Cooperatives, enterprises where workers are the owners of their workplace, have always held an awkward place in the socialist movement. Proponents, such as Robert Owen, saw worker cooperatives as socialism in practice. Other socialists, such as Karl Marx criticized cooperative projects for being “utopian” in the sense that cooperative advocates sought to build a socialist society without first dismantling the existing order. Rosa Luxemburg’s critique of the cooperative movement best exemplified the thought among many Marxists,
“The workers forming a co-operative in the field of production are thus faced with the contradictory necessity of governing themselves with the utmost absolutism. They are obliged to take toward themselves the role of capitalist entrepreneur—a contradiction that accounts for the usual failure of production co-operatives which either become pure capitalist enterprises or, if the workers’ interests continue to predominate, end by dissolving.”
Mark and Luxembourg were not wrong. Take the Mondragon Corporation, which is the largest worker cooperative in the world, employing 81,507 people and generating 12 billion euros in revenue. But market pressures to maximize profits over the broader interests of the community have eroded Mondragon to adopt exploitative practices typical of a corporation. Today, only a minority of Mondragon’s workers are owners and the cooperative is infamous for suppressing labor unions in its foreign subsidiaries. As cooperatives became more profitable, the worker-owners started to lose their sense of solidarity with their fellow workers as their self-image takes on the contours of a small business owner.
Are cooperatives fated to end up like Mondragon? A growing group of organizers and academics are firmly saying “NO.” Learning from the accomplishments and failures by previous socialist experiments, these activists are confronting the assumptions that cooperatives cannot dismantle the existing institutions of oppression, are anti-political, and suppress class consciousness. But before that, let’s talk about the other and larger socialist movement that has dominated much of the 20th century.
The Social Democratic Century
Most leftists agreed with Luxembourg and instead opted to join the social democratic movement. Unlike cooperatives, social democracy was perceived as political and militant. Social democrats believed the best path to abolish capitalism was by expanding the state bureaucracy through political parties and trade unions. The legacy of the New Deal era, a period of high union density and massive expansion of government programs, seemed to have validated those beliefs. But what followed social democracy wasn’t socialism, what followed was neoliberalism, also known as a 40-year bipartisan effort to undo every aspect of the New Deal from slashing taxes for the rich, weaponizing racist dog whistles as an excuse to gut welfare, and pass massive layoffs in the industrial heartland.
In their book “Bigger than Bernie”, Jacobin contributors Meagan Day and Micah Uetricht argue that the revived socialist movement’s main priority should be to finish the New Deal. Day and Uectricht’s call to undo the last 40 years is best reflected in the Democratic Socialists of America (DSA) national platform, which currently consists of building a rank and file labor movement, electing democratic socialists to office, and passing Medicare for All and a Green New Deal. Though Day and Uetricht acknowledge it’s simply not enough to rebuild the welfare state. As numerous historians have pointed out, a major cause for the downfall of the social democratic era was union bureaucrat’s suppression of militant labor organizers during the 2nd Red Scare. Day and Uetricht advocate for a supposedly revised version they call “class struggle social democracy.” The basic idea is that socialists should elect social democratic politicians and agitate for a militant labor movement at the same time. The assumption is that a militant labor movement can act as a check on social democracy’s tendency “to limit the scope and substance of the reforms which it has itself proposed and implemented, in an endeavor to pacify and accommodate capitalist forces."
But organizing a militant labor movement isn’t new, it was actually the main strategy for social democrats in the 20th century. While the CIO leadership did try to contain the more radical sections of the labor movement, the labor federation still relied on militant actions to force concessions. In 1936, the United Auto Workers organized the famous Flint Sitdown Strike, even though the Wagner Act already created the National Labor Relations Court to mediate labor disputes the year before. Union bureaucrats containing more militant activists can only explain part of the decline of social democracy, a greater factor was the expansion of the professional-managerial class. A large reason why so many working-class households left the union hall for the cubicle was the level of education and experience many white-collar jobs required allowed those workers to negotiate higher wages without the need for a union. A New York Times article on Tom Harkin’s failed 1992 presidential run sums up how devastating the professionalization of America had an effect on the left,
"The audience for Harkin's message is literally and figuratively dying," says Mike McCurry, the senior communications adviser to Kerrey. "It's just not appealing to the baby boomers, the geodemographic bulge that accounted for the Republican ascendancy of the 80's and that might signal a new Democratic resurgence in the 90's. These are people with virtually no party affiliations. The imagery of Roosevelt's New Deal simply does not resonate with them."
A revived social democratic movement will only recreate this cycle of a generous welfare state expanding a professional middle class that would push for reforms that will then shrink the middle class and so on and so forth.
But can the cooperative, that utopian experiment, provide a new path towards socialism? Cooperative activists correctly point out that worker-ownership reverses the dynamics between management and labor and thereby provide a much more radical transformation than expanding government programs and trade union density. Three case studies, one historical and two that are ongoing, provide evidence that cooperatives do not inherently have to cave to market forces but can act as a catalyst for social movements, and most importantly, by allowing people to experience a life where workers can own the means of production, they can counter the pressures to assimilate back to capitalism.
The Populist Movement
The Civil War violently abolished America’s slave economy, but the war did not abolish crippling poverty for poor whites and emancipated slaves. The Civil War had accelerated America's industrial revolution. Slavery was not replaced with the Jeffersonian ideal of every man their own entrepreneur, instead, slavery was replaced with a more modern form of capitalism, the crop-lien system.
Merchants known as "the furnishing man" by white farmers and "the man" by black sharecroppers, controlled the post-war cotton industry. The furnishing men ensured that farmers were perpetually kept in poverty by forcing farmers to pay exorbitant interest rates and seizing their crops as collateral or lien. By taking crops as collateral, the furnishing man reaped the farmer’s surplus.
In response to what amounted to debt slavery, cotton farmers in the South and later corn and wheat farmers in the Midwest, organized cooperatives through the National Farmers Alliance to fight back against the crop lien system. Unlike previous cooperative societies, the populists were both confrontational and class-conscious. The populists inaugurated what Lawrence Goodwyn called, "the largest democratic mass movement in American history."
Similar to a labor union, a farmer’s cooperative was a collective of farmers that allowed them to bargain with merchants for livable prices. According to Goodwyn, America’s founding ideology of meritocracy and rugged individualism forced farmers to create an entirely separate political tradition rooted in class warfare. The Farmers Alliance accomplished this feat by instituting a circuit of traveling lecturers who sought to replace the Jeffersonian myth of the farmer as the entrepreneur with an ideology that placed farmers and wage workers as members of the “producing class” being exploited by the financial monopoly. The growing class consciousness among farmers drove the National Farmers Alliance to seek an alliance with the labor movement through the Knights of Labor. According to one anti-union newspaper, the aid that farmers were giving to the Knights of Labor was integral to the Great Southwest Strike, “but for the aid strikers are receiving from farmers alliances in the state and contributions outside, the Knights would have gone back to work long ago.”
However intense opposition by the railroad monopolies prevented the cooperatives from replacing the furnishing men, so the populists entered the political scene. In 1892, farmers formed the People's Party, the most successful third party in American history. The People's Party elected 11 governors, 35 members of the house of representatives, and six senators. But tragically, the populist movement does not have a happy ending. The People’s Party collapsed after their endorsed presidential candidate, William Jennings Bryan, lost to monopoly backed candidate, William McKinley. Bryan was not the populist’s first pick, he had actually refused to endorse the party’s most important demand, a radical transition of America’s monetary system from the gold standard to fiat money, a transformation we would not see until the 1970s. The populists also failed to dismantle America’s racial and regional divides, preventing the farmers from forming a strong alliance with black sharecroppers and northern industrial workers who became disorganized after the Knights of Labor dissolved. Worst of all, even after nearly two decades of fighting, the merchant and railroad monopolies were still intact, which took a huge toll on farmers’ morale. However, the remnants of the populist movement would later form the backbone for the burgeoning Socialist Party.
'“Politics without economics is symbol without substance”. This old Black Nationalist adage summarizes and defines Cooperation Jackson’s relationship to the Jackson-Kush Plan and the political aims and objectives of the New Afrikan People’s Organization and the Malcolm X Grassroots Movement in putting it forward.'
In the heart of the deep south, Chockwe Antar Lumumba, the socialist mayor of Jackson, Mississippi is promising to build "the most radical city on the planet." Lumumba and his father, the former mayor, also named Chockwe Lumumba, have been part of a decades-long fight to fulfill the Jackson-Kush plan, an ambitious promise to transform Jackson into a solidarity economy, a network of worker cooperatives, urban farms, and community land trusts. What may be most unique about Jackson-Kush is that it’s not rooted in the populist era cooperative movement or English mutual societies. Instead, Jackson-Kush is based on the ideology of pan-Africanism. The elder Lumumba, a veteran of the black power movement, was inspired by former Tanzanian president Julius Nyere’s theory of Ujamaa and Fannie Lou Hamer's Freedom Farms.
Activists in Jackson began the movement by organizing the "People's Assembly." Taking inspiration from previous experiments in post-Katrina New Orleans, the People’s Assembly was a mass forum for citizens to address community issues, wage strategic campaigns to leverage pressure on political and economic decision-makers, and foster a culture of direct democracy. The assembly was incredibly effective in its goals, reaching 300 members by 2010. The People’s Assemblies were more than just a mechanism for direct democracy, they were a cultural revolution. Most city governments are run like personal fiefdoms, preserved through a system of patronage and party machines. The Peoples’ Assembly flipped that model by agitating the largely black and working-class population to become active decision-makers.
The elder Chockwe channeled the politicization from the People’s Assembly towards an electoral landslide in 2013, winning the mayorship with 80 percent of the vote. Tragically, the elder Lumumba died only seven months into office. In 2014, Lumumba's son founded Cooperation Jackson, a grassroots organization committed to building a solidarity economy, which also became the base for Chockwe Antar’s successful 2017 election.
However, relations between the mayor and activists started to sour. Lumumba drained the People’s Assembly of most of their top organizers and staff, which created a rift between city hall and the grassroots. Lumumba’s actions were partly in response to Mississippi’s white supremacist state legislature maneuvering to take away Jackson’s local control, including engaging in a tense legal battle with the city government threatening to take over the Medgar Wiley Evers Airport. Cooperation Jackson, the organization Lumumba founded, has started to focus on building the Jackson-Kush plan independent of the state. Cooperation Jackson’s possible shift away from politics risks the project eroding into the same pressures as Mondragon. However, Chockwe Antar Lumumba still has a working relationship with grassroots activists and against all odds is still pushing through with his promise to turn Jackson-Kush from a dream into a reality. It is hard to tell what the future holds for Jackson, Mississippi, but one thing is clear, only through the state will there be a transition to the solidarity economy.
“We on the Left can once again set about our historic task of constructing in earnest the kind of possible future world in which we’d actually want to live.”
At the turn of the 21st century, a group of academics and activists created Democracy Collaborative to answer the criticisms that market forces will inherently erode cooperatives into a typical capitalist enterprise. Democracy Collaborative can't really be given a single label, it's a think tank, a business incubator, and a grassroots lobbying arm all-in-one. Their answer to the market pressure argument is a program they call "community wealth building." Under this framework, cooperatives are only one part of a larger economic system. The local community, through the state and NGOs, invest in worker-owned cooperatives, which are guaranteed employment through contracts with something known as "anchor institutions," businesses that are not going to be leaving the community. Most importantly, the decision-makers are not limited to the existing worker-owners but include the government, community leaders, and in some cases labor unions.
It is important to remember that power and status in Mondragon is not determined by stratified educational levels and bargaining power, but by membership into the cooperative. Under Mondragon's structure, a worker-owner on Fagor's assembly line is more privileged than a programmer who was only an employee. Mondragon's erosion back to capitalist norms was caused by worker-owners excluding the next generation of membership, mutating worker ownership from a form of economic democracy into an exclusive club. By expanding the decision-makers beyond the worker-owner, community wealth building creates a check on worker-owners potential greed.
To prove the viability of their model, Democracy Collaborative decided to test their model in Cleveland, Ohio. Cleveland is a textbook example of deindustrialization. Decades of neoliberalism, offshoring of manufacturing jobs, and white supremacist policy has turned Cleveland into one of the poorest cities in America. In 2010, the city government and several NGOs created the "Evergreen Cooperatives," which are three worker-owned cooperatives: Laundry, Energy Solutions, and Green City Growers. The Evergreen Cooperatives were deliberately set up in neighborhoods with a median income of $18,500, a disproportionately large undereducated workforce, and an unemployment rate of 25 percent. Evergreen also explicitly hired workers with prior felony charges. The cooperatives were guaranteed a contract with local anchor institutions, such as the Cleveland Clinic and University Hospitals.
Like any new business, there were some early mistakes. The cooperatives had an overambitious target of 1000 employees and the lack of financial literacy among workers forced the cooperative to adopt a more representative model of governance. However, within a decade, Evergreen has grown to more than 100 workers, 30% of whom are already worker-owners. Two out of three of the cooperatives are profitable, with Green City Growers on track to profitability. Currently, only 15% of the revenue comes from the original anchor institutions. Keep in mind, this is all inside one of the poorest and under-invested-in cities in America. Through Community Wealth Building, Democracy Collaborative reversed the neoliberal norm of cities begging for corporate contracts by cutting public services.
But Democracy Collaborative was never satisfied with merely proving there is an alternative to the status quo. During a Q and A session at Cornell College, Thomas Hanna elaborated that Evergreen is only a proof of concept, the main vision is to directly transition existing businesses and industries, from Amazon to Wall Street. Democracy Collaborative has intensely lobbied politicians, political parties, and organizers towards this program. Already the Bernie Sanders 2020 presidential campaign, the UK Labour Party, and People's Action, a million-member community organizing network, have all adopted the community wealth building framework. Community wealth building should not be seen as a “startup incubator”, but a spiritual successor to Socialist Party presidential candidate Eugene V. Debs vision for "the whole of all industry to represent a giant corporation in which all citizens are shareholders and the state will represent the board of directors acting for the whole people."
What the three case studies have shown us is that the answer to Luxembourg’s criticisms is not to abandon the cooperative, the answer is to integrate cooperatives into militant social movements. Each case study has directly challenged the existing order, actively engaged in the political sphere, and created an alternative analysis of the dominant narrative. The populists built agrarian cooperatives to organize a militant social movement and politicize farmers. Cooperation Jackson’s plan for a solidarity economy became the basis for a successful political campaign and created a radical vision of black self-determination. Democracy Collaborative proved that cooperatives do not have to succumb to market forces. More importantly, the three case studies are causing many leftists to question if the distinction between cooperative projects and social democracy still matters. Nationalizing key industries does not inherently contradict the cooperative’s effort to expand workplace and economic democracy, if anything they complement each other. Thomas Hanna recently published “Our Commonwealth,” where he argues for expanding public ownership through publicly owned enterprises in red states, such as the North Dakota Public Bank. Bernie Sanders' 2020 labor platform included a promise to force large corporations to divert 20 percent of their stock to an ownership fund democratically controlled by workers, itself influenced by the Meidner plan, a policy proposed by the Swedish Social Democratic Party in the 1970s. The Marxist economist, Richard Wolff, maybe right when he called cooperatives “Socialism in the 21st century.”
About the Author:
Greg Chung is a Korean-American, born in New Jersey, but lived abroad for ten years in Vietnam and South Korea. He moved back to the states in 2018 to attend college in Iowa, where he became a community organizer for Iowa Student Action and later the Cornell College chapter of the Young Democratic Socialists of America.