[For footnotes, see the PDF file of the book.]
Despite its reputation for individualism and unbridled capitalism, the United States has a history rich in cooperation and communalism. From the colonial era to the present--and among the indigenous population for millennia--local communities have engaged in self-help, democracy, and cooperation. Indeed, the “individualistic” tradition might more accurately be called the “self-help” tradition, where “self” is defined not only in terms of the individual but in terms of the community (be it family, township, religious community, etc.). Americans are traditionally hostile to overarching authorities separate from the community with which they identify, a hostility expressed in the age-old resentment towards both government and big business. The stereotype, based on fact, is that Americans would rather solve problems on their own than rely on political and economic power-structures to do so. The following brief survey of the history substantiates this claim. While my focus is on worker cooperatives, I will not ignore the many and varied experiments in other forms of cooperation and communalism.
Certain themes and lessons can be gleaned from the history. The most obvious is that a profound tension has existed, constantly erupting into conflict, between the democratic, anti-authoritarian impulses of ordinary Americans and the tendency of economic and political power-structures to grow extensively and intensively, to concentrate themselves in ever-larger and more centralized units that reach as far down into society as possible. Power inherently seeks to control as much as it can: it has an intrinsic tendency toward totalitarianism, ideally letting nothing, even the most trivial social interactions, escape its oversight. Bentham’s Panopticon is the perfect emblem of the logic of power. Other social forces, notably people’s strivings for freedom and democracy, typically keep this totalitarian tendency in check.
In fact, the history of cooperation and communalism is a case-study in the profound truth that people are instinctively averse to the modes of cutthroat competition, crass greed, authoritarianism, hierarchy, and dehumanization that characterize modern capitalism. Far from capitalism’s being a straightforward expression of human nature, as apologists often proclaim, it is more like the very antithesis of human nature, which is evidently drawn to such things as free self-expression, spontaneous play, cooperation and friendly competition, compassion, love. The work of Marxist historians like E. P. Thompson shows how people have had to be disciplined, their desires repressed, in order for the capitalist system to seem even remotely natural: centuries of indoctrination, state violence, incarceration of “undesirables,” the bureaucratization of everyday life, have been necessary to partially accustom people to the mechanical rhythms of industrial capitalism and the commodification of the human personality. And of course resistance continues constantly, from the early nineteenth century to the present day. “Wage-slavery,” as workers in the nineteenth century called it, is a monstrous assault on human dignity, which is why even today, after so much indoctrination, people still hate being subordinated to a “boss” and rebel against it whenever they can. The history of worker cooperatives in particular shows that commitment to the ideals of workplace democracy, indeed worker ownership and control, is just below the surface of mass consciousness. A spark could light a fire.
From this history one can draw another lesson, more limited in scope: most cooperatives have been formed during economic contractions or waves of political and social movements. On the other hand, many cooperatives, like all kinds of businesses, have succumbed to economic contractions. The best way to prevent that is by building up a thick mesh of institutional networks, cooperative federations, and ideologically friendly banks. Fortunately, this is happening now. As it continues, moreover, society will no longer have to wait for recessions to stimulate the creation of new co-ops; they will be born continually around the world, as organizers spread the gospel and help provide the capital. Effectively there will be a continuous social movement.
This also suggests that another pitfall of earlier movements has finally been overcome: each generation of past cooperators often had to begin anew, relearning the lessons of their forebears, because most cooperative institutions did not extend sufficiently in time or in space. Even if knowledge and capital could be accumulated over many years—which they usually could not—the means of coordinating a continent-wide movement did not exist. Now they do, increasingly so every year.
More generally, a lesson of the history of radical social movements is that advances in freedom or against power-structures do not occur as quickly as activists would like or expect them to. Radicals in the 1880s, 1910s, 1930s, 1960s, and so on, thought that society was on the cusp of a social revolution. Strictly speaking, though, society is never on the “cusp” of a social revolution, because these things take an inordinate amount of time. I’ll return to this subject in the next chapter; suffice it to say that the history of cooperativism is an excellent illustration of the slowness of systemic change, the necessity for revolutionists to be dedicated to decades of slow, patient organizing as opposed to sweeping assaults on the fortress of capitalism. To use Antonio Gramsci’s terms, the “war of position” is more important than the “war of maneuver”—precisely because, with regard to a social revolution, the war of maneuver should be seen not as separate from and subsequent to the war of position, as Gramsci saw it, but as a component in the latter. Radicals should always be testing the strength of reactionary power-structures, pushing against them directly through political “maneuvering” to enact reforms that erode their power and conservatism, while at the same time educating and organizing the multitudes partly as a basis for these political actions. This is the process through which most genuine, long-term progressive achievements have been won, as opposed to abortive “revolutions” like Lenin’s in 1917 (which led to Stalinism). In the long run, Leninist impatience does not work.
Anti-capitalist movements were fitful and sporadic prior to the Civil War, although horror at the excesses of early industrialism was widespread even among the privileged, and the miseries of the lower classes in urban and rural areas fostered a seething discontent that exploded in events like the Flour Riot of 1837, Dorr’s Rebellion in the 1840s, the Anti-Renter movement in the Hudson Valley around the same time, innumerable strikes by factory workers, and the formation of the world’s first Workingmen’s Parties in New York and other states. The frequently wretched work conditions of the first half of the nineteenth century are well known. Less well known are the early, tentative experiments in alternative social and economic arrangements. In the very early nineteenth century workers occasionally formed cooperatives while on strike, or after a strike had failed. In Baltimore, a cooperative shoemakers’ manufactory was organized in 1794; in 1806, Philadelphia shoemakers organized another cooperative manufactory. Such actions became increasingly common in the early labor movement, especially among artisans and craftsmen. A less oppositional sort of cooperativism was practiced by immigrants from Europe, as it would be in later waves of immigration as well: they formed communities in cities on the east coast in which mutual-aid structures were essential to survival.
At the same time, communalism of both secular and religious varieties was trying to gain a foothold in the U.S. Communalism has been a recurring phenomenon in American history, from the early seventeenth century to the 1970s and beyond: a group of like-minded people get together and establish a community on the fringes of American society, away from the capitalist rat-race. Quakers, Shakers, Mormons, Rappites, Christian Socialists and other religious groups founded cooperative communities in the late eighteenth century and early to mid-nineteenth century, usually with at most a few hundred members. Some of them were quite successful, lasting decades; others ended after a few years because of personality clashes or organizational problems.
Secular communalism was not wildly successful either. Robert Owen came to the U.S. in 1825 to spread his new socialist ideas and start experimental communities at New Harmony, Indiana and other locations. With 900 people, New Harmony did impressively well for a while—so well, in fact, that Owen prematurely changed its status and structure into that of a commune, with means of survival held in common and remuneration based on need rather than work. This enterprise failed miserably: the township was too diverse, consisting, as Owen’s son said later, of “a heterogeneous collection of radicals, enthusiastic devotees to principle, honest latitudinarians, and lazy theorists, with a sprinkling of unprincipled sharpers thrown in,” and infighting spelled its doom. The whole Owenite movement effectively collapsed in 1828.
A second wave of communalism began in the 1840s, when Charles Fourier’s ideas were put to the test. Horace Greeley, a disciple of Fourier, summarized these ideas eloquently:
Not through hatred, collision, and depressing competition; not through war, whether of nation against nation, class against class, or capital against labor; but through union, harmony, and the reconciling of all interests, the giving scope to all noble sentiments and aspirations, is the renovation of the world, the elevation of the degraded and suffering masses of mankind, to be sought and effected.
Associationists, as they were called, hoped that “phalanxes,” Fourier’s ideal communities, would eventually sprout all over the country and transform it from a competitive to a harmonious, cooperative society. Owen’s followers had focused on cooperative agriculture, but Fourier’s emphasized industry, since times had changed since the 1820s. Dozens of phalanxes with at least a hundred members each were founded in the eastern half of the country. But after a few years the old problems with Owen’s movement returned: most poor people couldn’t afford to found phalanxes, even after combining their resources, and the phalanxes they did form usually remained poor, “strangled by debts they had undertaken.” Participants expected the new communities to magically solve their economic problems; when they didn’t, and in fact added such new stress to life that many people “burned out,” the movement lost its vitality and collapsed (after ten years or so).
Concomitant with Associationism was a renewed union worker cooperative movement. After the case Commonwealth v. Hunt, decided by the Massachusetts Supreme Court in 1842, established that labor unions had the right to exist, unions grew quickly throughout the east. Strikes erupted in the late 1840s in response to wage cuts brought on by a depression, and cooperatives were formed in the wake of these strikes. For instance, the iron molders of Cincinnati struck in 1847, lost, and then organized a successful cooperative foundry: the 47 members collected $2100 with which to buy land, and philanthropists from Cincinnati erected buildings for the new business. Unions established cooperatives in many states—often as a response to failed strikes—and among such diverse groups as glassblowers, cabinetmakers, barrel-makers, seamstresses, tailors, and hat-finishers. Europeans who had emigrated after the failed revolutions of 1848 also started many cooperatives in eastern cities. On the whole, however, this wave of cooperativism was over by the mid-1850s, having succumbed to a lack of resources and fierce capitalist competition. The depression of the mid-1850s also wreaked havoc on cooperatives, and the Civil War eliminated most of the few that still remained.
But before that final catastrophe happened, consumer cooperatives made their first major appearance in the U.S., between 1845 and 1860. In a consumer cooperative, as opposed to a worker cooperative, “the customers are the voting members who band together to acquire consumer goods directly from producers and eliminate the profits of middlemen [i.e., retailers]. The workers in the cooperative may or may not be members.” Consumer co-ops are more capitalistic than worker co-ops in that, while the property is collectively owned by consumer-members, managers exist (appointed by a board of directors elected by the membership) who hire and fire workers as in a capitalist enterprise. Nevertheless, the co-op has definite advantages over the private enterprise, not the least of which is that it can sell goods more cheaply, at close to cost, by eliminating the middleman. This is what the Working Men’s Protective Unions did, approximately 800 of which were established in New England and Canada between 1845 and 1860, servicing 30,000 to 40,000 members and tens of thousands of non-members. The movement was stimulated by the harsh economic climate for working people of the 1840s, and also by the energy of radical European immigrants who carried the frustrated hopes of 1848 to America. The hundreds of stores provided cooperative employment, cheap goods, and devoted much of their financial surplus to insurance for the aged and the sick. And yet the movement lasted only a few years because of the aforementioned problems of debt, lack of resources, and economic depressions in the 1850s. It also fatally incurred the wrath of capitalists for selling goods too cheaply: private enterprises used the tactics of price-slashing and blacklisting to drive the co-ops out of business, after which prices were raised again.
The Rochdale consumer-cooperative movement in England, which began around the same time as the Protective Unions in the United States, avoided some of the latter’s mistakes, particularly the mistake of selling goods much more cheaply than conventional businesses did. Instead, the Rochdale cooperators pioneered a device that has been used to great effect ever since: rather than every customer’s paying a low price, regular prices were charged but rebates periodically given to members (greater rebates going to those who purchased goods more frequently). This mollified capitalist competitors. At the same time, the Rochdale group was better able to secure financing for its operations by relying not merely on small membership fees, as in the Protective Unions, but also on shares of equity sold to members, who thereby could earn a fixed dividend of no more than 5 percent. Another important contribution of Rochdale was to formulate concrete principles of cooperation that have been embraced by cooperators for 150 years. Among them are the following: voluntary and open membership; democratic member control; member economic participation, such that capital is equitably contributed to the business; autonomy and independence; education and training (of members and the general public, to spread the ideology of cooperation); cooperation among cooperatives; and concern for community. Hundreds more cooperative stores opened in America after the Civil War, most of them modeled on the Rochdale system rather than the failed Protective Unions.
It is after the Civil War, during the “second industrial revolution,” that the history of cooperativism becomes really exciting, full of promise and tragedy. Organizations like the National Labor Union, the Sovereigns of Industry, the Knights of St. Crispin, and the Knights of Labor enthusiastically supported cooperation and proselytized for it. Around the time of labor’s Great Upheaval (the late 1870s and 1880s), thousands of cooperative stores and workshops were born around the country, especially in the east. Hundreds of thousands of laborers and artisans had faith in cooperation—at least in the long run—as an escape from industrial misery, low wages, and periodic unemployment, hoping to mold society anew in the image of a “republic of labor,” which would be a continuation and fulfillment of the Founding Fathers’ republican political vision. Labor reformers thought that in order for liberty, equal rights, and the pursuit of happiness to flourish, social conditions would have to be revolutionized: cooperation would have to supersede “wage-slavery,” so that economic reality could be made consistent with America’s democratic form of government. “The principles of Co-operation,” wrote a reformer in the late 1860s, “are more in harmony with the principles of our form of government than our present social system.” The dream of this cooperative utopia inspired reformers for decades.
For example, in the late 1860s the newly formed National Labor Union, a loose federation that had over 300,000 members before it collapsed in 1873, endorsed cooperation and sponsored the creation of many cooperatives. William Sylvis, its president, declared that “Of all the questions now before us, not one is of so great importance, or should command so large a portion of our consideration, as co-operation… Co-operation is the only true remedy for low wages, strikes, lock-outs, and a thousand other impositions and annoyances to which workingmen are subjected.” The NLU even petitioned Congress to spend $25 million on establishing cooperatives. Many local unions in New England organized co-ops to support strikes or in the case of a lockout, but continued to operate them after the strike or lockout had ended. For instance, between 1866 and 1876, iron molders established at least 36 foundries and shoemakers at least 40 workshops, most of which were responses to failed strikes or lockouts. In fact, nearly all the important trades assayed cooperation in the years after the Civil War, including bakers, coach-makers, coal miners, shipwrights, machinists, blacksmiths, plumbers, tailors, printers, and many others.
The Knights of St. Crispin, a shoemakers’ union (excluding unskilled labor) that was founded in 1867, were equally zealous in their propagandizing for cooperative work. They were among the most powerful unions in the world: with over 50,000 members, by December, 1870 they had scores of lodges in Massachusetts, New York, New Hampshire, Ohio, Michigan, Pennsylvania, Indiana, Wisconsin, New Jersey, even California. Like other national unions of the period they were decentralized, and so they mostly left it to the initiative of local branches to found co-ops. But it was recommended that every lodge consider starting a cooperative workshop and a store. In Massachusetts, by 1869 the Crispins had organized between 30 and 40 cooperative stores; in the following years they organized workshops in New England, New York, New Jersey, and other states. The Crispins disappeared in the late 1870s, but the Knights of Labor would go on to form cooperative shoe shops in the 1880s.
The methods of financing and organizing all these workshops and stores varied. Since the labor movement was highly decentralized at the time, the initiative usually lay with the local branches of unions. These comprised mostly skilled workers and craftsmen hostile to unskilled labor and the development of industry because it threatened to deprive them of their livelihood and the pride they took in their work. (Mass unionization of “unskilled” workers did not come into its own until the late 1930s, with the founding of the CIO. Craft unions, organized by occupation rather than industry, were the norm at the end of the nineteenth century.)
So how did these craftworkers start all their co-ops? The main obstacle was and is the need for capital. One common tactic was to require workers to purchase shares of stock, which would earn a small dividend. Perhaps after a failed strike at a capitalist business, a dozen carpenters in a union would get together and decide to form a co-op. Often they wrote letters for advice to labor leaders like William Sylvis, John Samuel, and Thomas Phillips, inquiring, for example, as to whether it was better to distribute profits on the basis of shares owned or of labor performed. They might start a retail store as a way to accumulate capital for production. In the 1880s, local and district assemblies of the Knights of Labor oversaw the creation of cooperative businesses, and it became common practice to open a store first. Victor Drury, a French immigrant influential in the labor movement, recommended that products be sold in the store at slightly above cost, only until
we could sell at cost those commodities which we should produce ourselves as soon as we begin to manufacture. So soon as we could find sale for sufficient of the products of any of the industries we have mentioned to employ a few producers, we should establish a workshop or centre of production. For instance, if we sold sufficient bread and pastry to employ four or five bakers, we should immediately establish a bakery… We should then call upon the Trades’ Unions to furnish us with the most skilled and capable men in their special industries to direct these centres of production.
Drury was a member of the Knights of Labor’s District Assembly 49 in New York, which organized many cooperatives that were managed by a designated committee. It sold shares in an organization called the Solidarity Co-operative Association, which invested over $6000 in various enterprises. No interest was paid to the shareholders, nor did they have any control over the management of the firms; instead, the association would buy back the shares later and reinvest 50 percent of its profits in cooperation. By 1887, the Solidarity Association was running eight businesses, one of which had capital of $67,000 and employed over 100 workers.
Most of the cooperative businesses of the 1860s and 1870s—like many private enterprises—succumbed to one of the several depressions that rocked the nation in those decades, such as the severe slump of 1873. But the Knights of Labor picked up where the National Labor Union and the Sovereigns of Industry (among other groups) had left off, and it was in the 1880s that cooperativism had its greatest successes.
The Knights of Labor originated in the late 1860s and early 1870s in Philadelphia but slowly expanded into the rest of Pennsylvania and finally became a national organization with 750,000 members. It encompassed many trade unions and was organized geographically rather than by occupation. “The Knights attempted to organize all American productive workers into ‘one big union’ regardless of skill, trade, industry, race or sex and were divided into local, district and national assemblies, with a centralized structure”—although substantial autonomy was granted to local assemblies, which took the initiative in establishing hundreds of cooperative stores and factories. The national leadership was less energetic on this score than local leadership. The overarching purpose of the organization was, as its longtime leader Terence Powderly said, “to associate our own labors; to establish co-operative institutions such as will tend to supersede the wage-system, by the introduction of a co-operative industrial system.” To this end, the Knights lobbied politically, engaged in numerous strikes, lent their support to other radical social movements, and, of course, organized co-ops. Masses of workers genuinely believed that they could rise from being “rented slaves” to become cooperators in control of their work and wages, living in revitalized and stabilized communities, no longer subject to periods of unemployment. Cooperation was a religion for some of them.
In 1880 the delegates to the General Assembly earmarked 60 percent of regular dues for cooperatives; in the following years they also levied a compulsory monthly tax on members and subsequently a voluntary one. But in 1884 the Cooperative Fund was still only $974.52. On the other hand, the national leadership was willing to spend $20,000 over several years to support a coal mine that had been started by eight miners in 1883 after they leased a forty-acre plot. They ran into financial troubles and appealed to the Knights’ Executive Board, with the result that this Indiana mine became the first major production cooperative to be run directly by the central organization. As John Curl states, “the Knights intended the mine to be the first link in the economic backbone of the new society they planned to build.” However, after buying the land, equipping the mine, and laying railroad tracks to it, the Knights discovered that the railroad company would not connect their switch to the main track for nine months. Later they found out that they would have to provide their own switch engine, which they could not afford. Such problems accumulated, and in the end the Knights leased the mine and finally sold it.
As already noted, more successful than these centralized efforts were the hundreds of projects initiated by local assemblies or unions. Minneapolis in the 1880s was a particularly exciting place for cooperators, who were running 35 or 40 businesses. There were eight cooperative barrel factories, eight building-and-loan associations, two print shops, and one grocery store, shirt factory, house construction company, library, cigar factory, dry-goods store, laundry, and a 250-acre cooperative colony miles from the city. Most of these businesses were started between 1882 and 1886, when the Knights had a strong presence in the city, though some of the barrel-making factories dated from the ’70s. These came to dominate the city’s barrel industry; in 1887 they grossed over a million dollars’ worth of business and employed 368 journeymen-owners out of 593 coopers in the city. Evidently their methods of capitalization served them well: each of the sixteen original members of the first factory (in 1874) bought a $15-share initially and paid $5 to the business every week thereafter, which eventually allowed them to buy a shop near the railroad. New members had to buy shares, which they could purchase from departing members (if there were any). Through these simple means, and the high demand for barrels among millers, the business was able to expand and spawn others, until a veritable cooperative community developed which maintained admirable cohesiveness despite the mixture of ethnicities—German, Swedish, Norwegian, Irish, Italian, and American.
Incidentally, it’s worth quoting Albert Shaw, a nineteenth-century historian, on the salutary effects of cooperation among the Minneapolis coopers:
Coöperation has developed business capacity in the men which they were not aware of possessing because they had never tested it. The conduct of the shops from the governmental point of view may well encourage one’s belief in democracy. Sound judgment almost invariably prevails.... Dissension is almost unknown. Differences of opinion are not infrequent, but the will of the majority is acquiesced in without strain.... The coopers themselves are emphatic in saying that the moral effects of their coöperative movement constitute its highest success. It has unquestionably wrought a transformation in the character of these craftsmen. They are no longer a drunken, disreputable guild, figuring in the police courts and deserving the disfavor of the community. They have become a responsible and respectable class of citizens....
The key to their economic success, of course, was institutional support. This is always essential to the success of any oppositional movement. A rich network of mutually supporting institutions is necessary, helping each other with finances, publicity, organizational and recruiting work, “moral support,” etc. It is necessary to build a genuine community outside the mainstream. The Minneapolis coopers had this community, as testified by Shaw:
In Minneapolis there are men who are earning their living in a cooperative cooper shop, paying for their home through a cooperative building and loan association, buying their groceries at a cooperative store, and having their washing done in a cooperative laundry. Some of them perchance enjoy the advantages of membership in a cooperative neighborhood improvement association, obtain books and magazines from a cooperative reading club or library association, and so on. Many of them belong to societies and orders which have as their most practical feature a system of cooperative life and accident insurance.
However, the experience of the cooperative coopers is illuminating also with regard to the challenges they faced. For example, they had an ambivalent relationship with the labor movement and the Knights of Labor. On the one hand, the Knights provided institutional support and leadership. Indeed, the main reason cooperation failed in Minneapolis after 1887 was the organizational decline of the Knights. On the other hand, the cooperators were running a business and so did not always have the same interests as the journeymen coopers, the wage-laborers, who were employed in conventional workshops with bosses. At times they acted in solidarity with their fellow workers, while at other times their business interests put them at odds with the labor movement. Some of the cooperators even hired journeymen and machine operators in their shops and so became employers themselves. The Knights actually expelled the members of one co-op from the local Assembly for acting too independently vis-à-vis ordinary workers. Such conflicts are, as we saw in the last chapter, always a possibility given the ambiguous nature of the worker cooperative.
As the Knights expanded over the continent—especially after 1885, when they won a major nationwide strike against Jay Gould’s railroad company—worker cooperatives followed in their wake, at least 334 of them between 1880 and 1888 (according to one study), in 35 of the 38 states. Many were a response to the depression of 1883–85, when wages were cut on average 15 percent, causing workers to look to other sources for income. The businesses they started were not “factories” as we understand the term, with its connotations of mass production and assembly-line workers, but rather workshops in which skilled craftsmen or semi-skilled workers supervised themselves and each other, sometimes with an almost obsessive concern for democratic procedures. The minutes of general meetings attest to this preoccupation with democracy, given the insistence on having formal votes on almost every conceivable matter. Workers were always very reluctant to fire a fellow worker, and it seems to have happened in only the most exceptional cases.
Indeed, aside from their predictable sexism and racism, the attitudes and behavior of cooperators in the Gilded Age seem not to have differed substantially from those of cooperators eighty or a hundred years later, at least with respect to relationships in the workplace itself. There was the same emphasis on freedom and democracy, on realizing the inherent dignity of work, and the same struggle to reconcile cooperative ideals with the pressures of the market and hostility of conventional businesses. There was also a progressive desire to organize women, or for women to organize themselves: in Chicago, for example, women in the Knights of Labor organized twenty cooperatives in the clothing industry. Forty women established one such co-op after being locked out by their employer; they bought shares of stock for $10 each, distributed the profits equally among the workforce, and worked only eight hours a day.
There were, however, major differences between the respective upsurges of cooperativism in the 1880s and the 1960s, revolving around the fact that the earlier one was part of a broad-based labor movement, unlike the later. Thus, the skilled and semi-skilled cooperators during the 1870s and 1880s explicitly used cooperatives as a way to guarantee employment, and arguably they were more ambitious, with their revolutionary hopes for a cooperative commonwealth. Their ideology, of course, was not the educated middle-class countercultural and anti-authoritarian one of the 1960s’ youth movements but “laborist,” “producerist,” devoted to the Jeffersonian ideal of a republic of free laborers, mostly artisans and craftsmen. Some scholars have argued that this fact proves the Knights of Labor were “backward-looking” rather than truly revolutionary—that the future lay in mass production, not skilled labor or artisanry—but this criticism seems partly off the mark. It is true that the Knights were hostile to mechanization, just as workers were in the era of the AFL-CIO, because in both cases it threatened to put them out of a job or to result in the lowering of wages and the deskilling of work. If this aversion to the degradation and mechanization of work is reactionary, so be it. But it is also a source of such revolutionary demands as democratization of production-relations, cooperative organization of the economy, public ownership of industry, destruction of the capitalist class and its frequent tool the state, and other hopes cherished by hundreds of thousands of workers in the late nineteenth century.
In reality, the Knights of Labor were radical and conservative at the same time. They were genuinely progressive in their political positions, such as abolition of child labor, support for the eight-hour day, advocacy of public ownership of the railroads, water systems and utilities, support for the women’s movement and “equal pay for equal work,” attempt to organize all workers into “one big union,” and so forth. They were conservative insofar as they still exalted the ethos of artisanry and rejected, in their prescriptions for a future economic system, nationwide socialist institution-building, something like the plan put forward by Henry Sharpe when he was president of the Knights of Labor’s Cooperative Board in the mid-1880s. He saw that large-scale and long-term cooperativism could not work as long as co-ops remained isolated units in a market economy. Dependence on wages could not be superseded that way; competition would always remain a fact of life, as would, therefore, the downward pressures on wages, the necessity to mechanize and expand, the subjection to the business cycle, etc. Instead, the Knights of Labor had to create their own self-sufficient world of cooperation—“a great industrial union, self-employing, self-sustaining, self-governing.” The members, he said,
should be taught to look upon themselves as a “people,” or, so to speak, as a nation, and the legislative, the executive, the judiciary, the industrial, the police, the insurance, the educational and the charities departments should all be well defined, properly officered and actively employed. It is high time that members be found whose special aptitudes incline them toward one or the other of the departments, and who, finding therein a field for their activities, develop their aptitudes still further and become specialists.
In effect, he was advocating state socialism. While his vision was impracticable and arguably morally objectionable, it had at least one virtue: as Steven Leikin says, it accepted “the organizational realities of the new industrial economy.” It anticipated the elaborate bureaucratic structures of the twentieth-century state, and hence was in no sense “conservative” or “reactionary.” But the Knights refused to take cooperation to these limits. They would not consent even to compulsory taxes, much less to Sharpe’s vision of centralized authority. Insofar, therefore, as they desired a cooperative society but would not make an all-out assault on capitalism or commit to building a network of alternative economic institutions, they can perhaps be called unrealistic and conservative. Similarly, inasmuch as bureaucracy, statism, and mass production represented “progress,” the Knights, like anarchists and left-Marxists, were indeed ambivalent towards progress.
As it turned out, Sharpe was right. Cooperation succumbed to market forces, but even more to the war waged on it by the business classes. By 1887 the latter were determined to destroy the Knights, with their incessant boycotts, their strikes (sometimes involving hundreds of thousands), their revolutionary agitation, and their labor parties organized across the country. In the two years after the famous Haymarket bombing in Chicago and the Great Upheaval of 1886, in which 200,000 trade unionists across the country went on a four-day-long strike for the eight-hour day but in most cases failed—partly because Terence Powderly, the leader of the Knights, who had always disliked strikes, refused to endorse the action and encouraged the Knights not to participate—capitalist repression swept the nation. Joseph Rayback summarizes:
The first of the Knights’ ventures to feel the full effect of the post-Haymarket reaction were their cooperative enterprises. In part the very nature of such enterprises worked against them. The successful ventures became joint-stock corporations, the wage-earning shareholders and managers hiring labor like any other industrial unit. In part the cooperatives were destroyed by inefficient managers, squabbles among shareholders, lack of capital, and injudicious borrowing of money at high rates of interest. Just as important was the attitude of competitors. Railroads delayed the building of tracks, refused to furnish cars, or refused to haul them. Manufacturers of machinery and producers of raw materials, pressed by private business, refused to sell their products to the cooperative workshops and paralyzed operations. By 1888 none of the Order’s cooperatives were in existence.
Thus, by 1888 it had become evident that a national cooperative movement could not succeed in America, at least not in the absence of sustained, massive and violent attack on the wage-system, far more massive and well-organized than the Knights’ movement had been. As Henry Sharpe said, what they were doing was not realistic. Small workshops with little capital and obsolete machinery in an age of rapid industrialization; insufficient institution-building to give financial and material support to co-ops; enslavement to the market at a time when competitors would stop at nothing to suppress working-class moves toward independence. Especially with the weak leadership of Terence Powderly and the mass desertion of former Knights after 1886, as they lost strike after strike, the great dream of building a national cooperative economy was effectively over.
Farmers in the South, West, and Midwest, however, were still building a major movement to escape from the control of banks and merchants lending them supplies at usurious rates; agricultural cooperatives—cooperative buying of supplies and machinery and marketing of produce—as well as cooperative stores, were the remedy to these conditions of virtual serfdom. While the movement was not dedicated to the formation of worker co-ops, it is worth mentioning anyway because of its vast historical importance. In the late 1880s and early 1890s it swept through southern and western states like a brushfire, even, in some places, bringing black and white farmers together in a unity of interest. Eventually this Farmers’ Alliance decided it had to enter politics in order to break the power of the banks; it formed a third party, the People’s Party, in 1892. The great depression of 1893 only spurred the movement on, and it won governorships in Kansas and Colorado. But in 1896 its leaders made an enormous strategic blunder in allying themselves with William Jennings Bryan of the Democratic party in his campaign for president. Bryan lost the election, and Populism lost its independent identity. The party fell apart; the Farmers’ Alliance collapsed; the movement died, and many of its cooperative associations disappeared. Thus, once again, the capitalists had managed to stomp out a threat to their rule.
They were unable to get rid of all agricultural cooperatives, however, even with the help of the Sherman “Anti-Trust” Act of 1890. Nor, in fact, did big business desire to combat many of them, for instance the independent co-ops that coordinated buying and selling. Small farmers needed cooperatives in order to survive, whether their co-ops were independent or were affiliated with a movement like the Farmers’ Alliance or the Grange. The independent co-ops, moreover, were not necessarily opposed to the capitalist system, fitting into it quite well by cooperatively buying and selling, marketing, and reducing production costs. By 1921 there were 7374 agricultural co-ops, most of them in regional federations. According to the census of 1919, over 600,000 farmers were engaged in cooperative marketing or purchasing—and these figures did not include the many farmers who obtained insurance, irrigation, telephone, or other business services from cooperatives.
From the 1890s to the 1920s, cooperation had its home mainly in the agricultural sector. The sheer number of regional and national organizations devoted to cooperation in agriculture testifies to this. There was the National Farmers Union, the American Society of Equity, the Non-Partisan League in North Dakota, the Farmer-Labor Exchange, the Farmers’ Equity Union, the National Grange, Farm Bureaus all over the country—which in 1920 led to the American Farm Bureau Federation—to educate farmers on business methods and cooperation, many regional associations such as the California Fruit Growers Exchange (which became Sunkist), the California Associated Raisin Growers (now called Sunmaid), and the Missouri Farmers Association, and in the 1920s there emerged a variety of Communist farm organizations. Many of these associations had the financial and political support of the federal government, state governments, and business groups, who recognized that the atomistic, competitive model of classical capitalism was inappropriate to agriculture. The passage of the Capper-Volstead Act in 1922 was of great importance for marketing co-ops, since it determined that they did not violate the Sherman Act’s prohibition of organizations in restraint of trade. Because of this exemption, marketing co-ops no longer had to worry about the sort of legal harassment they had endured for years.
Consumer cooperativism, however—not to mention worker cooperativism—was not having much success around the turn of the century. In 1896 the American Federation of Labor decided to support consumer co-ops, but they did not become a priority of the labor movement. Many immigrant groups ran co-ops in the East and Midwest, and in the West there were several thriving associations, such as the Pacific Cooperative League, the Pacific Coast Cooperative Union, and the California Rochdale Company; but aside from these Western movements, and some Midwestern federations, there was little coordination or communication between co-ops. The Cooperative League of America was founded in 1916 with the mission of coordinating consumer cooperativism (although eventually it expanded its activities to apply to all co-ops). It joined the International Cooperative Alliance in 1917, and it exists today as the National Cooperative Business Association.
From the 1890s to the 1930s, worker cooperatives were almost entirely ignored by the labor movement. Neither the AFL nor the IWW had much interest in them; nor did the Socialist or the Communist Parties, nor even the Cooperative League. Labor activists seem to have learned their lesson from the fate of the 1880s’ co-ops. Not until the Great Depression and the self-help movement would there be a resurgence of a type of producer cooperativism, and this time the movement would be even more spontaneous and decentralized than it had been under the Knights of Labor. Consumer co-ops, too, would make a comeback; they had not fared well during the 1920s.
The self-help cooperative movement, which flourished between 1931 and 1935 but lasted in some form until 1938, originated not in production but barter. It involved the exchange of goods and services, with cooperators sometimes performing labor services on farms in exchange for meals. Productive associations, vaguely similar to worker co-ops, arose after 1934, oriented around such activities as butchering, plumbing, flour milling, logging and sawmilling, carpentry, dentistry, printing, furniture-making, coal mining, laundering, shoe-repairing, etc. Over the course of the movement, more than half a million families were affiliated with 600 self-help organizations in 37 states; about 250 of these were productive associations. The cooperatives thrived particularly around Los Angeles, San Francisco, Seattle, Salt Lake City, Denver, and Minneapolis.
The production cooperatives differed in at least one crucial respect from ordinary worker co-ops: they relied heavily on government funding and government assistance—$4,730,000 worth of funding. In 1933 a Division of Self-Help Cooperatives was set up in the Federal Emergency Relief Administration to administer the grants and set the rules that cooperatives receiving money would have to follow. One significant rule stated that no cooperatively produced goods could be sold on the open market. “In effect, a self-help economy was created which functioned separately from the open-market economy. These rules reflected the government’s desire to allow the cooperative sector to operate as long as the free market was not disturbed.” Evidently the government was comfortable with cooperatives insofar as they had a stabilizing influence on society and would provide a safe outlet for discontent.
The economic performance of the co-ops was not quite stellar, but it was not shabby either. Many or most of the workers were in their fifties or older—people who had particular difficulty finding employment—and so were less productive than the average employee in a comparable capitalist business. The cooperatives tended to be relatively small too, and grew but slowly. They were, however, a very cost-effective way for the government to provide relief to the unemployed, because it seems that, had these co-ops not existed, the government would have spent far more on relief than it did. (Families who were eligible for relief did not apply for it, instead relying on their cooperative income.) In addition, they provided a useful service as “rehabilitation” for the unemployed, who derived psychological benefits from working when otherwise they would have been idle and discouraged. Therefore, whatever one thinks of the government’s motives in supporting the co-ops, and their systemically stabilizing effects, it can hardly be denied that they performed a valuable function for the families affected.
In the end, the main lesson of the self-help co-ops may be that government assistance can be of great use to cooperators and societal innovators—as it was in Kerala, India—but they should be careful not to become too dependent on it. For then they are subject to the whims of bureaucrats, policymakers, and politicians, who may withdraw legislative and financial assistance if the political winds change. Government funding of self-help was not guaranteed and policies changed erratically, not always to the benefit of the co-ops. In any case, the movement lost much of its momentum after the Works Progress Administration was set up in 1935, providing employment for millions and thus obviating the need for the cooperatives.
The government also promoted cooperatives under the aegis of the Tennessee Valley Authority, in the mid- to late 1930s. As is well known, the TVA was conceived as a grand experiment in social reconstruction. It turned out to be quite successful, in no small part because of the fertilizer and electric cooperatives that the government helped set up. Indeed, the TVA served as the “incubator of the federally promoted and financed rural electrification program” that began in 1935, when only ten percent of the country’s farms were electrified. Dozens of electrical power cooperatives had already been set up in the Midwest between 1914 and 1930, but it was only with the Rural Electrification Administration that the problem was tackled on a large scale. In December 1935, 789,000 farms were being served by public and private utility systems; five years later, largely as a result of the REA, the number was 1,871,942. By 1940 more than half of rural America was still not electrified, but in the coming decades the job was completed.
Agricultural cooperation thrived during the 1930s, again due to New Deal initiatives. In 1933 the Farm Credit Administration set up Banks for Cooperatives, a program that created a central bank and twelve district banks; it “became a member-controlled system of financing farmer cooperatives, as well as telephone and electric cooperatives.” For the rest of the century, Banks for Cooperatives would prove an invaluable resource. Already by 1939 its financial assistance made it possible for half the farmers in the United States to belong to cooperatives.
With World War II and the end of the New Deal, and especially in conservative postwar America, cooperation in all spheres but agriculture plummeted. The political left went off to fight Hitler as the right gained control of the government and many unions. After the war the CIO was purged of Communists, dealing a huge blow to the labor movement. Through reactionary legislation like the Taft-Hartley Act, military and police violence against unions, imperialist foreign policy, McCarthyite fear-mongering, and other such devices that created a center-right consensus in the 1950s, the labor and cooperative movements were severely damaged. It was essentially a war of big business and conservative Republicans against the social and political legacy of New Deal America, a war in which centrist politicians and even liberal Democrats were complicit, due in large part to the supposed exigencies of the Cold War.
Nevertheless, all was not quiet on the worker-cooperative front. In Washington and Oregon a number of large cooperatives had been and were still being organized; these were the plywood co-ops discussed in the last chapter. They would go on to become the longest-lived cluster of cooperatives in the United States, lasting from the 1920s to the early 2000s (although dwindling in later years). The first one was called Olympia Veneer, organized in 1921: a bank loan of $25,000 was secured, and 125 shares of equity were sold at $1000 each to loggers, carpenters, and mechanics, in order to finance construction. The business did well, and shares were sold at a high price to outsiders. Soon the worker-owners were earning one-and-a-half times the pay of employees in conventional enterprises, due to their higher labor-productivity. Over time the co-op degenerated into something like a capitalist corporation, since non-member employees were hired and non-workers could buy shares. By 1952, 1000 non-owners were employed and the original plant had been sold to a conventional lumber company; in 1954 Olympia was sold to U.S. Plywood Corporation.
More plywood co-ops were formed just before World War II, and 21 were organized between 1949 and 1956. Over the course of their lifetime, the size of their workforces would be between 60 and 500. In the 1940s and ’50s the cooperatives accounted for 20 to 25 percent of total production capacity in the industry; in later decades their relative share declined as many more conventional firms were created and almost no new co-ops. On the whole, though, they continued to perform very well, as well as or better than their conventional competitors even during severe slumps in the industry. Their decline in the 1990s did not reflect problems with their cooperative organization but rather the overall decline of the regional industry. Conventional mills succumbed too.
Why were the plywood co-ops so successful? One reason is that they were formed in the growth period of a major new industry. As stated above, the cultural origins of the cooperators surely played a role too: the Scandinavian people have traditionally sought cooperative solutions to problems. Also, the Northwest had had a lot of experience with consumers’ and producers’ co-ops. These last two reasons point to the importance of a “collective memory,” a cultural memory, to the resilience of an oppositional culture. Examples are legion: the Knights of Labor was defending an artisanal, pre-industrial, Jeffersonian-republican ethos; the Italian working-class anarchists in Northeast urban communities at the turn of the twentieth century had recently emigrated from rural areas in Italy with rich communal traditions they carried over to the New World, and which served as a foundation for radical opposition to industrial capitalism; in the 1960s, SNCC had success organizing a civil rights movement in the South because it tapped into local traditions of participatory democracy, religion, empowerment through music and ritual, and small-town mutual respect and dialogue. Even in the 1990s, Mayans in North Carolina who had recently emigrated from Guatemala waged a long battle against their employer Case Farms, nourished and encouraged by their collective memories of rural community, mutualism, agricultural cooperation, and immersion in the Catholic church. All these dissidents derived their strength from the “radicalism of tradition” as it came into conflict with industrial society.
That fact would seem to have a discouraging implication with respect to the viability of contemporary and future struggles against capitalism, namely that they will not be very “resilient” because, in many parts of the world, the possibility no longer exists of grounding them in “tradition,” a “collective memory,” “precipitates of past historical experience.” These precipitates, after all, have largely been erased by late capitalism. However, I think the conclusion is unwarranted. As will be evident from the following chapter, I think a good way to conceptualize radical movements is by dividing them into those that proceed in large part from the “radicalism of tradition” and those that do not obviously draw sustenance from past historical experience but instead grow out of mature capitalism itself. These two categories are of course merely ideal-types, and actual social movements might not always fall clearly under one or the other. But examples of the “non-traditional” kind of movement would be the anti-war, the feminist, the environmental, and the Black Power movements of the late 1960s. Currently, the vast global movement symbolized by the World Social Forum is, on the whole, a clear case of the “mature” sort of anti-capitalist radicalism, the unequivocally progressive sort (as opposed, for instance, to the Knights of Labor, which was in some respects reactionary). These latter-day movements have been quite resilient, some lasting decades and instigating major changes in culture and politics.
Karl Marx had little to say about the traditional, “primitive” sort of radicalism, and in fact the utilitarian, Enlightenment-derived, “progress”-fixated, rationalistic and economistic bias of Marxism makes this theory not a wholly adequate framework for understanding them. Historical materialism as a sweeping theory, at least, tends to downplay the significance of “culture” and cultural residues, just as it has little interest in the psychological motivations that actually guide actors, emphasizing instead the latters’ structural locations in the economy and the utilitarian interests that these locations dispose them to pursue. This framework has its deficiencies, but it is more appropriate to the analysis of “modern” radical movements than “archaic” ones. In particular, it is a powerful tool for interpreting, first, “modern” struggles between capital and labor, with regard to which considerations of culture and tradition are decidedly subordinate to the objective facts of structural location, and secondly, the future evolutionary transition to a post-capitalist society. (See chapter four.) It is precisely the latter that Marx intended his theory to explain. Archaic cultural residues will be less relevant to this evolution, which, if it happens, will be propelled overwhelmingly by the economic conditions of late capitalism.
In another sense, however, “collective memory” has always been and will always be essential to every oppositional movement, inasmuch as the movement has to educate itself, remember its past experiences and learn from them, maintain and expand on its institutional innovations, build up economic, social, and cultural bases of resistance. The plywood cooperators came from a subculture that had already experimented with consumers’ and producers’ co-ops, which made their new venture that much easier. Another reason for their success is that the first few co-ops provided a “template” that later organizers could use. This, too, is an important lesson for contemporary cooperators.
Another lesson lies in the fate of many of these cooperatives: due in large part to their success, they degenerated into semi-capitalist corporations. Some of them were actually sold to conventional enterprises, but apparently all of them used hired, non-member labor much of the time. As stated in chapter two, they did not want to increase the number of worker-owners by creating new shares, because that would have entailed a loss of income for the current members. So the firms that wanted to expand simply hired employees who were not allowed to participate in decision-making and had vulnerable, often temporary jobs. They were effectively second-class citizens in the plants—and they sometimes constituted almost 50 percent of the workforce. This clearly interfered with a culture of cooperation. In fact, what sometimes happened was that when a member retired, his share was not sold to a new worker but instead bought back by the firm, so that each member would have a somewhat higher annual income. The result was that the membership, i.e., the class of owners, gradually shrank as the class of hired labor expanded. For example, during the first five years of Olympia’s operation (1923 to 1928), 100 non-members were hired, as the number of worker-owners dropped from 118 to 92.
This capitalist mentality was evidenced also in the fact that these co-ops did not participate in cooperative social movements and were founded purely for the sake of providing employment to members. They had no strong ideological commitment to cooperation; they rarely even linked up with one another for political, economic or ideological reasons. Each enterprise was simply “one big family” (with the exception of the hired labor) united against a hostile outside world. As mentioned earlier, therefore, it is essential that co-ops maintain a connection with social movements if their cooperative identity is not to erode. No great social change will happen if cooperatives simply speckle the economic landscape atomistically, even if there are quite a few of them; they have to actively spread their ideology, spawn new co-ops, maintain ties with the labor movement, fundraise continually, agitate politically for grants and favorable legislation, look to progressive social experiments being undertaken in other parts of the world and learn from them or contribute to them. Besides, it is likely that the more connections they have with each other, the smaller is the possibility that they will fail economically.
The next great wave of cooperatives after the 1930s adhered to some of these principles, and was in any case the very antithesis of what the plywood mills represented. I’m referring to the movements of the 1960s and ’70s. The perennial question arises: what caused these movements? At first glance they seem to have appeared out of nowhere. That is not true, of course; rumblings in the 1950s and earlier anticipated them. In the South, black activists in the 1940s and ’50s were establishing connections with each other, testing the limits of repression, registering voters (voter registration increased fourfold, eightfold, tenfold even by the early 1950s); the NAACP became increasingly active prior to and after Brown v. Board of Education, and its membership expanded. Conflicts escalated between whites and blacks as the latter grew in collective confidence. At the same time, urban centers in the North were incubating the counterculture, notably Greenwich Village and San Francisco, where artists, students, intellectuals, and dissidents of all sorts came together in loose communities. In the late 1950s and early 1960s, these movements reached a critical mass and exploded into the national spotlight.
Ultimately, the explanation for what was happening lies mainly in the advance of the productive forces and their bursting the shackles of certain conservative production relations. In the South, for example, tractors appeared during the First World War; later, flame cultivators cleared land more cheaply than laborers did; a cotton harvester came into use during the 1940s, which did the work of forty cotton-pickers. In short, cotton production was being mechanized. At the same time, “competition from synthetics and cheap foreign cotton made cotton a less valuable crop.” Plantations needed fewer and fewer laborers, and so there was less economic need to control blacks, “either through the near-peonage of sharecropping or through violence.” Millions of them migrated to Northern cities, while the rest tended to become more socially assertive—not least because the rise of radio and television, as well as the mass mobilization for the Second World War, lessened their isolation from the rest of the world, encouraging activism to enact freedom and equality. Northern cities became more populous and diverse, which fostered creativity and dissent, as Southern cities became more overtly conflict-ridden.
The movements that sprouted from this soil, including the civil rights, anti-war, women’s, students’, environmental, and anti-nuclear movements, translated their concern with freedom and democracy into organizational arrangements that revolved around the “collective.” In a broad sense, a collective is just a small group that embodies participatory democracy; it is a form that can be adapted to many uses, from education and childcare to art or law. It was nearly ubiquitous in the 1960s—Freedom Schools, informal leadership committees, law collectives, communes, underground newspapers, cooperative housing, “food conspiracies,” free medical clinics in Chicago and Oakland administered by the Black Panthers, the latter’s Liberation Schools, free breakfast and clothing programs, free stores in San Francisco, music and art groups, “free universities” offering unorthodox courses, etc. And there were hundreds of worker collectives, and even more consumer co-ops.
John Curl summarizes the evolution of 1960s’ worker collectives:
The earliest collective businesses were mostly connected with radical communication media: presses, bookstores and film. This reflected the explicitly political movement from which they emerged. They were followed by food-related cooperatives in the late 1960s, and artisan/industrial collectives and cooperatives beginning around 1970 both in urban and rural areas. These differed from earlier American industrial cooperatives and co-op stores mainly in that they chose worker control through the collective consensus decision-making system, rather than the majority-rule managerial system predominant since the early 19th century.
I cannot discuss the sixties and seventies in great detail here. Much of the history is common knowledge or is easily accessible. The rise and partial fall of food co-ops is illustrative and perhaps most worth looking at: “Of all the countercultural organizations, they became the most interconnected, the most developed ideologically and…had the most far-reaching effects.” Between five and ten thousand of them were organized in the late sixties and seventies, at the end of which decade they had an annual volume of about $500 million. Some were controlled by their workers, others by their workers and customer-members. Many began on college campuses but spread to working-class and middle-class neighborhoods as food prices skyrocketed in the 1970s, rising almost 50 percent between 1972 and 1976. The cooperatives’ goal was, first, to provide healthier, less expensive food to their communities, and second, to create a radical alternative to the dominant system. The movement developed dozens of cooperative warehouses around the country to help supply the stores, since most co-ops could not buy in sufficient bulk for established wholesalers to do business with them. Trucking collectives helped connect the system of alternative wholesalers, co-ops, and regional federations on both coasts and in the Midwest.
When one considers the forces against them, it is remarkable how much the cooperatives accomplished. As always, the main obstacle was lack of money. Sometimes organizers had to knock on doors in their communities to fundraise before creating a store, or hold benefits such as dances. When the co-op got started it was often able to sell some food (not all) more cheaply than supermarkets because its members were not concerned with making a profit, and their business had little overhead. Some customers would be recruited for volunteer labor, but most importantly, workers paid themselves very low wages. Without this extreme “self-exploitation,” most co-ops could not have lasted long or offered food at such low prices.
The food co-op movement, insofar as it can be called a movement, declined in the late 1970s. Co-ops could not compete with corporate supermarkets at selling processed foods or meat, or having a high volume of products. They became specialty stores that customers would patronize to buy natural and wholesome foods before skipping over to the local supermarket to buy everything else. Cooperators found that in order to remain in business they had to expand—which meant compromising their principles and led to bitter ideological fights. Even if they were able to expand, which they usually weren’t, they were often still too small to remain financially viable for long, and with the low wages, workers “burned out” after a few years. There was also a chronic shortage of business experience. Financial problems were sometimes not taken seriously until it was too late. Some of these failures could have been mitigated had more cooperative networks been established across the country, but participants in the movement had too many different ideologies and goals to work together in a sustained way. Some had political agendas, others were committed only to running a store. “The co-ops in Minneapolis,” said one participant, “are very isolationist.” This was true almost everywhere.
Surveying the terrain of New Left movements in the sixties and seventies, one is led to several conclusions. Most of these movements seem to have gone wrong in similar ways, due to similar causes. State violence and repression were instrumental in some cases, especially regarding those few movements, such as Black Power, that explicitly challenged the class structure. More widespread in its counterproductiveness was ideological sectarianism. The bitter factional infighting that erupted in the late sixties and early seventies drained energy from networking and coordinating dissent. Often participants could not agree on their overall aims, or even their immediate aims. Even more importantly, the movements that attempted to create such alternative institutions as cooperatives and communes suffered from an inevitable lack of capital; in the end, the organizations that survived, whether in the media—like the Village Voice and Rolling Stone—or in the food industry, had to follow the rules of the dominant system. Idealism and inexperience lost out to pragmatism and business acumen.
On a deeper level, the fatal flaw in the New Left was that it did not set out to change the dominant mode of production in any comprehensive or competent way. One cannot have a true “social revolution” without radically transforming the class structure, which is the foundation of society’s institutional structures in general. The sixties’ movements, by and large, focused on culture and politics while neglecting the economy, thus vitiating their long-term goals. They were more interested in “sexy” things like culture, ideology, and politics than the hard work, the decades-long work, of building up a new economy. Of course, this could not have been done anyway; structurally it was impossible at that time, and even now it will be decades before the transition from capitalism to a more cooperative mode of production, if it takes place at all, will reach a very visible level. Nevertheless, the absence in the 1960s of an alliance between the labor movement and the New Left—indeed, the outright mutual hostility —suggests the latter’s “superstructural” nature, as it suggests the former’s bureaucratic ossification and conservatism under George Meany and the old guard.
The fate of the New Left shows that the way to a new society does not lie with sectarian ideologizing. It lies with protracted economic evolution, coordination of sustained economic and political struggles, the slow accumulation of financial and human resources—nothing so culturally fixated and impatient as the movements of the 1960s. They were a product not of the impending demise or decrepit nature of capitalism, as many hoped, but of transformations in production relations and technologies (most obviously in the South), population movements, the complex of federal, state, and local housing and tax policies that fostered “white flight” to the suburbs and left inner cities to rot, the spread of media that connected distant regions to an unprecedented degree, the partly resultant elevation of the problem of poverty into the national consciousness, the U.S.’s waging of an unpopular war in Vietnam, and many other circumstances.
All this time, mainstream cooperatives were making quiet progress. Credit unions, for example, which had been given legal foundations in the early decades of the century, spread after World War II. By 1969 there were nearly 24,000 credit unions, and a decade later they had 43 million members. Housing co-ops, which date to the beginning of the century, expanded in cities during the 1960s, many of them partly financed by the Department of Housing and Urban Development. Agricultural cooperatives (in marketing, buying and selling, etc.) continued to thrive and merge into ever-larger units, even as the number of farmers shrank. In 1955 there were 8100 farmer cooperatives with 7.6 million members; in 1979 there were 7500 cooperatives with fewer than 6 million members. Most rural inhabitants were no longer independent farmers but wage-earners for agribusinesses, part of the rural proletariat. As for worker co-ops, John Curl estimates that their U.S. membership reached its peak in 1979 with about 17,000 people. There were 750 to 1000 small co-ops and a number of larger ones, including 18 plywood co-ops and a reforestation cooperative called Hoedads with 300 members.
The Reagan years were not kind to cooperatives, as they were unkind to the whole labor movement and in fact to oppressed people everywhere in the world. It was a terrible decade, the first full decade of neoliberal attacks on the global population. Still under the influence of conservative Meanyite traditions, the U.S. labor movement remained ambivalent to worker-ownership as manifested in employee buyouts, ESOPs, and cooperatives, opposing the blurring of the line between employees and management. Ever since the AFL had endorsed collective bargaining and rejected worker cooperatives in the late nineteenth century, this had been the standard line. It began to change in the late 1970s as union officials and local communities experimented with employee buyouts as ways of preventing plant shutdowns and saving jobs. But in most cases the traditional adversarial relations between workers and bosses remained despite majority employee-ownership, and often buyouts could not prevent the failure of a plant anyway. Stock ownership plans have become increasingly popular since the 1980s, but usually they have little in common with worker cooperatives, since employees typically do not control the firm even if they own most of its stock. Arguably they are of more use to management than to ordinary workers, being ways of raising capital and of giving employees a direct stake in the company’s success (which is supposed to motivate them to be productive) Gar Alperovitz may be right, however, that in the long run ESOPs have great transformative potential, as employees demand more control over the companies they own.
Recessions and a hostile political environment led to the relative decline of consumer and worker co-ops in the 1980s and, to a lesser extent, the 1990s, but in some areas in the latter decade co-ops began to come together in federations or sponsored the creation of supporting institutions. San Francisco’s Network of Bay Area Worker Cooperatives, founded in 1994 to connect dozens of co-ops, is an exemplar of that trend, and it continues to spawn new businesses and affiliate with others. The National Cooperative Bank, chartered by Congress in 1978, provided assistance to cooperatives throughout these years; its total assets as of December 31, 2012 were $1.7 billion. Unfortunately it does not often provide loans to worker cooperatives, focusing instead on consumer co-ops, housing, ESOPs, community development corporations, and sometimes even fast-food chains like Dunkin’ Donuts (which qualifies as a business cooperative under NCB’s definition).
Recently the prospects for cooperatives in all spheres, all over the world, have become brighter than ever. The United Nations and affiliated institutions have repeatedly proclaimed that cooperatives are a crucial component of the plan to meet the Millennium Development Goals by 2015. From dairy cooperatives in Bangladesh, water cooperatives in Bolivia (to give people access to safe drinking water), and a revitalized consumer cooperative sector in Russia, to tenant takeovers of abandoned housing in New York City and cooperative care of the elderly and disabled in Wisconsin and New York, the movement is making life livable for millions and spreading an anti-capitalist ethos. Indeed, as stated in this book’s Introduction, we seem to be in the early stages of a renaissance unlike any in the history of cooperativism.
As will be clear from the following chapter, this renaissance is not some accidental or inexplicable thing. Forty years of savage neoliberal assaults on workers’ rights have decimated civil society and discredited conventional approaches to fighting capitalist power. The old paradigm of bureaucratic business unionism, a narrow focus on wages and collective bargaining, and reluctance to fight for broader issues of social justice has failed catastrophically. New strategies are desperately needed and have begun to be pursued, even by such former strongholds of conservatism as the AFL-CIO. Unions that used to follow the motto “We’ll get it done ourselves” are now allying with women’s groups, immigrant organizations, environmental groups, and community groups of all kinds to fight for mutually beneficial goals like environmental protection, immigrant rights, a higher minimum wage, and improved public education. The innovative strategy of “minority unionism” is spreading: rather than organizing a majority of workers at one business and then holding a vote for union recognition, a minority of workers at multiple businesses are organized to engage in militant, public actions that dramatize grievances, galvanize political action, and hopefully force employers to make concessions while attracting more workers to unionism. Recent strikes at Walmart, in the fast-food industry, and for a 15-dollar federal minimum wage have followed this model. Progressive unions are reaching across national borders to create transnational alliances--a long-delayed necessity in this age of globalization. New models are emerging of “regional power-building,” the construction of durable coalitions between unions, local labor councils, progressive business groups, and other civil society organizations. In this context of free-wheeling experimentation to address labor’s woes, the spread of cooperativism and worker ownership is one of the most exciting developments. The sophistication of current projects is striking: in particular, institutions have learned the lesson that nothing is more important than to make connections with each other to birth new co-ops.
For instance, the United Steelworkers union and Mondragon announced in October 2009 that they were collaborating to establish manufacturing cooperatives in the U.S. and Canada, an agreement that USW president Leo Gerard called “a historic first step towards making union co-ops a viable business model.” In March 2012, the USW, Mondragon, and the Ohio Employee Ownership Center jointly announced the publication of their detailed template for union co-ops, which sets out an organizational structure that can be replicated by other unions interested in starting co-ops as a way to save jobs and communities. The template is based on Mondragon’s structure but with the key innovation that a Union Council (in place of Mondragon’s Social Council) is empowered to collectively bargain with the management team on such matters as compensation and working conditions. That is, worker-owners elect a Board of Directors that appoints a management team to oversee the business’s day-to-day operations and to engage with the Union Council on matters pertaining to employee rights and welfare. All the members of these bodies are required to be worker-owners themselves. The template, which also includes guidelines on ownership structures, financing, education, training, etc., is flexible enough to be appropriate for businesses of from ten workers to thousands of workers.
The USW, along with SEIU and other unions, is already involved in a number of cooperative initiatives. For instance, it is helping to launch the Pittsburgh Clean and Green Laundry Cooperative, a new industrial laundry that will employ a hundred people. “Under the union-cooperative model,” Amy Dean writes, “the laundry’s employees would be able to join the union of their choice, and the jobs offered at the plant would provide a living wage, benefits, and a collective bargaining agreement. As worker-owners, the employees would also gain equity in the business.” Pennsylvania’s Steel Valley Authority, which has been integral to the project, describes its ambitions as follows:
It would be our intent to create worker ownership initiatives across the Pittsburgh region and examine the potential for expanding this initiative state and region-wide, and over time, explore opportunities for national replication. In order to accomplish this, the SVA is exploring the development of a dedicated center that provides technical assistance, a revolving loan fund that provides early stage capital for new co-op businesses, and a training program that provides specialized training for company leadership....
All these ideas are taken, in part, from Mondragon, which is collaborating with the SVA.
Another example of the USW’s activism is its support of the Cincinnati Union Cooperative Initiative, which is developing a railway manufacturing co-op, a co-op for retrofitting buildings for energy efficiency, and a “food hub” called Our Harvest that allows institutions “to buy produce that is grown, harvested, and packaged by worker-owners.” Our Harvest, which is in partnership with the United Food and Commercial Workers union, is already in operation: food is grown on a 30-acre farm in an urban neighborhood, though plans are underway to get a thousand acres’ worth of production going.
As Rob Witherell of the USW notes, union-affiliated projects like these are springing up all over the country, from Seattle to New York. “One of the nice problems we have,” he says, “is trying to keep track of it all.” This “problem” is a happy indication that the U.S. labor movement, in the footsteps of Latin America’s, Canada’s, and Europe’s, is finally starting to take seriously the enormous potential that cooperatives have as both job-saving devices and means of pushing society in a progressive direction. Not since the 1880s, in fact, have mainstream American unions been so actively involved in either worker cooperativism or what has come to be called “social justice unionism” (or “social movement unionism”).
One of the success stories that has inspired this recent flurry of activism is the Evergreen Cooperative Initiative in Cleveland, Ohio. So successful has it been that in 2010 it was featured on NBC Nightly News, which glowingly reviewed its efforts to revitalize an impoverished community on the east side of the city; it has also been the subject of articles in the Economist, Business Week, the Nation, Time, and dozens of less prominent media outlets. The reason for all this hype is that it has provided a new and ambitious model for reversing economic decline in a blighted area of the Rust Belt. The project came to fruition in 2008 when several local institutions (including the Cleveland Foundation, University Hospitals, Case Western Reserve University, and the municipal government) teamed up with the Ohio Employee Ownership Center and the Democracy Collaborative at the University of Maryland to establish a network of worker-owned businesses modeled on Mondragon’s federated structure. The goal was, and is, to create ten co-ops and five hundred living-wage jobs for local residents. With the help of millions of dollars in grants, three businesses had been created as of 2013: Evergreen Cooperative Laundry, Evergreen Energy Solutions, and Green City Growers Cooperative (supposedly the largest urban food-producing greenhouse in the country). Technologically these are cutting-edge enterprises, committed to being the greenest firms within their sectors. They are also very profitable, in part because they’ve attracted the business of hospitals and other local “anchor institutions” that are trying to reduce their carbon footprint (and keep their money within the community). To help start new co-ops, each of the businesses is required to pay ten percent of its pre-tax profits into a Cooperative Development Fund--a practice that is modeled, again, on Mondragon.
Perhaps as noteworthy as these glimmers of a new movement is the fact that worker cooperatives are faring comparatively well in our stagnant economy, on average better than capitalist businesses. An ILO report in 2009 concluded that “Financial cooperatives remain financially sound; consumer cooperatives are reporting increased turnover; worker cooperatives are seeing growth as people choose the cooperative form of enterprise to respond to new economic realities.” Cooperative banks, not being driven purely by the profit-motive, had little incentive to give risky loans; 2008 was in fact a record year in many respects for credit unions, some of which are among the largest banks in the world. Regarding other types of cooperatives, there has lately been an increase in their formation rates, and, as noted earlier, they have tended to last longer than conventional businesses.
A 2012 study by the (cumbersomely named) European Confederation of Worker Cooperatives, Social Cooperatives and Social and Participative Enterprises reaches similar conclusions. The record has not been uniformly positive across Europe, but in general cooperatives have been more resilient than conventional enterprises. Their members mostly attribute this fact to the “participation of members in the management of the cooperative, the build-up of reserve funds, the connection with territorial needs and the participation of the community, the capacity to organise and follow-up business transfers to employees, mutual aid and horizontal groups and consortia among cooperatives. In particular, the establishment of horizontal groups and consortia is considered by members as being an important instrument to support innovation and competitiveness for small and medium sized worker and social cooperatives.” The number of worker cooperatives in the UK actually increased during the crisis, from 373 in 2007 to 541 in 2011. In March 2013 the Financial Times had an article titled “Economic crisis spawns co-op revival,” which observed that the total number of cooperatives had risen by 23 percent since 2008, about the same rate as their growth of revenue.
One of the lessons of such developments is that as oppressed people and their advocates find traditional avenues of reform closed to them, they will be forced to invent revolutionary new solutions such as worker cooperatives. This is what the Latina immigrants in Natural Home Cleaning and Home Green Home Natural Cleaning have done, as well as those involved in the emerging New York City Co-op Network, and the Evergreen cooperators and many others. They have all been stymied in their attempts to seek help through conventional channels. Economic outcasts like these will continue for decades to network with each other outside the mainstream, accumulating resources on behalf of cooperativism, building up an alternative civil society alongside a decaying capitalist order. The system itself will drive them to these extremes; it will produce its own gravediggers as it collapses in old age. And the long, tragic history of cooperatives will finally be consummated: it will be rescued and celebrated as a glorious harbinger.