CHAPTER IX. VOLUNTARY ECONOMIC ORGANIZATION - THE COOPERATIVES
There is a society with 3,500,000 members, all of whom have joined together voluntarily, each member having the right, by withdrawing his share of the property, to withdraw at any time to join any other society, or to shift for himself.
It has 1,209 branches and runs 116 factories and productive industries in which anything is made from shoes to furniture, from rope to preserves, from books to automobiles. It is the largest distributor of tea in the world and operates a large plant in Chicago, for blending, packing and shipping, in which 454 men and women are employed. Its tea trade averages about 60,000,000 pounds a year. It owns 33,552 acres of land in the United States, with a nominal original value of nearly $ 5,000,000; 10,000 acres in Canada; and besides, 5,699 acres of tea plantations in Ceylon, and 28,617 acres in India, employing ten thousand people. The total wholesale distributive trade for the year amounts to $ 319,638,338.20.
It furthermore operates a bank of its own with over 1,500 agencies throughout the country. In the year in question, it has had a turnover of over £2,408,510,843.90. One-half of the industrial life and accident insurance in the country is written by this cooperative society. Its life insurance costs one-fourth of the old profit-making rates. Its social work embraces almost every branch of human service. It not only serves its own members, but is also of wide public benefit.
By this time certain impatient, matter-of-fact readers will no longer be able to control themselves:
"How would it be possible for over three million people to cooperate in such a large and varied enterprise? It is absurd! It can't be done! You would have to change human nature! You; will never get together such a large number of people for those purposes without compulsion. People are too selfish."
The reply is: such a society, exists at the present, time. For Chicago read London, and for the United States read England, and you have a statement of the affairs of the English Cooperative Wholesale Society. What has been presented as imaginary was an actually existing fact in the year 1922. Is it incredible? If proofs is desired, the reader is referred to a publication of the United States Government in Washington, entitled Cooperation in Foreign Countries, a report of the Federal Trade Commission, 1925, from which the foregoing report is taken almost verbatim. Another even more enlightening book is James Peter Warbasse's Cooperative Democracy; which is full of interesting and stimulating information about what has been done in the field of voluntary associations.
Another answer is that while it would probably be impossible to compel those people to work together thus harmoniously, their social and Mutualistic propensities impel them naturally and voluntarily to cooperate to do the things that need to be done associatively. In the absence of force, their self-interest makes them come together on a Mutualistic basis, where the advantage of one is the advantage of the other, and where everyone gives and takes on a free man's basis. Thus they satisfy wants which, by themselves, they could not satisfy as wall. This satisfaction awakens new wants. These demand new enterprises, new combinations, new inventions. In this way society will grow naturally and easily, like a tree.
If, even now, with the constant interference and disturbance of social relations through the conditions mentioned in the preceding chapters, it is possible to do such things, what may not be expected when special privilege is gone and truly Mutualistic relations can be established in all provinces of life, and especially in economics? The belief that government compulsion is necessary to make people produce associatively the things they need or want is absurd.
The Cooperative Movement (^)
Instead of being the outcome of a certain definite social theory, the Cooperative Movement has simply developed within the last eighty years, from economic conditions. According to James Peter Warbasse, the chief exponent of the movement in the United States, a Cooperative is
"a voluntary association in which the people organize democratically to supply their needs through mutual action, in which the motive of production and distribution is service, not profit, and in which it is the aim that the performance of useful labor shall give access to the best rewards."
The ultimate tendency is
"toward the creation of a new social structure that shall be capable of supplanting both profit-making industry and the compulsory political state by the cooperative organization of society."
In contrast with the largest experiment in socialism (by the Bolsheviks), the Cooperative Movement has fully demonstrated its ability to provide food, clothing and shelter for all in abundance. Anyone who studies this movement marvels at the fact that business transactions running into billions are carried on very successfully by organizations based entirely on voluntary cooperation. Of the various types of cooperatives - the consumers', producers', credit, and agrarian - there are in the International Cooperative Alliance thousands of societies, represented by eighty national organizations.
Although the cooperative housing movement in this country is only twenty-five years old, it has made enormous strides. There is now, in such enterprises, a total investment of over $ 500,000,000, of which $ 200,000,000 is in New York City and $ 100,000,000 in Chicago. Strange to say, it does not seem to have been inaugurated here in the interests of people of small means, but New York' millionaires were the first to adopt it, in the form of magnificent apartment houses, as giving them greater comfort and conveniences at less cost and trouble, while providing an investment that has invariably increased in value.
After the wealthy had demonstrated the value of the plan, it was utilized by many others in all walks of life and in all the forms adapted to the uses of the various classes of persons adopting it; those of moderate means being the predominant type represented. It may be added, moreover, that there have been practically no failures in these ventures.
In banking and insurance, cooperatives have proved of immense benefit to those who had suffered from the capitalist system. The small producer and the farmer in Europe were in the clutches of the usurious money-lender until the cooperative banks, greatly opposed, of course, by the governments, came to their help. If the farmers of this country understood the development of a credit instrument that would take care of their needs without robbing them, they could do the same thing in this regard as they did in the case of insurance, which in many places has been cut in half through the self-help of the farmers.
Will the Cooperative Movement obtain for the worker the full product of his labor? It is evident that the Cooperative Movement is working toward that end, to the extent that it envisages the problem. While most of the cooperatives pay the stockholders some dividends, these are comparatively small. And, irrespective of the number of shares a member owns, he has only one vote in the affairs.
Furthermore, his savings returns do not depend on the number of shares, but on his patronage of the society. For instance, if one family buys $ 2,000 worth of goods during a year, and the savings returns are ten per cent, then they get back $ 200 at the end of the year, even if they own only one share. On the other hand, if a man patronizes the same society only to the extent of purchasing ten dollars' worth of goods, he will receive only one dollar, even if he owns twenty shares, or whatever the limit allowed to one member may be.
In other words, the tendency is to give service to members at cost, and not pay them a profit for the loan of their capital. It is quite possible that in the course of time service at cost would be the rule, and the progressive leaders are hoping for this; but they cannot wholly accomplish this without such an instrument as the Mutual Bank.
As a matter of fact, it seems that they feel the need of just such an institution. J. P. Warbasse apparently expresses that feeling in the following words:
"The payment of interest might be expected to disappear as the society developed to the point where it was unnecessary to call upon its members for capital for development purposes. Ultimately, when a society desired to undertake new developments, it would proceed with the labor power of its members. It would use the materials and natural resources which it already possessed. Material which it had to procure from other societies would be paid for with credit to be exchanged for products of its own. A central clearing house, growing out of the International Cooperative Alliance, or the banking or wholesale agency which it creates, would serve to stabilize and adjust international exchange."
There are a number of advantages which the employees of consumers' cooperatives enjoy at the present time. On the whole, the wages are slightly better than in capitalist enterprises. The treatment of the employees is better, as far as working conditions, hours of employment, vacations, etc., are concerned. The cooperative stores in England were the first to allow the half day a week to employees. Some organizations pay their women more than the legal minimum wages; since most cooperators are working men and women themselves, they are sympathetic to any movement for the welfare of the employees of the society. Sometimes their vote will provide for these people conditions better than those under which they themselves are working. Most cooperatives give continuous employment to workers, because they are assured of a more stable market through their distributive societies, and, in some cases, out of a mere sense of responsibility, which is usually absent in ordinary business. The majority of employees, being at the same time members, have a voice in the running of affairs. In many places, cooperation between the society and the employees, and among the employees themselves, has developed to an astonishing extent in supplying the latter with insurance, education, recreation, housing, and health protection. A notable example is the cooperative garden city of Freidorf, in Switzerland.
Furthermore, there are on record a number of cases where strikes have been won by workers with the help of cooperatives. Frequently, a strike is decided by the length of time that the workers can endure hunger. Where strikers have to depend on profit stores or, worse yet, on company stores, they will be starved into sub-mission. But where they have their own cooperative, with a national organization at the back of it, they can show an independence that will bring results. A favorite trick, in case of strikes, is for banks to refuse loans to unions or prevent them from using their funds, as has been done in a number of cases in England. In every case, the Cooperative Wholesale Society has helped the unions with a spirit of mutuality that was inspiring and that had the logical consequence that membership in the society, as well as deposits in its banking department, increased.
Cooperation Is Libertarian (^)
Will the Cooperative Movement increase individual liberty? One of the tests of any reform movement with regard to personal liberty is this: will the movement prohibit or abolish private property? If it does, it is an enemy of liberty. For one of the most important criteria of freedom is the right to private property in the products of one's labor. State Socialists, Communists, Syndicalists, and Communist-Anarchists deny private property. Even some of the cooperators, while admitting the right of private property, believe that the individual is better off when owning capital jointly, as if there were some particular evil in the individual ownership of capital. But, happily, there are a great many cooperators who realize that private property is a prime essential for individuals, making them independent, thrifty, responsible - effects exactly opposite to those produced by public ownership.
The Cooperative Movement is founded on the principle of voluntary association. Any member may withdraw from his Cooperative, taking with him that which belongs to him. In other words, he is free, in that respect. And, since the ultimate aim of the movement is the gradual disappearance of monopolistic and compulsory institutions, the individual will enjoy a progressively larger freedom than he does now, if this aim is reached.
A cooperative association can tolerate criticism; it can be threatened by any member with non-support, or even with opposition; any number of members may actually secede and be free to start a counter organization, without being shot for treason.
In fact, a true cooperative is a creature of its members; it has no power over, them except what has been accepted, by voluntary agreement; they can overthrow it at any time; and it will only be able to exist if it gives the service for which it was intended.
This is freedom; and, because, cooperators acknowledge this freedom, there is hope that, in the course of time, they will acknowledge freedom as the most important requirement in all the relations of men. Moreover, they will, no doubt, also find, that the, only liberty possible in human relations is equal liberty - that is, the largest amount of personal liberty that is compatible with the like liberty of all.
The fact that the Cooperatives are purely voluntary associations, and are, as far as they go, wholly libertarian, gives them a high place in the esteem of Mutualists, who maintain that the world's best work is done in the absence of compulsion, and in spite of, rather than with the aid of, the arbitrary power of organized authority. It is this characteristic of their structure, in the view of Mutualists, that renders the Cooperatives of peculiar value in advancing the principles of Mutualism and in developing its processes.
It is a significant fact that the Bolsheviks, after trying to squeeze the Russian Cooperative Movement into their State capitalism, were forced by the bad results to give back to the Cooperatives their freedom, and that they now expect more help in the socialization of Russian economic life from the cooperatives than from any other agency. But, if these remain true cooperatives, the Communists will be sadly disappointed in their expectations.
Voluntary Organization Immediately Practicable (^)
Voluntary cooperation is one of the phases of Mutualism that can be put into immediate operation, without the alteration or abrogation of a single law, and it is already being practiced in many countries. But most people are utterly unaware of the magnitude of some of the cooperative enterprises now in existence. The English cooperatives started as competition against short weights, poor goods, and high prices. The competition of the present cooperatives the world over acts as an economic governor to corporate greed and rapacity. The competition of cooperative insurance has cut other insurance premiums in half. If, to what has already been done, the Mutual Bank and occupancy-and-use tenure of land should be added, all exploitation by capital could be eliminated.
It would be possible to point to a large number of cooperative organizations now in existence, but space is not available here, and, moreover, the information may be found in a number of books now obtainable in book stores and public libraries. Suffice it for the present to call attention to a few figures which may be surprising and interesting.
There is in existence today the International Cooperative Alliance, with groups from 34 different countries; representing 80 national organizations, such as wholesalers' cooperatives, which in turn represent anywhere from 50 to over 2,000 individual societies each. The total membership of these societies organized in this way is over 50,000,000 people. If an average of four to a family be taken, the result is a total of more than 200,000,000 who are served by these cooperatives. That is nearly twice the population of the United States. (International Co-operative Bulletin, 1926.)
On January 1, 1926, Germany had 52,788 cooperative societies (consumers', producers', credit, and agrarian), with 10,000,000 members. Taking four to a family, it is found that more than half of the German population is thus served. The Central Union alone consists of 1,100 associations, with 8,500 shops and stores, a turnover of $ 154,000,000, and a membership of 3,500,000.
Russia has as many cooperators as Germany, if not more. The little country of Switzerland had, in 1924, 519 cooperatives; with over 360,000 members, and a turnover of 350,000,000 francs a year. More than one third of the Swiss families are cooperators.
Should it be suggested that the largest bakeries in our future society may be cooperatives, many people, thinking of the big capitalist trusts, will be skeptical. If they should be told that there is one cooperative bakery with 120 ovens and the most modern machinery, which turns out 800 tons of bread a week, and distributes $8,000,000 worth of bread and cakes a year; should they be further told that this bakery keeps the price of bread down to cost for the consumer, that it uses only good ingredients, that it sifts its flour, in contrast to profit bakeries - in short, that it is the best equipped, the largest, and the cleanest in respect to equipment, material and personnel - these persons might still be doubtful. Yet this is an actually existing organization which has been described: The United Cooperative Baking Society of Glasgow, Scotland, which has been in existence since 1869. Similar ones are to be found in many other countries.
These examples are cited merely to refute the critics who insist that voluntary economic organization is impossible. Mutualists unreservedly acknowledge and sincerely appreciate the achievements of the Cooperative Societies. When cooperative stores were started in England, years had to elapse before prejudice and opposition could be overcome. One at a time the members straggled and in dropped out. Three generations passed before the great organizations which exist today were finally evolved. In England, the Mutualist principle of exchange could be put into effect at once. The cooperative organizations have the complete machinery for a Mutual Bank right in their very hands. Thus, if the factories and stores and farms, and ships, and above all, the banking departments of these associated societies were operated at cost - that is to say, at an interest rate of zero per cent per year - so much benefit would accrue to the workers and producers that all except the parasitic classes would become more prosperous. The small loss of the interest on their deposits and the loss of profits in their stores would come back threefold to the Cooperative workers through the increase in production, through better wages and through cheaper commodities.
One hundred years, ago, Josiah Warren, in Indiana, demonstrated in the "time Store" that goods could be sold at cost. There it was accomplished under primitive conditions by a single individual; it is infinitely simpler to do it now by the cooperation of a million persons!
Denmark, a country in which cooperation has been highly developed, has shown how better land and credit systems can work wonders. When the increase in population made itself felt in that, country, as it did in all of western Europe, the Danes had neither coal nor water power, and could not turn to manufacturing, as did England and, later, Germany, so they began a system, of intensive agriculture, with garden and dairy products as specialities. In this field they have become very efficient, and the eggs, butter, and cheese produced are so highly esteemed that they are in demand over all others in the neighbouring countries.
As Denmark has no ruling landlord and capitalist class, its land is parceled out into many small holdings, which are owned by the farmers themselves. There is not much tenancy. This is in sharp contrast to England, where the nobility owns millions of acres of land, and 2,000,000 people are paupers or unemployed all the time; or to Germany, where the people, notwithstanding all their sufferings, are even now unwilling to dispossess the Kaiser of his lands.
The Danish cooperative societies, through their credit system, can borrow money from the banks at a low rate of interest. The government, haying no landed or moneyed aristocracy to coddle, at the expense of the rest of the population, puts fewer obstacles in the path of the producing classes than elsewhere, with the result that the country, poor as it is, has a very large export trade.
Colonies (^)
A form of cooperation that is recurrently popular is that of colonization. Eagerness to realize diverging political or economic ideals during their own lifetime has, from time immemorial, caused ever-new groups of idealists to segregate themselves in colonies. While society was comparatively simple and primitive, and plenty of desirable land was to be had for the mere occupancy, some of these colonization schemes were able, to succeed; but at the present stage of civilization, with its complex needs and demands, and with every inch of the earth being claimed by one or another of the established political units, they are generally predestined to failure as far as their true object is concerned.
Such experiments may still serve as useful laboratories in which to try out various schemes and ideas, and in that way they may have a certain value. However, they are also bound to demonstrate the futility of segregation from the mass of the people as a solution of the social problem. Mutualists, while they regard these plans with toleration and even with eager interest, do not presume to offer them as a practical means of realizing their own ideals.
With the exception of the groups that were bound together by religious ties, those experiments were usually doomed to early failure; and even the religious ones finally tend to wind up as capitalistic concerns.
A typical case is the rise of and the present state of Mormonism. Commercial and industrial organization for profit seems to be the chief function of that society as it exists today. Another case is that of the Doukhobors in Canada, a communistic colony of the religious variety. Through constant friction with the State in which their colony is located, they were forced to vest all powers in their leader, Peter Veregin, who rules them as a benevolent czar and represents, and defends them against the government.
Social problems can be fruitfully worked out only in the midst of present-day society. To go away from it with a few choice spirits, and to try to begin anew by pioneering, with all its hardships, is a mistake, as it takes away from society the very persons most needed for the solution of the problems.
Colonies usually begin with agriculture, which, especially for the inexperienced city dweller, has in itself so many problems that must be solved that the immediate cares soon take possession of the colonists, leaving little time or energy for the practice and realization of the very ideal for which the colony was founded.
Living together as closely as colonists generally must and having intimate dealings with one another to the exclusion of outsiders, always turns out badly, because that truly communistic impulse, which the believers in these close forms of cooperation and group life postulate, is lacking, even in the first generation, and especially so in the next. This basic misconception has caused the downfall of all such experiments, whether large or small.
In many a forgotten corner of the United States may be found a small group of people who constitute the remnant of a colony where many persons, sometimes numbering hundreds, risked and lost the savings of a lifetime trying to realize an ideal condition of societary relations. If all this expenditure of time, and wealth, and personal effort, and all this high-minded eagerness of spirit, could have been put to a more practical purpose, the libertarian movement would have gained immensely by it.
Other Efforts (^)
There are a great many organizations which have been formed expressly for the purpose of getting individuals to cooperate, in the hope that, by such united action, they might simplify or standardize conditions controlling the production and marketing of commodities; lessen the cost of commodities to the consumer; increase the rate of compensation for work performed; and secure the use of land, capital, and ideas on more favorable terms.
In the first group are farmers' and fruit-growers' associations, trade associations, corporations, and trusts.
To the second group belong the consumers' cooperative societies.
The third group is largely represented by the various labor organizations.
And the fourth group includes building and loan societies, insurance companies, credit unions, labor banks, land leagues, and other units of radical and reform movements.
Naturally the demarcation is seldom clear cut. There is nearly always some overlapping of interests and aims.
While the avowed intention of the Cooperative Movement, according to its leaders, is the abolition of the profit system, there is no indication that the rank and file have yet been educated to the point of understanding that the principal form of exploitation is interest.
The great majority of cooperatives are still paying interest or dividends on the capital invested by the members, and they are still demanding interest on loans and paying interest for bank deposits. Since they are in the midst of a society organized on a capitalistic basis, they are necessarily affected by profit psychology, and it is therefore understandable that they do not realize that interest and profits will have to disappear entirely before exploitation can be wholly abolished.
Since that psychology is natural in that environment, as long as the Cooperatives do not familiarize themselves with Mutualistic means of circulating their own credit, or, rather, of furnishing credit to their members without pure interest, they will feel it necessary to continue to charge and pay interest in transactions with their members. To help them to see the vast opportunity that lies within their grasp, and to utilize the power with which their admirable organizations provide them, it is hoped the present volume may be of service.