Cuma, Şubat 06, 2015

Weighing Workers' Cooperatives

Weighing Workers’ Cooperatives

As a rara avis in capitalist flora, the value of worker cooperatives are beyond dispute. Definably, being business entities which are owned and controlled by the workers, these quasi-social enterprises promise a way different business organization. Theoritically, profit maximization is overrided as worker cooperatives generate employment for their member workers. These enterprizes are diffentiated as they allow workers to ponder upon and make decisions on operational issues. While doing this, workers benefit from openly held consensus-making processes, in which each associate can articulate their opinions freely. To further, As Proudhon divulged, every associate has an indivisible share in the property of the company. Each worker takes his/her share of the heavy and repugnant tasks. Each to go through the gamut of operations and instruction, of grades and activities, to insure that he has the widest training. Workers must go through all the operations of the industry they are attached to. Office-holders should be elected and regulations submitted to the associates for approval. Remuneration to be proportionate to the nature of the position held, the degree of skill, and the responsibility carried. Every associate to share in the profits in proportion to the service he has given. Each to be free to set his own hours, carry on his duties, and to leave the association at will (Proudhon cited in Guérin, 2009).

Cooperative movements are known to spring to life as early as 19th century. As adversarial waves, they came about in the midst of an economical conjuncture, in which surplus value appropriated in the pure Machevellian modus operandi. However, iron laws of capitalism undermined further expansion and survival of these enterprises. To this effect, we should evoke a thought of line presciently suggesting the immanent laws preponderated in capitalist mode of production, which leads alternative modes of production to degeneration or dissolving. I assume that we may appeal to Marx and Luxemburg to further detail this thought of line. Being explicitly sympathetic to the movement, Marx asserted that by deed and instead of argument, they have shown that production on a large scale, and in accord with behests of modern science, may be carried on without the existence of a class of masters employing a class of hands; that to bear fruit, the means of labor need not be monopolized as a means of domination over, and of extortion against, the laboring man himself (Marx, 1864). On the other hand, adopting a holistic perspective, Marx aimed to shed a light at the flip side. He acutely argued that these firms “as transitory and inferior forms, are destined to disappear before associated labor plying its toil with a willing hand, a ready mind, and a joyous heart” (ibid). Resoundingly, Luxemburg- in her pamphlet Reform or Revolution- posited that worker co-ops “can be described as small units of socialized production within capitalist exchange. But in a capitalist economy exchange dominates production and, as a result of competition, ruthless exploitation, i.e. the complete control of the production process by the interests of capital, becomes a condition for the survival of each enterprise (Luxemburg, 1908, pp. 45-46). She claimed that “the domination of capital over the process of production expresses itself in the following ways; Labour is intensified. The working day is lengthened or shortened, according to the situation of the market. And, depending on the requirements of the market, labour is either employed or thrown back into the street” (ibid). I believe that by relying on arguments reflected by Marx and Luxemburg, we may continue to conretize the issue at hand. W emay begin with pricing strategy in the framework of capitalism. It is beyond the shadow of a doubt that pricing strategy stipulates conventional capitalist firms to come up with a pricing policy linked with aspects ranging from development and circulation of commodities to advertising materials, warehouse locations and such. Workers cooperatives can hardly exist without a pricing strategy either. Pricing strategy is a sine qua non to produce value. Value is a sine qua non imperative of capitalist mode of production. Value must be produced and reproduced to survive in free market. For small units of worker ventures to survive, certain amount of work loads must be ensured. With an attempt to maintain steady work loads, worker cooperatives- amongst other things- always seek for a good bargain in the market. As one simply predicts, striking a good bargain will legitimate and build further on the exploitation of the usual suspects; laborers at other competing firms. From another angle, slashing variable capital entails worker cooperatives to outsource the production processes. Thanks to deepining molecularity, production processes are more fragmented than ever. This, in turn, may encourage worker cooperatives to contract capitalist firms as subcontractors. These companies unwaveringly offer low-cost labour, such as those in under-developed South. This will legitemate and build further on so-called First World tendencies to colonize the labour force by means of finance capital.      
Ensuring steady work loads requires reproduction and absorption of surplus value. As widely known, firms can not effectuate re-investments relying on internal financing from profits only. However, as Vanek demostrated, workers may/do not want to re-channel the turnover as they have incentives to claim higher wages which may result in complete disregard to re-invest in cooperative (Vanek, 1977). Refusal to re-invest leads to under-investment and discontinuation of the enterprise. To eliminate this, worker cooperatives intend to get external financing; generally in the form of bank loans. However, according to Artz and Kim, worker cooperatives will face difficulties with obtaining a bank loan given the general unfamiliarity with the structure of these firms. Unfamiliarity to evaluate the risks and profitability of these firms are also of concern for outside financial support (Artz and Kim, 2011, p.24). With this in mind, these enterprises are very likely to fail to secure structural reproduction, or simply go shrunk or resort to a merger with capitalist firms. As on the map, consolidation and merger of enterprises cause an inevitable degeneration; the capitalization.   
Worker cooperatives must persuade their customers. In order to do this, they must promote their business. Well, how can they do so? They must simply be active and visible in their community. That they define and accordingly adress their customer portfolio will surely make a huge difference. Customers want to let know why they should choose same product over another. To achieve this, worker cooperatives must develop a coherent marketing strategy and set realistic targets. All in all, this will require an extensive market research conductable in the purest competitive, capitalist sense. What do I mean by this? For instance, you must collect data about competing firms whether cooperatives or those capitalists. You must be well aware of human psychology and draw on bourgeoisie science so that you can develop an insightful attitude towards your potential customers. You must adopt an adequate marketing rhetoric so that your products find a buyer. You must figure out the scope of your customers and pursue national or global consumer markets; only to survive. In short, this will disempower worker cooperatives to do business in an alternative/different manner. They can not derail and show great deal of enthusiasm to challange the game within predefined margins.

If we re-route to the history, we will see that worker cooperatives are sometimes stimulated by regressive regimes. As Marx stressed, plausible noblemen, philanthropic middle-class spouters, and even keep political economists have all at once turned nauseously complimentary to the very co-operative labor system they had vainly tried to nip in the bud by deriding it as the utopia of the dreamer, or stigmatizing it as the sacrilege of the socialist. To save the industrious masses, co-operative labor ought to be developed to national dimensions, and, consequently, to be fostered by national means (Marx, 1864). Justifying Marx, in the 1960s, the labor minister of Spain’s fascist dictator General Franco awarded the Gold Medal for Merit in Work to Mondragón’s Arizmendiarrieta. Decades earlier, in fascist Italy, Benito Mussolini established the National Fascist Cooperative Agency (Ente Nazionale Fascista della Cooperazione) and encouraged the expansion of cooperatives in the farming and food processing sectors as a way to downplay class differences (Gasper, 2014). Worker cooperatives may be incited with nationalistic motives at the expense of labor class unity. This, in turn, does harm to class consciousness. Class solidarity gets hurt due to artifical discriminations.

A brief self-reflexion instead of a conclusion

Hitherto, I have had to discuss self-management or workers’ cooperatives in a commercial-laden context. However, I have realized that I am shackled by the mainstream lexicography of business. Once we begin to frame self-management in such context, we will do nothing but to misrecognize it. Self-management can never be reduced to commodities or services; be it laissez faire or socialist market economy. It is a coherent overarching concept. It should be understood in a way of social organization. A different mode of social organization which envisages self-management of individuals in every respect of ever day life. It should be understood and organized at a macro structural level. Otherwise, it discursively mis-signifies factories without bosses which serves to render self-management almost meaningless.     
Erhan Özcan                  

Works Cited
Artz, G. and Kim, Y. (2011). “Business Ownership by Workers: Are Worker Cooperatives a Viable Option?”, Presented as Working Paper at Dept. Of Economics in Iowa State University
Gasper, P. (2014). “Are Workers’ Cooperatives the Alternative to Captalism?”,

Guérin, D. (2009). “Anarchism: from Theory to Practice”,
 Available from 

Luxemburg, R. (1908). “Reform or Revolution”,

Marx, K. (1864). “Inaugural Address of the International Working Men’s Association”, Available from

Vanek, J. (1977). “The Labour Managed Economy: Essays”, New York: Cornell University Press

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