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’.”

Co-operatives, socialism and communism: Marx’s Critique of the Gotha Programme

“What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges.”

Below are some notes on Marx’s Critique of the Gotha Programme (1875), focusing on what it says about co-operatives as a transitional form of production to post-capitalism: communism. I’m trying to get to grips with the text so as to better situate the potential of (worker) co-operatives as a transitional form of organising production and services which provide the experimental basis of a post-capitalist mode of production and the subsequent subjectivities, epistemologies, etc. that the emergence of post-capitalism (‘communism’) will give rise to.

In reading commentary elsewhere, there’s a tendency for some people to dismiss the revolutionary potential of worker co-operatives, arguing that they inevitably become disciplined, subsumed and converted by capital. There is certainly empirical evidence for this, but I think such a view is missing an important point which Marx’s Critique makes clear: Capitalism is a necessary historical condition for the mode of production that succeeds it (communism). Though worker coops might fail to maintain their radical objectives of democratic control over the means of production, they can be understood as prefigurative projects that have developed out of the historical and material conditions of capitalism. Worker coops are a dialectical response to capitalism and everything we understand about that historical mode of production. As Marx said, they “attack the groundwork” of capitalism, but they are not its negation. No single organisational form is. Furthermore, the transition to post-capitalism is inevitably gradual since the mode of production, according to Marx’s tradition of historical materialism, also ‘produces’ who we are and how we think. In that sense, we are capitalism. Several hundred years of being conditioned by capitalism cannot be rejected or put aside during a brief revolutionary uprising or indeed the constitution of a co-operative.

In some respects, attributes of communism are already here: the production of ‘free software‘ is a good example, I think. There are many examples of collective efforts to practice new forms of social relations that are not mediated directly by the capitalist production of value. The Social Science Centre, in which I am involved, is one of them. Of course, these are made possible, in part, because its members subsist through capitalist work elsewhere, but such efforts are experiments for exploring the possibilities of new forms of social relations. They are often transient, but collectively and gradually, have a pedagogical purpose in exploring the possibilities of alternative historical, material conditions and therefore new forms of subjectivity, knowledge and culture. Individually, I don’t think we should expect too much of them but rather engage them in critique as Marx was doing with the Gotha Programme . Collectively and over time, they are exploring and developing the conditions for a post-capitalist mode of production and social relations. To use Marx’s metaphor, they are a form of midwifery for a new mode of production to emerge from the “womb” of capitalism.

Another observation I had when reading the text is that Marx is relentless and steadfast in adhering to his scientific critique of capitalism. There are to be no compromises and much of his Critique of the Gotha Programme is an attack on the development of state socialism because he knew it could only be another form of liberal capitalism. For anyone to maintain Marx’s critical integrity is very difficult, not only to comprehend in the first place, but to commit to against popular (liberal) criticism , the seduction of capitalism, and what may appear to be the good intentions of the Left which are, in fact, only operating at the level of appearances, rather than social, scientific substance.

Section One

The Critique is a late text by Marx, which he described as “marginal notes” on the draft programme of the United Workers’ Party of Germany.  It is a scathing, short text, showing little regard for the version of socialism that the Gotha Programme outlines. It is regarded as one of the key documents where he described characteristics of a future post-capitalist mode of production: communism. On a number of occasions, he also discusses the role of co-operatives in the gradual transition from capitalism to communism.

In the text, it is clear that the capitalist mode of production is a necessary pre-condition for the communist mode of production. Marx states that “in present capitalist society the material, etc., conditions have at last been created which enable and compel the workers to lift this social curse.” In this respect, capitalism is both a curse and a force that develops the potential, unique in history, for self-determination.

What distinguishes the two modes of capitalist and communist production?

From Marx’s body of work, we can say that the capitalist mode of production has the primary purpose of creating value (‘wealth’) and it is a result of this imperative that ‘culture’ and other aspects of social life appear. It is a social, ‘co-operative‘ mode of production where labour power is employed to produce products/services (‘commodities’) for the purpose of exchange rather than direct use by the workers. The products are bought to be used by other workers (in their role as ‘consumers’), who likewise produce products/services for the purpose of exchange, and so on.

In this mode of production, the labour of an individual is not direct labour (Marx refers to it as ‘indirect’) that results in the exchange of another product of labour of equal value. In the capitalist mode of production, where workers do not own and control the means of production in common, they must negotiate the value of their labour power with the owners of the means of production (‘capitalists’), whose role and imperative it is to create additional, surplus value out of the labour power of the worker. Since the worker does not receive a wage that is equal in value to the value of their labour power, the money  they exchange (as an concrete representation of the abstraction of ‘value’) for the product of others is not a direct (i.e. equivalent) abstraction of the true value of their labour power in exchange for the true value of another worker’s labour power. Both workers have been paid less than the true value of their labour power and therefore the exchange value of the transaction does not equate to the use value of the worker’s labour power as a commodity itself.

To try to offer a simplified example:

Bob, who produces chairs is paid £10 for one hour’s work which his employer anticipates is worth £20 to them upon exchange of the chair that Bob produces. In this case, Bob’s labour power is actually worth £20 (the price of the product will be higher still) but is forcibly undersold to the employer who is under constant pressure to realise a surplus for a number of reasons, one of which is to re-invest surplus capital in new methods of production so as to remain competitive in the marketplace. Likewise, Bob sells his labour in a competitive labour market and is under constant pressure to identify the full value of his labour power so as to sell it at the highest price.

Likewise, Alice, who produces coats, is paid £5 an hour and her employer calculates that her labour power is actually worth £15 to them. Like Bob’s chairs, the final price of the coat is much higher and takes into account all other costs involved in production as well as the need to realise an overall surplus. A reliable income of surplus value can be achieved by her employer if Alice and her co-workers are consistently paid less than the true value of their labour power.

When Bob buys one of Alice’s coats, he uses some of the money from his wage. The money (cash or electronic) is the concrete result of the abstract exchange of value which takes place between Bob and his employer. Bob transfers that value to Alice’s employer, who has also undertaken an exchange of money for her labour power.  In Bob’s purchase of Alice’s product, the relationship between all four parties can be described like this:

Bob’s employer pays Bob for his labour power, who pays Alice’s employer for the coat, who pays Alice for her labour power.

However, the relationship between Bob and Alice, who may live on opposite sides of the world, is not direct, not because they don’t physically hand over the coat for money or barter chairs for coats, but because Bob and Alice’s employers have intervened in the exchange by under-valuing the true value of their labour power.

As such, labour power is no longer being exchanged as an equivalent, but rather the product of labour power, the commodity is exchanged as an equivalent. There is, what we might call a ‘corruption’ in what could be, under a different (proto-communist) mode of production, an exchange of equal values measured by the equal standard of labour rather than the equal value of the commodity. As such Alice’s labour power would be a direct equivalent of Bob’s labour power.

“…the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form.”

In this transitional phase from capitalism to communism, the remnant of equivalence still remains from the capitalist mode of production, but it is an equivalence not mediated by capital but by labour which owns the means of production. An individual firm operating in this way is simply a situation where “workers are their own capitalists” and remain subject to the forces of the competitive markets. However this changes when the majority of enterprises in society are run as producer co-operatives.

“Within the co-operative society based on common ownership of the means of production, the producers do not exchange their products; just as little does the labor employed on the products appear here as the value of these products, as a material quality possessed by them, since now, in contrast to capitalist society, individual labor no longer exists in an indirect fashion but directly as a component part of total labor.”

In his Critique, Marx recognises that a new mode of production cannot develop apart from the existing mode of production, nor will it occur suddenly. Communism emerges slowly from the “womb” of capitalism.

“What we have to deal with here is a communist society, not as it has developed on its own foundations, but, on the contrary, just as it emerges from capitalist society; which is thus in every respect, economically, morally, and intellectually, still stamped with the birthmarks of the old society from whose womb it emerges.”

Recognising this transition, Marx offers some examples of what intermediary changes might take place prior to the establishing of full communism.

“Accordingly, the individual producer receives back from society — after the deductions have been made — exactly what he gives to it. What he has given to it is his individual quantum of labor. For example, the social working day consists of the sum of the individual hours of work; the individual labor time of the individual producer is the part of the social working day contributed by him, his share in it. He receives a certificate from society that he has furnished such-and-such an amount of labor (after deducting his labor for the common funds); and with this certificate, he draws from the social stock of means of consumption as much as the same amount of labor cost. The same amount of labor which he has given to society in one form, he receives back in another.

Here, obviously, the same principle prevails as that which regulates the exchange of commodities, as far as this is exchange of equal values. Content and form are changed, because under the altered circumstances no one can give anything except his labor, and because, on the other hand, nothing can pass to the ownership of individuals, except individual means of consumption.

But as far as the distribution of the latter among the individual producers is concerned, the same principle prevails as in the exchange of commodity equivalents: a given amount of labor in one form is exchanged for an equal amount of labor in another form”

The “deductions” Marx refers to can be generally understood as contributions (taxes) to administration, public services and welfare. In the transition from capitalism to communism, he sees some of those contributions diminishing and some increasing:

“First, the general costs of administration not belonging to production. This part will, from the outset, be very considerably restricted in comparison with present-day society, and it diminishes in proportion as the new society develops. Second, that which is intended for the common satisfaction of needs, such as schools, health services, etc. From the outset, this part grows considerably in comparison with present-day society, and it grows in proportion as the new society develops. Third, funds for those unable to work, etc., in short, for what is included under so-called official poor relief today.”

As I understand it, in such a society, there would be no need for the products of this mode of production to be held privately, because no-one is attempting to undercut the value of labour power in order to create a private surplus of value. All such goods and services would effectively be owned in common by individual workers and what we think of as ‘exchange’ would be recognised not as an act of transferring value, but merely as an exercise in administration and planning so as to avoid scarcity. In effect, exchange as understood under the capitalist mode of production would be abolished and labour would exist “directly as a component part of total labour.” Marx calls this ‘direct’ mode of production, communism. Arguably, this is already in practice among ‘free software‘ developers.

It is fundamental to Marx’s historical materialist method of analysis and critical theory that we understand that the specific historical mode of production gives rise to culture and therefore is the basis of human ideas. In a transition from one mode of production to another, people will assume existing principles hold true despite growing evidence of their contradictory nature. Discussing the equivalence of labour power, Marx identifies the principle of “equal right” as such a principle that will initially remain:

“Hence, equal right here is still in principle — bourgeois right, although principle and practice are no longer at loggerheads, while the exchange of equivalents in commodity exchange exists only on the average and not in the individual case.”

Marx sees the principle of “equal right” as a “bourgeois limitation” that will gradually be stigmatized. He sees this as an inevitable defect in the “first phase of communist society”

“Right can never be higher than the economic structure of society and its cultural development conditioned thereby.”

In this transitional phase, “the right of the producers is proportional to the labor they supply; the equality consists in the fact that measurement is made with an equal standard, labor.” Here, Marx explains why the idea of equality is a bourgeois concept: Individuals are different but under the capitalist mode of production we are regarded fundamentally as equivalent workers. A communist society would recognise and compensate inherent ‘inequalities’.

“But one man is superior to another physically, or mentally, and supplies more labor in the same time, or can labor for a longer time; and labor, to serve as a measure, must be defined by its duration or intensity, otherwise it ceases to be a standard of measurement. This equal right is an unequal right for unequal labor. It recognizes no class differences, because everyone is only a worker like everyone else; but it tacitly recognizes unequal individual endowment, and thus productive capacity, as a natural privilege. It is, therefore, a right of inequality, in its content, like every right. Right, by its very nature, can consist only in the application of an equal standard; but unequal individuals (and they would not be different individuals if they were not unequal) are measurable only by an equal standard insofar as they are brought under an equal point of view, are taken from one definite side only — for instance, in the present case, are regarded only as workers and nothing more is seen in them, everything else being ignored. Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal… In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly — only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”

In the same way, Marx attacks the Gotha Programme’s assertion of the “fair distribution of the proceeds of labour”. He argues that what we might consider “fair” today, is a result of the capitalist mode of production. As above, he is arguing that legal principles such as “fair” are created within the economic context of the existing mode of production and that what might appear “fair” today, should not be assumed so for post-capitalist society. He regarded such terms as “dogmas, ideas which in a certain period had some meaning but have now become obsolete verbal rubbish”

Here, Marx also makes an interesting distinction about the relationship between production and distribution.

Any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves. The latter distribution, however, is a feature of the mode of production itself. The capitalist mode of production, for example, rests on the fact that the material conditions of production are in the hands of nonworkers in the form of property in capital and land, while the masses are only owners of the personal condition of production, of labor power. If the elements of production are so distributed, then the present-day distribution of the means of consumption results automatically. If the material conditions of production are the co-operative property of the workers themselves, then there likewise results a distribution of the means of consumption different from the present one. Vulgar socialism (and from it in turn a section of the democrats) has taken over from the bourgeois economists the consideration and treatment of distribution as independent of the mode of production and hence the presentation of socialism as turning principally on distribution.

Nothing has changed….!

Further on in the text, Marx discusses the the identity of the working class and its relation to the nation state. He emphasises the need for national solidarity while recognising that capital is transnational: “Every businessman knows that German trade is at the same time foreign trade.” If we relate this to the the formation of producer co-operatives it underlines the need for co-operation and solidarity at both national and international levels. Just as capital is continually trying to operate globally without restriction through international treaty and law, a co-operative working class movement must pursue the same at both the diplomatic, legislative and economic levels.

Section Two

In section two of the Critique, Marx discusses wages in an attempt to remind the United Worker’s Party that their proposed programme is yet again confused and taking retrograde steps by asserting an “iron law of wages”. Marx refers to his earlier work in scientifically analysing waged labour:

“there has asserted itself in our party the scientific understanding that wages are not what they appear to be — namely, the value, or price, of labor—but only a masked form for the value, or price, of labor power. Thereby, the whole bourgeois conception of wages hitherto, as well as all the criticism hitherto directed against this conception, was thrown overboard once and for all. It was made clear that the wage worker has permission to work for his own subsistence—that is, to live, only insofar as he works for a certain time gratis for the capitalist (and hence also for the latter’s co-consumers of surplus value); that the whole capitalist system of production turns on the increase of this gratis labor by extending the working day, or by developing the productivity—that is, increasing the intensity or labor power, etc.; that, consequently, the system of wage labor is a system of slavery, and indeed of a slavery which becomes more severe in proportion as the social productive forces of labor develop, whether the worker receives better or worse payment.”

Clearly Marx is exasperated here with the lack of understanding and development of his critique of political economy, published just eight years earlier. He criticises the Party, which “following in the wake of the bourgeois economists, took the appearance for the essence of the matter.” Today, he would say that nothing has changed!

Section Three

Section three focuses on the role of the state and the role of class struggle. The Gotha Programme places an emphasis on state assistance in setting up worker co-operatives. Agency is therefore assumed to be in the hands of the state rather than the workers’ struggle. Marx responds:

“Instead of arising from the revolutionary process of transformation of society, the “socialist organization of the total labor” “arises” from the “state aid” that the state gives to the producers’ co-operative societies and which the state, not the workers, “calls into being”.”

Marx is clear that the need for workers themselves to “revolutionize the present conditions of production and it has nothing in common with the foundation of co-operative societies with state aid.” The meaning and purpose of co-operatives is, we might say, expedient or pedagogical. They are a step towards communism and away from the capitalist state, but should not be confused with a form of communism itself. They provide the conditions for communism to historically, materially and epistemologically emerge.

“But as far as the present co-operative societies are concerned, they are of value only insofar as they are the independent creations of the workers and not proteges either of the governments or of the bourgeois.”

Section Four

The final section of the Critique focuses on freedom and democracy. The Gotha Programme advocates “the free basis of the state”, which Marx questions rhetorically: “Free state – what is this?”

He accuses the German Workers’ party of treating the state as independent of the mode of production, asserting that the state is “a fiction”.

“…instead of treating existing society (and this holds good for any future one) as the basis of the existing state (or of the future state in the case of future society), it treats the state rather as an independent entity that possesses its own intellectual, ethical, and libertarian bases.

And what of the riotous misuse which the program makes of the words “present-day state”, “present-day society”, and of the still more riotous misconception it creates in regard to the state to which it addresses its demands?

“Present-day society” is capitalist society, which exists in all civilized countries, more or less free from medieval admixture, more or less modified by the particular historical development of each country, more or less developed. On the other hand, the “present-day state” changes with a country’s frontier. It is different in the Prusso-German Empire from what it is in Switzerland, and different in England from what it is in the United States. The “present-day state” is therefore a fiction.

Nevertheless, the different states of the different civilized countries, in spite or their motley diversity of form, all have this in common: that they are based on modern bourgeois society, only one more or less capitalistically developed. They have, therefore, also certain essential characteristics in common. In this sense, it is possible to speak of the “present-day state” in contrast with the future, in which its present root, bourgeois society, will have died off.”

In this sense, the state as a social form, independent from capitalist society is “a fiction”, but the capitalist state as an abstraction that has essential characteristics shared across national borders, is real: a real abstraction which appears in the form of national governments.

In this section of the Critique, Marx also attempts to discuss how a future communist society would perform the social functions currently handled by the state (“the government machine”).

“What transformation will the state undergo in communist society? In other words, what social functions will remain in existence there that are analogous to present state functions? This question can only be answered scientifically, and one does not get a flea-hop nearer to the problem by a thousand-fold combination of the word ‘people’ with the word ‘state’.

Between capitalist and communist society there lies the period of the revolutionary transformation of the one into the other. Corresponding to this is also a political transition period in which the state can be nothing but the revolutionary dictatorship of the proletariat.”

It’s worth nothing, too, that Marx views social change without regard for national borders. He complains that the Gotha Programme is simply appealing for what has already been realised elsewhere. For the German liberal socialist, the future already exists, only it is elsewhere (Switzerland!).

“Now the program does not deal with this nor with the future state of communist society.

Its political demands contain nothing beyond the old democratic litany familiar to all: universal suffrage, direct legislation, popular rights, a people’s militia, etc. They are a mere echo of the bourgeois People’s party, of the League of Peace and Freedom. They are all demands which, insofar as they are not exaggerated in fantastic presentation, have already been realized. Only the state to which they belong does not lie within the borders of the German Empire, but in Switzerland, the United States, etc. This sort of “state of the future” is a present-day state, although existing outside the “framework” of the German Empire.”

Although written nearly 150 years ago, the same could be said of much political activism today.

Marx is scathing at this point in the Critique, and accuses the German Workers’ Party of demanding a democratic republic from what he regards as a military dictatorship, “a state which is nothing but a police-guarded military despotism, embellished with parliamentary forms”. Only in their imagination could their demands be met through the instruments of the bourgeois state.

The last few paragraphs of the Critique focus on the demand for free, public elementary education. Marx argues that “free” education is not free but paid for through taxation of the rich and he equates the demand for free education to the existing administration of free criminal justice, which “is to be had free everywhere.” Marx objects to “elementary education by the state”, preferring the American system whereby education is regulated by the state, rather than “appointing the state as the educator of the people!” Rather, “the state has need, on the contrary, of a very stern education by the people.”

“But the whole program, for all its democratic clang, is tainted through and through by the Lassallean sect’s servile belief in the state, or, what is no better, by a democratic belief in miracles; or rather it is a compromise between these two kinds of belief in miracles, both equally remote from socialism.”