of cooking and the politics of food, including the cause of hunger and malnutrition. Afterwards, when we were cleaning up the kitchen, I thought about designing a kitchen that would avoid wasting food. This ties in with another project I am working on, building a house for visitors to Utopia. I want to design a contemporary croft out of concrete. My School: Life, is holding a competition. The best house design is going to be built by the students and teachers. This project connects my interest with concrete as a concept and as a building material. I was interviewing a visitor to Utopia to get ideas for my building. She asked me, ‘what subjects are you studying’. I said, ‘I am not studying subjects. I am studying Life. And next year I am studying Machines’. She was incredulous, not least when I told her we didn’t have exams but produced work to be read and seen in public as acts of collaboration and generosity. I have to be honest but I find my allocated work project less interesting. It’s with the School of Property. I have no interest in law or bureaucracy. I just want to build things. My tutor asked me what laws are needed to build a new society not based on private property but a unity of purpose and social defence. I told him I would think about it. If I get time. I don’t have any time. Or space. I am knackered. The pace of work is too slow. I don’t get to the computers until next year when I start on Machines. Writing letters is part of the pedagogy, or the science of teaching, as they call it here. One of the Schools is called Letters, which extends to the humanities and the arts. My tutor says writing letters allows for more critical reflection which is essential for learning. I am not so sure. My handwriting is rubbish and my favourite pen burst in my pocket so my shirt has an ink stain. I told Ellie it was tie dye. She said, ‘Do you think I am stupid?’ I said, ‘No, I think you are the smartest person I have ever met’.
Lots of love to you and to Dad. x
Thanks for the money you sent me. It is very kind but I don’t really need it here. Other than to buy more soap and some chocolate and fruit and beer.
As you know I was never interested in money, but the idea of the commonwealth is different. It is based on creating a new form of social value based on human purpose in the natural world. Like people and the planet. For now, we can’t avoid life with coinage, so we all make a financial contribution to Utopia’s commonwealth. I raised my contribution from saving some of my wages when I worked before coming to Utopia and some crowdfunding and the money you gave me. As you know this pays for accommodation and meals as well as the teacher’s salaries. The annual accounts are a teaching object in the classes on Property. Money is the universal form of property. The university has reserves from donations and a levy from the international co-operative movement, for whom education is a core principle. My contribution is like an investment in the life of the university and if any profits are made at the end of the year I can draw down a dividend, or leave it in the fund to accumulate. The teachers pay a contribution to the commonwealth from their wages, which mounts up like a pension fund. I can earn money by working in the university to help the teachers teach and on necessary tasks to maintain the buildings. At Utopia doing is promoted above having. I might even leave the university with money in my pocket rather than a mountain of debt. So the Commonwealth is not just an idea but a living source of value. Part of this is experimenting with new forms of social value, like labour time banks and other sharing schemes. I told Ellie that I loved her and I wouldn’t share her with anyone. I believe in free education but not in free love. Does that make me a conservative? I want to be radical, but it is hard.
Lots of love to you and Dad x
I’m pleased that the warmer weather has arrived. I bet you and Dad are enjoying being out in the garden more. It certainly makes my job here more enjoyable as I’ve started to work in the university gardens, too. It’s a funny thing, you know. All members of the university work for it in some way, including students, but it doesn’t feel like ordinary work when it’s an organisation that you collectively own and control. Through this work, I’m getting a different view of the way things run around here, too. There are quite a lot of meetings to discuss all aspects of the University, but we usually come to decisions quite quickly (although some topics can drag on!). Rules really matter though and I’m realising that democracy needs people to be actively involved and have the right information at hand so we can make good decisions. It’s not just our internal rules that I’m learning about but also the way we have to operate within the law and how the law is reflected in forms of regulation and in our university’s administration. It’s all connected, which is why it seems important to understand law and politics and the economy as what my teacher referred to as ‘social forms’, rather than things in themselves (i.e. natural). Does that make sense?
People here are elected for a period to take the lead on things such as running the courses, overseeing money, and representing different types of members at committee meetings. It’s a big responsibility and I heard that last year, members voted to remove someone from their role because they didn’t listen to anyone! He’s gone back to teaching in the School of Property. I was in a seminar the other day where we were discussing ‘bureaucracy’ and it occurred to me that there’s plenty of it here but actually in a good way. It seems to help protect what people care about in their organisation and if someone really wants to change the way things are done, then we can discuss it and vote at the next general meeting (I think that’s how it works, or maybe there are other meetings where it gets discussed first). Well, as you can probably tell, I’ve been here nine months and I’m still figuring it all out. Some days I learn more in a committee meeting than I do in a seminar. Sometimes the committee meetings remind me of the type of discussions that were held in the Occupy movement that we studied last term. That’s a good thing, I guess.
As I mentioned on the phone, I don’t think I’ll be home for summer. It’s been agreed that I’ll be working with one of my teachers on a photography project about concrete buildings (can’t wait!) and Ellie has got a part-time job at her old school, helping run outdoor activities for kids.
Lots of love to you and Dad x
You asked me what have I learned over the last year. I learned universities are not about teaching and learning, but producing knowledge. My teachers talk about knowledge as an object of social value: something much more than value for money. I learned to develop a critical frame of mind. Not just through my own work but in reviewing the work of others. There are no grades or marks here, but a judgement by students and teachers on whether the work is ready for the world. If it is ready, then it gets published or put on show in an exhibition or as a public installation. If not then we redraft and resubmit, pull it apart and put it back together. We are taught to see the review as part of the process of the production of knowledge rather than as an assessment. As an act of collaboration with our teachers and with each other.
All of our work involves collaboration, a sort of intellectual solidarity. This way of working does not forget that we are at the same time individuals in a collective context. We are not all the same, and our idiosyncrasies are allowed to flourish. For example, my interest in concrete as a philosophical concept and as a construction material. Maybe I will become an architect. My favourite building style is Brutalism.
Collaboration extends to other school work like maintaining the buildings. Not out of any sense of idealism about the dignity of labour, but the more of us working together the faster it can get done, especially the more menial and mundane tasks. This sense of solidarity extends beyond the university. Next year I am going to the University of Mondragon as part of an exchange visit, working in their Electronics factory. This will form part of my studentship in the School of Machines.
In the curricula, Machines comes after Life. Life grounds knowledge in a relationship between humanity-in-nature, beyond the human intellectual and the cognitive to include the knowingness of the non-human world. Maybe this is the most important thing that I have learned. Letters deals with art and humanities and the importance of aesthetics. Property deals with different forms of social wealth and how they are expressed in the law and the physical environment.
I also learned about democracy and the importance of everyone having an equal say in how the university operates. Coming to a decision can take a very long time, but when we get there it feels like the right decision. The discussions are a learning process. Sometimes I feel like we have reached the right decision even if I do not agree with it, if that doesn’t sound too weird.
We are encouraged to retain our commitment to the University of Utopia when we leave. They have established a society of friends to support this long term relationship. So, in a sense, students will never leave this place, at least not in our minds and in our hearts.
And I learned about personal commitment and the way in which we can show solidarity towards each other, to the extent that we can become mirrors for each other’s individual needs. For a while Ellie had taken on that role for me, but it is too much for one person. We cried when we realised we were over, but laughed when we saw the world we had opened for each other.
Did you and Dad ever feel like this?
In Solidarity. X
Mike Neary and I have been awarded funding by the Leadership Foundation for Higher Education to focus on ‘co-operative leadership’ in the higher education context. Below is the introductory section of our research proposal. You can read the rest on Mike’s blog. Here’s a link to the project blog.
The aim of this research is to explore the possibility of establishing co-operative leadership as a viable organisational form of governance and management for Higher Education. Co-operative leadership is already well established in business enterprises in the UK and around the world (Ridley-Duff and Bull 2016), and has recently been adopted as the organising principle by over 800 schools in the United Kingdom (Wilson 2014). The co-operative movement is a global phenomenon with one billion members, supported by national and international organisations working to establish co-operative enterprises and the promotion of cooperative education. The research is financed by the Leadership Foundation for Higher Education’s small development projects fund.
Higher education in the UK is characterised by a mode of governance based on Vice-Chancellors operating as Chief Executives supported by Senior Management teams. Recent research from the Leadership Foundation for Higher Education on Neo-collegiality in the managerial university (Bacon 2014) shows that hierarchical models of governance alienate and de-motivate staff, failing to take advantage of research-based problem solving skills of staff operating at all levels, not accounting for the advantages to organisations when self-managed professionals interact with peers on matters of common purpose, particularly in knowledge-based industries.
The co-operative leadership model for higher education supports the ambition for more active engagement in decision-making to facilitate the best use of academics’ professional capacities, but framed around a more radical model for leadership, governance and management. Members of the co-operative university would not only be involved directly in decision-making and peer-based processes that make best use of their collective skills, but have equal voting rights as well as collective ownership of the assets and liabilities of the co-operative (Cook 2013). This more radical model builds on work done recently as part of a project funded by the Independent Social Research Foundation (ISRF) to establish some general parameters around which a framework for co-operative higher education could be established (Neary and Winn 2015). One of the key issues emerging from this research is the significance of co-operative leadership – the focus of this research project.
We recommend to the working men to embark in co-operative production rather than in co-operative stores. The latter touch but the surface of the present economical system, the former attacks its groundwork. (Marx, 1866)
My previous post outlined the key points from my reading of Egan and Jossa. In these notes, I reflect critically on the significance of labour-managed co-operatives, which are at the centre of their respective and related arguments.1
Characteristics of a labour-managed co-operative firm
As previously outlined, Jossa identifies a specific form of producer co-operative as “revolutionary” and the institution of such firms at a national level as the actualisation of socialism. We need to be clear about the nature of this “revolutionary” institutional form, which, among other things, may provide a framework for a new model of co-operative university. In point 12 of my previous post, I encapsulated Jossa’s position as follows:
Labour Managed Firms “are cooperatives which fund themselves with loan capital and consequently draw a clear-cut distinction between incomes from work and incomes from capital or property.” (Jossa, 2005:14)
LMFs “effectively reverse the capital-labour relationship… the moment when cooperatives are prevented from self-financing themselves (i.e., provided they are organised as Labour Managed Firms (LMF) rather than Worker Managed Firms (WMF)), the description of producer cooperatives as firms run by workers as ‘their own capitalists’ will no longer apply. And as the LMF reverses the capitalistic relationship between capital and labour, it can without doubt be rated a genuine socialist enterprise in which workers cease acting as their own capitalists.” (Jossa, 2005:15)
Does this mean that the LMF abolishes the duality of concrete and abstract labour determined by capitalist wage labour and therefore the production of value based on the exchange of labour as a commodity? For Jossa, “The commodities manufactured by democratically managed cooperatives cease to be ‘in the first place an external object’ unrelated to our work … and turn into the product of free choices made by workers in association.” (2005:8)
It is worth quoting Jossa (2012a: 824-825) in more detail so that we are clear about the unique form of the Labour Managed Firm (LMF) – remember that the difference between the Worker Managed Firm and the Labour Managed Firm is, according to Jossa, “decisive.”2
- LMFs are publicly owned firms whose managers are elected by the members of the firm in line with democratic procedures.
- Personnel can be freely hired and dismissed.
- Each self-managed firm is free to distribute its surplus to the members or retain it for capital accumulation.
- Given the ban on share issuance, LMFs raise capital resources either by contracting loans with banks or other credit institutions or by issuing bonds that can be freely placed on the market.
- The division of labour is still applicable, but as it is governed by the decisions made by workers in individual firms, it will be less strict than in capitalistic firms, where it is framed by capitalists.
- The interest that bondholders, the ‘capitalists’ of this system, cash on their loans is determined in accordance with methods consistent with orthodox theory.
- Even financial companies may be self-managed by workers.
- In Vanek’s approach, LMFs tend to maximise average member incomes; conversely, in later theoretical approaches the aim of an LMF is appropriately said to be maximising benefits of every type for the members through majority resolutions by the firm.
- The State is allowed to intervene in the economy with the aim of redressing market malfunctions in full keeping with the rules governing parliamentary democracies in general.
- Both for the sake of simplicity and because it is not easy to combine markets with planning it is assumed that public policy will not be centrally planned.
Briefly, an LMF can be termed an entity whose workers hire capital, remunerate it at a pre-fixed rate and apportion the firm’s earnings among themselves.
As a result, the firm models to be set against each other are capitalistic versus self-managed firms. In the former, capitalists or their representatives hire workers, pay them a fixed income (the wage rate) and appropriate the residual (the firm’s profit); in the democratic, cooperative or self-managed firm, workers (or their representatives) ‘hire’ capital (capitalists), remunerate it at a fixed rate of interest and appropriate the residual.
Hence, it is possible to describe democratic firms as non-capitalistic entities that reverse the typical capital–labour relation of capitalistic systems. This reversal is triggered by two main factors: (i) decisions are vested in workers, instead of in capitalists (as is the rule in capitalistic companies); and (ii) capitalists and workers switch roles, in terms that capitalists take the place of workers as fixed income earners and the variable incomes traditionally associated with capitalists are earned by the members of democratic firms.”
Jossa argues that this form of democratic, labour-managed, producer co-operative operates differently to a traditional capitalist firm by turning the relationship between capital and labour on its head.
However, what is crucial in this discussion is that on a number of occasions, Jossa emphasises that in his work “capital is defined in orthodox terms as the bulk of existing production means (not as a social relation).” (Jossa, 2012a: 824; 829; 2012b: 406) This conception of capital “as a material thing” (2012a: 829), and a “tool” (2012b: 413-4) has significant theoretical (and in my view practical) implications and we must start to unravel them with a discussion about labour. If a labour-managed co-operative is so distinctive from a worker-managed co-operative, what is “labour”?
Like his definition of capital, Jossa’s conception of labour is similarly orthodox. He recognises that when labour power is exchanged for a wage, it becomes a commodity and with that, the product from the socialisation of human creativity becomes the ‘property’ of the capitalist, the owner of the means of production. Although Jossa does not make a clear distinction between labour power and labour, we must assume that he understands labour power to be creative human potential and labour to be the application of that potential by the worker.
Jossa spends some time discussing abstract labour in the context of the labour theory of value where he is specifically concerned with the ‘problem‘, of transforming value into prices. Although he doesn’t define abstract labour in any certain terms, he eventually, and reassuringly, aligns himself with Bonefeld’s analysis. Unfortunately, he doesn’t seem to take very much from Bonefeld.
Jossa’s conviction is that in a labour-managed firm, labour power is not commodified and the duality of concrete and abstract labour (which Marx refers to as one of his two key contributions to political economy) no longer exists. We might expect that a post-capitalist form of labour no longer has the attributes of capitalist labour, as analysed by Marx, but in an attempt to avert “an insoluble contrast between Marxism and orthodox economic science” (2012a: 835), Jossa is willing to dismiss outright Marx’s dialectical method as well as his labour theory of value.
My reflections so far have provided evidence that—thanks to the demonstration that self-managed firms neither use labour power as a commodity nor, as a result, turn concrete labour into abstract labour—the theory of democratic firm management goes to refute the assumed link between the notion of commodity and Hegelian dialectics… Work becomes abstract when it is done in exchange for wages, and as democratic firms use no hired workers, such work as is done in these firms can never be abstract. As a result, the idea that the labour power-commodity identity is a dialectical contradiction is ruled out as a matter of course. (2012a: 836)
What is key here, is that Jossa thinks that abstract labour is determined by the wage. Without the wage, work “can never be abstract.”
Fine & Saad-Filho (2010: 20-21) provide a useful discussion of labour, which can help us understand Jossa’s views, without committing them to sharing his conclusions:
To distinguish the workers from their ability or capacity to work, Marx called the latter labour power, and its performance or application labour. The most important distinguishing feature of capitalism is that labour power becomes a commodity. The capitalist is the purchaser, the worker is the seller, and the price of labour power is the wage. The worker sells labour power to the capitalist, who determines how that labour power should be exercised as labour to produce particular commodities. As a commodity, labour power has a use value, which is the creation of other use values. This property is independent of the particular society in which production takes place. However, in capitalist societies use values are produced for sale and, as such, embody abstract labour time or value. In these societies, the commodity labour power also has the specific use value that it is the source of value when exercised as labour. In this, labour power is unique.
On the other side to the class of workers are the capitalists who control the workers and the product of labour through their command of wage payments and ownership of the tools and raw materials or means of production. This is the key to the property relations specific to capitalism. For the capitalist monopoly of the means of production ties the workers to the wage relation, explained above. If the workers owned or were entitled to use the means of production independently of the wage contract, there would be no need to sell labour power rather than the product on the market and, therefore, no need to submit to capitalist control both during production and outside, in society.
Jossa’s conception of capital and labour under capitalism accords with this description of labour and labour power in terms of the labour-capital property relation. In the passages above, all authors seem to align themselves with a material view of capital as a thing (i.e. property) which capitalists, a class of people who own the means of production, control.
In the absence of the wage-relation i.e. the LMF, workers sell the products that they created and own, rather than sell their labour for a wage. It seems that for Jossa, the key to the capitalist firm and therefore the ‘anti-capitalist’ LMF, turns on how property relations are organised. For Jossa, freedom from capitalism is equated with owning the means of production and from that “decisive” moment, a transition from the capitalist mode of production to the socialist mode of production occurs (Jossa, 2012b:405). For Jossa, once property relations are re-organised in favour of the worker, such that the wage can be abolished, labour is no longer a commodity and its value is no longer measured in abstract labour time because “work becomes abstract when it is done in exchange for wages.” (Jossa, 2012a: 836)
This view of capitalism and its alternative of socialism is common and can be considered the “orthodox” view. However, I think that despite the crucial importance to socialism of labour controlling the means of production, this alone is not a decisive characteristic of a new mode of production. Whereas Jossa argues that in the Worker Managed Firm the workers “are their own capitalists” and in the Labour Managed Firm, “workers cease acting as their own capitalists”, in my view both types of firm continue to operate in the capitalist mode of production, according to the law of value. In the passages quoted above, Jossa and Fine & Saad-Filho posit capital as a material thing and capitalists as controllers of the means of production and therefore of labour. This view is not objectionable and Marx discussed capital and capitalists in these terms, too. However, Marx and other later writers elucidated their conceptualisation of capital in much richer terms that, I think, deny the “decisive” significance of whether a wage is paid or surplus collective income is shared democratically. In both cases, capital and the law of value remains in control of both the workers and the capitalists. I discuss this next.
What is “value”? If Jossa represents an orthodox view of Marxism, other writers such as Clarke, Elson and Postone offer a more radical and in my mind more convincing explanation of value and its role in capitalist society.
Simon Clarke (1979: 4)
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 inseparably, 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.
Elson (1979: i)
Why is Marx’s theory of value important? It is important because Marx’s theory of value is the foundation of his attempt to understand capitalism in a way that is politically useful to socialists. It is not some small and dispensable part of Marx’s investigation of capital; it constitutes the basis on which that investigation takes place. If we decide to reject that theory, we are at the same time rejecting precisely those tools of analysis which are Marx’s distinctive contribution to socialist thought on the workings of capital. The debate about Marx’s value theory is, in fact, a debate about the appropriate method of analysis, about the validity of the concepts which are specific to, and constitute the method of, historical materialism. The outcome of this debate therefore has implications far beyond the way in which we understand prices and profit in the capitalist economy. It has implications for the question of how we should carry out our empirical investigations today of the international restructuring of capital accumulation; of new forms of class struggle, of the capitalist state; and of the possibilities for socialism. It has implications for the fundamental question of whether what is distinctive about Marx’s method of analysis is really of any use to socialists today.
Postone (1993: 188-90)
The abstract character of the social mediation underlying capitalism is also expressed in the form of wealth dominant in that society. Marx’s “labor theory of value” is not a labor theory of wealth, that is, a theory that seeks to explain the workings of the market and prove the existence of exploitation by arguing that labor, at all times and in all places, is the only social source of wealth. Marx analyzed value as a historically specific form of wealth, which is bound to the historically unique role of labor in capitalism; as a form of wealth, it is also a form of social mediation.
Marx explicitly distinguished value from material wealth. This distinction is crucially important for his analysis. Material wealth is measured by the quantity of products produced and is a function of a number of factors such as knowledge, social organization, and natural conditions, in addition to labor. Value is constituted by human labor-time expenditure alone, according to Marx, and is the dominant form of wealth in capitalism. Whereas material wealth, when it is the dominant form of wealth, is mediated by overt social relations, value is a self-mediating form of wealth.
What Jossa seems to overlook is that ‘value’, not the wage, mediates labour in a capitalist society.
According to Marx, labour in a capitalist society has two aspects: concrete and abstract labour. Concrete, physiological labour, produces an objective form of social wealth i.e. useful things: a chair, for example. Those things are valued because of their utility (‘use value’) and for their ability to be exchanged for other commodities, usually money. In a capitalist society, most things are made in order to be sold for a surplus compared to the total cost of producing them. In other words, almost all useful things are made primarily to be commodities. Therefore, a commodity, has both a ‘use value’ (the expression of its utility), and an ‘exchange value’ (the expression of its value).
I have said that ‘value’ is realised in the act of exchange, as ‘exchange value’, such that the product of labour has a use value and an exchange value. In order to have a value that is realised in the act of exchange, there must be a measure of equivalence so that the exchange value (value) of a commodity can be exchanged for another commodity, regardless of its utility. This is how we exchange the chair commodity for an ‘equivalence’ of the money commodity. This equivalence is an abstraction – not simply a mental, reasoned form of abstraction, but a ‘real abstraction’ where the desire or imperative for producing value creates a relation of abstract equivalence between different commodities. The thing or product, which is real and has ‘use value’, is exchanged in its abstract form i.e. value, expressed as exchange value.
The use value (the useful thing) is the product of concrete, physiological labour. It ‘contains’ that labour. Its exchange value is mediated by value, a real abstraction which is measured by ‘abstract labour’. Abstract labour is the labour ‘contained’ in the product when exchanged as a commodity. As most products are produced so as to be exchanged as commodities, we can say that the products of concrete labour in general, circulate in the exchange process as containers of abstract labour. Strictly speaking, a commodity is therefore nothing but abstract labour. Viewed as a social whole – a local, national and international market of commodity exchange – each commodity is, and expresses, a fraction of the abstract labour undertaken at the level of society as a whole. It is because of this, that like the equivalence of exchange, there is an equivalence of labour: abstract labour. If the equivalence of exchange is measured by the real abstraction of ‘value’, which mediates labour, how is the abstraction of labour measured?
Abstract labour is objectified as ‘value’, which is realised in the moment of commodity exchange. Money is a commodity, the most explicit expression of the equivalence of value. Labour is a commodity, because it is undertaken for money i.e. a wage. The value of abstract labour is socially determined through the equivalence represented by the exchange value. What determines this equivalence changes constantly, based on a number of factors, such as the rate of productivity, the availability of skilled labour and ultimately the time it necessarily takes to produce the commodity using labour broadly understood i.e. mental and manual labour, living human labour and the ‘dead’ labour embodied in machinery. All of these manifestations of labour are related by the time it takes to produce the commodity. What may take living human labour to produce in two weeks, may take the ‘dead labour’ of machinery one minute to produce. Therefore, the value of abstract labour is determined by the ‘socially necessary labour time’ that it takes to produce commodities for exchange. Marx writes: “How, then, is the magnitude of this value to be measured? By means of the quantity of the ‘value-forming substance’, the labour, which it contains. This quantity is measured by its duration, and the labour-time is itself measured on the particular scale of hours, days, etc.”
From this analysis, we can say that the real abstraction of labour time determines value in capitalist society, and that because the majority of things are produced primarily for the purpose of exchange, socially necessary labour time determines the social and private lives of all members of that society. This includes the owners of capital, who themselves are governed by the same imperative: what Postone calls the ‘determinate logic’ of this value-creating process i.e ‘capital’.
A determinate mode of production
According to this view, capitalism is driven by a determinate logic expressed by the ‘commodity form’ (i.e. use value and exchange value). Regardless of whether the worker is paid a wage for the production of the commodity, if the commodity is exchanged (e.g. for money), it has an exchange value that expresses its value and therefore the value of its substance: labour. In capitalist society, value, the substance of which is (abstract) labour, is the dominant form of social wealth. Therefore, whether the worker is paid directly for their labour by the owner of capital (i.e. a ‘wage’), or draws her means of subsistence from the surplus value realised in the exchange process of commodities produced under conditions of production which she, on the face of it, controls; at the point at which the product of her labour, the commodity, is exchanged, its value is determined by the equivalence of socially necessary (abstract) labour time. As such, in the Labour Managed Firm, despite not receiving a conventional ‘wage’, and despite owning the means of production, the worker is “their own capitalist”, and remains dominated by the abstract ‘logic’ of value.
In order to be free from the domination of the logic of value, which mediates labour and therefore all social relations, it is not sufficient to control the specific means of production i.e. a ‘firm’. The problem must be tackled at all levels of society, locally, nationally and internationally, in order to overcome the overwhelming logic of this valorisation process located in both the production and the exchange of commodities, i.e. use values primarily produced for exchange value. Value is the form of social wealth in capitalism. What is the form of wealth3 in a post-capitalist society where the imperative of creating value has been overcome? That is the question we are left with.
It is worth reiterating that the production of value fundamentally determines our lives: it is the organising principle of social relations. We know this because the majority of people need to sell their labour (‘labour power’) in order to survive from one year to the next. In many societies, there are ways of alleviating periods of unemployment (welfare, charity, loans), but this is not a solution to the problem of self-reproduction nor a socially acceptable form of subsistence. In the absence of a formal wage, as in the Labour Managed Firm, the worker still needs to draw an income from the surplus value created by the exchange of products they produced (i.e. the ‘commodity form’ still operates). As such, value and its real abstraction of equivalence between commodities and labour time remains the determinate of social relations.
However, despite our lives being fundamentally determined by the necessity to sell our labour as a commodity, within this overwhelming constraint, there is some contingency due to the dynamic, changing, social and ultimately contradictory nature of capital, expressed as value, the substance of which is human labour. Capital needs labour. Capital must confront labour.
Attacking the groundwork
Marx recognised that producer co-operatives, more so than consumer co-operatives, “attacked the groundwork” of capitalism. My notes above do not contest this, nor are they intend to dismiss the work of Egan, Jossa and the significant benefits of labour-managed co-operative production. Certainly, workers owning and democratically controlling the means of production is an essential part of the transition to socialism and both Jossa and Egan acknowledge that Labour Managed Firms are not the whole answer to achieving a post-capitalist society. Their work is very valuable in attacking the groundwork of capitalism, but in my view while the ownership of the means of production might change, the mode of production remains the same, determined by the law of value. The struggle to achieve a federation of labour-managed co-operatives on a national and international scale is as crucial today as it was in Marx’s time. In undertaking that struggle for the means of production, we must continue to critique the mode of production and recognise that despite the class opposition, both the worker and the capitalist remain unfree, bound to a particular mode of production that requires another strategy of theoretical and practical attack.
- As always, the production of knowledge is a social, co-operative endeavour. I am grateful to my colleagues, Sarah Amsler, Richard Hall, Mike Neary and Gary Saunders for the discussions we are having in helping me further my understanding of these issues. [↩]
- Throughout these notes, text in bold is my emphasis. [↩]
- By ‘form’, I do not mean ‘type’, but use the word in the same way that Marx often used it to refer to a social ‘configuration’ or ‘arrangement’, i.e. value form, commodity form. [↩]
We acknowledge the cooperative movement as one of the transforming forces of the present society based upon class antagonism. Its great merit is to practically show that the present pauperising, and despotic system of the subordination of labour to capital can be superseded by the republican and beneficent system of the association of free and equal producers. (Marx, 1866)
- Egan, D. (1990) Toward a Marxist Theory of Labor-Managed Firms: Breaking the Degeneration Thesis.
- Jossa, B. (2005) Marx Marxism and the cooperative movement.
- Jossa, B. (2009) Gramsci and the labour Managed Firm.
- Jossa, B. (2012a) A system of self-managed firms as a new perspective on Marxism.
- Jossa, B. (2012b) Cooperative Firms as a New Mode of Production.
Key points from Egan and Jossa papers1
- Both authors write about co-operatively run ‘Labour Managed Firms‘ (LMF) in the context of Marx, Marxism and the historical development from capitalism to socialism. Jossa appears to be unaware of Egan’s earlier work but can be read as a continuation of Egan’s main points, as outlined below.
- Co-operatively run Labour Managed Firms (LMF) are distinct from Worker Managed Firms (WMF) – Jossa regards this distinction as “decisive.” (2005:14) However, for the purposes of these notes we can refer to both types of co-operative firm as ‘producer co-ops‘, which are distinct from the more common ‘consumer co-ops’. “We recommend to the working men to embark in co-operative production rather than in co-operative stores. The latter touch but the surface of the present economical system, the former attacks its groundwork.” (Marx, 1866)
- Producer co-ops abolish wage labour. They hire capital rather than labour. This is a fundamental characteristic. “Employment is based on payment of a membership fee or the purchase of a membership share in the enterprise, not the sale of workers’ labor power. Any net surplus is distributed to labor, not capital.” (Egan: 67)
- Another fundamental characteristic of producer co-ops is that they are democratically run. In capitalism, democracy operates politically, but not economically. Capitalist firms are not democratic. Producer co-ops uniquely establish democracy within the firm. “Advanced capitalist states are predicated on the exclusion of democracy from all but the political sphere of social life. In particular, the discourse of democracy in these states is not extended to work and the economy.” (Egan:67) A genuine producer co-op is “an organizational expression of democratic control of production.” (Egan:69) “…one main advantage of producer cooperatives (from the perspective of a critic of capitalism) is to realise economic democracy as an essential component of political democracy.” (Jossa, 2005:5)
- A principal contradiction of capitalism is that it socialises the production of private property. i.e. labour is purchased and brought together by the owners of capital to produce more privately owned capital. In the capitalist firm, capital controls and co-ordinates labour through the wage. Marx referred to the ‘double nature’ of management in capitalist firms, where due to the imperative to grow, capital ownership and management become separated and management is socialised (Egan: 70-71). The owner of capital supplies capital while the manager of the firm is the administrator of capital. The capitalist no longer directly supervises the production of capital. Joint-stock companies resolve this contradiction for the capitalist, in a way that remains negative for labour.
- Producer co-ops resolve this contradiction positively for labour. “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.” (Marx, 1894) The management of a producer co-op is established as a function of labour instead of capital. As Marx recognised: “In a co-operative factory the antagonistic nature of the labour of supervision disappears, because the manager is paid by the labourers instead of representing capital counterposed to them.” (Marx, 1894, quoted in Egan: 71) “Instead of management hiring labor, labor now hires management.” (Egan, ibid)
- Historically, Marxists have largely dismissed the potential of co-operatively run firms as ‘market socialism’ which inevitably degenerate into capitalist firms. However, there is clear evidence that Marx understood the distinct form of producer co-ops positively and as a historical development of capitalism leading to socialism (both Jossa and Egan point to similar sources in Marx’s writing to evidence this). “Marx sees cooperatives as a “transforming force” to the extent that they reflect the structural possibilities for democratic social production found within capitalism.” (Egan:72)
- Marx recognised that emerging producer co-operatives continue to operate within capitalism and reproduce the commodification of use-values through the sale of things in the market. In this way, the sustained success of producer co-operatives approximates that of the capitalist firm. Egan states that “this is where most contemporary Marxist commentary on labor-managed firms in advanced capitalism stops… A form of market determinism permeates this commentary; the power of the market to force cooperatives to degenerate into capitalist firms (if they survive at all) is seen as absolute.” (Egan: 73) However, capitalist markets are a historically specific form of social relations and therefore a dialectical analysis reveals the possibility of an alternative. “Worker cooperatives are politically and theoretically problematic, but so are all struggles which arise out of and challenge (either intentionally or unintentionally) the logic of capitalism… A Marxist analysis of worker cooperatives must critically examine the limitations of such an organizational form within capitalism, but it must do so from a foundation which also recognizes the positive qualitative developments which such organizations reflect.” (Egan: 76) “The potential for degeneration [into a capitalist firm] must be seen to lie not within the cooperative form of organization itself, but in the contradiction between it and its capitalist environment. Degeneration is not, however, determined by this contradiction.” (Egan: 82)
- For Marx, the formation of co-operatives as a historical (dialectical) outcome of capitalism must be the outcome of class struggle, rather than instituted by the state or paternalistic capitalists. For Marx, Egan and Jossa, a further fundamental characteristic of producer co-ops is “the development of a cooperative, solidaristic orientation between cooperatives themselves.” (Egan: 74) Co-operatives must assist each other rather than compete with each other in a “unity of action, and identity of interest.” (Egan, quoting Jones: 74)
- Drawing from Marx, Egan outlines “three institutional mechanisms designed to prevent co-operative degeneration.” First, hired labour must be prohibited. Second, co-operatives should belong to a national organisation. Third, a proportion of the surplus of co-operatives should be devoted to a fund for the creation of new co-operatives. (Egan: 75)
- Worker Managed Firms, “which are widespread in the Western world, self-finance themselves and consequently do not strictly separate labour incomes from capital incomes; their members earn mixed incomes (from capital and work), in place of pure incomes from work.” (Jossa, 2005:14) In such firms, workers are “their own capitalists”, a progressive development of capitalism. Marx wrote: “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.” (Marx, 1894)
- Labour Managed Firms “are cooperatives which fund themselves with loan capital and consequently draw a clear-cut distinction between incomes from work and incomes from capital or property.” (Jossa, 2005:14) LMFs “effectively reverse the capital-labour relationship… the moment when cooperatives are prevented from self-financing themselves (i.e., provided they are organised as LMFs rather than WMFs), the description of producer cooperatives as firms run by workers as ‘their own capitalists’ will no longer apply. And as the LMF reverses the capitalistic relationship between capital and labour, it can without doubt be rated a genuine socialist enterprise in which workers cease acting as their own capitalists.” (Jossa, 2005:15) Does this mean that the LMF abolishes the duality of concrete and abstract labour determined by capitalist wage labour and therefore the production of value based on the exchange of labour as a commodity? For Jossa (2005:8), “The commodities manufactured by democratically managed cooperatives cease to be ‘in the first place an external object’ unrelated to our work … and turn into the product of free choices made by workers in association.”
- For Jossa, the successful transition to socialism can and must be a gradual, non-violent process (Jossa, 2009). Producer co-operatives operating within a market economy “must be looked upon as a transitional economic system.” (2005:12) “This [co-operative] system can be established piece by piece, by enacting parliamentary legislation designed to further self-management in manners that will encourage the creation of democratic firms until these end up by outnumbering capitalistic firms. (Jossa, 2012a:834-5) Producer co-operatives mark a change in the mode of production and in this sense are revolutionary. Socialism based upon national and international associations of producer co-operatives is the most credible alternative to the failures of state socialism and its centralised planning. (Jossa 2012a: 823)
- According to Jossa, a defining characteristic of capitalism is not that commodities (use values) are produced primarily for sale (exchange value), but that labour power is purchased as a commodity for the production of profit (surplus value). In a LMF, labour power is not purchased and consequently a number of features of capitalism are called into question (e.g. alienation, the ownership of the means of production, the mode of production, the division of labour, the necessity of work). (Jossa, 2012a: 836)
UPDATE (01/02/2011): This idea is now developing into an autonomous Social Science Centre. Click here for the website.
The university has a staff suggestion scheme that rewards good ideas from staff. I’ve just submitted a proposal to the university for help in setting up a Social Science Centre. This is based loosely on an unsuccessful bid to HEFCE that we made a couple of months ago to develop an ‘academic commons’ of sustainable, co-operatively run centres for higher education, somewhat based on the Social Centre model. Initially, as you’ll see below, we’re proposing that courses are run in existing public spaces, with a view to buying or renting a city-centre property further down the line. Attached to this (preferably on the premises) would be some kind of co-operatively run business (I like the idea of a decent bakery – you can’t buy real bread in Lincoln), which would bring in an income to help cover running costs and act as a way to connect with local residents apart from and beyond the educational provision of the Centre.
Anyway, here’s a brief overview of the idea which we’re keen to develop over the next year. If you’re interested and in Lincoln, then a few of us are meeting In Lincoln at 5pm on the 25th September to discuss the practicalities of this idea further. Members of the Cowley Club and Sumac Centre will be there to talk about their experience setting up their respective Social Centres. Email me for more details.
The proposal is that the university support the development of an independent Social Science Centre in Lincoln. The Social Science Centre will offer credit bearing courses in Sociology, Politics and Philosophy, programmes not currently available as part of the University of Lincoln’s portfolio. A key aspect of the Centre is that students would not pay any tuition fees. The Centre would be community based, utilising already existing public spaces in Lincoln, e.g., libraries, museums, schools, community centres. The Centre will be ran as a co-operative, involving local people in the managing and governance of this provision. The courses will be provided by academic members of the co-operative on a voluntary basis. The role of the university will be to provide accreditation for the programmes and an advisory role in establishing the centre as well as an ongoing supportive input. There will be no direct ongoing costs for which the university will be liable. An important principle for the Centre is that it is sustainable and, for that reason, the number of students will not exceed twenty in any academic year. It is intended that this model of sustainable, co-operatively run centres for higher education will act as a catalyst for the creation of other centres for higher education.