On co-ops, conflicts and straw men - libcom.org

A reply to Iain McKay on the question of anarchist responses to the economic crisis.

The initial pair of articles, ‘Bailouts or co-operatives?’ and ‘Co-operatives or conflicts’ were published in Freedom newspaper’s Christmas 2008 edition, Iain’s response to my piece is available here. As we head into what is expected to be the deepest post war recession there are already signs of both heightened class conflict and reactionary slogans, and therefore the importance of a comprehensive discussion of a libertarian communist response to the crisis is reaffirmed. To this end, I'll reply to Iain in the hope of clarifying some of his misunderstandings or misrepresentations of my position and contributing constructively to this necessary debate. To begin with, Iain claims that my arguments are contradictory:

"Firstly, I do need to point out a few contradictions in his argument. He proclaims that we are “in no position to demand anything. As a tiny minority in the class, our ‘calls’ for this or that are impotent cries.” Yet, without irony, he raises various “communist demands” we should be making! What is it to be? Are we in no position to demand anything or can we raise demands?"

There is no contradiction here, for two important reasons. Firstly, because as I made clear in my article my objection to a strategy of co-operatives is twofold:

"Firstly, and not insignificantly, we are in no position to demand anything. (…) The second problem is on a more fundamental level (…) like nationalisation, workers’ control is not a demand based on our concrete material needs as a class, it is about how capital should be managed."

My argument is that like Trot demands for nationalisation, anarchist demands for co-operatives are impotent, since we’re in no position at present to force them. Demands as to how capital is managed (by the state, by co-operative workers associations) are meaningless without a workers movement strong enough to impose them. But in any event they would not represent a communist demand even if we were.

Secondly even in the absence of a powerful workers movement, proposals of what workers should do are not as impotent as demands over how capital should be managed, because while the incumbent managers of capital can only be swayed by force – that is by class struggle; strikes, occupations and other forms of direct action – our fellow workers can in principle be persuaded by force of argument, that is to say by propaganda activities promoting libertarian communist tactics.

Of course even if you think co-ops are a good idea, we’d first need to get into a position to force them. Iain agrees, thus the over-riding challenge for an anarchist response to the crisis is how we increase the power and confidence of the class – which unlike the management of capital is something we are in a position to influence at the moment. That said, it’s still worth debating what demands we’d make with such class power as and when it exists, as to do otherwise would be to assume failure from the outset. Therefore it’s worth revisiting my criticisms of a strategy promoting co-operatives.

Iain summarises his argument as being that co-operatives represent “a valid socialist alternative to bail-outs and nationalisation within the current crisis,” (while being clear that "yes, it is not socialism"). He writes:

"[Kay] argues that if we turn his workplace “into a co-op, those same market forces causing my boss to make cuts would still be there, but we would have nobody to say no to when under pressure to increase the rate of exploitation to survive in a hostile market.” Really? Is he saying that workers’ would make the same decisions as a boss would in the same circumstance?"

Aside from Iain presuming to know more about my workplace than I do, one could answer this question by reading my original piece! I in fact addressed precisely the possibility that if my work became a co-op we could manage it differently, saying that:

"using the director’s former salaries we might be able to make less redundancies or improve wages. But if the firm has the resources to do this, and we would only be able to create a co-op with sufficiently strong class struggle to force expropriation of the bosses, we should simply demand the concrete material things we want – in this case job security and improved conditions – not demand how capital should be managed to meet our actual needs."

However, Iain’s “argument was primarily related to when firms are about to go bust”. What then are we going to take over and self-manage? In the case of my work, we lend money that we borrow from major banks. The way would be likely to go bust is if either our bad debts rose too high, or if these funding lines were cut off. In either case, a co-op would be faced with the same problem as the boss, but would only have the option of managing it differently. The same is true more generally for Woolworths or Zavvi workers: co-operative insolvency is still insolvency. Occupations may help prevent the administrators selling off assets to pay off credtiors instead of workers, and help secure improved redundancy terms, but they can't make a failing firm viable. The only thing that might is a big increase in unpaid overtime by the workers providing the surplus labour to kickstart the firm's profitability, but even that unappealing prospect is dependent on creditors and suppliers extending credit and workable terms of trade to the illegally occupied firm, which seems about as likely as Barclays providing mortgages to squatters.

Iain’s claim that this “argument is identical to the apologists of capitalism – bosses have no power, the market is supreme” is thus nonsense. It is not an apology for capitalism to understand how it works (ironically, to claim that self-managed firms are “socialist” is much closer to an apology for capitalism than anything I have written). Bosses are not free, they must act broadly in accordance with the market. They’re almost certainly not lying when they say they regret making redundancies and the like, I’m sure they would rather be taking on more workers and making more profit. Of course they choose to lay off a worker on £15k rather than take a £15k pay cut themselves, so yes “being a boss shapes any decisions made” – as I made clear in my article.

But this returns us to the point, if the resources are there to make less redundancies, in what way is it more realistic to demand the boss surrenders his capital to the workers rather than say forgoing some or all of his salary to save jobs? What boss would rather surrender their capital than take a temporary pay cut? Iain argues co-ops are a “short-term solution for those workers facing closing workplaces or whose bosses are seeking bailouts” – but if expropriation – which is what co-ops represent – is on the cards, I’m sure the mere safeguarding of jobs would have been on the table long before that.

It’s not that I think it would be a bad thing if laid off workers occupied their workplace and tried to run it as a co-op (a la Zanon), but I think it’s (a) not really on the cards given the current state of the class struggle and the severity of the coming recession, (b) far less practical and realistic than demanding improved redundancy packages (as in Derry and Poland) or no redundancies at all, and that given this it's (c) not something libertarian communists should be proposing as a strategy given as if we’re in a position to expropriate capital, co-operatives are a dead end for such militancy. I argued all this in my original article, and Iain still hasn’t explained why co-ops are a more realistic response to the crisis than struggles resisting cuts or demanding decent redundancy packages – the kind of struggles that are actually happening already.

Thus the problem is not how capital is managed, but that it is capital, regardless of who manages it or how democratically they do so. Quote-mining Marx does not change the fact that there is money in motion, returning with a surplus (M - C - M') - the assets of a co-op do not cease being capital when votes are taken on how they are used within a society of generalised commodity production and wage labour. That is to say there remains an imperative to accumulate with all the drive to minimise the labour time taken to do a task this requires, even in a co-op. This is why it is accurate to talk about self-managed exploitation. Iain disagrees, and it’s worth exploring this point further, because it cuts to the heart of just what the capitalist social relation is, and how to oppose it. He says that:

“As for “self-managed exploitation”, that is just confused. “Self-managed exploitation is not just a neat turn of phrase”, Key asserts but I disagree. He is confusing the fact market forces would still exist and rule workers' lives (and this is a serious objection) with capital/wage labour and so exploitation (in an anarchist or Marxist sense of expropriation of surplus by non-producers).”

A firm operating in a competitive market – as would certainly be the case with firms “about to go bust” - must generate enough surplus to re-invest in expanding output and new technology to maintain or improve its market position relative to its rivals. That is to say the firm - as a concentration of capital - has a logic of its own. It needs to be nourished by surplus living labour or it will whither and perish. As dead labour, it must vampire-like suck life from the living, and lives the more, the more it sucks. This is why it is "exploitation in an anarchist or Marxist sense" without "expropriation of surplus by non-producers", which is an unneccessary personification of social relations. The firm can have a logic of its own - expand or die - without there being a villain in a top hat and monocle sat atop it. This is the reality of running a business, and it exists independently of how that business is run (as a one-man private tyranny, a Plc or a co-op). Thus when I wrote that “many anarchists focus mainly on the vertical rule of workplace hierarchy” - I unwittingly anticipated Iain’s one-sided understanding of the capital relation. So when Iain writes…

“[Kay] argues that “capital rules social life” vertically “through the person of the boss” and horizontally “through market forces”, yet do I really need to point out that capitalism is a mode of production, not a mode of distribution? Markets existed before capitalism and a self-employed artisan working his own tools is not exploited by a capitalist.”

…he really makes my point for me. Within the prevailing capitalist mode of production, the abolition of the capitalist - that is, and individual personification of capital at the level of the firm - does not abolish the exploitation of labour by capital, that is by dead labour, which requires a surplus to sustain and expand it relative to its rivals, lest those rivals expand and swallow it up or force it out of business.

Thus by appealing to pre-capitalist artisan production to explain why co-ops under capitalism supposedly do not involve the exploitation of labour, it is Iain that is confused, and ahistorical to boot. He commits precisely the mistake I warned against of focussing on capital’s vertical rule though workplace hierarchy - the person of the boss – to the detriment of understanding the horizontal rule imposed by the market; the imperative to accumulate - that is to extract a surplus from living labour – that is inherent to any firm in capitalism, however it is managed. The fact the market is the main mechanism by which this imperitive is imposed does not make it a question of distribution; under capitalism production for the market, i.e. commodity production necessitates this dynamic of 'grow or die.'

Iain is right that “there is an anarchist tradition of making this kind of demand [for co-ops]” for precisely the reason that there is an anarchist tradition of myopically focussing on the hierarchical aspect of the capital relation to the detriment of the horizontal – and thus championing the bourgeois freedom of the market against the despotism of production, which is its necessary counter-point. Proudhon, Kropotkin et al at least had the excuse of not having the wealth of hindsight now afforded us in the early 21st century. No matter how eruditely Iain marshals his army of authorities, he doesn’t have the same excuse.1 The rallying cry “it is time to give economic liberty a go!” is precisely in this tradition – the tradition of 19th century small business socialism that was discredited both practically and intellectually long ago.2

So, having addressed the more substantive matters at issue, I feel I must now address some of the rather uncomradely accusations and misrepresentations with which Iain peppered his response. He asks:

"Is he seriously suggesting that workers, faced with the closure of their workplaces, should simply collect their P45s and head straight to the unemployment office? That the task of anarchists is not only to not suggest occupations but to oppose them. I am surprised that a member of the Solidarity Federation would resist suggestions to expropriate capital, to oppose calls for workers to occupy their workplaces"

This a ridiculous insinuation, and one (unsurprisingly) made without any quotation from my article. This is of course because nowhere do I oppose workers occupying their workplaces or propose workers “simply collecting their P45s.” If you doubt this, simply see what I wrote in my piece that Iain is purportedly responding to:

"we have to make concrete material demands; no to job losses, wage cuts, public service cuts and evictions"

I couldn’t really be any clearer than that – and Iain has the benefit of actually reading my article before responding, so there really is no excuse (our original articles were written 'blind', simultaneously). I would therefore appreciate him withdrawing this charge, because it makes it hard to have an honest discussion when you stand baselessly condemned for things precisely the opposite of what you actually said. Workplace occupations are indeed something I support, my argument is that demanding they be turned into co-operatives is misguided. Iain goes onto say:

"Perhaps it could be argued that expropriating workplaces in a non-revolutionary situation is a bad idea, yet why is it a non-revolutionary situation? Perhaps because workers are not expropriating their workplaces?"

Unfortunately this has all the logical rigour of suggesting the frost outside is caused by the low reading on the thermometer. Clearly ‘revolutionary situations’ are not created by the expropriation or workplaces so much as characterised by them. Revolutions are the high watermark of class struggle, and so the question becomes ‘how can we help increase the level of class struggle?’ This is a much more pressing question, since until some increase comes about, any demand we dream up is meaningless (I don’t pretend an increase in class struggle will only come about through us answering this question, but the question must be posed since we are workers being fucked over during this crisis and can only defend ourselves collectively).

To try and answer this question, the Brighton local of the Solidarity Federation has recently produced a pamphlet on anarcho-syndicalist strategy and organisation. We advocate trying to create networks of militants on a regional and industrial basis, who can encourage practices of solidarity, direct action and rank-and-file control amongst their workmates and the wider class. We think workers who agree with these principles should network with one another and produce propaganda advocating mass workplace meetings and collective, direct action. The demands we would argue for are concrete ones relating to our actual needs (against pay and job cuts, for income and job security, in case of redundancies happening anyway for improved pay-offs etc).

We would certainly include workplace occupations as an example of collective, direct action. But I would see it as a mistake to encourage workers to try take over businesses on the verge of going bust going into the worst recession since WWII, since even if the businesses could be turned around it would only be at massive extra effort in terms of unpaid overtime and the like – the kind of thing we would rightly resist if imposed by the boss, but have no choice about if imposed on self-employed co-ops by the market. Finally, I feel I must address one more point which belies two assumptions unbecoming of a libertarian communist. Iain writes:

"Is he seriously suggesting that (…) we should be indifferent when public (our!) money is used to bailout the muppets who got us into this crisis to begin with?"

Firstly, the identification of state funds with “our!” money (exclamation no less!) requires an embarrassing conflation of the population with the state. State funds raised by taxation are no more ‘ours’ than my boss’ Bentley is ‘mine’, because tax revenue represents the state's portion of the surplus value expropriated by the capitalist class.3 Of course taxes are more visible than other forms of surplus value, but they are no more ‘ours.’ The notion of ‘taxpayers money’ may have rhetorical advantage to populist orators, but it’s a staple of bourgeois ideology from George Galloway to David Cameron. I would expect anarchists to see through such naked conflation of the population and the state.

Secondly, it repeats the line of no less an exemplar of bourgeois ideology than the Prime Minister, that the bankers are to blame for the crisis.4 It’s not that there aren’t greedy or reckless bankers, but that any materialist, communist analysis of the crisis has to see through such populist scapegoating and look at the underlying causes of the crisis (I wrote a brief account here for Tea Break). Of course without such ‘irresponsible’ lending the economy wouldn’t have experienced the decade of steady credit-enabled growth on which Brown built his reputation, which once again demonstrates the vacuousness of the notion bankers “got us into this crisis.”

Thus in conclusion I feel Iain has failed to defend his assertion that co-operatives represent “a valid socialist alternative to bail-outs and nationalisation within the current crisis (...) a practical alternative for libertarians” Instead, he has misrepresented my objections and claimed - undoubtedly in continuity with some in the 'anarchist tradition' - that running your own business is a useful strategy in the class struggle. In doing so he has demonstrated several assumptions quite in line with bourgeois ideology; that the market represents a freedom worth fighting for, that state finances are 'our money' and that the crisis is all the fault of some banker 'muppets' and not rooted in the very contradictions of capitalist accumulation.

Therefore I maintain that a libertarian communist response to the crisis is one which increases the power, confidence and self-organisation of the class to demand the concrete things we want from capital, and not one which puts forward 'realistic' ways in which capital could be better managed (i.e. co-operatively instead of hierarchically); since capital cannot be managed in our interests it is pointless to try. A strategy of promoting co-ops and conflict in the 21st century would have as much to do with communism - the real movement asserting our needs against the present state of things - as nationalisation and conflict had in the 20th. We have to learn to stop trying to manage capital and instead try to fight it.