Marx thinks of it — that is, that kind of society where the " workers as an association are their own capitalist,"* so that, if it necessarily reproduced all the faults of the present system, yet it did away in fact with the antagonism between capital and labour and thus proved the superfluousness of the capitalist employer. Yet experience has since taught that industrial co-operation constituted in just that kind of way was not, and is not, in a position to produce this proof; that it is the most unfortunate form of associated labour; and that Proudhon was actually in the right when, in regard to it, he maintained against Louis Blanc that the associations were " no economic force, "t The social democratic critic has sought hitherto the causes of the economic failure of the purely productive co-operative societies simply in their want of capital, credit, and sale, and has explained the decay of the associations that have not failed economically by the corrupting influence of the capitalistic or individualistic world surrounding them. All that is to the point as far as it goes. But it does not exhaust the question. Of quite a series of productive associations that have failed financially, it is quite certain that they had sufficient capital for f If Proudhon appears sometimes as a decided opponent and sometimes as a supporter of co-operation, this contradiction is explained by his having at one time quite a different form of co-operation in his mind than at another. He refuses to the essentially monopolist association what he admits to the mutualistic association, that is to the association working a system of reciprocity. His criticism is, however, more intuitive than scientific, and full of exaggerations.
ii4 their work and no greater difficulties in selling than the average manufacturer. If the productive association of the kind depicted had been a force superior to the capitalistic undertaking or even of the same economic power, then it should at least have continued and risen in the same ratio as the many private enterprises begun with most modest means, and it would not have succumbed so pitiably to the " moral M influence of the capitalist world surrounding it, as it has done continually again and again. The history of the productive co-operative societies that have not failed financially speaks almost more loudly still against this form of 11 republican factory M than that of the bankrupt ones. For it says that, regarding the first, the further development means exclusiveness and privilege. Far from attacking the foundation of the present economic system they have much more given a proof of its relative strength.
On the other hand, the co-operative stores on which the socialists of the 'sixties looked so disparagingly, in the course of time have really proved to be an economic power — i.e., as an organism fit to perform its work and capable of a high degree of development. Against the pitiable figures which the statistics of the purely productive co-operative societies offer, the figures of workmen's co-operative stores show up like the budget of a world-embracing empire to that of a little country town. And the workshops erected and conducted on account of such co-operative stores have already produced many times the amount of goods which have been "5 made by purely, or nearly purely, productive co-operative societies.* The deeper reasons for the economic as well as the moral failures of purely productive associations have been excellently presented by Mrs. Beatrice Webbt in her work on the British Co-operative Movement, even if here and there, perhaps, a few exaggerations are found. For Mrs. Webb, as for the great majority of English co-operators, the society belonging to the workmen engaged in it is not socialistic or democratic but "individualistic. " One can take offence at the selection of this word, but the line of thought is quite correct. This association is not socialistic, as Robertus, indeed, has already shown. When the workmen employed are the exclusive proprietors, its constitution is a living contradiction in itself. It supposes equality in the workshop, a complete democracy, a republic.
* The figures for the latter kind of productive co-operative societies are extremely difficult to ascertain as the official statistics of production by associations do not distinguish between them and the much more numerous and large workmen's share associations (companies) for objects of production. According to the returns of the British Board of Trade in 1897 and 1905, the value of the year's production of those associations for which the Board issued returns was: — Of Co-operative Stores in their own workshops ^6,100,730 ^12,525,104 Of Associations of Millers' trades 1,264,402 1,128,328 Of Irish Dairy Farming Associations 353>247) Of Workmen's Associations for objects of Pro- v 3,683,699 Against this the registered British Co-operative Societies had in the years — I Published under her maiden name, "Potter."
u6 But as soon as it has attained a certain size — which may be relatively very modest — equality breaks down because differentiation of functions is necessary, and with it subordination. If equality is given up, the corner-stone of the building is removed, and the other stones follow in the course of time, and decay and conversion into ordinary business concerns step in. But if equality is maintained, then the possibility of extension is cut off and it remains of the small kind. That is the alternative for all purely productive associations. In this conflict they have all broken down or languished. Far from being a suitable form for removing the capitalist from the field of modern large industries they are much more a return to pre-capitalist production. That is so very much the case that the few instances where they have had relative success occurred in artisan trades, the majority of them not in England, where the spirit of large industries dominates the workers, but in strongly " small bourgeois " France. Psychologists of nations like to set England up as the land where the people seek equality in freedom, France as the land where they seek freedom in equality. The history of the French productive associations includes, indeed, many pages where the greatest sacrifices were undergone with touching devotion for the maintenance of formal equality. But it shows not one purely productive association of the modern large industry type, although the latter is nevertheless fairly widely spread in France.
Dr. Franz Oppenheimer, in his book, Die «7 «7 Siedlungsgenossenschaft,* has earned the merit of materially extending and making more thorough the investigation of Mrs. Webb. He offers in the first chapters, in a very clearly arranged classification, an analysis of the different forms of association which in certain parts can scarcely be exceeded in critical clearness. Oppenheimer brings into the classification of associations the separation in principle between associations for purchase and sale, the importance of which, in our opinion, he somewhat over-estimates on single points, but which, on the whole, must be noted as very useful and on the basis of which a truly scientific explanation is possible of the financial and moral failure of the purely productive associations — an explanation in which personal faults, want of means, etc., for the first time move into the second place, as accidental factors, which explain the exception but not the rule. Only to the extent to which the association is substantially an association of purchasers do its general aims and its peculiar interests make its extension desirable. But the more the association is one for sellers, and the more it is one for the sale of products manufactured by itself (the matter is somewhat modified in the case of peasant associations), the greater is the internal opposition. Its difficulties grow with its growth. The risk becomes greater, the struggle for sales more difficult; the same is true regarding the procuring of credit, and the * Colonising Co-operative Societies. Leipzig: Duncker and Humblot.
n8 fight for the profit rate or the dividends of the individual members in the general mass of profit, becomes more severe. It is therefore forced again into exclusiveness. Its interest in profit is opposed not only to that of the buyers, but also to that of all the other sellers. The association of purchasers, on the other hand, gains with growth; its interest as regards profit, if opposed to that of the sellers, is in agreement with that of all the other buyers; it strives after the keeping down of the profit rate, after cheapening of products — a pursuit of all purchasers as such, as well as of the community as a whole.
Out of this difference in the economic nature of the two kinds arises the difference in their management so clearly laid down by Mrs. Webb: the essentially democratic character of all genuine associations of purchasers, and the tendency towards an oligarchy in the character of all associations purely for sale.
The differentiation of the associations into those of purchasers and those of sellers is of value to the theory of the nature of associations because it is, in turn, connected with socialistic theory. He who objects to the terms " purchase " and " sale " as formed too specially for capitalistic production of commodities and substitutes for them the conceptions M provision M and " exchange," will then recognise all the more clearly what a much greater importance the former has for the community than has the latter. The provision of goods is the fundamental general interest. With respect to it all ii9 the members are associates in principle. All consume but all do not produce. Even the best productive association, as long as it is only an association for sale and exchange, will always stand in latent opposition to the community, will have separate interests as opposed to it. With a productive association which carries on any branch of production or public service on its own account, the community would have the same points of difference as with a capitalist undertaking, and it depends altogether on circumstances whether the arrangement with it is an easier one.
But to return to the starting-point which has led us to this discussion in the domain of the theory of associations, sufficient has been shown to prove that it is quite a mistake to believe that the modern factory produces in itself a considerable disposition for associated work. And likewise the republic in the workshop becomes a more difficult problem as the undertaking becomes greater and more complicated. For exceptional objects it may answer for men themselves to name their immediate leaders and to have the right to remove them. But for the tasks which the management of a great factory brings with it, where day by day and hour by hour prosaic decisions are to be taken which always give an opportunity for friction, it is simply impossible that the manager should be the employee of those he manages, that he should be dependent for his position on their favour and their bad temper. It has always proved impossible to continue this, and in all cases it has led to a change in the forms of the associated factory. The desire of the workers to take in hand new undertakings where they are employed as an associated manufactory and are bearing corresponding responsibilities and risks, stands in an inverse ratio to the size of their undertaking. But the difficulties grow at an increasing rate.
Let any one only for once look at the thing in the concrete and examine any large industrial undertaking, a great establishment for building machines, large electricity works, a great chemical factory, or a modern publishing business. All these and similar large industrial undertakings can certainly be quite well carried on by co-operative associations, to which also all the employees may belong, but they are absolutely unfit for the associated management of the employees themselves. It would then be shown, in the clearest way possible, what Cunow contends — viz., that the feeling of solidarity between groups of workers, different as to degree of education, manner of life, etc., is only very moderate in amount. What one usually understands by associated labour is only a mistaken rendering of the very simple forms of co-operative work as they are practised by groups, gangs, etc., of undifferentiated workers, and which, at the bottom, is only piecework by groups.* * " The thing was not easy. People like the cotton workers do not easily range themselves in the ranks of equality which are demanded for the successful conduct of a society " (Sketch of the History of the Burnley Self-help Association in Co-operative Workshops in Great Britain, p. 20).
What the community itself cannot take in hand, whether by the state, the district, or the municipality, it would do very well, especially in stormy times, to leave alone for the time being. The apparently more radical action would very soon prove to be the most inexpedient. Co-operative associations capable of living do not allow themselves to be produced by magic or to be set up by order; they must grow up. But they grow up where the soil is prepared for them.
The British co-operative societies are in possession to-day of the ^15,000,000* which Lassalle considered sufficient as state credit for carrying out his association scheme. In proportion to the British national wealth that is only a small fraction; after one subtracts the capital invested abroad and the twice-reckoned capital, it is not the hundredth part of the national capital. But it does not exhaust by a great deal the British workman's capital power, and it is also steadily growing. It has nearly doubled itself in the ten years from 1887 to 1897, and has grown faster than the number of members. These rose from 851,211 to 1,468,955, the capital from 11.5 million pounds sterling to 20.4. The production of the societies has increased latterly still more quickly. Its value in 1894 ran only into ^4,950,000 altogether, and in 1897 it was already almost double the amount, namely, ^9,350,000. f I [In 1906 the membership was 2,334,641; the capital, ^39>898>000 5 the value of production, ^13,953,828.]
These are such astonishing figures that when one reads them one asks oneself involuntarily: where are the limits of this growth? Enthusiasts on the system of co-operation have reckoned that if the British societies accumulated their profits instead of distributing them, in the course of about twenty years they would be in a position to buy the whole land of the country with all the houses and factories. That is, of course, a calculation after the manner of the wonderful calculation of compound interest on the celebrated penny invested in the year one.
It forgets that there is such a thing as ground rent and assumes an increase of growth which is a physical impossibility. It overlooks the fact that it is almost impossible to win over the poorest classes to a co-operative society or that they can be won over to it only very gradually at best. It overlooks the fact that in the agricultural districts only a very limited sphere is open to a co-operative society and that it can lessen but cannot annihilate the expenses of the retail trade, so that possibilities will always spring up for the private undertakers to fit themselves into the changed conditions, and thus a retardation of its growth from a certain point of time becomes nearly a mathematical necessity. It forgets above all things, or leaves out of consideration, that without a distribution of dividends the co-operative movement would generally be at a standstill, that for large classes of the population it is just the dividend, that cursed apple of sin of the idealists of the co-operative system, which forms the chief attraction of a co-operative society. If what is often maintained to-day is very much exaggerated, namely, that the dividend of a co-operative society is no measure of the greater cheapness of its goods, that the single business sells most goods just as cheaply, on the average, as the co-operative store so that the dividend only represents the sum of small, unnoticed rises in the price of certain articles, still, the exaggeration is not altogether unfounded. The workmen's co-operative store is just as much a kind of savings bank as a means of fighting the exploitation which the parasitic retail trade means for the working classes.
But as with many persons the impulse to save is by no means very deep seated, they follow the convenience of buying at the nearest shop rather than put themselves to some trouble for the sake of the dividend. Moreover, it would be quite a mistake to say that England was originally a particularly favourable soil for co-operative societies. Quite the contrary. The habits of the working classes, the great extension in area of the towns which the cottage system brings with it, counterbalance in this respect the influence of better wages. What has been attained in England is the fruit of the hard, unflinching work of organisation.
And it is labour which was, and is, worth the trouble. Even if the co-operative store did nothing more than lower the profit rate in the retail trades, it would accomplish a work extremely useful for the national economy. And there can be no doubt that it does work in this direction. Here is a handle by means of which the working class can seize for itself a considerable portion of the social wealth which would otherwise serve to increase the income of the propertied classes and thereby strengthen them, and this, without direct destruction of life, without recourse to force which, as wre have seen, is no simple affair.
We can consider it as proved that the co-operative society has shown itself to be an economic factor of importance, and if other countries are behind England in this, it has taken firm root in Germany, France, Belgium, etc., and gains ground more and more. I forebear quoting numbers because the fact is well known, and continual figures are wearisome. Of course legal trickery can hinder the spread of co-operative societies and the full development of their innate possibilities, and their success is again dependent on a certain degree of economic development; but here, we are above all concerned with showing what co-operation can do. And if it is neither necessary nor possible that the associations as we know them to-day can ever take possession of all production and distribution of commodities, and if the widening domain of public service in the state and the municipal and district councils puts limits on the other side, yet on the whole a very wide field is open to co-operation, so that, without lapsing into the co-operative Utopias I have referred to, we are justified in expecting very much from it. If in a little over fifty years out of the movement which began with the £28 of the weavers of Rochdale an organisation has developed which handles a capital of ^20,000,000, it would need great courage to be willing to prophesy how near we are to the point of time when the limit of its growth is reached, and what forms of the movement are still slumbering in the unknown years of the future.
To many socialists the co-operative movement is not quite acceptable because it is too 11 bourgeois.' ' There are salaried officials and workmen employed for wages; profits are made, interest is paid, and disputes occur about the amount of the dividends. Certainly if one kept to forms, the public elementary school, for example, is a much more socialistic institution than the co-operative society. But the development of public services has its limits and needs time, and meanwhile the co-operative society is the easiest accessible form of association for the working class, just because it is so 11 bourgeois/ y As it is Utopian to imagine that the community could jump into an organisation and manner of living diametrically opposed to those of the present day, so it would also be Utopian to make a beginning with the most difficult form of associated organisation.
Meanwhile co-operative production also will be realised though probably in other forms than the first theorists of the co-operative system imagined. For the present moment it is the most difficult form of the realisation of the co-operative idea. It has already been mentioned that the English co-operators handle more than I2Ö the;£i 5,000,000 which Lassalle demanded for his scheme of association. And if the matter were only a financial question other pecuniary resources would be at their disposal. The friendly societies, the trade unions hardly know where to invest their accumulated funds. But it is not exactly, or not only, a question of financial resources. Nor is it a question of erecting new factories for a market already supplied. Opportunity is not lacking for buying existing and well provided factories. It is now to a great extent a question of organisation and management, and therein much is still lacking. " Is it, in the first place, capital that we need," we read in an article in the Co-operative News, the central periodical of the British Society; and the writer of the article answers the question with a decided negative. " As it appears, we have at present at our disposal some ^10,000,000, which are only waiting to be employed in a co-operative way, and a further ^10,000,000 could doubtless be quickly procured if we were fully in a position to apply it usefully in our movement. Do not let us, therefore, conceal the fact — for it is a fact — that even at the present hour in the co-operative world there is a greater need of more intelligence and capacity than of more money. How many among us would buy nothing that was not made and finished under co-operative conditions, if it were possible to live up to this ideal? How many of us have not again and again attempted to use goods made by cooperators without being perfectly satisfied?* * December 3rd, 1898.
In other words, financial means alone will not solve the problem of co-operative work. It needs, leaving other hypotheses out of the question, its own organisation and its own leaders, and neither are improvised. Both must be sought for and tried, and it is, therefore, more than doubtful whether a point of time in which all feelings are heated and all passions excited, as in a revolution, can be in any way conducive to the solution of this problem which has already proved to be so difficult in ordinary times. In human judgment the contrary must be the case.
I have not here to enlarge on other forms of the co-operative system (loan societies, credit societies, raw materials, and warehouse associations, dairy farm associations, etc.), for these are of no importance to the wage-earning class. Nevertheless owing to the importance which the question of small farmers (who also belong to the working classes even if they are not wage earners) has for social democracy, and in view of the fact that handicrafts and small trades play a still noticeable part, at least according to the number of persons employed in them, I must point out the advance which the co-operative system has attained in these directions. The advantages of the co-operative purchase of seeds, of the co-operative purchase of machines, and the co-operative sale of produce, as well as the possibility of cheap credit, cannot save peasants already ruined, but they are a means of protecting from ruin thousands and tens of thousands of small peasants. There can be no doubt of that. There are unusually abundant opportunities to-day for the acquisition of small holdings. It would be rash to say, as some writers do, that for agriculture, with reference to the advantages of large and small undertakings, exactly the opposite law holds good as for industry. But it is not too much to say that the difference is quite extraordinary, and that the advantages which the large farm, powerful in capital and well equipped, has over the small are not so important that the small holding could not make up for them to a great extent by a fuller use of the system of cooperation. The use of mechanical power, the procuring of credit, the better security of sale — co-operation can make all these accessible to the peasant whilst the nature of his farming makes it easier for him to overcome occasional losses than is possible for the larger farmer. For the great masses of peasants are not always simply producers of commodities; they themselves raise a considerable share of their necessary food.* In all countries of advanced civilisation the co-operative system quickly increases in extent and scope. Belgium, Denmark, France, Holland, and lately also Ireland, show herein no different picture from Germany. It is important that social democracy instead of fishing out of statistics proofs for the preconceived theory of * In Prussia, from 1895 t0 I9°7» tne small holdings of 3 to 20 hectares (7J to 50 acres) have increased from 698,357 to 760,315, and the area they cover has also considerably increased, whilst that of the larger holdings has decreased.
the ruin of the class of small farmers should examine searchingly this question of the co-operative movement in the country and its importance. The statistics of forced sales, mortgage incumbrances, etc., are in many respects misleading. Undoubtedly landed property to-day is more mobile than ever; but this mobility does not work only from one side. Until now the openings which the forced sales have made have always been filled again.
As far as the agricultural classes are concerned we are face to face with the fact that however many co-operative arrangements they have made, one thing in co-operation has always hitherto been withheld from them: the cultivation of the land itself, that is the farming of field and meadow and actual cattle rearing. Different kinds of work linked with farming and attached to it are carried on co-operatively, or at least for co-operative societies, but farming itself withdraws here and elsewhere from co-operative work. Is co-operation less advantageous for it than for other industries? Or is it simply the peasant's landed property that stands in the way?
The fact has already been emphasised often that the division of the land among many owners is a great hindrance to the co-operative cultivation of the soil. But it does not form the only hindrance, or, to express it differently, it increases its real difficulties but is not usually the cause of them. The separation by distance of the workers, as well as the individualist character of a great part of agricultural work, plays likewise a part. It is possible that the peasants' syndicates which are still so young may get over these hindrances in their further development, or — which seems to me most probable — they will be driven gradually beyond their present limits. Meanwhile they cannot yet be reckoned with.