Sunday, March 25, 2007

Van Ornum, Co-operation, II

May 24, 1894.



Let as apply the principles already reached, to those movements in this and other countries, which have flourished under the name of co-operation; and, I think, it will easily be seen why they have failed to bring any considerable relief to the producing classes, or have gone out of existence entirely. They have not been co-operative in the true sense of co-operation. They have been either purely capitalistic, or they have been an admixture of capitalism and co-operation, I have been unable to find a single instance of pure co-operation in all the history of organised co-operative effort to which I had access.

Taking the most conspicuous and withal the most successful of all mode in co-operative movements, that which has grown up in England known as the Rochdale system, and it will take but the slightest examination to see that it not only falls far short of what an ideal system should be; but that it is only the faintest attempt at co-operation; and has far more of capitalism than co-operation in it. Mr. Holyoke, in his “History of English Co-operation,” defines co-operation as “a new power in industry, constituted by the equitable combination of worker, capitalist and consumer, and a new means of commercial morality by which honesty is: rendered productive. It is a concert of many for compassing advantages impossible to be reached by one, in order that the gain may be fairly shared by all concerned in its attainment,”

Here is a distinct recognition of the old political economy, that capital is a factor in production and is entitled to share in the product. By including the capitalist in the enumeration of the co-operators be ignores the doctrine of social economy that it is labor which produces all wealth and is therefore entitled to all wealth, The problem of labor is to get the whole of its earnings; and bow can it do that when a part is set aside for those who perform no part of that labor? Unless co-operation can secure this for the worker it can never work the emancipation of labor.

But English co-operation is confined to exceedingly narrow limits, Even if its principles were all that could be desired, it would still fall far short of the proper requirements. It is almost wholly distributive, It makes but very slight attempts at production. Up to 1882, out of 1,199 co-operative establishments in the United Kingdom, five were co-operative corn mills mainly engaged in grinding for the co-operative stores; and only twenty-two of the total number of 1,226 carried on any other manufacturing. The comparative insignificance of this co-operative manufacturing will be seen in the report of sales, The aggregate sales in 1,199 stores in 1882 reached £24,000,000, The sales from the five corn mills during the same year were £1,300,000; while for the twenty-two co-operative manufacturing establishments they only amounted to £220,000. It will be seen that while the system has had a large development, it has been almost entirely in the line of the purchase and distribution of certain necessaries of life, such as groceries, bread, meat, coal, furniture, draperies, etc. The most important field, that of production, has as yet scarcely been touched, But we shall have to look a little closer at the system to see bow widely it departs from the true principles of co-operation. Of course, in a sense, all working together is co-operation; but the co-operation which is to stand forth as a distinctive principle from capitalism, which is to secure to the worker the full fruits of his industry; destroy competition: abolish the wage system; and which is destined to realize the Co-operative Commonwealth has a far greater significance than that. While the English co-operative societies differ somewhat in their various constitutions, they all have certain characteristics upon which they agree and which are considered essential to the system.

First, they all have definite capitalization in shares, instead of an uniform membership. This alone is destructive of true co-operation.

Second, members may hold any number of shares ranging from £1 to £5 each, as a minimum, up to £200 as a maximum; which makes them joint stock companies; and indistinguishable from any other joint stock corporation except that the stock is distributed in more hands.

Third, interest is allowed to the shareholders on the amount of their shares held, which is unadulterated capitalism and a clear violation of co-operation.

Fourth, goods are sold for ready cash only.

Fifth, the ordinary market prices are charged for goods sold, realizing large profits to the store. This perpetuates the idea of profits. It is out of these profits that interest is paid to the shareholders, and out of which there remains, after paying the interest, something to be divided back to the purchasers of goods as dividends on purchases. A truer idea of cooperation would be taught by furnishing those goods to members at cost plus the expense of handling, with no allowance for interest to shareholders and no profits.

Sixth, dividends are declared at regular intervals on cash purchases, whether those purchases are made by members or not.

Seventh, each member casts one vote only at all elections, regardless of the number of shares he holds. This tends to preserve equality in the management, and prevent many of the abuses of capitalism. But in this country this provision is not applicable, because the law allows one vote for each share. Therefore there must be a complete abandonment of the share system, even if it were otherwise desirable.

Eighth, a small sum, commonly two per cent of the net profits, is set apart each year as an educational fund with which the society maintains a library, obtains periodicals and carries on a propaganda for cooperation.

Such are the essential features of English co-operation. It will be seen that it is based upon and teaches the old economies; scarcely touches the labor question; and perpetuates ail the abuses of capitalism. In fact, in its actual workings, it is made a bulwark of capitalism. It seeks to harmonize capital and labor; to inculcate pinching economy as the road to wealth; and to cultivate a class of small capitalists. Professor Jevons says: “Savings deposited in almost any form of co-operative company tend to incite the instincts of the capitalist, and to acquaint the owner with a new view of the labor question.” It is because of this manifest tendency that co-operation, such as exists in England, has been encouraged and often assisted by English capitalists; especially since this tendency became clearly discernable. The same thing has been noticed by others.

The “Encyclopedia Britannica” points out that English co-operation is distinctly capitalistic in its tendencies because it strengthens the principle of capital and private property by making every co-operator a capitalist and thus personally interesting him in the maintenance of present economic conditions of society. It has frequently been urged against co-operation that such enterprises are especially liable to failure; and therefore that there is great risk in putting money into them. But the statement is not borne out by the fact. In 1884 “The Co-operator” published a list of 224 industrial cooperative societies (so-called), which had been dissolved; but even according to the loose and indefinite ideas of cooperation which prevailed then, and still prevails in England, it was forced to admit that 16 of them were merely joint stock companies, with no co-operative element in them; forty-four of them proposed to divide the profit among capitalists and customers, and twenty-four of them between capitalists, customers and workers. There was not one of the entire 224, which was entitled to the term co-operative, as understood in the new economy. Therefore such an experience is absolutely worth nothing as against any plan which eliminates every element of capitalism from it. But there are lots of instructive lessons which may be learned from English co-operation, lessons which it would be well for those who are attempting to set up co-operative enterprises in this country to learn. One of those lessons is, that large resources in the way of monied capital, and special advantages are not needed. In fact, it has been observed that wherever a co-operative society started out under peculiarly favorable auspices and was able to buy everything it needed at first, it has been led into excesses which soon wrecked it; whereas, those which started in poverty, in pitiful savings, oppressed by the clergy, by traders and by the law, which had no rights which they did not win by hard fighting, have been the ones which scored the greatest successes. I think it will be found that the same principle will hold good in the present co operative movement. The danger to individual enterprises will be that they will not start small enough; will undertake to do too much, and will purchase their necessary experience too dearly.

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