Sunday, March 25, 2007

Van Ornum, Co-operation, VII

Twentieth Century, June 28, 1894, 7-9.

CO-OPERATION.—VARIOUS SCHEMES:—VII.

BY WM. H. VAN ORNUM.

In America, some attempts at co-operation among farmers have been made by means of the granges. The grange movement was started in New England a little more than twenty years ago. It was begun as a co-operative scheme; and patterned as nearly after the Rochdale plan as circumstances permitted. Aside from its social and educational features, it aimed to reduce the cost of supplies required by the farmers by buying direct from manufacturers at wholesale prices; securing an economical distribution of them; and finally getting goods of better quality. The movement spread rapidly to the west; and it is there that it reached its greatest development. It quickly took on the character of a popular revolt against the high prices charged, and impositions practiced upon the farmers throughout the country. A great deal of bitterness was engendered against tradesmen, much of it needless, which was returned with interest on the part of the tradesmen. Being based upon a very imperfect knowledge of co-operation; and developing rapidly, as it did, there was no opportunity for its leaders to acquire a thorough knowledge of the principles they were called upon to practice, so that it is nothing strange that the co-operative feature of the grange has failed to realize the sanguine expectations of its early promoters; and has largely fallen into disuse. The grange still exists with considerable strength in some parts of the country, held together by its social and educational influences; but it forms an element which may be utilized at no distant day for a larger and purer co-operation which will sweep capitalism into oblivion. And the same remarks will apply to the Farmers Mutual Benevolent Association, and other farmers organizations which still flourish in many of the western and southern states.

The Sovereigns of Industry was another co-operative order started in the east about the same time as the grange; and was intended to fill about the same place among artisans and residents in the cities and towns as the grange did in the country. Councils were started in many of the stat incipient Stores organized; and considerable headway made. The rapidly shifting populations, especially in western cities and towns, added to many other causes, interfered with definite settled work and continuity of action; so that they soon fell into disuse. It was in the work of this order that the writer learned his first lessons in cooperation. About this time a co-operative society at New Bedford, Mass., attained a considerable success. It probably belonged to this same order, as it was modelled after the same pattern. It clubbed the money of its members; bought goods at wholesale; and divided them at the houses of the members. In time it opened a store where it did a business of $2,500 a month. The retail dealers formed a combination against it and threatened to boycott any wholesale house which should sell goods to it. Under this pressure the supplies were, for a time, cut off; but other wholesalers, a little further off, accepted the trade that the others refused; and the era of prosperity was continued. It was nothing, however, but co-operative buying on orders which had previously been given and paid for. It kept no stock; incurred no debts; and supported no paid shopkeepers. I have no information as to the later history of the society.

Co-operation has been applied extensively to insurance of almost every kind and quality in this and other countries. There are a few purely mutual companies; but generally co-operation is so mixed up with capitalism that the capitalists reap the benefits which accrue from co-operation. This is true in all those companies which have capitalistic features, such as capital stock, dividends, fixed premiums, etc. Another class known as benevolent insurance orders will be considered under the head of Friendly Societies, later on.

Building and Loan Associations are classed as cooperative. And they are so In one particular: they are co-operation applied to savings. In all their other features they are purely capitalistic. They loan out the accumulations of savings of the members on strictly capitalistic principles, at enormously high rates of interest. And the interest which accrues from these loans is divided according to the same principles. At one time, when publishing a paper in the interest of building and loan associations, I was informed by a prominent banker in Chicago that at that time he held building and loan association stock to the amount of $80,000. And yet he never expected to borrow from an association. On the contrary, he was a lender of money; and found this an opportunity to loan his money at a much higher rate of interest than he could realize from ordinary bank loans. Taking these societies as a whole it is the veriest burlesque of co-operation to class them as co-operative. While they have one single co-operative feature yet their advantages all accrue to capitalism. And just so far as they foster the idea of building up a capital by small increments on which to do business or perform undertakings they are strengthening capitalism.

Kaweah and Topolobampo are still fresh in the minds of co-operators in this country. Without going into any of the controversies which have marked the history of these enterprises, I think it possible to learn an important lesson from both of them; a lesson which has been taught in many another co-operative scheme which we have passed under review in these chapters. Kaweah was wrecked, first, by the jealousies and rivalries of its rulers and would-be rulers; and, finally, by the hostility of the government, whose real function was, and is, to maintain and perpetuate the present capitalistic system. In all co-operative societies rulership has produced rivalries, dissensions, disorders, and finally dissolution, with a certainty proportioned to the intelligence of the mass of the members. It is only the densely ignorant who will continue to submit to being ruled; and even they are far more orderly and reasonable if accorded an equal voice in common affairs. Any scheme of co-operation to be successful, must be strictly democratic in its management; and that management must not extend one step beyond business matters. For its best success, it must place no regulations or restraints upon the private affairs or habits of life of its members. Rulership in government is just what is destroying human society today; and it must be eliminated from the coming society or it will destroy that also.

The same observations apply with even greater force to Topolobampo. A benevolent despotism can never be a lasting success. A dictator is a legitimate slave- holder; and is as much out of place in a co-operative or communistic community as the prince of darkness would be in paradise.

Profit sharing—so-called—has been put forward and heralded the world over by interested parties as a cooperation of the interests of the employer and the employed; but it is no such thing. The interests of the employer, looked at from his standpoint, are to obtain the greatest amount of labor for the smallest amount of wages: that is, to retain in his own hands as much as possible of the wealth produced by the employed; while the interests of the employed are to obtain all, or as much as possible for themselves, of that wealth. Now there can be no co-operation in that. The two positions are absolutely antagonistic. G. J. Holyoke says: “There can be no association between persons of opposing interests; and it is idle to speak of fraternity between rivals.” Still, workmen may be tricked into a belief, by reason of a want of knowledge of their own rights and interests, that their interests and the interests of their employers are identical. Under the influence of that belief, they may guard against waste and exercise increased industry. And, in order to obtain that increased efficiency, the employer may engage to hand over to the workman something more than he would do without it; but this is obviously in the interest of the employer and not of the workman. The interest of the workman lies in emancipation and not in amelioration. Whatever closes his eyes to emancipation and makes him content with amelioration is against his interest. As a matter of fact, profit sharing, as commonly practiced, is but a sort of discriminating charity.

The keynote of the whole scheme of profit sharing is contained in the remark made by Robert Owen to Mr. Marshall, of Leeds, when he was being shown over the mills there. Mr. Marshall said: “This army of workmen, if they chose to be careful in the use of material entrusted to them, might save me £4,000 a year.” “Then,” remarked Owen, “why not give them £2,000 and they will do it, and you would gain £2,000 by the arrangement?“ It is on this theory that profit sharing proceeds. But the employers almost never carry it out. In this country and in England profit sharing has been a snare and a delusion. Time after time the solemn engagements entered into by the employers have been broken. It was conspicuously the case in the colleries of the Messrs. Briggs, in England, where the system was put in force with great flourish of trumpets. The estimated saving of £3,000 a year was fully realized. But the workmen were cheated. The Briggs’ did not apportion to them their just share according to their own agreement. Some one has said that, “any agreement between Allen, the employer, and Barton, the workman, that Barton shall receive what Allen chooses to give him is no agreement at all.” Moreover, profit sharing has generally been accompanied with dishonoring conditions which were calculated to break up the workingmen’s unions.

A single instance of profit sharing will be sufficient to illustrate its workings. One of the most conspicuous in this country has been that of Alfred Dolge, of Dolgeville, N. Y. The facts which are here presented are condensed from Mr. Dolge’s book, so that he cannot complain that I have misrepresented him.

Mr. Dolge calls his plan “A great distribution of earnings.” The following is the substance of it: In the first place, he sets aside each year a calculated amount of the profits of the business for the benefit of the men. He does not give it to them in cash, hut invests it in various schemes for their benefit. There is a pension fund; a life insurance plan; a mutual aid society; a building fund for houses; a club house and a public park. But all depends upon the arbitrary will of the employer.

The following is an extract from the “Pension law:”

“From a desire to improve the material condition and prospects of its employés; to establish them as a compact, contented and well regulated community; and to fasten the mutual ties of esteem as well as of interest, that hold us together, and without which no lasting success is possible, the firm of Alfred Dolge has this day made the following pension law:

“Every employé, after continuous service 10 years, shall be entitled to a pension under the following conditions: In cask of total or partial disability to work, by accident, sickness or old age, while the disability lasts he shall be entitled to a pension calculated upon the basis of the last year’s service, s follows: 50 per cent after xo years service; 6o per cent after 13 years service; 70 per cent after 16 years service; 80 per cent after 19 years service; 90 per cent after 22 years service; and 100 per cent after 25 years service. If accident arises, or sickness is contracted in pursuance of duty, 50 per cent may even be allowed before the expiration of 10 years service.”

But the peculiarity of the whole thing is that the firm retains the absolute power to discharge any employé at any time, and thus cut off his pension, as well as to alter, amend, or even abolish any one or all of the above rules. It is an agreement which does not bind. It will probably be found that the employés of Mr. Dolge are prepared to appreciate and understand genuine cooperation.

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