A Scottish road to nationalism


‘Is the a Scottish Road to Socialism?’, edited by Gregor Gall, Scottish Left Review press, 2007.

‘Scotland’s Road to Socialism: Time to Choose’, edited by Gregor Gall, Scottish Left Review press, 2013

I have mentioned before that the Yes side of the Scottish independence debate appears to present a positive message that contains hope and optimism while the No campaign appears negative and doubting.

Speaking to my daughter and sister however, it is similarly the case that the Yes campaign also has its powerful negative argument.  This consists of the claim that to vote No is to vote for the status quo and the status quo is neither popular nor acceptable.

But why is the status quo so bad?  What causes it to be like this?

For anyone who calls themselves socialist, by definition the problem is the social system.  One that produces disaffection everywhere and therefore cannot arise from ‘London rule’.  Socialists are also, or rather they should be, well used to nationalist campaigns that put the ills of society down to the nationality of the state, and which therefore obscure real causes.

Some on the left however have argued that Scottish workers and Scottish society generally is more progressive and that this justifies separation from England and Wales, in order to forge ahead in creating a more egalitarian society that can form a better starting point for the creation of socialism.

In a number of places within the two books reviewed the idea of making a fresh start is raised.  However what this demonstrates is not that some formula has been discovered that wipes the slate clean and allows past defeats to be overcome, but that the left has no answers to the problems that have beset socialism.  This means that these will still be there after independence, in worse circumstances and to a worse degree, should the objective of a separate Scottish capitalist state be achieved.

Even if it were true that the Scottish working class is more progressive, for a socialist this would mean finding ways through which Scottish workers could lead the rest of the British working class, of which they are an integral part.  Instead Scottish nationalists seek the creation of a separate state, one that can only be capitalist in current circumstances, and give it the role of catalyst for progressive change.

The key role of the state in substituting itself for the activity of the working class as the agent of change is demonstrated not only in the unavoidable claims that a Scottish state will be more progressive simply because it is Scottish but also in claims made for the unalterably reactionary nature of Britain as a political unit and the UK state.

In order to respond to the argument that, if they are more advanced, Scottish workers should lead their English and Welsh sisters and brothers, it is asserted that this cannot happen because there is something in  British politics or the UK state which just cannot be changed.  Behind the seemingly positive message of Scottish advance, of Yes to independence, is a pessimistic and very negative view of the British working class.  What lies behind the smokescreen of hope is a mountain of despair:

“There is a very simple answer to the question, ‘is socialism possible in contemporary Britain?’  On the basis that it is possible, the answer is yes, but it isn’t going to happen.” (Is the a Scottish Road to Socialism, p 57)

“. . . key vested interests are so entrenched within the very fabric of the UK state that it is difficult to see them ever relinquishing control.”  (Scotland’s Road to Socialism: Time to Choose p. 45)

“Labour can offer no guarantee that it can deliver greater capacity for providing ‘Scottish solutions to Scottish problems’ whilst defending the union.” (Scotland’s Road to Socialism: Time to Choose p. 59)

“We find ourselves in a unitary, multi-national British state that is politically locked into a neo-liberal world order.  In 2014, we have the opportunity to break free from that state and to start again in a newly independent country.” (Scotland’s Road to Socialism: Time to Choose p. 117-118)

“I find it simply impossible to look at Britain and conceive of any strategy at all that might even bring a hint of socialism to London. . . If we want change in our lifetimes, we’re going to need independence” (Scotland’s Road to Socialism: Time to Choose p. 128)

“There is not a scintilla of evidence that Labour can be reformed, that significant forces wish it to be reformed or that any UK socialist party can emerge to replace it.” (Scotland’s Road to Socialism: Time to Choose p. 157)

“This is what needs to be understood about Britain, that it is structurally incapable of being progressive.” (Scotland’s Road to Socialism: Time to Choose p. 164)

Since Scotland is an integral part of Britain and the state in Scotland a component part of the British state, the damnation of Britain and the British state is really an equal damning of Scotland.  Except that what these authors really mean is that it is England and the English that are the problem.  Otherwise their assertions make no sense whatsoever.

Somehow the unreformable nature of the British state and British politics does not apply north of the border.  Apparently a Scottish capitalist state can be reformed.  Such a new state will not be part of the neo-liberal world order.  How?  God knows – for even a workers revolution in Scotland that placed political power in the hands of a completely democratic workers’ state could not escape being locked into a neoliberal world order.

Only in a scenario of immediate spread of the revolution could it have any hope of surviving and still be something worthy of the description socialist.  But such a prospect would immediately depend on not just solidarity but spread of the revolution to, of all places, England and Wales.

Aware of the self-defeating argument that Scottish workers are better off being separated from England the argument is then put that the great leap forward by Scottish workers would act as an example which English and Welsh workers would follow.

The two problems with this is, firstly it isn’t shown how this cannot be done more easily by Scottish and English workers remaining united and avoiding nationalist division.  And secondly, the example that Scottish nationalism is giving to English workers is not the need for solidarity and unity but that English workers are incapable, that the Scots are better off advancing by themselves and that this is the way forward for them to follow.  So, if there is a No vote, what our left nationalists are really saying is that English workers should dump the Scots.

Left nationalists might reply that it is not English workers but the ‘British’ state that is unreformable but the nationalist argument is that this state cannot be dealt with by British workers but only by Scottish workers leaving it.  This can only mean that a new Scottish capitalist state will somehow be more reformable and/or that English workers are a drag on Scottish workers in defeating the British state.

Except it is not proposed to  destroy the capitalist character of the British State but simply to set up two capitalist states where previously only one existed.  Much is made of the dominance by the British state by the financial interests of the City of London, but Scottish separation is not going to do anything about that.  This dominance has been around for at least a century, it is not something new brought about by recent ‘neo-liberalism’.  As the Irish contribution to ‘Scotland’s Road to Socialism: Time to Choose’ explains, the new Irish state did nothing to reduce the power of the City of London when it was created.

What it did do was spawn a tiny competitor to it, the International Financial Services Centre in Dublin, which has been described as the wild west of international finance.  Irish workers now assert the sovereignty of their state through tax deals with US multinationals and no-union factories. The SNP promise exactly the same.  In the 1970s it promised that Scotland would be like Switzerland and in the 21st century that it would be like the Celtic Tiger, until it crashed and burned.

The example being set by left nationalism in Scotland is that the ills of capitalism, ‘neoliberalism’ and austerity, should be fought through small nations seeking independence.  Not by seeking the broadest unity of workers.

Independence is supported because it would be a defeat for the British state and the British state is a barrier to working class socialism.  In so far as it goes this is correct but what it leaves out is much more important than what it says.  It is not only the bones of the left nationalist argument but its whole physiology.  This makes it simple, simple minded and wrong.

Socialism is the movement of the working class and its conquest of economic, social and political power, irrespective of nationality.  It can exist only at an international level.  This too is a simple description.  But even at this simple level is shows the incompatibility of left nationalism with socialism.

In the case of Scottish nationalism the capitalist nature of the British state is confused with its being British which allows opposition to it being British hiding the fact that whatever replaces it will still be capitalist.  Scottish left nationalism seeks a new start on the basis of a newly independent nation but since Scotland is already a nation what they mean is that the new start depends on creation of a new capitalist state.  Unfortunately for such ideas, socialism is not the result or product of state action no matter how new or progressive that state is.

Nationalism, no matter how left it is, always confuses action by the state for socialism, so it calls upon the state to redistribute wealth and take control of resources ‘for the people’, whereas socialism calls upon workers to take ownership of production itself and build the power of its own organisations so that one day these can replace the state.  Internationalism is not the solidarity of one progressive state with another but is the international action of workers – from organising in parties and unions internationally to creating and building workers’ cooperatives internationally, across borders, not favouring the population within certain lines on a map.

The betrayal of socialism involved in the embrace of nationalism by sections of the Scottish left is revealed by this state-centred conception of socialism, although this is hidden from many because socialism is popularly identified with state action and in particular by the growth of gigantic, bureaucratic state power, exemplified by the Soviet Union.  This is one reason it remains unpopular among the mass of workers.

It is revealed in assertions that Scottish nationalism is really internationalist.  Often such claims are made on the basis of comparisons with the struggle for a separate state in Catalonia or the Basque Country or even Ireland, but what this reveals is not internationalism but the solidarity of nationalisms.

The point of nation states is that they compete with each other, sometimes through alliances with other nations.  In fact it is usually through alliances with other nations, but this doesn’t make such alliances examples of internationalism.  The Axis and Allied powers in World War II were not rival internationalisms except in the sense of being rival imperialisms.

For small countries such alliances are doubly necessary and necessarily involve subordination to bigger and more powerful states.  An ‘independent’ Scotland would be no different.

So the argument that independence is to be supported because it will be a significant defeat for the British state is weak because it will simply create two capitalist states where one previously existed.  It will set a rotten example for workers who seek solutions to austerity and will only exacerbate competition between nations from which workers will suffer.

National separation in the case of Scotland will not settle nationalist grievance but intensify it through Scottish competition with England.  It will not significantly weaken the international imperialist system either economically, since Scotland will remain a capitalist society, or politically, since Scotland will remain part of the EU and of NATO.

What it will do is promote nationalist solutions to the problems of capitalism, or ‘Scottish solutions to Scottish problems’ as one author put it.  It will further division of the British working class and make more difficult the radicalisation of this working class into a movement for a new society.

Apologists for Scottish nationalism claim that Scottish workers can still belong to British trade unions, although why they would want to if the British labour movement is an irredeemable failure is nowhere explained.  The history of Ireland shows the powerful divisive potential of creation of separate states even within a single national working class.  Partition has dramatically increased divisions in the Irish working class and not just along religious lines.

The small pro-nationalist left organisations in Scotland have already revealed their true colours when it comes to claims to internationalism.  Almost their first step is creation of separate Scottish organisations.  They are oblivious even to the possibility of supporting Scottish independence while seeking by their own organisation to demonstrate their longer term goal of workers unity by being part of a British socialist party.  This is because working class unity and internationalism has no real practical significance for their programme, activity or organisation.

There is therefore something positive in a No vote that rejects the despair of nationalism.  This is hope and faith in the unity of the British working class, an historical reality with a tradition that has overcome internal nationalist divisions in the past. The future of the Scottish working class lies in its unity with the rest of the British working class and building towards unity on a European scale, not national separation.



Is Scotland an oppressed nation?









‘Is the a Scottish Road to Socialism?’, edited by Gregor Gall, Scottish Left Review press, 2007.

‘Scotland’s Road to Socialism: Time to Choose’, edited by Gregor Gall, Scottish Left Review press, 2013.

I remember having a brief chat with a left nationalist who argued that, in the context of a reference to Ireland, that there are degrees of national oppression. And so undoubtedly there is. What is demonstrated by the Scottish independence debate is that the measure of it, if it even exists, is very small. We know this because there is no real demand for change.

What we have had are references to “bluff, bullying and bluster” by Alex Salmond over leaders of the Labour Party, Tories and Liberal Democrats, rejecting use of sterling by a new ‘independent’ state. But even here the essential nationalist case is not that Scotland is being told what it can and cannot do but that all this is bluff and bluster, a pure negotiating tactic and not meant to be taken seriously.

Not strong grounds to claim oppression.

A couple of arguments have been raised to demonstrate the national oppression of Scotland. These include the prevention of devolution after the 1979 referendum despite the nearly 52% yes vote on an almost 64% turnout. This was indeed a denial of national democratic rights. It was changed very quickly when the New Labour government of Tony Blair took office in 1997, a new referendum held within six months and the Scottish parliament set up two years later.

It is claimed that Conservative Governments are elected in Britain without a mandate from Scotland. In the 1989 Euro elections Scotland became, for the first time at any elected level, a ‘Tory-free zone’ and in 1992 they were elected for a fourth term with just 25% of the Scottish vote.

Yet governments are elected all the time in Britain without a majority of the vote. English and Welsh workers have suffered the depredations of Conservative Governments no less than Scottish workers and the Tories do not devise policies aimed specifically at the Scottish people. In 2010 the ‘no mandate’ argument became weaker when eleven Liberal Democrats joined the single Tory as Scottish representatives of the new ConDem Government.

It is claimed that the introduction of the poll tax a year earlier in Scotland than England represented national oppression. If it did it obviously didn’t last long. Let’s also forget that one of the two authors of the tax was himself Scottish, dubbed “father of the poll tax.”

The referendum in itself, whatever its limitations, is a demonstration that Scotland has the right to self-determination and can exercise this right.

In this exercise there is no question of nationalists having to face questions of oppression – of the national language; the teaching of Scottish history; the right to fly the Scottish flag; discrimination in employment in favour of English colonists; the mass arrest and detention without trial of political opponents; of English police or an English army called in to police demonstrations or protests; the widespread inflicting of torture on political opponents; the shooting of demonstrators demanding civil rights or the creation of armed gangs to intimidate and terrorise those demanding independence.

If there were any of these or anything like it the referendum debate would be very different; not only the terms of the debate but also the methods of struggle.

The exploitation and oppression that does exist has been displaced and subsumed within a debate within which they cannot be clearly articulated, at least with any honesty, and certainly with any perspective that provides solutions.

Solutions to unemployment and poverty; to chronic insecurity and stress; to ignorance and powerlessness cannot be found in any nationalist programme, either left or right. They arise from the nature of the economic system not the nationality of the state apparatus that presides over it.

Class grievances are portrayed as those of a people, of Scots against ‘London’ or the ‘British state.

Through nationalism the class exploitation of workers either disappears or is rendered secondary to the more immediate demand for national ‘freedom’.

As I have said before such ‘freedom’ does not exist; there are always restrictions and external limitations, which means that pursuit of it, which requires that the demands of workers are postponed, means that they will always be postponed. Nationalism acts as a permanent brake on the aspirations of the working class.

At a certain stage the true class character of nationalism becomes clearer when the new nation trumpets its cause as competitiveness with other nations in the battlefields of lower wages, lower business taxes and willing workers. Such at least has been the Irish experience.

So Scotland is not an oppressed nation but ironically it is nationalism that has the potential to take it in such a direction and the referendum debate has demonstrated how.

Alex Salmond has made much of the “bluff, bullying and bluster” coming from leaders of the Labour Party, Tories and Liberal Democrats. But these parties are very aware that they cannot engage in too open a form of bullying because it has the potential to alienate voters and upset the legitimacy of the state they seek to rule. So their bullying has limits. A separated Scotland would provide less restrictions.

Salmond has portrayed all the decisions that will arise from separation, such as sharing the pound sterling and financial regulation, as ones that will be easily agreed to his satisfaction but in such negotiations the UK state has no reason not to flex its muscles with the smaller state. Such actions by the UK state would, within Scotland, no doubt strengthen SNP nationalism and scotch the illusions of the left that after independence nationalism would suddenly dissipate to be replaced by a left-right divide. Real bullying by the UK state would feed Scottish nationalism and further its growth within the Scottish working class while increasing the divisions between Scottish, English and Welsh workers.

So the rump British state would have every reason to want Scotland to use sterling but enough reasonable arguments to place more or less onerous conditions on Scotland in order for it to happen. It is well known that currency union must involve severe limits on monetary policy within Scotland and there is no reason why the rest of Britain should consider Scotland’s interests as equal to that of England and Wales. If burdens have to be borne there is no reason to make them equitable.

It is also clear that currency union would limit the fiscal policy of a separated Scotland so that its taxation and expenditure policy would also be subject to limits, again set at least partly by the UK state. As the Governor of the Bank of England, Mark Carney, put it: “in short, a durable, successful currency union requires some ceding of national sovereignty.”

Scottish debt might find itself being owned by UK institutions demanding a premium from the new state and any new financial crisis arising within Bank of Scotland and RBS etc. would all too clearly demonstrate the respective powers of the two states.

Financial regulation will also come from London and there is no reason why this regulation would be to the benefit of anyone other than the City of London except with nationalist hopes or assumptions that what is good for the City is good for Edinburgh – exactly the sort of attitude now so scorned by these Scottish nationalists.

Only recently the BBC reports that the siting of Trident in Scotland is one of many areas that would be up for negotiation. Only a fool believes Salmond when he claims all these negotiations will give the SNP what they want in all of the issues, and he will be first to call out the fools when they complain about it after the negotiations are over.

The BBC states that ‘a dozen high-ranking defence veterans have written to Mr Salmond claiming a proposed constitutional ban on nuclear weapons in an independent Scotland “would be unacceptable for NATO”.’

“Were the Scottish people to vote for independence, then Scotland, as a new small nation in an uncertain world, would need international partners to help secure its economic and social objectives and allies to provide national security.”

“NATO, as an alliance with nuclear deterrence as a central part of its strategic concept, could hardly be expected to welcome a new member state whose government put in jeopardy the continued operation of the UK independent nuclear deterrent – a deterrent which protects not only the UK but all of NATO as well.”

Those putting their names to the letter include former chief of the general staff General Sir Mike Jackson (he of Bloody Sunday), Admiral Lord West of Spithead, and former chief of the air staff, Air Chief Marshal Sir Peter Squire. This was followed up the next day by another political intervention, this time by a serving member of the top brass, Admiral Sir George Zambellas.

How comforting is it to know that NATO will help secure the economic and social objectives of the new state? Whose security does NATO seek to protect? Why is the SNP not denouncing the political interference of the armed forces?

Such a political intervention by those recently and currently in uniform portends the future pressure put on the new separated state should it seek to have its cake of being in NATO and eating it by frustrating its operation. Of course the British monarchy, with all its disguised powers, will also continue to preside over the newly separated state.

So, while Scotland is not currently an oppressed nation, the law of unintended consequences might conceivably shift it in that direction. Just as Thatcher’s policies strained the bonds within the British state she so loudly championed so Scottish nationalists might deliver their separated state into a new partnership of subordination with the rest of Britain.

But perhaps this doesn’t matter to the left nationalist case. After all as I noted right at the start, this case is based on the difference between Scotland and England and the view that socialism or moves towards it are more easily achieved through a separate state. I’ll turn to this in the next post.

PS. In his comment on my previous post Boffy correctly states that even where a nation suffers some form of national oppression within a larger state entity the “priority should still be to defend the unity of the workers.”

This should always be the case. The issue is how this might be achieved.

It might be necessary in certain circumstances not only to champion the right of a nation to self-determination but also to advocate its exercise through separation.

This will depend on the degree of national oppression and related to this (more importantly) whether the socialist movement would place itself outside of a real democratic struggle that dominated politics if it did not advocate separation (by so doing isolating itself from the working class).

Even where this is the case the role of socialists would be to warn workers about the limits of national separation, whether called national liberation or not; to separately organise the working class under its own banner and prosecute the class struggle not only against imperialism but against native capitalism.

Its role would be to draw out the class nature of working class oppression and exploitation and warn that nationalism has no solution to these. It would warn that a new capitalist state will not address working class needs, will not empower it but will be set up to enforce the power of the native capitalist class.

None of this applies to Scotland. It does not suffer such national oppression and the Scottish working class has throughout its history fought its greatest class battles in unity with English and Welsh workers.

The nationalist left in Scotland has not prioritised workers unity or, as the two books under review have made clear, prioritised exposure and condemnation of Scottish nationalism and the future to be offered by a capitalist Scotland. What they have done is attempt to argue the priority of supposed national restrictions on Scottish workers and to conflate opposition to class oppression with that of the nation claiming ‘freedom’.

The need to support separation because of national oppression, which I see as sometimes necessary, entails recognising the need for a retreat from a more open and clear class struggle against capitalism and should be the subject of bitter regret for socialists should they consider it necessary.

The opportunistic championing of Scottish nationalism by sections of the Scottish left is therefore doubly mistaken for it is assisting creation of the barriers to the fight for socialism and a united working class that they should be seeking to destroy.

Scottish nationalism and British imperialism










‘Is there a Scottish Road to Socialism?’, edited by Gregor Gall, Scottish Left Review press, 2007.

‘Scotland’s Road to Socialism: Time to Choose’, edited by Gregor Gall, Scottish Left Review press, 2013.

One way of addressing the arguments about socialism and Scottish independence is to review the two books above, which give a platform to a fairly wide range of views, both those in favour of a Yes vote in the coming referendum and those in favour of a No vote.  It is also interesting to compare the arguments between the two over time to see how they have stood up, or fallen down.

In my first post I said that for socialists the relationship between independence and the self-determination of the working class involves a number of questions and not just that independence must in some way be a move towards socialism or makes it easier to achieve.  It would be possible to be a passionate supporter of independence by believing that in itself it was a step forward without also implying any great move forward for socialism.  What is striking in both books is the absence of this argument and the keenness of those supporting independence to minimise such an argument and argue that independence is either intimately bound up with socialism or makes it easier to achieve.

In 2007 one contributor wrote that “when the national question rears up again, as it inevitably must, the debate will not be over the degree of devolution, but a blunt choice between defending the British state or a bold demand for independence and socialism”.  In fact, of course, it is not.  It appears as a choice between the British state and a Scottish state – both capitalist.  Two instead of one and the consequences of each.

Colin Fox argues in ‘Time to Choose’ that “the key question is can the socialist cause be advanced in Scotland through independence or not?  And the answer is yes it can, but only provided it involves a complete repudiation of neo-liberalism, corporatism, the financialisation of our economy and existing class relations.”

The first problem is that the independence campaign is led by the Scottish National Party, a “pro-capitalist, neo-liberal party moving to the right” according to Fox, which would undoubtedly form the first government of the new capitalist state and, buoyed by a stunning victory, would put an indelible stamp on its new constitution. If there is a Yes majority there will therefore be no “repudiation of neo-liberalism, corporatism, the financialisation of our economy and existing class relations.”

If independence can only advance the socialist cause in Scotland by a complete renunciation of these things then clearly independence, the real independence currently on offer, will not advance the cause of socialism.

However if Scotland was an oppressed country, so that everyone within it suffered some denial of democratic rights, by virtue of being Scottish or living in Scotland, then it would be possible to argue that Scotland should be independent and that socialists should support such a demand even without the repudiation of neoliberalism etc.

Once again however the argument that Scotland is an oppressed nation is by and large conspicuous by its absence in the two books, despite the large and varied pro-independence contributions.

However one contribution in ‘Time to Choose’ does not shy away from making such a claim.  “The struggle for Scottish independence is, at its heart, an anti-colonial struggle.”

But who are the colonists?  It can hardly be the English born population in Scotland, its largest ‘minority’, all 422,386 of them.  But what other candidates for this role are there?

“Scottish independence is a blow at the heart of imperialism.”  But if imperialism is understood as an economic system nothing of the economic system in Scotland will essentially change.  If it is understood as the political arrangement of states we will have two capitalist states instead of one, both in the EU and both in NATO.

Both countries currently form a unitary state in which both are part of the same imperialist state.  While Britain has often been called England the Empire has always been called by its proper name – the British Empire.  Scotland has played a disproportionate role in this Empire, in its expansion and exploitation of the rest of the world, despite the proclivity of Scottish nationalists to talk about the British state and Scotland as if they were two entirely different places.

Left nationalists obscure the integral role of Scotland in British imperialism, talking about “independence that would . . .  free us from the shackles of British imperialism”, (Colin Fox ‘Time to Choose’). How could Scotland be shackled by British imperialism?  The Scottish people have been exploited not by the English but by fellow Scots.

Or rather they used to be.  Scottish capitalism, in partnership with the English as part of the British Empire, took an identifiably large role in building this empire precisely because it was separately involved.  The Scottish banks and other financial institutions, which continue to this day, and most of its major industrial corporations were owned and controlled within Scotland.  So much was this the case that one recent study by an economic historian has said that Scotland was even more oriented to Empire than the English.[i]

Part of this was due to the narrowness of the domestic market, a result of low incomes, itself a result of relatively low wages or the greater exploitation of Scottish workers by Scottish bosses.

In the 1960s however manufacturing employment began to fall in Scotland, in this respect no different from that of Britain as a whole.  In the UK manufacturing as a share of employment peaked in 1966 while in Scotland the percentage of industrial employment fell from 39.3% in 1965 to 32.3% in 1979, 17.7% in 1993 and 11.1% in 2007.  Scottish deindustrialisation looks greater than that of many other OECD (advanced capitalist) countries only because its starting point was higher while its finishing point is unremarkable.

The British government succeeded in postponing this deindustrialisation through regional policy and attracting multinationals through incentives, which increased sixteen-fold from 1962/63 to 1969/70, but these increasingly failed to have the desired effect in the 1970s, at the end of the post-war upswing in the world economy.  Decline in Empire and decline in industrial Scotland went in tandem because the latter was in integral part of the former.

The British state had failed to prevent deindustrialisation and the demands of the Left today for nationalisation show how little they have learnt from this failure, with their repeated calls for nationalisation.  Much of the Scottish left now wants a Scottish instead of the British state to do the business.  Nationalisation did little to reverse the decline of the railways, coal or steel industries.  In fact much of the decline took place under nationalisation, with employment in the Scottish railways falling from 55,393 in 1951 to 22,910 in 1971 and employment falling in the coal industry from 89,464 to 34,315 during the same period.

It has been argued that the beginning of deindustrialisation coincided with the beginning of serious pressure for devolution and the growth of Scottish nationalism; a section of the petty bourgeoisie clearly registering the need for another capitalist project to take over from the existing partnership in a declining empire.

In this the nationalists typically saw things in reverse, with the SNP candidate in the famous Hamilton by-election in 1967 proclaiming “stop the world, Scotland wants to get on”.  In fact Scotland had been rampaging on the world for two centuries and many colonies at the time wanted it to get off.



Today however 87% of Scotland’s manufacturing industries turnover is in companies owned outside Scotland.  One study quoted in ‘Time to Choose’ states that “economic power does not lie in Scotland.  It still predominantly lies at a UK level.”  Scotland does have an autonomous financial services industry, in so far as any financial services in Britain can be described as autonomous. It also has oil but it isn’t owned by Scotland no matter what we think ‘Scotland’ means in this context.  Trade is dominated by the relationship with the rest of the UK – “Scotland exports more than twice as much to England, Wales and Northern Ireland as we do to the whole of the rest of the world put together.” (Time to Choose p. 108)

The basis for a nationalist Scotland has therefore eroded except in one very important respect, pointed out in the paper noted above.  This is in the growth of employment by the state: official Scottish Executive figures give public sector employment as a share of total employed as 23.5 % or 580,000.  However another estimate, taking account of out-sourcing and the growth of state-funded but non-state employment, puts the figure at 31% or 772,000.  The responsibility for most of this employment belongs to Edinburgh, not London; the official figures showing that 485,000 of the 580,000, or over 80%, falls under devolved budgets.

State employment in this respect substitutes for that lost by deindustrialisation.  This employment is financed by taxation of the increasingly service based economy including financial services, with its imperialist appropriation of surplus value, and of course oil, and also by debt.  What matters to Scottish nationalists are the revenues controlled by the state and hence the centrality of the debate about the tax revenue from oil and the levels of state expenditure it might support.

Scottish nationalism represents an attempt not so much to turn its back on Empire as to give a layer of the middle classes and capitalists direct access to the fruits of state activity, its taxation and expenditure.  To the working class the SNP promises fairness while to big business it promises a lower rate of corporation tax.  It doesn’t particularly matter what this rate is as long as it’s lower than that set in London; as the Tories lower it the SNP say lower still.

The state is no less the base of the nationalist left, in fact more so since it expects the state to do even more wonderful things to the Scottish working class.  For those who believe socialism is nationalisation of the economy it is no matter of principle what state might appear the most likely candidate to carry it out.

All this is why the proposals of the SNP promise such remarkable results from independence while also promising such little change to the fundamental features of the status quo.  While the currency stays the same and no radical change in policy is offered, relatively minor differences based on pure assumptions and assertions are open to the grandest of unproven promises.  No wonder there are complaints about the lack of clarity generated by the debate and confusion caused by claim and counter-claim.

Hypotheses, projections and counterfactuals take the place of hard and immediate alternatives.  So the debate is about can Scotland continue to use the pound sterling; can it stay a member of the EU or negotiate membership within months; can it continue with the Bank of England as lender of last resort and with financial regulation ‘from London’, otherwise a term of nationalist abuse.

There is no or precious little debate about whether the pound should be the currency or what a currency means or is supposed to achieve, or about how the financial services industry could provide the catalyst for a new economic crisis.  Keeping the pound, keeping financial regulation from the city of London, staying in the EU and continuing to cut corporation taxes are the marginal ‘changes’ upon which grand nationalist rhetoric hides reality.   Meanwhile the No camp assists the nationalists by claiming that they can’t have many of their fairly timid set of demands.

But if Scotland actually was an oppressed nation the nature and characteristics of such oppression would be central to the debate.  Even accepting a continuing capitalist Scotland there would be something important, something urgent, something raw that would inflame passion.  But there isn’t.


[i] The Economic basis of Scottish Nationhood since 1870, Jim Tomlinson, University of Glasgow.

Arguments against workers’ cooperatives: the Myth of Mondragon Part 2

mondragon-humanity-at-workIn Part one of this post I looked at the argument that the most famous example of workers’ cooperative ownership involves the division of the working class within the cooperative so that technicians and especially mangers have different views and interests from manual workers.  This is reflected in their relative enthusiasm for the cooperative form.

In fact there is no evidence or argument presented in the book under review that there is a fundamental difference of interest between managers and workers arising from class position within the relations of production, although some evidence that there is differing levels of enthusiasm.

I argued in response that the evidence for the view that there is weaker engagement of workers in the cooperative involves writing off the views of the higher paid workers, some of whom might be called managers, but that there is nevertheless some weak evidence of an unhealthy lack of participation by manual workers in decision making.  In Marx’s support for cooperative production he noted that:

“The co-operative factories of the labourers themselves represent within the old form the first sprouts of the new, although they naturally reproduce, and must reproduce, everywhere in their actual organisation all the shortcomings of the prevailing system. But the antithesis between capital and labour is overcome within them, if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour.”

The evidence of the book is that some of the most political workers have organised to struggle against some of these shortcomings and have succeeded.  This response of the workers is one that should be supported rather than dismiss workers ownership outright.  To anticipate the whole argument – if workers should not take up experiments in running their own workplace how are they ever to be expected to – in one momentous event called revolution – ever to take over running the whole of society and creation of their own state to protect it?

The actions of these politicised workers show the role that a workers’ party could play in advancing the socialist project within cooperative production.

The argument of the book (The Myth of Mondragon) however is not only that the real workers cooperative, as opposed to the mythical one, divides workers within the cooperative but more especially has resulted in, and was meant to result in, the division of the working class in the local area and within the Basque country more generally.

The argument has already been referred to but it is made up of several components.  The first is that the cooperative has imposed middle-class values on workers by making them, in effect, small property owners.  In this they faithfully reflect the motives and views of the original sponsor of the cooperative in Mondragon, Catholic priest José Mariá Arizmendiarrieta, who was heavily influenced by Catholic social teaching and who sought to ameliorate class struggle through education and co-operativism.  Hence the significance noted in the first post of relatively more co-operators viewing themselves as middle class than workers in a private sector firm.

This fed into the views of Basque nationalism, particularly the bourgeois PNV (Partido Nacionalista Vasco) but also the radical nationalism of ETA, which, like the Irish versions of bourgeois and petty-bourgeois nationalism, liked to look on the Basque people as inherently egalitarian and predisposed to small property ownership which united the nation against the outside enemy, harking back to an original society free of class contradictions that preceded foreign rule.  For the radical nationalists the cooperative could simultaneously be supported by emphasising Basque unity and workers participation, so demonstrating the compatibility of nationalism and socialism while opposing any role for foreign multinationals.

The cooperative was thus a conscious political instrument to divide the working class, which was traditionally militant and socialist.  This division is also exhibited in resentment by some workers in Mondragon expressed in remarks that ‘los cooperativistas’ “have it easy”.

A third element of the argument is that it is no coincidence that the cooperative was set up under the fascist regime of General Franco since both co-operativism and fascism share a desire to negate class struggle.  Cooperatives were also supported by Mussolini and the Mondragon cooperative came into existence only because more militant forms of working class action were illegal and repressed.

The author of the book refers to the first criticisms of Mondragon by ETA which accused the Mondragon cooperative of dividing the local working class between co-operators and the rest because the cooperative workers did not want to engage in strikes with their fellow workers.

What is to be made of these arguments?

The argument that the cooperative workers have bought into the illusion that they are middle class is not strongly supported by the evidence in the book but if they did they would not be alone because such identification is not uncommon amongst many better off sections of the working class.  That through the cooperative, through their ownership of the firm, there is some basis for such a view is reflected in the quote from Marx above, that the workers make themselves their own capitalist.  However, this has not prevented workers expressing solidarity with their fellow workers or being sensitive to inequality within the workplace. Objectively their position is a transitional transcendence of capitalism but a very partial one, the more partial the more isolated it is, and cannot provide on its own guaranteed grounds for the development of socialist class consciousness.

This needs to be fought for by a working class party.  The class struggle is not abolished by cooperatives but is a means to pursue it and a battle ground on which to wage it.  The question is whether this battle involves growth and development of the cooperative form or not?  The answer for Marx was clear:

“. . . however excellent in principle and however useful in practice, co-operative labour, if kept within the narrow circle of the casual efforts of private workmen, will never be able to arrest the growth in geometrical progression of monopoly, to free the masses, nor even to perceptibly lighten the burden of their miseries. . . To save the industrious masses, co-operative labour ought to be developed to national dimensions, and, consequently, to be fostered by national means.”

That the Mondragon cooperative was sponsored by a Catholic priest should no more be a reason for condemning it than should the Bolsheviks have condemned the demonstration led by the Russian Orthodox priest Father Gapon, which sparked the revolution in Russia in 1905.

That cooperatives have existed under fascist regimes does not demonstrate that they are essentially instruments of fascism any more than it demonstrates that fascism is the essential expression of cooperatives.  In Italy Mussolini’s fascist thugs terrorised and burnt cooperatives before making them subordinate to the fascist regime.  In Spain the dictatorship of Franco could allow isolated cooperatives to the extent that they did not follow the path, recommended by Max to the First International above, that they expand and combine to develop nationally and indeed internationally.

The example of fascist sponsorship or acquiescence is but the most extreme warning to workers that the potential for their independent initiative should not be compromised by seeking the sponsorship of the capitalist state, no matter how democratic its form.  The revolutionary content of workers cooperatives, whatever its workers might believe at any particular point in time, is that they represent the independent actions of a class that is taking measures that undermines one pillar of existing society, which is the monopoly of the means of production in the hands of a separate class of capitalists.

The need to expand is not limited to national growth but is practical demonstration that workers ownership can only succeed internationally.  So far from supporting any form of nationalism it is practical vindication of the need for workers to reject national solutions, and not just at some future point in time but now.  Workers’ ownership should be extended internationally not tied to some view that workers are part of a purely national development of a specific country and its particular state, especially when this state is inevitably a capitalist one.  Workers of different nationalities united by ownership of the one enterprise with different workplaces in different countries would be powerful demonstration of unity of interest and practical international solidarity.

The first criticisms of ETA reflect a common view on the Left, which appears to be endorsed by the author of the book, which is that the struggle of trade unions against employers is a better model of class struggle than the development of workers’ cooperatives.  Hence the criticism that the cooperative workers often did not go on strike, even though the author quotes a local militant expressing the view that this is perfectly understandable.

Who would they be striking against?  If the purpose is not to influence or pressurise their employer, which is themselves, then it would be part of a movement to demonstrate support for particular demands and the strength of feeling and organisation behind those demands.  In that case this is what demonstrations and meetings are for.

In themselves trade unions do not exist to undermine capitalism but to enforce its operation by acting on one side of the supply and demand of labour power which sets its price.  It enforces the laws by which capitalism regulates workers alienation from ownership of the means of production, it does not in itself threaten it.  Strikes can be seen as a simple refusal to sell labour power for a period rather than an existential threat to the wages system itself.

Would Left critics criticise strikes that demanded workers ownership of their firms?  Or would this be seen as a demand not actually to be realised but one only useful in so far as it leads more or less quickly to revolution?  In which case what would they say if some workers, but not all, actually succeeded – fuggedaboutthat and let’s start all over again?

None of these points negate the argument that trade unions might not be helpful for cooperative workers in order to assist them in both elaborating alternative plans for their coop or to protect them against the actions of management. Particular interests of workers are not guaranteed by workers ownership but we should not believe that trade unions are somehow superior forms of workers’ organisation and representation than the organs of the cooperative.

The latter will be composed of all the workers while the trade union will usually not.  Trade unions are not inherently more democratic as the current bureaucratised organisations show.  Nevertheless for particular workers or in particular circumstances they may be useful in representing the interests of some workers even against the majority.  These workers need not be more backward but could be more advanced and we should not necessarily believe such organisation is required because the unions are needed to represent workers in the same way Lenin claimed they were required as protection against their own bureaucratised state.

The book recalls a significant strike in the Mondragon cooperative in 1974 sparked by job regradings and the system for their evaluation.  The strike only lasted one day, following a walk-out by some of the workforce, but twenty-four leaders were fired pending a vote of a general assembly of the workers.  When this assembly convened the workers voted to uphold the sackings.  A campaign was launched to let them return which eventually, in 1978, led to their being readmitted.

The strike and its aftermath exposed the political assumptions behind the participants on both sides with cooperative managers claiming the strikers were anti-Basque while some of the strikers went on to join a Maoist-oriented organisation.  Some Left organisations then went on to develop left-wing critiques of cooperativism.

The messiness of such events gives a headache to those who like their politics simple, with workers on one side and bosses on the other.  Simple trade unionism seems to provide for that although simple trade unionism does not go beyond capitalism, much of it is purely sectional and some of it is even reactionary.

Despite the authors apparent approval of this model of class struggle she notes that, contrary to her overall argument, that the “most important factor influencing the local labour movement” was the Moncloa Pact between the Left parties, including the Spanish Communist Party, the trade unions syndicates and the Spanish Government.  This accepted changes to the law which reduced workers’ rights below what had been provided under the Franco dictatorship.

So trade unions are not an anti-dote to workers’ failure to make islands of socialism out of workers’ cooperatives, which can hardly be expected because they haven’t been able to do that for themselves.  The answer is not to see workers cooperatives as alternatives to class struggle but as part of it.  Once again the question is whether the answer lies in expansion of cooperatives or their rejection.

The answer for Marx was that they should be developed.  This is elaborated on in the two posts recommended by Boffy in his comment on the first of these posts on Mondragon.

On their own a cooperative can easily be a capitalist enterprise owned by its workers in which, as Marx says, the workers become their own capitalist.  What makes them a powerful weapon of transformation is their development and growth into a social and economic alternative to capitalism through cooperation between them and their living example of workers’ power.

As isolated coops they are indeed subject to the economic and political subordination of the capitalist economy and its state.  If content to be providers of jobs and income only to their members there is clearly no wider ambition.  However as a cooperative movement determined to grow and develop in other areas of production, both to secure its own future and share its benefits with others, and to provide other cooperative services such as education, health and other socials services, it inevitably poses itself as an alternative to capitalist production and the capitalist state’s provision of services.  It becomes a political alternative because its growth, as an economic sector driven by the needs of its workers and their customers and not by profit, is a real, practical and living example of an alternative economic and social system.

The development of the cooperative sector to become such a political rival and alternative is at least partly dependent on Marxists fighting for such a perspective within cooperatives and for cooperatives to propagandise their alternative.  In Marx’s remarks to the First International he praises workers’ cooperatives and calls for the workers to pursue just such a task:

(a) We acknowledge the co-operative movement as one of the transforming forces of the present society based upon class antagonism. Its great merit is to practically show, that the present pauperising, and despotic system of the subordination of labour to capital can be superseded by the republican and beneficent system of the association of free and equal producers.

(b) Restricted, however, to the dwarfish forms into which individual wages slaves can elaborate it by their private efforts, the co-operative system will never transform capitalist society. to convert social production into one large and harmonious system of free and co-operative labour, general social changes are wanted, changes of the general conditions of society, never to be realised save by the transfer of the organised forces of society, viz., the state power, from capitalists and landlords to the producers themselves.

(c) We recommend to the working men to embark in co-operative production rather than in co-operative stores. The latter touch but the surface of the present economical system, the former attacks its groundwork.

(d) We recommend to all co-operative societies to convert one part of their joint income into a fund for propagating their principles by example as well as by precept, in other words, by promoting the establishment by teaching and preaching.

Let’s see how such a perspective might address another frequent criticism of Mondragon and other cooperative enterprises.  This is that the cooperative further divides the working class through its large use of temporary contract labour, as much as one third of a particular workforce in Mondragon.  These workers are not members of the cooperative with all the rights of membership and obviously have much less job security.  In these circumstances the workers are not their own capitalist, since they do not have membership of the cooperative, and are exploited not by themselves but by others – the Mondragon cooperative.

If it was the case that these workers were indeed needlessly kept on purely temporary contracts it would be open to the most class conscious workers within the cooperative to campaign and seek a vote on their award of cooperative membership.

On the other hand let us assume that the cooperative workforce does not accept this because it views these workers as an unfortunate but necessary buffer against periodic reductions in demand for their products, such fluctuations being an inevitable feature of capitalism.  Then it would not be possible to give these workers cooperative membership because the cooperative could not guarantee their continued employment should demand for the products they make fall.  This might be despite the fact that the Mondragon and other cooperatives seek to move workers around the wider cooperative group in order to protect the employment of their members.

The second class status of the workers could lead to resentment within the wider working class and support for the view that the cooperative workers are indeed a privileged layer that is separate from the rest of the workers.

What is the answer to this problem?

The answer is not obviously to give these workers the same rights as the rest of the cooperative workers for this solves no problem.  If demand does suffer a drop or there is some other crisis in the cooperative, for example if some customer does not pay up because it has gone out of business, the cooperative can choose to keep all its workers on the payroll and then either weather the storm or as a result go out of business altogether.

If the latter is the foreseeable result of the event then keeping all the workers on is a mistake, not only for those workers who could otherwise save their job but for the cause of worker owned production in general.  The whole cooperative would cease to exist when part of it at least could be saved.  If all the workers, including temporary workers, have equal rights how is it to be decided who will lose their job?

If this problem is to be minimised the cooperative should seek to be part of a wider federation of cooperatives so that downturns in economic activity in one area can be made up by possible growth in employment in another.  The larger the cooperative movement the more scope there is to diversify risk and build up reserves to protect its members during crises.  Were this to happen then cooperative production would be seen by workers in the capitalist sector as a real progressive alternative to the insecurity of the capitalist sector in which workers jobs are more or less quickly sacrificed for the profits of the big wigs.

The answer then is not to reject cooperative production but to seek its growth.

In the meantime there are steps that could be taken to defend the rights and position of temporary workers.  The first might be to ensure adequate union organisation and representation for them within the cooperative.  The second might be for these temporary workers to form or be part of a ‘temporary workers’ cooperative themselves, which has a membership across a number of firms that might not all have to be cooperative enterprises. (Just such an idea is proposed by Boffy in the posts referred to above).

In this way the temporary workers would not have to simply rely on the actions of others but would, through their own cooperative employment agency, take some control of their employment situation including building up reserves for bad periods, providing social insurance or job seeking support, including retraining facilities.  Such a cooperative could be the sponsor of a political campaign in defence of the rights of temporary contract workers.

To return to the main argument: the promotion of cooperative production is not an alternative to class struggle but a part of it.  It is the solution to a problem that many of those who believe in socialist revolution believe does not exist.  This problem is that the majority of the working class do not see any need for their own ownership and control of production.  They not only do not see the need for it but even if they did they have no experience of it, nor any particular, in fact any, view of how it would seek to achieve its aims.

The view that running society is something that can be done more or less easily on the morrow of the revolution does not ask why workers would carry out this revolution in the first place or why they would be fit to run things after it.  What is it they would seek to do differently and how could it be done?

Instead the process of revolution, as normally argued, envisages workers rebelling against attacks on their living standards and democratic rights through some sort of politicised general strike which develops into workers councils.  These will then take over from the capitalist state.  What is missing from this is any understanding of socialist revolution as a change in the mode of production.  From one based on profit to one based on use.  From one based on capitalist ownership of the means of production to one based on workers ownership.

We are asked in this scenario to believe that the whole working class will in one fit of more or less violent rebellion against repression etc, seek and know how to implement its own ownership of production but that such strivings should not be encouraged or expressed before the revolution in the growth of workers cooperatives.

There is no need for workers to learn about how to organise production within their own factories and offices.  No need to learn how to manage trade and production between other workplaces and customers.  No need to master how the economy works the better to make changes that benefit fellow workers and fellow consumers.  No need to learn how to compile economic plans within the firm, within the wider cooperative movement and the wider economy.

No need to learn by practical experience the role of the capitalist state in protecting capitalist property against rival workers’ owned property; to learn the need to build their own structures that will defend their plans to develop production as they see fit, and no need to seek to defend their own cooperative property through the overthrow of the capitalist state.

The argument is not whether cooperative production plays a role in the move to socialism but what role that is, over what period of time such production can realistically be expected to develop and what the role is of Marxists in politically fighting for and defending the growth of workers property.

Back to part 1

Arguments against workers’ cooperatives: the Myth of Mondragon Part 1

9780791430040Perhaps the most well-known workers’ cooperative is the Mondragon Group based in the Basque country, famous not only because of its success and longevity but because of its involvement in manufacturing.  Its approach has been recognised by many around the world as an alternative to the capitalist corporation, resulting in numerous visits and studies of its performance and operation from those keen to learn its lessons and apply them at home.  For Marxists it would seem practical demonstration of the claim that capitalists aren’t needed and workers can successfully organise production in a fairer and more equitable way and without abandoning efficiency or the making of goods that other workers would like to buy.  I therefore want to look at the arguments in a book that says that this view is wrong and is based on an understanding of the Mondragon story that is mistaken because that story is a myth.[i]

The myth arises, says the author, by de-contextualising the cooperative from its social and political environment and from its historical origins and development.  The workers of Mondragon are not more class conscious but less.  She quotes approvingly the view, expressed in a separate study of a particular group of workers’ class position, that political and ideological dimensions are often more significant for actual class position than are strict property relations.  When we adopt this perspective things look quite different.  The author presents general arguments around the question of workers’ cooperatives and a particular analysis of Mondragon.  She does so ‘from a working-class perspective.’

I am not knowledgeable enough to make judgements on the particular arguments about the Basque country but I will comment on the evidence for her claims that she presents and the general arguments presented on workers’ ownership within capitalism.

In my view her first mistake is to identify workers cooperatives as part of a spectrum of labour-management cooperation, ranging from quality circles, team organisation, works councils and employee share ownership programmes all the way to workers’ ownership.  All are designed not only to make workers obey management but to make them want to obey.  They involve various mechanisms of labour management cooperation and compare unfavourably with the conflict model that involves militant trade unions facing up to management and representing the workers.

Her mistake is to see workers’ ownership as a model of capital-labour cooperation.  Far from a mechanism for cooperation with management and capitalists it is a model for workers cooperating with each other and in which capitalists, at least within the firm, do not exist.  Its logic is to extend cooperation among the working class and in so doing create the grounds on which a new socialist society can be built and there are no capitalists anywhere.

Of course there is still a management within the cooperative and the model involves various mechanisms for shop-floor worker and management cooperation but it is the workers themselves who can appoint, and if so devised, replace management because it is the workers who are the owners.  Management is accountable to the owners who are the workers.  In a capitalist firm workers are accountable to management.

Of course Kasmir is aware of this but at places within her book she presents the management of Mondragon as virtually a separate class from workers on the shop floor.  As an anthropologist she is sensitive to the differences between the daily lives of workers and managers even where the income differences are relatively small compared to most capitalist enterprises. She sees these relatively small but significant differences in income reflected outside the workplace also reflected in knowledge, responsibility and power within the cooperative.  She notes that it is the cooperative’s managers who are most enthusiastic about the cooperative and that it is they who invariably welcome visitors and present the views of the cooperative’s members to outsiders.

It is undoubtedly true that workers are sensitive to even relatively small differences in income, especially in contexts in which equality is held as a primary virtue and objective.  It was just such dissonance between claims and reality that led to such cynicism among workers in the Stalinist regimes in Eastern Europe.  While workers were supposed to be in power and equality reigned, in the reality that everyone lived and saw the bureaucracy maintained exclusive power and defended all the material privileges that went with it.

It is not the case however that Mondragon is a little bit of Stalinism in the Basque country or economy of the Spanish State.  There is no attempt made to claim this in the book.  In fact the book records that repeated attempts by management to increase the allowed differential between management and shop floor pay have been repeatedly voted down by workers.  Workers have the power to limit the pay of management.  What capitalist firm allows that?  Read the financial press and it is full of complaints that even capitalist shareholders have difficulty doing this in big corporations.  How many votes did the Stalinist bureaucracies in Eastern Europe ever allow themselves to lose?  Unlike in these states the Mondragon cooperative does not outlaw political activity and the author records the actions of a small group of politicised workers who campaigned actively against the management proposal and succeeded.

The author however also reports that workers do not feel the strong identification with the cooperative that might be assumed.  She demonstrates this through a survey in which she is able to compare the attitudes of workers in a factory within the Mondragon Group to those in a similar privately owned one.  These results have been referred to on a number of occasions by people on the Left as justification for opposition to cooperatives, here for example.

Asked in the Clima cooperative whether ‘in your job, do you feel that you are working as if the firm is yours?’ 23 said yes (40 per cent) and 33 said no while in the privately owned Mayc 10 said yes (28 per cent) and 25 said no.  If technicians and managers are excluded the difference between the two almost disappears with 6 in Clima and 5 in Mayc agreeing.  In both therefore the majority denied feeling that they were working as if the firm was theirs.

Asked if they ‘feel that you are part of the firm?’ 34 agreed in Clima and 21 said no while 23 in Mayc said yes and 13 said no.  While a majority in both therefore agreed that they felt part of the firm a higher percentage agreed in the privately owned firm (64 per cent) than in the cooperative (59 per cent).  Again the feeling was stronger among managers within the cooperative.

Cooperative workers did however report that they felt solidarity with their co-workers, 97 per cent in Clima compared to 86 per cent in privately owned Mayc, while 53 per cent of Clima workers compared to 56 per cent of the private Mayc reported that they had participated in a solidarity strike.  The total for the Clima cooperative included 14 managers at all levels.  The author notes that age played a big part in the answer given the decline of such strikes.

To the question ‘is there any competition over salaries/job indexes?’ (indexes denote salary, responsibility and skill levels) 72 per cent in the cooperative said yes while 56 per cent in the private firm said yes.  When asked ‘is there competition for jobs?’ 79 per cent in the cooperative Clima said yes while 56 per cent in privately owned Mayc also said yes.

The author reports that in neither firms did the workers express strong confidence in the organs that represented them – the social council in the Clima cooperative and the workers’ council in Mayc.  Managers voiced stronger confidence in Clima.  Asked if trade union syndicates should play a role in the cooperative 13 manual workers said yes and 11 said no.  Asked if they needed them to support them and assist in getting expert advice to feed into alternative production and business plans 15 manual workers agreed.  Nevertheless though half of the sample agreed to trade union syndicates playing a role, and although individual membership was allowed while syndicate activity was not, only a handful of workers in 1990 were actually members.

Only six co-operators said they would prefer to work in a private firm.  Of those who did not want to change one said “but I would like it if things changed a lot in the cooperatives.”   Another, explaining his preference for a cooperative, said “because in theory we are worker-owners and the decisions are made by the manager as well as the guy who sweeps the floor.”

Finally asked ‘what social class are you?’ 25 per cent of manual workers in the private Mayc said they were middle class while 70 per cent in the Clima cooperative said they were middle class.  It is an argument of Kasmir that there is a tendency for cooperative workers to see themselves as middle class although she says that while this may be the case these workers see clear distinctions between themselves and their cooperative managers.

So what are we to make of these responses?  First we should note that the evidence is not clear cut and sometimes appears contradictory.  So more co-operators than private sector employees felt that they were working as if the firm was theirs, while a higher percentage of workers in the private firm agreed that they felt part of the firm.  More co-operators viewed themselves as middle class – 70 per cent -yet 97 per cent felt solidarity with their fellow workers.  Like all surveys we might not interpret the questions correctly never mind the answers.  Is there more competition for jobs in the cooperative and if there was was this a good thing rather than a bad thing – a sign of the openness to individual progress and a less rigid and restrictive job structure?

The most immediate problem however is that the survey was not representative.  In other words no robust conclusions can be drawn from it.  Only 58 cooperative workers answered the survey, which was only 19 per cent of the workforce.  Only 36 or 6 per cent of the private firm answered the survey.  The cooperative survey was also not representative because it contained a higher number of new recruits to the Clima cooperative, which might explain a lower identification with it.  Cooperative workers were also more likely to skip questions and write in their own answers and the author speculates that this might be evidence of the ‘culture of dialogue’ which exists in the cooperative.

The author is keen to point to the differences of response from manual workers and the technicians and managers, with the latter being more positive about the cooperative.  As we have seen, she endorses the view that ideological and political views might be more important than class position defined by the relations of production.  It is more than probable however, given the income differentials permitted in the cooperative, that these technicians and most managers were simply better paid workers and their views cannot be reduced on that account.  In the present context it would be rather circular to claim that particular ideological views are working class (less enthusiasm for cooperatives) than others (endorsement of workers’ ownership) without some argument as to why objectively cooperatives are not an expression of working class power inimical to capitalism.  To make such a case one would inevitably have to refer to relations of production but this is the approach the author appears to reject.

It would be a mistake however to simply reject and ignore the finding s of the survey because it is unrepresentative, although one could quite legitimately do this.  The author considers the survey important because its findings are consistent with the more informal and anecdotal evidence she has collected in her stays in Mondragon, including her conversations with some of the local people and review of the political debate among the left on the Mondragon experience.

But the same sort of criticism can be made of her evidence here as well.  So she refers to a demonstration in Mondragon over the annual province-wide labour contract for the metal sector.  This involved a ritualistic demonstration and a short strike as sometimes both the workers and business owners “simply go through the motions so that the structure of the contest does not break down.  Thus the strike is not always a genuine struggle between labour and owners but a ritual of class solidarity.”(page 169)

However this year, 1990, only 60 people turned up; many workers did not vote on whether to have a strike; many who did vote voted against one; the demonstration was short, was over in half an hour and “was disappointing for all who participated.”  It obviously graphically demonstrated the overall decline in workers’ struggle in the town and more widely in the Basque country and the Spanish State.  Given all this there is no big point to be made in noting that not one cooperative worker took part in the demonstration (and the metal contract only indirectly impacted on cooperative workers’ pay).  The author notes that co-operators always made some showing in the past.

The argument of the author however is that the cooperative model was a conscious stratagem to weaken the class combativity of the Mondragon working class – this argument, and that the cooperatives divide the working class, will be reviewed in the next post.  At this point however it is worthwhile accepting the possibility that the workers in Mondragon are not fully engaged in the management of the cooperative, might be apathetic and might not have the enthusiasm that we would wish for.

All this could be true and it would not at all invalidate the struggle for workers’ ownership as a crucial and central part of the struggle against capitalism and for a new socialist society.  Only if one believed that the weight of capitalist society could be lifted from workers’ shoulders by the still limited development of cooperatives could it be possible to be either surprised or deflated that the class consciousness of cooperatives workers has not risen to the requirements of socialist revolution.

It should be recalled that socialist revolution is not just the product of such consciousness but its creation and realisation.  Neither is such revolution reducible or possible as a one-off event but is the culmination of long and varied experience.  Since workers ownership and control of the whole of the productive powers of society is central to socialism it should not be a surprise that relatively early and limited steps towards this do not reflect in purity the future that socialists seek.

The Mondragon experience proves that cooperative workers and their political consciousness might not leap beyond that of their fellow workers.  The evidence of the book under review however is that the class consciousness and combativity of the Mondragon workers was not the cause of the downturn in class struggle in the Basque country and Spain but was simply a reflection of it.

Unlike workers in private firms however cooperative workers maintain ownership of their workplace even during such a downturn.  They therefore maintain an economic and social power which they can build upon in the future.  Their example lives on and they have at hand much greater resources to call upon when it is a more opportune time to advance.  All this compares very favourably with the more or less unrestricted powers of private owners and managers in firms stripped of trade unions or in which unions are weaker, thoroughly bureaucratised or in which they have become company poodles.  None of these rather common scenarios invalidates the correctness of continuing to fight for union organisation as part of the fight for socialism.

Perhaps the evidence of this book illustrates that greater trade union involvement might help raise the participation of workers in running the cooperative or that more open and structured involvement of political groups might achieve the same.  The point is that the possibility of this only arises where workers already own their workplace.

 Forward to part 2

[i] ‘The Myth of Mondragon. Cooperatives, Politics, and Working-Class Life in a Basque Town’, Sharryn Kasmir, State University of New York Press.

Employee ownership and socialism

coop-klBeyond the Corporation: Humanity Working, David Erdal, The Bodley Head, London, 2011.

The author of this book is clearly not a Marxist and he approves of arguments for workers’ cooperatives that encapsulate ‘good, basic, capitalist thinking.’  He puts forward the view that what he is proposing is, far from being woolly and utopian, not only immensely practical but has been implemented many, many times in many, many places.  It’s sheer practicality is one of its attractions and let’s be clear – the practicality of something is an attraction.  It is a clear advantage for any option that it can actually be implemented.

Much of the Left however recoils in horror at the ideas proposed in this book.  Nevertheless the impulse and development as well as the ideological case for workers’ ownership are forceful reflections of the analysis of Marx, which posits the growing contradiction between the socialisation of production and the private appropriation of this production by capital.

Ironically the author gives an illustration of this contradiction.  He compares the electronics industry in Silicon Valley favourably to that of Boston and accounts for the relative success of the former as a result of the fluidity of the movement of people involved in the industry, lack of proprietorial authority in many of the industries’ firms  and the inability of owners and managers to contain the flow of information within individual companies; all contributing to creative development of products and production.

It is notable, he says, that there is less of a top-down culture in Silicon Valley and that employee ownership has been a major driver in business development.  Companies could not attract good people simply by cash so instead used share options, a form of ownership, to get them to come, work for them and stay in the firm.  This together with the excitement of the work itself became the greatest motivating factors for employees.

The socialisation of production is evidenced by the increasing division of labour in which thousands, if not millions, of products are separately produced across the globe in order to come together as one combined product.  The necessity for this production to take place in a balanced and proportionate way, so that the final product can be efficiently produced, requires co-ordination and planning within and across hundreds and thousands of companies.

In April two years ago the BBC reported that a fire in a factory in the small town of Marl in western Germany had killed two people and affected the production of a resin called P-12, used in car braking and fuel  systems. This threatened car production across the world so that “Earlier this week, more than 200 executives from companies including General Motors, Volkswagen, Toyota and Ford met in Michigan. -. . . The group said that it was clear that “a significant portion of the global production capacity” had been compromised.  After the meeting, the big car companies were saying nothing on the record.  But some sources now say there is a real worry that the potential impact could be serious, including a slow-down in production.”

Such cooperation is planned but insufficiently so.  The inevitable disproportions in production lead not to conscious alterations in levels of production in order to seek balance in the myriad locations but to individual crises of cash-flow or profitability in individual firms and production units, leading to crises and disruption.  Economic and production efficiency is calculated at the individual firm level without regard to the overall system of production, the cooperative system of labour, which is in place.

We saw this through the recent dispute at the Grangemouth refinery and petro-chemical works, on which much of the British chemical industry was apparently dependent.  The economic calculation that was carried out rested solely on the relative profitability of the Grangemouth plant and not on an assessment of the industry as a whole.

Both examples illustrate the contradiction between private ownership of the means of production and the increasingly socialised system of production on which it is based.

An even more dramatic illustration of this contradiction is shown by the following two graphs.  They show the falls in world trade and industrial production following the credit crunch in 2008 compared to the impact of the great Depression of 1929:

World Trade

eo fig 2 eichengreen_2ndupdate_fig1

World Industrial Production

What these show is the dramatic falls in economic activity consequent on the decisions of individual banks and financial institutions not to lend because they did not trust each other to be in a position to pay the loans back.  The huge socialisation of resources that is carried out through the credit system became a prisoner of the private ownership of these credit institutions.  Each feared that the other might be fatally insolvent due to speculation in sub-prime mortgages or old-fashioned overproduction of houses and offices as in the case of Ireland.

What has this to do with the growth of workers cooperatives?  Well, if we  understand that capitalism is characterised by the separation of workers from the ownership of the means of production (including credit) and the ownership and control of these means in a separate class, the class of capitalists, we can see that such a system can exist only by workers gaining their livelihoods by selling their capacity to work on the labour market and using the money received to purchase the means of subsistence that they have just produced (but which are owned by the capitalists for whom they work).  The sale and purchase of these two types of commodities, labour power and means of subsistence, takes place in the market and the economics profession attempts to analyse how the economy works by focusing on how these markets work – without previously understanding or analysing why there is a need for these markets in the first place.

The explanation for this is that workers do not own the means of production and therefore cannot allocate these means or the output derived from them directly, through conscious planning, to satisfy the needs and wants that they have themselves previously identified.  They do not set the priorities for what has to be produced, how and where it is to be produced or consciously regulate the effects of what they produce so that any relative over-production does not lead to a closure of workplaces but to a planned decrease in capacity and switch to other desirable production.

The creation of workers cooperatives is a step in overcoming the separation of workers from the ownership of the means of production and therefore of overcoming capitalism.

Many on the left advance fears that workers will become their own capitalists and because the author of this book is not a socialist he quotes approvingly the view that while capitalism is good at creating capital it is not good at creating capitalists. The fear is that the competition involved in the Market will lead workers, even those owning their own businesses, to compete with each other in a way that simply replicates the exploitation involved in private capitalist ownership.  The drive to produce cheapest will lower wages and increase work effort.  In effect workers will exploit themselves.

What this view does in effect is give priority to the Market in analysing capitalism in just the same way as do the mainstream economists.  What they don’t see is the potential of workers cooperatives to overcome the separation of workers from ownership of the means of production and through ending this separation threaten the monopoly of the capitalist class, in doing so undermining the existence of the market as a regulator of economic life.

This can be done through the simple expedient of individual workers’ cooperatives cooperating!  The immediate objection to workers cooperatives is that they will have to compete with each other, or at least with private capital, and while the latter may be true the former is not.  Workers cooperatives can cooperate with each other.

Will workers cooperatives still exist within a society that is capitalist?  Yes, which is why books like the one reviewed see no contradiction between capitalism as a system and workers ownership.  Will this involve competition and will this not involve unwanted and unpleasant features and decisions? Yes, but Marx explained that the new society would not be born except on the basis of the old one and not on one that we could choose.

The sometimes contradictory arguments of this book reflect this contradiction existing in real life.  No more so than the argument about how the transition to workers cooperatives can come about.  Here it is argued, obviously on the basis that there is no contradiction between cooperative production and capitalism, that the capitalists themselves should simply transform their companies into cooperatives.  ‘The powerful need a change of heart’; senior managers will have to ‘make do with a smaller proportion of the wealth’; managers will ‘certainly have to learn how to exercise their power differently’ and ‘advisors will need a change of outlook’.  The book has explained why this should happen but not why it is in the interests of these people that it should happen.

The author calls on Government to prefer cooperatives and points out that this will increase prosperity, boost tax receipts, reduce social problems, increase citizen welfare and reduce social expenditure.  This makes sense only if you think the State is there for all citizens and not just for a few.

It calls on trade union leaders to realise the importance of workers gaining ownership rights and the potential it has for higher earnings, enhancing workers’ rights to information and their power to influence company decisions.  On this score it might appear that the author is on more secure ground since trade unions claim to represent workers and their interests.  Unfortunately it is just for this reason that many do not support worker ownership since such ownership would undermine claims that they exclusively represent workers in a particular workplace.  Normally union leaders prefer state ownership because the state will often guarantee union recognition, and therefore the dues income that pays the salaries of the union officials, while it allows these same officials the ability and right to claim exclusive representation rights.

The alternative perspective of some of the Left – of a once and for all take-over of all capitalist production by a workers’ state – has its own problems.  It leaves no role for the accumulation of prior social power and experience by the working class or of the potential radicalising effect of prior widespread workers ownership.  Such ownership would allow a ready reply to the accurate critique we now hear – where is your workers’ and socialist alternative?

Through many posts we have pointed out the fact that this has disarmed workers in fighting austerity, debt bondage and workplace closures.  Keynesianism – increases in state expenditure – is usually put forward as the only alternative to austerity but it is not an alternative that belongs to the working class.  The perspective of a workers’ economy can take root as a concrete alternative, at least in part to the degree that workers already own and control production.

Instead the ideal of a revolution, that in one blow achieves the requirements of decades of class struggle and experience, slides into the view that this comprehensive creation of socialised property becomes a single task of a country wide mechanism, usually the state.  So the State which is the protector of private ownership is wrongly held up as the means of overcoming it, through nationalisation etc.

Even those who see the creation of workers’ ownership as a task only for a workers’ state do not appreciate that this workers’ state itself must be based on workers ownership of production and of society.  How else do we prevent the bureaucratic degeneration experienced after the Russian revolution or expect the state to ‘wither away’ after revolution, which is the goal of Marxists and which was proclaimed by Lenin after the revolution?

The fight for workers cooperatives is a transitional one in that it contains the seeds of future society within the old.  It therefore contains elements of the old and those of the new but to condemn it for the former while ignoring the latter is a mistake.  In the next post I will look at criticisms of the idea of workers cooperatives as a means of achieving working class liberation and socialism.

Employee ownership and capitalism

{3E6643C4-0E2F-4C4C-B00C-DB42B68D2316}Img100Beyond the Corporation: Humanity Working, David Erdal, The Bodley Head, London, 2011.

The author of this book has an unusual pedigree.  He was born into a family which owned its own business from the year Charles Darwin was born, in 1809.  As a child he did not lack for money and joined the firm in 1977, at which time 1,500 people were employed in the company.  In 1985 he became its effective Chief Executive Officer.  In between he had led a rather different life, getting a job as an unskilled labourer on a London building site after leaving university

Through this real life experience he leant what thousands of Professors of economics are not – that it is employee’s work that creates wealth – and that the key to a company’s performance is leadership and commitment; leadership and commitment from everyone in the organisation.  That leadership is important should be readily understood by socialists.

He is therefore a strong advocate of employee ownership and the book presents his own experience of turning his family business into a workers’ cooperative and his own views on the benefits of such ownership.  He notes that because workers are so used to being ignored and exploited even the most minimal change, such as being allowed to own shares in the company, have positive effects in boosting productivity and performance.  He also notes however that such schemes transfer no real influence.  He is therefore clear that what is necessary is ownership because without ownership there is no real control.

Employee owned businesses do better because their workers are better trained, contribute more to the business and are more adaptable to change.  They generally do not suffer from underinvestment, do not lack ‘entrepreneurial’ spirit and do not exhibit shirking as workers monitor each other’s work effort.  Academic studies show them to be more productive and, while business problems are not solved by employee ownership in itself, or prevent strategic mistakes that may threaten the company’s existence, employee ownership will help the company survive longer.  If you own something you will look after it better.

He contrasts this with the views of traditional economists who, with no evidence, in fact against the evidence, claim that employee ownership will witness workers extract cash at the expense of the long term health of the business, take too long to make decisions, will see them avoid difficult decisions and witness the performance of  their business decline

In contrast he claims that the participation of everyone in decision making, and everyone being equally affected by the decisions made, makes for better decisions.

In his quest to turn the family company into a workers’ cooperative he was repeatedly told by finance advisors and other professionals that this was not a good idea.  The Market is always right – by definition.

He quotes one supporter of employee ownership who complains that workers normally have none of the rights associated with ownership, such as information, participation and control, and that while capitalism is good at creating capital, it is lousy at creating capitalists.

The view that cooperatives make capitalists of workers is one also heard from trade unions and argued as a reason to oppose workers’ ownership.  The author provides many examples of real employee ownership where workers have struggled with issues of productivity and competitiveness and where jobs have had to be cut because of threats of wholesale closure.

However the view that the Market is inimical to workers’ cooperatives is interesting because  in strict logic this is obviously not the case while it is also not the view most widespread on the Left, which is that workers’ cooperatives are simply not an alternative to capitalism because the market does not disappear and therefore capitalism does not disappear.

But it is not at all that simple and the hostility of some defenders of the market to worker owned companies is perfectly rational.

Irrespective of this the author notes that every generation throws up experiments with workers’ ownership but that most often this is not the result of the initiative of the workers themselves but arises from existing owners, from unusual individuals who stand against prevailing orthodoxy.  Who, from ideals of fairness, from appreciation of the contribution made to the company by workers, or realisation that the company can do better under their ownership, seek to transform ownership of their business.

Among the many issues arising from the idea of employee ownership, access to finance is often held up as the insuperable barrier to a business owned by those who work in it.  However the author notes that millions of small businesses do get access to finance, that most companies finance themselves from their own resources or can get started on the basis of the business itself, with funding based on sound business plans or backed by existing assets.  Or, in the case of the Mondragon cooperative in the Basque country, the workers can set up their own bank to finance their other cooperative initiatives.

This he contrasts favourably with the massive funding of mergers and acquisitions by private companies, which have a consistent record of failure, and the funding of property and other asset bubbles.  Mainstream dismissals of the viability and efficiency of workers’ cooperatives ignore the actual history and experience of capitalism as opposed to the mythical equilibrium properties of mathematical models of the market that exist nowhere outside of the models.

The massive increase of executive pay is ridiculed as an example that explodes the glib justifications of the market – that high pay for those at the top is simply the outcome of the interplay of supply and demand.  The demand for executives has not increased exponentially in line with pay but demand, fuelled by the cult of the capitalist exhibited in the growth of business schools and the MBA, alongside TV programmes such as ‘Dragon’s Den’ and ‘The Apprentice’, has seen supply multiply.  So why has the price risen?

Even if it could be argued that the demand for executives lies behind massive increased remuneration (to use the prevailing argot) the market is then supposed to increase supply to drive down prices to an efficient level.  Why hasn’t it?  Is it not working or is it rather that this is not how it actually works?

In the race to justify the rampant growth of inequality we now read about the ‘winner-takes-all’ society, which states baldly that market competition rewards those who win not those who come second or third or the rest.  The problem with this of course is that it is contradicted by the reality in which executive failure is still handsomely rewarded.  More worryingly for its proponents it contradicts the claim that the market rewards efficiency and is fair even minimally.

The author rejects many of the fashionable corporate claims.  For him employee ownership makes companies work better and their workers lead happier lives.  The contract of employment, which a worker signs, removes his right to his own product and pretends that he or she is a thing that can be rented.  Through case studies he argues that ownership make workers feel different – just as capitalism says it is supposed to!  But, he asks, why should such an effect be restricted to a few?

He has had enough experience to acknowledge the difficulties, not just of creating cooperatives but of running them.  How do you ensure workers’ actual as opposed to nominal participation and how do you deal with sometimes unrealistic expectations?  How do you overcome apathy among the workers?  After all, it is necessary not just to limit and control power exercised at the top but also necessary to ensure that it is wielded to effect at the bottom.

He addresses these questions and gives some practical answers, such as ownership being held collectively and not individually by particular workers.  This, he claims, has been the mechanism that ensures longevity of cooperative enterprises and obstructs private capital inserting itself and gaining control.  He acknowledges however that there is no obvious answer to what he calls the corporate governance problem.

It is exactly this question that is addressed by this recent blog post.  It is also only a Marxist approach that can address some of the apparently incongruous workings of capitalism that the author points up, such as why does it limit ownership of capital and not spread it around?

For a Marxist the obvious reason that capitalism does not encourage workers’ ownership is that by restricting such ownership capital compels workers to sell their labour power to those that do own capital and impels them to work on their behalf.  If all production was owned by workers then clearly an individual capitalist would be unable to compel anyone to work for them.

If all production was owned by the workers then equally clearly such production would be geared to what the workers wanted to produce and not to what capitalists believe would make them the most profit.  On both accounts production for profit would end.  Capitalists could find no one to provide the unpaid labour on which profit is based and the enterprises owned by the workers would have no incentive to pursue wasteful or aggressive competition aimed at forcing other enterprises out of business.  In fact they would have every incentive to collaborate in order produce in a way that met their collective needs.

When ownership becomes collective workers will feel differently but this simply demonstrates the truth of Marx’s claim that capital is not a thing but a relationship between capitalists and workers in which the unpaid labour of the latter expands the capital belonging to the former.  When workers own all the so-called capital it ceases to be a relationship between an owner and a worker, between an exploiter and exploited, and ceases to be capital.  When ‘capital’ is owned by everyone it ceases to be owned by anyone in particular so ceases to be capital.  This is why, unrealised by the author, the extension of workers ownership would spell not the expansion of capitalism but its ending.

Again and again the author reflects on how difficult it can sometimes be to get workers to think and act as owners of the enterprises they work in.   For Marxists this is indeed a big problem and is what we mean by saying that we need a revolution to change things, including changing the workers themselves.  Because a revolution is about transforming the lives of the working majority, which they can only do themselves, this includes transforming the vast amount of their lives they spend at work.  Probably unlike the author, we believe there are all sorts of obstacles and impediments put in workers way to gaining control of production, impediments that require workers taking political action to remove.

Production is only one aspect of how society works and attempting to take control of it requires ultimately taking control of the rest of society as well.  Taking control of society as a whole also reinforces the activity of workers control within the workplace.  It is also the Marxist case that ultimately no permanent and stable workers ownership or control can succeed unless the workers also control the state to defend such ownership.

There is therefore a real contradiction between workers cooperatives and capitalism, pace the author of this book, and equally no contradiction between cooperative production and revolution, pace the left opponents of workers’ ownership.

To be continued