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Social Philosophy

Why Marxism Isn't Dead (Because Capitalism Isn't Dead): The Case for Cooperative Socialism

Bob Stone
C. W. Post Center, LIU

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ABSTRACT: I defend the continued viability of Marx's critique of capitalism against Ronald Aronson's recent claim that because Marxists are 'unable to point to a social class or movement' away from capitalism, Marxism is 'over' 'as a project of historical transformation.' First, Marx's account of the forced extraction of surplus labor remains true. It constitutes an indictment of the process of capital accumulation because defenses of capitalism's right to profit based on productive contribution are weak. If generalized, the current cooperative movement, well advanced in many nations, can displace capitalism and thus counts as the movement Aronson challenges Marxists to point to. It will do this, I argue, by stopping capitalist exploitation, blocking capital accumulation, and narrowing class divisions. But in defending Marx by pointing to the cooperative movement, we have diverged from Marx's essentially political strategy for bringing about socialism onto an economic one of support for tendencies toward workplace democracy worldwide.

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Why isn't Marxism dead? Many anti-Marxists and even some Marxists say it is.

As proof, anti-Marxists point to the failure of the Soviet model of socialism, that is, an undemocratic government controlling the means of production, replacing markets with bureaucratic planning of production and distribution. (1) But on Marx's view undeveloped countries like czarist Russia with a minority working class were in no position to lead what was to be in any case a global change from an interdependent world market to socialism "as the act of the dominant peoples 'all at once' and simultaneously." (2) If anything the USSR's failure proved Marx right! (3) In the end Marx envisioned not government control of the means of production but control by the working class, joined to democratic planning not by bureaucrats but "by the associated producers." (4) So Marx's own vision of socialism was not proved a failure by the demise of the USSR because it was not tested.

Since Marxists are "unable to point to a social class or a movement" embodying change away from capitalism, Ronald Aronson, still a Marxist, concludes Marxism is "over" at least "as a project of historical transformation." (5) He opposes capitalism but seeks change in movements like feminism and anti-racism, especially as informed by postmodernism.

Both of these proclamations of Marxism's demise focus on Marx's political strategy for moving toward socialism. Yet Marx's enduring pertinence lies instead in his indictment of capitalism. Capitalism is fully alive. Over the past twenty years the United States particularly merits Marx's indictment for its aggravations of class divisions. As the rich get richer and the poor poorer, we are all pitted against each other, millions in the third world are killed each year by humanly reproduced poverty, environmental despoilation proceeds out of control, and handy advantages of race, gender or nationality are used to exclude our neighbors. Thus, since capitalism isn't dead, neither is the heart of Marxism.

I find two errors in Aronson's views: first, there are large anti-capitalist movements afoot meriting Marxists' support. Secondly, socialists work not for Marxism, which is a theory, but for socialism, which is a future non-capitalist state of affairs. (6) What is the relation of Marxism to socialism?

First one realizes one needs an improvement over capitalism, then one casts about for a tool for building it. Aronson mistakes Marxism as the end. Marxism is a tool, not an end in itself. It is, however, an essential tool. Marxism is not a single doctrine but a repository of many which together are indispensable for conceiving capitalism as a whole, hence its transcendence. If in willing the end (an improvement over capitalism) we also will the means essential to it (Marxism), then we do not live "after Marxism," as Aronson says. Socialism, is a name for this improvement. If a tool is broken one can fix it; if it is incomplete add another; if it is useless for its purpose, forge a new one. But to declare Marxism over before capitalism is over is to surrender without struggle an essential means for opposing capitalism.

Isn't postmodern theory also such a means? Postmodernists like Lyotard, Foucault, and Derrida also oppose capitalism. (7) But postmodernism's real enemy is modernism as the culmination of Western metaphysics, whose "purportedly neutral and universal subject of reason" (8) always turns out to be male, white, European and heterosexual. Tacitly excluded are female, colored, colonized and homosexual people. Yet most postmodernists would not abolish capitalism. (9) The very attempt is a modernist project to make the world safe for straight, white, male, Europeans, albeit of the working class. Marxism's "totalizing" narrative favoring a socialist humanity must be dropped, for the anti-humanist relativism of "difference." Result? A politics of micro-insurgency fostering plural narratives within capitalism, which is supposed to avoid all exclusions. (10)

But capitalism is exclusion. Like postmodernism, Marxism favors one "narrative" over others, but unlike post-modernism it would abolish capitalism. Anarchism aside, Marxism alone ponders capitalism from the angle of those it both excludes and exploits, namely, working people, be they female, colored, colonized or homosexual. Marxists typically claim that although the viewpoint of working people is partisan, it is better than that of rich people for understanding reality. This is because working people are positioned by capitalism to see more than rich people do: they can grasp the actions of the rich and their own. (11) Added to this epistemological preference is a moral preference for workers: since human need is for Marx its own reason for being satisfied, the need felt by those whose labor generates wealth constitutes a strong moral claim on that wealth. (12)

Marxism outstrips postmodernism in its comprehensiveness, especially regarding the inner tensions in capitalism that make it alterable. Simplified, and abstracting from the capitalist state's large legitimating role, capitalism as a mode of production is for Marx characterized by: 1) Production of value by wage labor. 2) Ownership and control of the means of production by a non-wage owners and managers who personify capital. 3) Distribution of the resulting products, as commodities, by a market.

Capitalism is both an objective system and a set of human enactments. In expressing this ambiguity, Marxists divide between determinists like Louis Althusser and libertarians like the existentialist Jean-Paul Sartre. The determinists claim rightly that each of the three elements -- wage labor, capital, markets -- designates a thing operating willy nilly in a cycle of reproduction. (13) But libertarians rightly insist the system appears autonomous only because we who animate it treat each other as if we were things. (14) They can agree that individual capitalists are not necessarily persons of ill-will. The meanness is in the system to whose reproduction we lend ourselves, capitalists from self-interest, workers from need. Once launched, the system's parts refer only to each other in a circle. And what is this system's "aim"? The infinite accumulation of capital -- which is to say, it has no aim beyond itself. Since everything subsumed under capital has its price, the impressions that greediness is human nature and that no alternative exists, are overwhelming.

Now I submit that capitalism, as so far described, is an evil that calls for immediate destruction. This assumes humanity is the highest value. Only then can elevating something subhuman (capital) above it, subjecting humanity to it in impersonal, "masterless slavery" (Max Weber's apt phrase), be said to be morally wrong. But because we "lend ourselves" to reproducing this 400-year-old system, we can conceive an alternative. To re-claim our authenticity, we might ask if there is a point of intervention, an imbalance in capital's cycle, whose jiu-jitsu-like employment by free humans could direct the system's momentum to its own undoing?

Marx identifies three elements in capitalism: labor, capital, and markets. The first two -- labor and capital -- though antagonistic, are more intimately related than either is to markets. Unless joined to labor, capital produces no value; and labor, lacking control of the means of production, cannot make what it needs to live. The imbalance, then, is: control of the means of production by non-workers. Lack such control workers must sell their labor power as a commodity to those who have such control, subjecting themselves to the latters' will during the workday. Those controlling the means of production, seeing that they can make more from workers' labor than it costs them, grant workers the temporary access to the means of production they need to reproduce their labor and themselves. A wage for time? It looks like a fair exchange if we overlook the imbalance. Yet this imbalance is signaled by workers' advance of their labor to capitalists before receiving compensation on payday, rather than the reverse. Once put to work, labor power soon fully compensates the capitalist for its cost to him; but it then keeps on adding value to commodities, unpaid, for the remainder of the workday. Workers may have access to the means of production to make what they need, but on condition that, having done so, they continue working, yielding up without compensation the greatest part of the value their labor produces. Marx's name for this unpaid labor done after workers cover their own labor costs is "surplus labor." Its product, "surplus value," is controlled by capitalists. It is from surplus value that profit and capital itself derives. (15) Workers' own savings will never match the accumulation of capital, which they create, but which the system awards to capitalists, along with huge social power. Individual workers may become capitalists, but the system's imbalance keeps the working class in subservience.

So far our account has been fairly value-neutral. But at the heart of the so-called "free" labor contract is a theft effected under a life-threatening extortion. Coerced into this contract by their need, itself due to their separation from the means of production, workers get paid a mere portion of the value they produce in order to reproduce their labor power, hence their lives. They are paid this portion only if they work unpaid for a larger part of the workday. (16) Should they decline surplus labor they will not be allowed enough access to the means of production to do even the labor needed to live. Trade unions may negotiate compensation only for this latter amount of labor. Surplus value is off limits. Marxists call the ratio of what labor costs capitalists to what it produces for them as surplus value, the rate of exploitation. It is often euphemistically called the rate of productivity. Surplus labor is extracted involuntarily since workers would not willingly hand over control of their earnings to others were they not compelled to do so by their separation from the means of production. This imbalance in capital's reproduction thus allows control of the lion's share of the extorted value to be controlled by the representatives of capital. Under cover of equal exchange, this is an exploitation of humans by other humans that is not made more just by being pervasive and normal in the process of capital accumulation. Chattel slavery was once normal.

It will not do to say capitalists are entitled to profit because of their unique productive contributions. Contributions usually named -- entrepreneurial insight, managerial skill, innovation, risk-taking, etc. -- are not unique to capitalists. Persons with these abilities may extract profit from others' labor only if they also own or control the means of production. Many so endowed who lack such control are excluded from profits. Ownership (or control) not skill is the key. Under capitalism all one needs for full entitlement to luxury is enough ownership of the means of production. Nor is providing capital itself a contribution that merits profits. Phoning one's broker is not a productive activity or contribution. (17) "Providing capital" is indeed widely accepted as a productive contribution, but this assumes such entitlement is just, and provides no proof.

Part of the illusion that capital contributes arises from the fact that capital is not physical things (equipment and materials) or money, but rather, as Marx said, "a social relation." (18) He was referring not just to our mystified attribution of agency to an abstraction we've collectively produced, but to the gradations of power that must permeate human communities which defer to such inhuman agency. This hierarchy is geographically displayed in the fine class gradations visible in residential neighborhoods of first world countries. In the end it matters little if capital's representatives lack justification for exercising power in its name. They control it (and it them); they give orders in its behalf; the police and courts back them up in a power structure with capital at the top. That is the way it is.

Let us imagine we have proved capitalism is evil. If there is no alternative, why fight it?

Not so fast! Thanks to Marx's analysis, we can see that capitalists' undue power is both the moral and the economic flaw in capitalism, relative to non-capitalist forms. Here is a ready occasion for applying jiu-jitsu.

Take producer cooperatives. These unite capital and labor in a non-antagonistic manner. In a true cooperative the same group of workers both produces value and owns the means of production. A coop's active workforce hires managers and capital (by jointly taking out loans) instead of being hired by them, a major reversal. A broad cooperative movement, by starting cooperatives and buying out existing enterprises, can dismantle capitalism, one firm at a time, in the following three ways:

First, by abolishing capitalist exploitation. Selling one's labor power always means subjecting oneself to another's domination. This might be acceptable were the subservient labor fully paid. Instead, it leads to capital accumulation and profit for managers and owners. By contrast, coops return all value to those who produce it, who then decide how much to pay managers, reinvest, and share as profits. Since the current workforce democratically decides on any work beyond that needed for living costs, such a workforce cannot be said to exploit itself.

Second, by abolishing the market in labor. By joining a coop workers pool their labor with equals and do not sell it. This has two effects: it shatters the illusion that capital is active since workers themselves unite the factors of production and profit therefrom; and, more crucially, it stops capital accumulation by non-workers, jamming the mechanism that maintains capitalism's imbalance and feeds finance capital.

And thirdly, by blocking capitalism's creation of class divisions within and between nations. This is due to the much smaller income spreads in coops than in capitalist firms. Since class divisions outside of workplaces tend to reflect those inside, cooperativization will narrow capitalism's class divisions and the resultant unjust distribution of life-chances.

Cooperativization, then, could displace capitalism. But Aronson's challenge is to point to existing movements. I point to the four networks leading the coop movement. They are: 1) Over 27,000 worker-owners deliver high tech goods to world markets through the Mondragon network of over 120 coops in Spain's Basque country, united by a strong bank that is among Spain's top ten. (19) 2) In Italy's Emiglia-Romagna region, three networks comprising some 2,700 coops of all sizes, run by over 150,000 worker-owners and led by sophisticated "flexible production" groups, are united by political parties oriented toward social change. (20) 3) Growing in Canada's maritime provinces since fishing cooperatives were started in 1927, the Coop Atlantic federation of 166 purchasing, retailing, producer, housing and fishing coops employs 5,850 workers and counts over 170,000 families as members in a region-wide network. (21) 4) Japan's Seikatsu network, started in Tokyo in 1965 as a buying club, now includes over 225,000 member households organized at the neighborhood level, and has over 160 worker-owned producer cooperatives to meet members' needs. (22)

The international workplace democacy movement -- teamwork, ESOPs and coops -- is already using capitalism's own tendencies against itself. The current integration of national markets into global capitalism awards competitive advantage to firms with greater productivity. And research shows that firms with worker participation in management, when combined with one or more added elements of workplace democracy (profit-sharing, guaranteed long-term job security, relatively low wage spread, guaranteed workers rights) have greater productivity than firms that do not. (23)

If the goal of socialism is a self-determining humanity, then even a fully cooperativized global economy will not be self-determining because of its subjection to market forces. Democratic planning is indeed needed for socialism. But cooperativization will realize two crucial socialist goals: abolition of exploitation, and blocking non-worker accumulation of capital. And it would make large strides toward three others: a classless society; bringing capital fully under human domination; and democratically planning the global economy. Workers need not introduce planning right away, and ought not. The self-management training of cooperativization will prepare them for democratic planning.

It must be admitted that in defending Marx we have diverged from him. Marx entertained cooperativization as a strategy. He admitted coops demonstrate that workers don't need capitalists in order to run firms. But he believed cooperativization could not bring socialism so long as capitalists control state power, which they had exercised so brutally in 1848. (24) Marx envisioned a world free of domination both by capital and the state, a world of direct self-determination by "the associated producers" in which states will have "withered away." But to defeat and expropriate capitalists, workers must meanwhile exercise state power in a "dictatorship of the proletariat" (a misnomer in many ways, since Marx envisioned an extension of democracy by democratic means). Forming parties to take power thus became for Marx the priority of the workers' movement.

We would shift to an "economic" strategy. Marx's essentially political strategy, which does not follow from his analysis of capitalism, yields a paradox which has dogged Marxism: how can workers attain emancipation from state power by exercising state power? To stay true to Marx's critique of capitalist exploitation, given intervening history, we dissent from his political strategy. Without excluding political action, cooperativization aimed at socialism is a first, direct step toward realizing the autonomy which for him was the goal of the worker's movement. The heart of Marxism is kept.

To complete both modernist and postmodernist projects, capital's dominance must be broken in favor of an inclusive socialism. There has to be something better than capitalism for free peoples. And there is.

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(1) See for example, Francis Fukuyama, "Have We Reached the End of History?" RAND corporation paper, 1989.

(2) Karl Marx, "The German Ideology," in The Marx-Engels Reader 2nd Ed., ed. Robert C. Tucker (New York: Norton, 1978), pp. 161-162. I'll refer to this book henceforth as "Tucker."

(3) One Marxist predicted the failure of the USSR long before it happened. See Hillel Ticktin, Origins of the Crisis in the USSR: Essays on the Political Economy of a Disintegrating System (Armonk, NY: M.E.Sharpe, 1992).

(4) Tucker, pp. 191, 194, 441.

(5) Ronald Aronson, After Marxism (New York: Guilford Press, 1995), p. 236, 3

(6) Terry Eagleton, "In the Same Boat?" Radical Philosophy, #82, March-April 1997, p. 37.

(7) See, for example, Jacques Derrida, Spectors of Marx: The State of the Debt, the Work of Mourning, and the New International, trans. Peggy Kamuf (New York: Routledge, 1994), P. 85.

(8) Seyla Benhabib, "Feminism and Postmodernism: An Uneasy Alliance," in Feminist Contentions: A Philosophical Exchange, Benhabib, et al (New York: Routledge, 1995), p. 19.

(9) Exceptions include Michael Ryan, Marxism and Deconstruction (Baltimore: Johns Hopkins University Press, 1982), and Bill Martin, Matrix and Line: Derrida and the Possibilities of Postmodern Social Theory (Albany: SUNY Press, 1992).

(10) See, for example, Michel Foucault, Power/Knowledge: Selected Interviews and Other Writings 1972-1977, ed. Colin Gordon (New York: Pantheon, 1980), p. 159, and also, Stanley Aronowitz, The Crisis of Historical Materialism (New York: Praeger, 1981), p. 18.

(11) As a class "in" but not "of" civil society, workers are positioned to see more; this does not entail that they do. Karl Marx, "Contribution to a Critique of Hegel's Philosophy of Right," in Tucker, p. 64.

(12) Cf. "Debates on the Law on Theft of Wood," in Marx-Engels Collected Works (New York: International Publishers, 1975), Vol. 1, p. 230-234. Referred to hereafter as "MECW."

(13) Louis Althusser and Etienne Balibar, Reading Capital, trans. Ben Brewster (New York: Random House, 1970), p. 174.

(14) Cf. Jean-Paul Sartre, Critique of Dialectical Reason, I, Theory of Practical Ensembles, trans. Alan Sheridan-Smith, ed, Jonathan Rée (London: New Left Books, 1976), pp. 284-291.

(15) Karl Marx, Capital: A Critique of Political Economy, Vol. I, The Process of Capitalist Production,trans. S. Moore and E. Aveling (New York: Modern Library, 1906), Part III, esp. pp. 330, 338-9.

(16) A normal ratio these days would be one paid to three unpaid hours. G.A. Cohen argues, in a related vein, that capitalist exploitation is morally objectionable because it violates "the self-ownership principle" (which he thinks is widely operative in capitalist societies) in the following way: "I do not (fully) own myself if I am required to give others (part of) what I earn by applying my powers." in Self-Ownership, Freedom, and Equality (Cambridge: Cambridge University Press, 1995), p. 216. Cohen's use of this principle to oppose capitalism is noteworthy since Robert Nozick invokes it, defending capitalism, in order to oppose taxes whose effect is to transfer wealth from the rich to the poor. Cf. Anarchy, State and Utopia (New York: Basic Books, 1974), p. 169. Cohen in effect turns laissez-faire capitalism against itself.

(17) Consider this argument: "Suppose a government suddenly nationalizes the means of production, then does nothing else but charge workers a use tax. We wouldn't say, would we, that the government is engaging in productive activity, or that the tax is a return for the government's productive contribution?" David Schweickart, Against Capitalism (Cambridge: Cambridge University Press, 1993), p. 11.

(18) Theories of Surplus Value, trans. G.A.Bonner and E. Burns (London: Lawrence & Wishert, 1951), p. 302. Cf. also Tucker, p. 250.

(19) Whyte, W.F. and Whyte, K.K., Making Mondragon: The Growth and Dynamics of the Worker Cooperative Complex (Ithica: ILR Press, 1988).

(20) Robert Fitch, "In Bologna, Small is Beautiful," The Nation, May 13, 1996.

(21) Grassroots Economic Organizing Newsletter (GEO), #16 and #17, Winter-Spring 1995.

(22) GEO, #12, Fall 1994. Many other countries have deep cooperative traditions, including the UK, France, Hungary, the Czech Republic, Indonesia, India, Chile, and Argentina.

(23) This finding was a summary of forty-three economic studies by David Levine and Laura D'Andrea Tyson, "Participation, Productivity, and the Firm's Environment," in A. Blinder, editor, Paying for Productivity: A Look at the Evidence (Washington D.C.: The Brookings Institute, 1990), pp. 205-214.

(24) "Inaugural Address of the Working Men's International Association," (1864) in Tucker, p. 518.

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