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Let’s Make Cooperative Theory By Talking—To One Another!
By Betsy Bowman and Bob Stone

© 2001 GEO, P.O. Box 115, Riverdale, MD 20738-0115

In our last issue, Jaques Kaswan called for a theory of how cooperatives can get us to the “cooperative social economy” sought by many of GEO’s readers. Such a theory would provide: a positive basis from which to criticize Mondragon’s failings; a guide to solving co-ops’ perennial lack of capital; and an alternative to the supply-demand axiom of capitalist economics which would provide “a comparable self-correcting process in cooperative economics.”

We second his motion. We ourselves have no theory, only suggestions.

First, believing there’s a cooperative solution to any cooperative problem, Jaques’s piece should kick off The Great Cooperative Dialogue. Practitioners from the networks and initiatives at Mondragon, Emilia-Romagna, Seikatsu, SEWA, and Co-op Atlantic and many, many others, could meet to share what they’ve learned and cooperatively develop a theory.

In this Dialogue, our movement’s goal might be debated. We think it is, in a word, freedom. Not the spurious freedom capitalism offers—passive choice between fifteen brands of catfood coupled with passive votes between pre-packaged candidates—but the concrete freedom of all humans jointly deciding what to produce to meet our needs. Now, if we’re lucky, we work for wages to buy commodities to meet needs. Why not work directly to meet needs? “The goal of capitalism,” Jaques notes, “is to create wealth” i. e., more capital, more power over us. Meeting needs is a peripheral side-effect. But the money-capital system is only a means—a bad means—to the autonomy we desire. Capital can’t buy concrete freedom. Instead, humans can and ought to replace capital.

So when Jaques advocates raising “large amounts of capital,” we add: Yes, but only to replace capital itself. How to raise such self-cancelling capital? Jaques mistrusts government funds which dry up when “political winds” shift. For this reason we think all credit sources outside the cooperative movement should be avoided, even the National Cooperative Bank. As co-ops displace capitalist firms, all outside capital risks being withdrawn by threatened financiers since co-ops choke off capital accumulation itself. The precedent for raising capital in a hostile environment: Mondragon’s Caja Laboral in Franco’s Spain.

Next on the Cooperative Conference agenda might be a global version of the Caja. Capitalization could be through tithes of 3% on all coops (like the Italian Lega del Cooperative’s self-assessments) to build a low-interest co-op startup fund. Priority would go to co-ops which, instead of producing commodities, take them out of the market, replacing them with direct human relations. Capital would go, in short, to dismantling capital. Jaques’s idea of going to financial markets to sell “some sort of shares that surrender no control but only some portion of profit” is unrealistic: capital is control—investors will go elsewhere; and it is futile: it recycles without dismantling capital, and risky.

The “comparable self-correcting process in cooperative economics” that Jaques seeks is simply meeting needs with human labor by direct communication. We meet human needs all the time inside of families without commodity exchange. This social metabolism can be extended first to neighbors, then to towns, regions and the world. Money is a form of indirect and distorted communication about human needs and resources. Instead of asking folks what they need and producing for that need, one studies “consumers” and produces for these market-created entities, aiming at capital growth. Capital’s power over us is parasitic upon this non-human money-relation. Decommodify buyer-seller relations and capital loses all power.

To “decommodify” means to replace the buyer-seller relation with the producer-need relation through direct human communication. This is done when communities in Connecticut (acting as consumer co-ops) set up day care service co-ops, or when communities in Nova Scotia start funeral parlor co-ops, or when neighborhoods in Tokyo (again acting as consumer co-ops) form co-ops to care for the aged, or when co-housing arrangements, LETS (electronic barter) networks, local currencies, old clothing exchanges, free tool banks, free bicycles, or community supported agriculture projects are set up. Instead of a commodity, need is wed to production through direct discussion of community needs and resources.

“Imagine that capitalism suddenly collapsed,” Jaques asks, “....are we really ready with an alternative socioeconomic system?” His query suggests a “first-world” focus. But as globalization makes non-G-7 nations less able to meet needs in the money system, co-ops are popping up as solutions. As we saw in our visit to the Chac Lol cooperatives in Mexico’s Yucatan peninsula (see GEO #38), these folks are waiting neither for capitalism’s collapse nor for a theory. The producer co-ops that sold tortillas were only the most visible part of the Maya’s village culture of non-market, non-money, mutual aid.

Attaining concrete freedom means democratizing all aspects of society, replacing the cash nexus with human decisions. Mondragon decommodifies labor power, removing it from the market, a major step. Universalizing the Mondragon model will decapitate capitalism by shutting off absentee accumulation of profit and capital, which remain with workers. However, Mondragon decommodifies labor power by producing commodities. This makes it vulnerable to the money system and accounts for its hierarchical management, which Jacques rightly decries. At its best, such cooperative production of commodities goes only half way to concrete freedom. Proliferating the existing Mondragon model, hence commodity production, leads only to competition for markets between co-ops, hence to continued hierarchy and replication of capitalism, not to concrete freedom. We think Mondragon’s founders knew this and would contribute their 3% to a global fund for cooperatives oriented toward decommodification.

Suppose one day we each simply decided to meet our needs for food, water, clothing, shelter, transportation, education, telephone and computer service, from cooperatives. If no co-op source is available, cooperativists would either start one or do without. Such a rigorous ethical choice, made on a mass scale in all aspects of life, would automatically create a huge vacuum, to be filled by non-market cooperative production. A process like this is underway in New England with the formation of a regional energy coop. From one day to the next it is possible to democratize all previously market-mediated relations with others, disempowering money and capital in favor of human relations.1

Can our idea work for heavy, industrial “capital goods” production? Of course, as Mondragon shows. It started small on the concept that labor itself can capitalize an enterprise. In a transitional phase to a money-less economy, think of the global Caja as a huge “social investment” movement with real bite. Banking, savings, investment, retirement funds, health, etc. could all be shifted to the global Caja, enormously increasing the capital under democratic control. Local credit unions could apply to it for major worker buyouts and conversions. The capital goods required for today’s advanced economies are increasingly sold over the internet, which could become the locus of a global discussion over needs and resources by producer-user coop networks. The Super-Market website developed by the Rural Coalition is a good step in this direction (see article to appear in GEO #40).

We have invoked three principles, ones already starting to work in the shell of the old society: inter-cooperation, decommodification, and labor-as-capital. To sum them up: what the means is under capitalism—human power—is the end of cooperative social economy. Humanity deciding its future is not the means, it is the end itself. Jaques seeks a theory that can make “predictions” that can be “falsified” by “data.”1 We are more inclined to “build the road as we travel,” that is, build a co-op theory from practice. Those who are already building the cooperative commonwealth can best find out from one another where they want to go. Let’s get together and talk. We could start this process at the upcoming International Institue for Self-Management Conference scheduled for January 10-14, 2000 in Havana, Cuba (see p. 15 below). For information on this Conference, contact us at: <ebowman@igc.org>.


1. For an account of the emerging de-commodification movement, see Richard Douthwaite’s Short Circuit: Strengthening Local Economics for Security in an Unstable World (Dartington, England: Green Books, 1996).

2. Falsifiability is an inherently conservative criterion inasmuch as it entails rejecting a prediction, and any policy based on it, that does not work under the capitalist status quo. The point, however, is to replace that status quo by concrete freedom. Capitalism itself is false. So falsifiability of predictions about capitalism’s future cannot be an absolute measure of the worth of a policy for replacing it with the cooperative commonwealth.

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©2001 GEO, P.O. Box 115, Riverdale, MD 20738-0115