Bailouts or co-operatives? - Iain McKay

As half of a Freedom newspaper feature on responses to the credit crunch, Iain McKay argues for the latter. Read the other half, Co-ops or conflicts?

Submitted by Joseph Kay on January 19, 2009

As capitalism goes into crisis (again), there have been bailouts of the financial sector as well as calls for the bailing out of certain industries. There are many reasons for rejecting this, but the problem is that their workers will be harmed by this. As such, I think it is wise for anarchists to have some practical suggestion on what to do – beyond, of course, calls for social revolution.

May I suggest that in return for any bailouts, the company is turned into a co-operative? This is a libertarian alternative to just throwing money at capitalists or nationalising workplaces.

Proudhon argued in 1848 he

“did not want to see the State confiscate the mines, canals and railways; that would add to monarchy, and more wage slavery. We want the mines, canals, railways handed over to democratically organised workers' association..”

In his classic work, The General Idea of the Revolution, he made a similar suggestion as part of his critique of capitalism and he influenced the Communards, who turned empty workplaces into co-operatives.

In 1912, Kropotkin argued along similar lines. He noted that the “State phases which we are traversing now seem to be unavoidable.” However, aiding “the Labour Unions to enter into a temporary possession of the industrial concerns” anarchists would provide “an effective means to check the State Nationalisation.” So there is an anarchist tradition of making this kind of demand.

What of the obvious objection, namely that this is not socialism and just “worker capitalism.”

Yes, it is not socialism – but it contains more elements of socialism than the alternatives of bailouts or nationalisation. It is a suggestion that could be applied in the here and now, where a social revolution is currently unlikely. If our position is one of revolutionary purity then it will be unlikely that anyone will pay much attention to us and if a revolt does break out then our influence will be smaller than it could be if we addressed social issues today.

If done in the right way, such activity can be used to get us closer to our immediate aim – a libertarian social movement which uses direct action and solidarity to change society for the better.

What of the notion it is “worker capitalism”? This is confused. It is not capitalist because workers own and control their own means of production. If quoting Engels is not too out of place, the

“object of production – to produce commodities – does not import to the instrument the character of capital” for the “production of commodities is one of the preconditions for the existence of capital... as long as the producer sells only what he himself produces, he is not a capitalist; he becomes so only from the moment he makes use of his instrument to exploit the wage labour of others.”

So workers’ associations are not capitalist, as Marx also made clear.

This is Proudhon’s distinction between property and possession and he placed workers’ associations at the heart of his anarchism, considering them as “a protest against the wage system” and a “denial of the rule of capitalists.” As long as these associations remained democratic (i.e., all people who work there are members) then this is a socialisation of the means of life (albeit, currently within capitalism). The key to understanding socialisation is to remember that it is fundamentally about access, that every one has the same rights to the means of life as everyone else.

This was Proudhon’s position, that “every individual employed in the association... has an undivided share in the property of the company”, has “the right to fill any position, of any grade, in the company, according to the suitability of sex, age, skill, and length of employment” and that “all positions are elective, and the by-laws subject to the approval of the members.” Bakunin was also a firm supporter of cooperatives, as was Kropotkin – although both were clear about their limitations.

This should be the criteria for any bailouts suggested now – the turning of the company into a co-operative which is run by its members and which any new workers are automatically members with the same rights as others.

Of course, it is unlikely that any government will agree to such a socialisation of companies. Unless pressurised from below, they will pick bailouts or (part/full) nationalisation in order to keep capitalism going. If ignored then people should simply socialise their workplaces themselves by occupying and running them directly. Nor should this be limited to simply those firms seeking bailouts. All workplaces in danger of being closed should be occupied – which will hopefully inspire all workers to do the same.

This support for co-operatives should be seen as a practical response to current events, a means of spreading the anarchist message and getting people to act for themselves. At the very least, it helps people who are suffering from the crisis while, at the same time, showing that another world is possible. And it is doubtful that the people whose jobs and communities are on the line because of the decisions of their bosses can make any more of a mess than has already been inflicted on them!

But this is a short-term libertarian solution to the crisis, one that can be used to help create something better. Capitalism has failed. It is time to give economic liberty a go!


darren p

15 years 6 months ago

In reply to by

Submitted by darren p on January 20, 2009

Yes, it is not socialism

Correct! it contains ALL the basic features of Capitalism!

There is no such thing as an "individual producer" in the modern world...

Such a system of "workers capitalism", individual and competing enterprises owned and run by the workers, would as painful a diversion as state capitalism was in the 20th century.

Submitted by lazyfunctional on January 21, 2009

"Help other cooperatives" is invariably one of the constitutional rules of cooperatives. Even the highly non-revolutionary ICA advocates the formation of broad cooperative federations.


15 years 5 months ago

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Submitted by 888 on January 21, 2009

I'm not for economic liberty, I'm for economic suppression


15 years 5 months ago

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Submitted by Antieverything on January 21, 2009

I'm not economic liberty, I'm for economic suppression

How cute. So you aren't for anything! And, yes, I understand the idea of communism as the suppression of the economy as a separate entity...but this only means that economic questions are subsumed by social questions, not that the economy ceases to function as an economy.

I think you fundamentally misunderstand the definition of economic liberty: control over the means and implements which are required to reproduce life, namely, the means of production. This understanding of freedom is consistent across nearly every strand of radicalism as well as classical liberalism.


15 years 5 months ago

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Submitted by 888 on January 21, 2009

Actually I think "economic liberty" is a term more often used by free marketers, not that that's what Iain meant here. I don't favour a mixed economy with cooperatives functioning within capitalism, I think capitalism has to be destroyed by force and a general strike. Since this is a rhetorical article about what people "should" do (while knowing they are not capable of doing it right now), why not suggest a revolutionary general strike? Or for immediate practical solutions, roaming direct action casework groups (like Seattle Solidarity Network, or workplace resistance groups are preferable to co-ops.


15 years 5 months ago

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Submitted by Django on January 29, 2009

Theres a response to the response to this here:

Still, have to say that I found the other half of this more sensible and still do. It was an excellent feature to run in Freedom though, I'd like to see more of these kinds of debates.

Joseph Kay

15 years 5 months ago

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Submitted by Joseph Kay on January 29, 2009

i'll have a read and try to reply if i get the time. just glanced at the first paragraph, and should point out i wrote my piece without seeing Iains, so it's not a "response", and neither did i pick the title, which was added by the sub.


It was an excellent feature to run in Freedom though, I'd like to see more of these kinds of debates.

i agree. much is i'm at odds with Iain on this issue, i think it's an important discussion to have, and i think Freedom can fulfil an important role in the 'anarchist movement' such as there is one by hosting such exchanges. it might have been better sequentially rather than concurrently though, as to a certain extent we argue past each other. alternatively it could have just been done as two independently written 'visions' or whatever, as opposed to a psuedo-debate. but yeah, it's a good format.


15 years 5 months ago

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Submitted by Spikymike on January 29, 2009

Just posted a brief comment on the 'Co-ops or Conflict' thread - seems to be the same thread as this?


15 years 5 months ago

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Submitted by Ex-temp on January 30, 2009

Yes Mike it was the same exchange. It might be a bit simpler to combine all of the exchanges into one article containing the whole debate.