Contemporary Marxist scholars on cooperatives

Over the past half-century or so, there has been a global push for ‘western democracy’ by world leaders, human rights activist and political scientist. Historically, governments have pursued political democracy at the expense of economic and social democracy (Jossa, 2014a, p. 4; Jossa, 2018, p. 8). In political democracy, a country is desirably ruled by the people, and hence decisions made about the political welfare of the country are representative of the people’s wishes. However, when it comes to the economy and the decisions about how the resources are to be utilised, a democratic process is believed to be inefficient, and hence only a few capital-owners have the right to decide (Egan, 1990; Jossa, 2018). Economic democracy can be achieved through the use of labour-managed firms (LMF) (Egan, 1990; Jossa, 2008, pp.

5-9; Jossa, 2014a, p. 9; Winn, 2013). Workers make decisions about the firm, hire capital, and pay it at a specified interest rate and retain the balance.

The degeneration thesis

There seems to be a silent consensus that classical Marxist cooperatives cannot be envisaged within an advanced capitalist model [Reich and Devine (1981) cited in Egan (1990, p. 74)].

Egan (1990, pp. 74-75) argues that most of the scholars who believe that Marxism did not favour cooperativism do so because they associate Marxist scholarship to the degeneration

88 | P a g e thesis. The degeneration thesis says that cooperatives start as labour-managed and Labour-controlled organisations, but then they grow larger to such an extent that they need to hire labour outside their cooperative. With further growth, control becomes wholly vested in the hands of the management. It decides for the members while at the same time coordinating capital. Additionally, to keep a positive growth rate, they will eventually need to cut down on cost, labour cost to be precise, hence resulting in the exploitation of labour just in the same way that a corporate firm would.

Egan (1990), however, argued that cooperatives could overcome degeneration. At the beginning, there is a capitalist who is directly in control of the capital. As the firm grows, the capitalist will hire management to look after the capital and to employ labour. The capitalist no longer needs to carry out all the functions, and this creates a joint-stock firm in which management (who are also workers) are in charge of labour instead of capital. Thus, at this stage, Marx argued that social production and private property are now divorced from each other, but since this divorce occurs within the capitalist production framework, the resolution is negative (Marx, 1992, pp. 571-572). What Marx meant by a negative resolution of the capital-labour problem is that labour still sells its labour-power to capital, which still exploit it, this time through the management. In the case of cooperatives, the contradiction between management and the labour is removed since labour hires management and not the other way around. Going a step further from this brings us the Labour-Managed Firms in which the capital owned by the capitalist is converted into producer capital (Egan, 1990, pp. 76-77).

Since cooperatives operate in a capitalist market system, it must operate according to the rules of the game. That puts it at the mercy of the capitalist, and it is forced to operate like a capitalist firm eventually. At some point, it will try to increase the productivity of labour (as is required to survive in a capitalist set-up) by either self-exploitation of its labour or by hiring non-cooperative member labour, and lastly, it will be forced to compete with other non-cooperatives in the same market. Additionally, more successful cooperatives will result in the accumulation of wealth in one region which ideologically undermines the whole concept of cooperatives. The hegemony of the capitalist framework is seen as so overwhelming that it always forces the cooperative to become more like any other capitalist organisation. That is the rationale of the degeneration thesis. Mandel (1975) in Egan (1990) wrote:

89 | P a g e All that they have succeeded in, however, has been to transform themselves into profitable capitalist enterprises, operating in the same way as other capitalist firms. – Mandel (1975, p. 8) in Egan (1990, p. 78).

This stage of a cooperative development equates to the LCF stage 4 (P4) in which the cooperatives has to decide whether to tinker, reinvent or exit (see section 3.3.1 on page 63).

However, to counter this problem, contemporary Marxist cooperative theory then stipulates that there should be a national federation (Marx, 1973). This federation should oversee redistribution and governing of issues or contradictions that may arise between the cooperative movement and the market (Vanek, 1970; Egan, 1990, p. 79). The federation should reduce class struggle, to ensure intra- and inter-cooperative ‘solidaristic orientation’. This, together with a deliberate but moderate connection with political struggle, makes cooperatives unite and help each other instead of competing.

Thus, three issues were suggested to avoid degeneration in Marxist cooperatives; i) all workers must share in the firm in order to reduce the risk of recreating classes within the cooperative, this mostly means no hiring labour from outside the cooperative, ii) all cooperatives must belong to a national federation which should be in charge of fostering common bonds and common grounds, and iii) a proportion of the surplus should be devoted to the creation of more capital and the creation of more cooperatives (Marx, 1973). Considerably, these remedies are reflected in the 1995 ICA cooperative values of self-help, equality, equity, democracy, and solidarity. The relationship between the degeneration thesis and the cooperative is tied to the later commentary on Marxist cooperatives than the Marxist theorisation of cooperatives itself (Egan, 1990, pp. 77-81).

The significant differences between Lenin and Marx is the focus on the role of the state within the cooperative movement, while Marx cooperatives were state-owned and worker-run, the Lenin cooperatives were owned and run by the workers. Thus, a movement from WMF to LMF as described by Gramsci. Gramsci himself was a scholar of Lenin, and some commentators claim Lenin wrote his 1923 article with insights from Chayanov’s writings (Chayanov, 1991, p. xxxi). I sought to show the existence of polarised views within scholarship and how to transition towards a common centre ground as seen through movement from Marx to Lenin (after the 1923 article) and Gramsci and Chayanov theories.

90 | P a g e 3.5 Introduction to Chayanov’s theory of peasant cooperatives

This theory was put forward by a Russian scholar, Alexander Vasilevich Chayanov (1888-1937). His ideas on the peasantry were later recognised in 1987 by Theodor Shanin (Chayanov, 1991; Shanin T. , 2009). His studies mainly focused on the agricultural cooperatives in rural Belgium, Italy, France, Switzerland and Russia in the 1920s. To articulate ideas on the progressive path that peasant societies should take, Chayanov first came up with a working definition of the peasantry. His conceptualisation of the peasantry (Section 2.63.5.1) enabled him to reduce the problem of the countryside to a reasonable level. However, his interpretation of the peasantry would also become the focus of most of his criticism, especially within Marxist scholarship (Banaji, 1976; Bernstein, 2009, pp. 56-59) (as elaborated in Section 2.63.5.1). I have discussed the Marxist, NCE and NIE theories on cooperation, Chayanov’s model comes in as a third-way type and most useful framework for understanding present-day cooperatives in Japan and Zimbabwe. In this respect, I describe the background and context to Russia when Chayanov was carrying out his theorisation in order to succinctly explain how relevant his ideas are for the contemporary Zimbabwean cooperatives.

A general agreement that cooperatives were the best form of social organisations that would deliver the peasants out of pauperisation swept across Russia as seen by an increase in the number of cooperatives from 1,625 in 1905 to 35,200 in 1915. These types of cooperatives were not bottom-up but were prompted by either the scholarly works of the intellectuals or the state (Chayanov, 1991). The general idea was to use cooperatives to achieve socialism, and this had to depend on the political conscientization of the peasants (as espoused in the Marxist-Leninist framework). Before Chayanov took centre stage, two significant scholars were writing about agricultural cooperatives in Russia. The first one was S.N Prokopovich (1913)who believed that there existed administrative and legal impediments to the cooperative movement and that individual rights (autonomy and freedom of association) had to be established before the cooperative could move forward (Chayanov, 1991, pp. xv-xvi). The second intellectual, Tugan-Baranovskii (1913) believed that although cooperatives were unable to achieve a shift from socialism to capitalism, they played a critical role in aggregating the peasants’ voices to guard their interest. For Tugan-Baranovskii, the cooperative had the potential to build a new society within an already existing one.

Chayanov’s works drew a lot from these two scholars, and he focused on producing a theory that could be adopted and modernised to suit any point in time. He was a fascinating character

91 | P a g e in terms of his political views during the last 20 years of his life because he neither outrightly supported nor discredited the Bolsheviks. His scholarship grew as he wrote articles and contributions in weekly magazines in Russia, Belgium and Italy; and so did his popularity among the general public (Chayanov, 1991, p. xxv; Shanin, 2009, p. 85; Bernstein, 2009, p.

57). Chayanov was able to connect science to everyday life or theory to practice making it easier for people to listen and relate to his ideas. He began to contribute as an intellectual to the Central Association of Fla-producer’s cooperatives (Apex body of 42 Unions and 142 individual societies) in 1915 (Motta, 2018, p. 64).

After the Russian revolution of 1917, Chayanov fought to implement democratic social reforms, especially in agriculture as seen through the formation of the League of Agrarian Reformers in 1917 whose mandate was to discuss the best ways of answering the Russian agrarian questions at that time (Motta, 2018). One of the most important outcomes from this league was the documents with three significant recommendations for the resolution of the agrarian question. Firstly, the foundation of the Russian agrarian system was supposed to be premised on the superiority of cooperation of self-employed peasants. Secondly, there would be a state-led land reform which had to respect geospatial differences across Russia and; thirdly, land reform was to be recognized only as the first step towards resolution of the agrarian question, and the cooperative was to link the peasant producers to the outside economy (Motta, 2018; Chayanov, 1991, p. xxvi).

Although this put him on the map, his pamphlet titled ‘What is the agrarian question’ published by the League of Agrarian Reformers in 1917 made him unpopular with the ruling elites (Chayanov, 2018; 1991, p. xxvi). This was so because ‘land to the working people’ was central to his revolutionary demand (virtually a demand for the landlords to cede their land to the peasantry). Alexander Chayanov never associated himself with any political party and criticised the government when he thought they were wrong and praised them when he thought they were doing good (Motta, 2018). In the same sense, he despised capitalism, but also did not outrightly support state socialism or anarchistic communism, but instead believed that a middle ground could be established (Chayanov, 1991, p. xxvii). His solutions to the agrarian question are termed ‘third-way type’ of interventions for this reason. So only cooperation could help establish this third-way common ground just as argued by Tugan-Baranovskii:

A cooperative emerges fully equipped with capitalist technology, and it stands on capitalist ground, and this is what distinguishes it in principle from socialist communes

92 | P a g e which seek to create an economic organisation on an entirely new economic basis. – Tugan-Baranovskii cited in Chayanov (1991, p. xxvii)

The revolution of the 1916-17 placed Lenin’s Bolsheviks into power, and these implemented a radical land reform by dictatorial methods (Chayanov, 1991, p. xxix) against the advice of people such as Chayanov. Thus, although Chayanov continued to work with the Bolshevik government, his antagonism to the October revolution was a public secret which set a series of persecutions under Stalin and culminated in his execution in 1937. His main argument was that the Bolshevik’s 1917 revolution had chosen to take the path of a dictatorship of the proletarian (radical seizure of power) instead of the constituent assembly (representative democracy) which he preferred (Shanin T. , 2009, p. 85; Bernstein, 2009, p. 54; Chayanov, 1991, p. xxi).

The final blow to him was his opposition to collectivisation (horizontal integration) which was implemented by Stalin instead of cooperatives (vertical integration). He was arrested and killed allegedly for ‘high treason and sabotage of Russian agriculture’.