Cooperative Enterprise and Market Economy: Chapter 16

Introduction & Preface | Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter 5 | Chapter 6 | Chapter 7 | Chapter 8 | Chapter 9 | Chapter 10 | Chapter 11 | Chapter 12 | Chapter 13 | Chapter 14 | Chapter 15

Translator’s note:

We continue to explore the relationship between cooperativism and the market and society. Is cooperativism “a practical demonstration of the possibility of an economy without bosses? A convenient mode of distribution of commodities? An economic form that preserves exploitation of workers and fails to overthrow bourgeois political domination? A way to live out the principles and values of Christianity in the economic terrain?”

Because it includes relations of social forces and “extra-economic” elements like ideology and politics, the application of Gramsci’s concept of a “determined market,” which Luis Razeto Migliaro introduced in the previous chapter, requires an approach that distinguishes between, but articulates, theory and practice, science and ideology, structure and history. It’s a tall order. Drawing on the early history of cooperative theory and practice, the author provides here a critical historical analysis that points to the need for and promise of a scientific theory of the phenomenon, to which this book is intended to contribute.

- Matt Noyes

Chapter 16

Theory and Practice, Necessity and Project, in the Origins and Evolution of Cooperativism

1. - The analysis of the specific modes in which cooperatives and the cooperative movement relate to the market (understood in the sense specified in the previous chapter) requires us to consider the cooperative phenomenon historically, analyzing the reasons for its emergence and development. We must simultaneously broaden the theoretical perspective so as to take into account aspects that are not directly economic but integral to cooperativism in its real complexity.

As the market is a complex system of relations and interrelations of force among the individual and collective subjects that participate in a determined economic-political formation, the examination of the relations that cooperativism has woven into it, historically and structurally, must involve a complex study of the place of cooperation in modern and contemporary society and the roles it plays.

What interests us here is to understand why cooperativism plays a subaltern role, dominated by other forms of economic organization; we also need to deepen our understanding of the reasons for its relative inability to transform the market. Without a doubt, we can not specify the relationship between cooperativism and the market without historical study of the force that this particular economic subject has had and continues to have in the context of the global system of social relations of power.

Now, to define scientifically the place and role of cooperation in society and in the market, it seems necessary first of all to understand the economic, social, political, and ideological motivations and reasons that converge in its formation as a new and distinct phenomenon. We also need to consider, in a critical historical manner, the relation between theory and practice in cooperativism.

It is often said that cooperation has practical origins, in the sense that it is a response by workers and marginalized populations to economic and social needs. At the same time, we are told that political theorists and thinkers like Owen, Fourier, Campbell, and King also played an essential role from the start, postulating cooperatives as a project of reform and social transition.1 These are not alternative explanations for the rise of cooperativism, nor do they imply two simultaneous foundations – theoretical and practical – of cooperativism.

All human social and organizational activity is at once theoretical and practical, in an indivisible determinate combination. What is important is to identify the meaning of each element and the roles they play in the complex activity being studied, so that we can discern which one – theory or practice – defines the direction in which the associative process develops, and to what extent it does so.

As Gramsci says,

If the problem of the identification of theory and practice is to be raised, it can be done in this sense, that one can construct, on a specific practice, a theory which, by coinciding and identifying itself with the decisive elements of the practice itself, can accelerate the historical process that is going on, rendering practice more homogeneous, more coherent, more efficient in all its elements, and thus, in other words, developing its potential to the maximum: or alternatively, given a certain theoretical position one can organise the practical element which is essential for the theory to be realised. The identification of theory and practice is a critical act, through which practice is demonstrated rational and necessary, and theory realistic and rational. This is why the problem of the identity of theory and practice is raised especially in the so-called transitional moments of history, that is, those moments in which the movement of transformation is at its most rapid. For it is then that the practical forces unleashed really demand justification in order to become more efficient and expansive; and that theoretical programmes multiply in number, and demand in their turn to be realistically justified, to the extent that they prove themselves assimilable into practical movements, thereby making the latter yet more practical and real.2

The relation between theory and practice is dialectical, that is, both terms of the relation are reciprocally conditioned in the development of the phenomenon in its totality; but this has implications (theoretical and practical) for the phenomenon – in this case for the cooperative movement and system. Whether the principal direction in the constitutive relation starts from practice and seeks in theory its coherence and empowerment, or else starts from theory or doctrine, seeking its realization, application, and verification in practice, matters.

If, for example, the cooperative phenomenon has been formed and developed primarily as a movement from practice to theory, that is, if in its historical and structural origins it is above all a response to the practical needs of workers and marginalized sectors, the place it will occupy in the market and its modes of insertion and economic functioning will be decidedly conditioned by those needs. In this case, the associative phenomenon will tend to fade as the needs that gave rise it are satisfied, or broaden and grow if the practical needs grow in quantity and quality. Moreover, the intellectual elaborations of the movement and the direction of the theoretical process connected to it will be strongly marked by its internal development and the vicissitudes of organizing.

If, on the other hand, the cooperative phenomenon has been born and grown as a movement from theory to practice, that is, if it is rooted in a theoretical conception critical of the existing society and a concomitant project of social transformation, the place it will tend to occupy in the market will be strongly determined and oriented by such conceptions. It will assert itself, for example, as a force of contestation and an alternative with respect to the functioning of the market. The strength or weakness of the organizing process, like the theory itself and the practical movement, will be decidedly shaped by the general orientations of the culture and the prevailing theoretical and political conceptions. The cooperative phenomenon will tend to fade as its ideology becomes theoretically outmoded, or to develop and grow if that ideology proves apposite and is widely adopted as an autonomous, integral, and superior conception.

If theory comes first, the orientation of the movement will be decidedly more intellectual and moral, if practical needs come first, it will be primarily economic and social.

We can observe, moreover, that when cooperative phenomena are constituted in the direction of moving from practice to theory – to the extent that this direction prevails in their relationship to the market – they give rise to processes and movements that are habitually subordinated, remaining dependent with respect to the global historical-political revolution defined by other instances and through other activities. This is because achieving autonomy always requires a higher theoretical elaboration that is not subordinated to the evolution of practical tendencies.

On the contrary, the social phenomena that are constituted in a movement from theory to practice typically give rise to movements that explicitly propose to transform, reorganize, or reform the given social order. The reason for this is that theoretical conceptions that are not directly dependent on particular conditions and circumstances have an inherent tendency to expand to the point where they can become the principle and center of a new integral system, a new global rationality.

(It is nonetheless obvious that theoretical concepts that have not actually reached a level of theoretical elaboration that is superior and autonomous, and that are not capable proving their rationality and realism on the level of practical collective necessities will never amount to more than ineffective documents of fleeting attempts.)

Lastly, we can imagine a given collective phenomenon formed in the direction practice to theory, which has developed as a subordinated movement, with a predominantly economic-social character, whose evolution has been conditioned by the conjunctural development of practical and organizational needs, in a economic-political context that it does not dominate or in which it does not intervene in a determining way. This phenomenon might evolve to a higher phase of development characterized by the establishment of a new, theory to practice relation, which guaranteed for it a rationally structured direction and provided it with renewed power and capacity for transformative intervention in the social order and an authentic autonomy, perhaps up to the point of constituting itself as the start and foundation of a new superior historical rationality, rising to its own full political and cultural maturity.

The preceding general notions about the relation between theory and practice, valid with respect to movements and collective organizations of different types (unions, political parties, associations), can guide us in our effort to understand the cooperative phenomenon and the place it occupies in contemporary society, its modes of relating with the market, and its potential for development and transformative action. They serve in particular to re-frame the much discussed question of whether cooperativism is antithetical to a functional part of the capitalist economic system.

2. - What, then, has been the function of doctrines in the origins of the cooperative movement? What is the predominant valence of the relation of theory and practice in the cooperative phenomenon, theory → practice, or practice → theory? Is cooperativism predominantly a response to economic-social needs or a project of economic-social transformation?

The answers to these questions can be found not in a simple empirical study of the chronological moment in which the first theories and first concrete associations appeared, but require a global analysis of the experience of the cooperative movement in its historical development and various manifestations.

From the beginning, cooperation, as a specific organizing process, was accompanied by a strong ideal and doctrinal component, that is, by global theories formulated by political intellectuals and thinkers who proposed cooperation (or alternative forms of economic enterprise with respect to capitalist firms) as an answer to the social problem and a path to social, economic, and political reform. But it must be underlined, at the same time, that efforts at systemic application of those theories in the practice of organizing never delivered stable and satisfactory results; in short order they dissolved or changed meaning, incorporating themselves into movements that had different characteristics.

Alongside of – and so to speak – below these “theorized” attempts, “spontaneous” cooperative associations arose and developed initially as a response to the economic and practical needs on the part of those who suffered social problems and marginalization, that is, people who had a direct interest in the matter.

These bottom-up processes normally found an intellectual and moral point of reference in the intellectual work of reformist thinkers whose theories provided contents for the movements’ own ideology. In this way theories played the specific function of all ideology: they helped organizations cohere internally and develop a coherent ethical and political perspective.

Thus, the practical movement arising from the bottom-up was intellectually fortified at the same moment when the “top-down” theoretical movement was declining. The relationship between theory and practice was established with the famous “Rochdale principles” which defined the specific and unitary physiognomy of the cooperative movement.3

As a result, the cooperative movement ended up having what we can call “two souls,” one being a mutualistic solidarity movement formed in the specifically economic terrain in order to meet immediate needs and address social problems, the other being an ethical-social movement for reform focused on confronting the general injustices of the economic-political system and founding a new type of society.4

The presence of this structuring “dualism” – which endures to our times – does not mean that the cooperative movement is split, but that it has the complexity and richness of a complex phenomenon, in which the unity between theory and practice has never been perfected.

We can represent the particular conformation of the cooperative phenomenon as that of a collective movement that was substantially constituted in the movement from practice to theory, with a converging movement of the theory to practice type, which, while it failed in the short run, was incorporated into the collective movement as the source of its particular ideological content.

This singular mode of emergence of cooperation has not only shaped the concrete development of the phenomenon, with its potential and limits, but also conditioned the unfolding of the theories that identify it. These have had a predominantly ideological character; some seeking to demonstrate cooperation’s power as a force of social-economic transformation, others pointing the opposite direction, questioning cooperation’s relevance to a revolutionary project. We see the evolution, from Marx, who saw cooperativism as a practical demonstration of the possibility of an economy without bosses, to Lenin, who for a time saw cooperativism as a convenient mode of distribution of commodities, to the “orthodox” marxist-leninists who criticize cooperativism as an economic form that preserves exploitation of workers and fails to overthrow bourgeois political domination. From the Catholics whose concern with the “social question” led them to see cooperation as an adequate and concrete method to address the most difficult social problems, and a way to live out the principles and values of Christianity in the economic terrain, to conservatives and liberals alike who reject cooperativism as a form of socialism.

As was well observed by the well known theorist and disseminator of cooperative ideas Bernard Lavergne, the highest point reached by cooperativism as a reform movement was the 1921 Cooperative Manifesto edited by Charles Gide and signed by 194 university professors who represented an elite among French thinkers of the epoch, in which this fundamental claim was made:

Cooperative societies teach us, first, that an enterprise can survive and prosper in the absence of the conditions considered indispensable by political economy, that is, without the lure of profit and the pressure of competition (…). Cooperative societies also show us that for an enterprise to be successful it is not necessary for capital to be the boss and reap the fruits.5

This quote synthesizes well many of the theories of cooperativism, capturing their ideological character, in that they aim more at giving coherence and orientation to the cooperative movement than at understanding the phenomenon in its complexity and identifying its effective potential and future trends in its development.

Larvergne himself complained about the scarce interest that the cooperative phenomenon inspired among economists:

Very distinct motives explain the disdain that this idea, the cooperative ideology, has suffered in the intellectual environments that should have been most favorable to it, that is, among scholars of economics. Very eminent economists like [Albert] Aftalion, Charles Rist, and Charles Gide were signatories of the Cooperative Manifesto. And yet, even in 1921, economists in general demonstrated no sympathy for cooperative ideas, which led Charles Gide to follow the Manifesto with an article that has earned a permanent place in the memory of cooperativists, titled precisely, Why Economists do not like Cooperativism...6

This tradition continues even today. With the exception of one or two of my colleagues, no contemporary economist is interested in the cooperative idea. Until 1940, my colleagues and I paid special attention to the social question that now leaves economists more or less indifferent. They have so distanced themselves from the cooperative idea that upon my retirement in 1962 my colleagues at the Faculty of Law in Paris decided to eliminate the course on the institutions and doctrines of cooperativism that René Capitant and I created, and that I taught from the beginning.7

By highlighting the predominantly ideological character of theories of cooperation we are not denying the existence of a body of valid knowledge of the cooperative phenomenon. This is because ideological theories are not devoid of all cognitive value; they offer concepts and models that can provide illuminating hypotheses for investigation. At the same time, alongside existing theories, we have seen the accumulation of immense amounts of empirical information that provide an image and concrete profile of the cooperative experience. Moreover, there do exist systematic works of scientific research on the problems of the cooperative movement, as much from the perspective of Law as from that of Economics. The first has contributed especially to the production of normative rules for the constitution and operation of cooperatives, consortia, and integrative associations, while the principal contribution of economic studies has consisted of conceptual models of organization and functioning of cooperative economic units in the market.

All of this constitutes a vast collection of conceptual and empirical material on which every new scientific elaboration must lean, even as it draws critical distinctions between contents that have the character of knowledge and those that are only misleading ideology, selectively recovering the necessary accumulated information and creatively elaborating a superior conceptual structure.

The elaboration of a scientific theory of the cooperative phenomenon, to which this work hopes to contribute, can have important consequences for the future development of cooperativism. If the cooperative phenomenon can establish new and more unified relationship between theory and practice, there is hope that the organizing process can gain a new dynamic and a spirit of renewal and that the movement can develop a more effective capacity for transformation.

Now, the elaboration of scientific theory follows its own objectives through procedures that are specific to it. It does not offer itself a priori as a guide to practical processes; it is precisely there that its autonomy and difference from ideologies resides.

Scientific theory is not an ideological elaboration that gives birth to a relation of theory to practice, because science can only start from concrete historical experience, acceding to the level of theory through a process of abstraction. Only having followed this path can it initiate a new “descending movement” towards practice, giving birth to a new practice and a new experience guided and structured by the new theory. In this way science manifests its own essence as a specific and superior mode of re-composition of the relationship between consciousness and experience.

What we now need to examine is how, and to what extent, cooperativism can constitute a response to current practical needs and a project of historical transformation of social reality.

Translated by Matt Noyes
Header image by Jeff Warren and Caroline Woolard. CC BY-SA 3.0

• 1

  Robert Owen, Scottish factory owner, social reformer and early socialist, founder of the New Harmony community in the U.S.; Charles Fourier, French theorist of utopian “phalanxes” who inspired the formation of communities around the world; Alexander Campbell, Scottish follower of Owen and founder of the Glasgow Cooperative Society; Dr. William King, founder of “The Cooperator” newspaper. - MN

• 2

  Antonio Gramsci, Selections from the Prison Notebooks, Theory and Practice, p. 365. Trans. Quintin Hoare and Geoffrey Nowell Smith, International Publishers, 1971. Razeto provides his own translation of Note #22, from Quaderni dal Carcere, Vol. III, Quaderno 15 (ii), p 1780.

• 3

  See https://rochdalepioneersmuseum.coop/about-us/the-rochdale-principles. – MN

• 4

  Reminiscent of Goethe’s famous verse in Faust: “Zwei Seelen wohnen, ach! in meiner Brust...”

• 5

  Charles Gide, Le Manifeste Cooperatif des Intellectuels et Universitaires Français, Revue des Études Coopératives, No. 1, Octobre-Decembre 1921. [My translation from the original - MN]

• 6

  Gide, Revue des Études Coopératives, No. 1, Octobre-Decembre 1921.

• 7

  Bernard Lavergne, Por qué nuestros contemporáneos no aman el socialismo cooperativo. Cooperazione e Societá, 1972, Nos. 1-2, P. 24. [My translation from the quoted text. René Capitant was a French lawyer, politician, and anti-fascist activist.]