The Push to Create Co-ops Is Energizing a New Generation of Socialists

Socialism is a yearning for something better than capitalism. As capitalism has changed and as experiments with socialism have accumulated — both good and bad — socialist yearnings, too, have changed. However, a bizarre disconnect surfaces as capitalism’s gross dysfunction during and since its 2008 crash brings socialism again into public discussion. Large numbers of people debate the pros and cons of socialism as if what it is in the 21st century were identical to what it was in the 20th. Is it reasonable to presume that the last century’s two purges, the Cold War, the implosion of the USSR, and the explosive emergence of the People’s Republic of China inspired no critical reflections on socialism by socialists themselves? No. The remarkable lack of awareness of new and different definitions of socialism since 1945, their elaborations, and their implications reflects the fact that sustained engagement with socialism was taboo in the US for decades. That people are now mostly unaware of socialism’s evolution in theory, practice, and self-criticism over the last half century is therefore no surprise.

The taboo against socialism resulted in a mass retreat from engaging with developments in socialism and connecting these developments to the problems of modern capitalism. Socialism rather became one of two things in the minds of most.

On the one hand, many politicians, academics, and media pundits portrayed socialism as coinciding with Soviet efforts to subvert global capitalism. Socialism for such people meant moving from private to state-owned and -operated workplaces and from market to centrally planned distributions of resources and products. These same people equated opposing capitalism with opposing democracy and freedom. This equation was then repeated endlessly in an effort to make it “common sense.”

On the other hand, socialism was the name adopted by Western European — and especially Scandinavian — “welfare-state” governments, which aimed to regulate markets comprised still mostly of private capitalist firms. This led many people to associate socialism with robust public spending and government intervention in the marketplace.

Consequently, socialism was viewed as more or less extreme, depending on whether it involved state-owned and -operated firms with central planning at one end or merely welfare-state policies with market regulation on the other. The words “communist” and “socialist” sometimes designated the more and less extreme versions, respectively. 

As a result of these wooden definitions of socialism, its evolution and diversity were obscured. Socialists themselves were struggling with what they viewed as the mixed results of the first major, enduring experiments in constructing socialist societies (USSR, PRC, Cuba, Vietnam, etc.). To be sure, these socialist experiments achieved remarkable and admirable economic growth. Such growth enabled mutual assistance among socialist societies, which was crucial to their defense and survival. Socialism thereby established itself globally as capitalism’s chief rival and likely successor. In the Global South, socialism arose virtually everywhere as the alternative development model to a capitalism weighed down by its colonialist history and its contemporary problems of inequality, instability, and injustice.

Yet socialists also struggled with some negative aspects of these first experiments in socialism, particularly the emergence of strong central governments that often used their concentrated economic power to achieve political dominance in very undemocratic ways. Many socialists agreed with critical denunciations of political dictatorship, even though some of these criticisms ignored the parallel dictatorships within capitalist megacorporations. Struggles of workers in socialist societies against internal exploitation and oppression likewise affected socialists’ thinking.

One strain of somewhat superficial socialist self-criticism stressed socialism’s inadequate recognition and institutionalization of democracy. This self-criticism acknowledged and accommodated socialism’s critics, many of whom asserted the absence of political democracy in socialist societies. Such thinking also sharpened the struggle within socialism between communist tendencies and social-democratic tendencies. The latter usually functioned within parliamentary systems, where socialists — even when they held elected power — had to govern democratically. These social democrats advertised their democratic credentials against socialists from countries where communist parties ruled. Thus, when Eastern European socialist regimes dissolved after 1989, many socialists in these countries sought transitions to Western European-type socialisms. In some cases — for instance, in Hungary and Poland — their hopes were badly disappointed.

Socialists who called for political democracy to be added to the socialist economic system confronted several questions and problems. First, how is that to be done? Merely adding multiple political parties and elections was surely not the answer. Socialists knew better than most how wealth, income, and economic power tended to concentrate in capitalist corporate hands, thereby rendering parties and elections formalities with little democratic substance. Why should socialists think that parallel concentrations in state-owned and -operated workplaces would yield a different outcome? 

A larger problem for the project of merging socialism with democracy concerned the question of where such a merger was to occur. Was democracy to be located in relations between the state, individual workplaces, and individual citizens; between different people inside workplaces; or in both? Would workplaces be counted like individuals in liberal democracies: one vote each, regardless of wealth, size, and so on? Would democracy be institutionalized inside every workplace so that all employees, with one vote each, could decide democratically what, how, and where the workplace produces and what is done with output and revenues? If so, how would such workplace democracy interact in a democratic manner with those affected outside a given workplace — for instance, customers or others in the surrounding communities? Capitalism never faced, let alone solved, these problems, so figuring out how socialism might do so proved difficult for the socialists who undertook the task.

Increasingly after the 2008 crash of capitalism, however, many socialists grasped the deeper issue of inadequate and incomplete democracy, both in conventional socialisms and in capitalisms, whether private or state. To invoke transition from communism to capitalism in the name of democracy — as was widely done before and even more so after 1989 — was to demote democracy from substance to formality. What struck growing numbers of socialists was that the absence of real, substantial democracy had undermined both traditional capitalisms and traditional socialisms. In the former, collaboration of the wealthiest and most powerful private capitalists with the state apparatus resulted in an undemocratic social and political oligarchy. In the latter, collaboration of the wealthiest and most powerful state and private economic enterprises with the state political apparatus resulted in much the same.

The effort to incorporate democracy into socialist frameworks taught those engaged in the project that the same task applied to capitalism. Systemic differences had blinded the 20th century to some basic similarities between capitalism and conventional socialisms. One key similarity is the internal structure or organization of workplaces and the related nature of the relationship between workplaces and the state. In both systems — recognizing all their variations — workplaces are organized in a starkly undemocratic manner. As socialists moved toward democratizing workplaces, socialism itself changed, resulting in the emergence of a major new socialist tendency at the close of the 20th century.

Through these lessons, a growing number of socialists have come to focus on worker cooperatives as a means to achieve tangible economic democracy. Such socialists reject master/slave, lord/serf, and employer/employee relationships because these all preclude real democracy. Socialist proponents of worker cooperatives seek to construct alternative workplaces that specifically avoid all such dichotomies. They do so in the name of ending the inequalities these dichotomies have always fostered and promoting the democracy such dichotomies have always refused. The goal is a transition away from all employer/employee workplace organizations toward those in which employees are also — simultaneously and collectively — employers. This new kind of socialism thus champions worker cooperatives where workers function democratically as their own employers. 

An economy based on worker co-ops would revolutionize the relationship between the state and the people. In their capacity as a self-employed collectivity, workers would occupy the spot traditionally held by the workplace in state-workplace relations and interactions. The former go-between in the state-workplace relationship — the employers — would be subsumed by the collective of worker-owners. The workers would collectively and democratically hold the purse strings to which the state would have to appeal. The state would thus depend on citizens and workers rather than the other way around. The state would depend on citizens in the usual residence-based public arena of elections and voting (or their equivalents). The state would also depend on workers in the other social arena: state-workplace interactions. In both arenas, real democracy would have taken giant steps forward. The state would no longer pretend to occupy the role of neutral arbiter in struggles between master and slave, lord and serf, employer and employee. The state would have fewer ways and means to impose its own momentum and goals upon citizens or workplaces. To that extent, the state’s “withering away” would become more immediately achievable than in any other variety of socialism known thus far.

The key difference between the emerging socialism of the 21st century and the previous socialist tradition is the former’s advocacy of the microeconomic transformation of the internal structure and organization of workplaces. The transition from hierarchical, dichotomous employer/employee organizations of workplaces to worker co-ops grounds a bottom-up economic democracy on a wider, structural level. The new socialism’s difference from capitalism becomes less a matter of state versus private workplaces, and state planning versus private markets, and more a matter of democratic versus autocratic workplace organization. A new economy based on worker co-ops will have to find its own democratic way to structure relationships among co-ops and society as a whole. Such an economy will need to work out, for instance, the best proportion of planned versus market distributions, and private versus public workplace ownership, as well as determine the specific structure of laws and regulations. Worker co-ops are thus doing anew what capitalist workplaces did in their emergence from a dying feudalism. In this manner, the new socialism emerges from the practical experiences and experiments of the old, and the theoretical self-criticisms it provoked.

In the new light of such a 21st-century socialism, history looks different. We can see that the kingdoms banished from the public, political sphere survived inside the private space of workplaces. Monarchy and autocracy were not banished completely in the modern era but rather relocated inside workplaces, where democracy was proscribed. These autocratic spaces then provided their owner-monarchs with the means to agitate against democracy in the political sphere. Before the end of political monarchy, conservatives worried that civilization could not survive without the sovereign leadership of the king and his court. Now, before the end of capitalism, conservatives worry that the economy, and thus civilization itself, cannot survive without the leadership of a boss and executives inside workplaces. 

A new socialism focused on transforming workplaces into worker co-ops offers a new generation of socialists a particularly effective political strategy. The old tradition of socialism taught its enemies to focus their critical counterattack on socialism’s statist tendencies. Those enemies are not prepared, at least not yet, to defend against a socialism defined instead in terms of workplace democratization and employee ownership. This unpreparedness gives socialists a strategic advantage. This new socialism also provides a solid basis on which socialists can critically appreciate and go beyond the old socialist tradition. The new socialism can applaud how the old tradition built up powerful political parties, won power in major countries, and spread interest and awareness of socialism across the globe. Yet it can also confront and overcome the limits of the old tradition, especially its statism, which shifted from being a means of socialism’s expansion to being a fetter on it.

Modern societies, both capitalist and socialist, have more than enough shortcomings — i.e., inequalities, instabilities, injustices, lack of real democracy — to enable and provoke their citizens to pursue a promising alternative. The evidence, theoretical and empirical, is here: Worker co-ops are that alternative. The needed next step is to build worker co-op sectors across our contemporary societies. That would allow citizens to encounter, work in, and buy from worker co-ops alongside conventional private and state capitalist workplaces. Such a sector would provide the basis for citizens to make informed choices about what mix of alternative workplace organizations work best. 

Worker co-ops are socialism’s new vision and goal. They criticize the inherited socialism of the past while adding something crucial to it: a concrete vision of what an alternative, more just, and humane society would look like. With the new focus on workplace democratization, socialists are in a good position to contest the 21st century’s struggle among economic systems.