Letter to the Advocates of the Co-operative Principle and to the Members of Co-operative Societies

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In 1851 the Chartist weekly Notes to the People published two articles by Ernest Jones, the editor, on co-operation: “A Letter to the Advocates of the Co-operative Principle, and to the Members of Co-operative Societies” (No. 2, May 10, 1851), and “Co-operation. What It Is, and What It Ought to Be” (No. 21, September 20, 1851). They were written at a time when especially close, friendly relations had been established between Marx and Engels on the one hand and Ernest Jones, the Left-wing Chartist leader on the other. Marx and Engels constantly helped Jones in his fight for the revival of Chartism on a socialist basis, in his propaganda campaign and his work as publisher and editor of the Chartist papers, Notes to the People and, later, The People's Paper, by publicising these periodicals in their articles and contributing to them. Marx also helped Jones to write his articles, particularly on economics. On November 4, 1864 Marx wrote to Engels the following: “I happened to come across several numbers of E.Jones’ Notes to the People (1851, 1852) which, as far as” economic articles are concerned, had been written in the main points under my direction and in part even with my close participation. Well! What do I find there? That then we conducted the same polemic—only in a better way—against the co-operative movement, since in its present narrow-minded form it claimed to be the latest word, as ten to twelve years later Lassalle conducted in Germany against Schulze-Delitzsch.”

The publication of Jones’ articles on co-operation met with a response from Edward Vansittart Neale, a Christian socialist and prominent bourgeois co-operator. On October 11, 1851 the weekly published (issue No. 24) Neale’s first letter and Jones’ reply to it. Neale’s second letter was published on November 15, 1851 (No. 29) and Jones’ reply on November 22 (No. 30).

These two letters by Neale and Jones’ replies to them show clearly the difference between the viewpoints of the Christian socialist and the proletarian revolutionary. The former saw the aim of the co-operative movement in distracting the workers from the class struggle and called for the collaboration of hostile classes and the reconciliation of their interests. Jones, supported by Marx, emphasised that from the viewpoint of the workers’ liberation struggle peaceful co-operation had no prospect and that under capitalism workers’ co-operative societies could not exist for long; they would not withstand competition on the part of big capital and would go bankrupt, or else they would turn into purely capitalist enterprises deriving profit from exploiting workers. The decisive condition, Jones said, for the workers’ co-operative societies to be really of use to the working class was that the latter win political power in order to reorganise the existing system in the interest of the working people.

Of Jones’ many articles on co-operation the two mentioned at the beginning of this note are included in this volume because they most vividly reflect the influence of Marx’s views on Jones and show clearly that Marx in fact took part in writing them.

The co-operative principles!

The errors of the present movement.

The true basis of co-operation.

It is too much the custom to cry down the individual whose vision is not identical with our own—he who will not advocate a principle in the same way in which it is advocated by ourselves, is too often denounced as an enemy instead of being recognised as a friend, who thinks that better means may be adopted for the furtherance of the very principle itself.

The liberty of opinion is the most sacred of all liberties, for it is the basis of all, and claiming a right to the free expression of my views on a subject that I hold of vital importance to the interests of the people, I take this opportunity for offering a few remarks on the character and results of the co-operative movement.

In accordance with the prejudice above alluded to, some may say, indeed some have said, that I am opposed to co-operation: on the contrary, I am its sincere though humble advocate, and, from that very reason, feel bound to warn the people against what I conceive to be the suicidal tendency of our associative efforts as conducted now.

At the same time I feel bound to express my full conviction that the present leaders of the co-operative movement are honest, sincere, and well-meaning men, who, in their zeal for the furtherance of a good cause, have overlooked the fatal tendency of some of the details in their plan of action.

I contend that co-operation as now developed, must result in failure to the majority of those concerned, and that it is merely perpetuating the evils which it professes to remove.

I will divide the remarks I have to offer, under three heads:

1st, what are the means the present co-operative movement possesses, of defeating the system of monopoly and wages-slavery;

2nd, what would be its effects upon society if successful; 3rd, what is the only salutary basis for co-operative industry?

Before proceeding, however, to the consideration of these several points let us ask, what are the avowed objects of co-operation?

To put an end to profitmongering—to emancipate the working classes from wages-slavery, by enabling them to become their own masters; to destroy monopoly and to counteract the centralisation of wealth, by its equable and general diffusion. We now proceed to consider—

I. The means applied to effect these results.

For the above purposes the working classes are exhorted to subscribe their pence, under the conviction that, by so doing, they will soon be enabled to beat the monopolist out of the field, and become workers and shopkeepers for themselves.

They are told that the pence of the working-man are, collectively, more powerful than the sovereigns of the rich—that they can outbuy the money lords in their own markets—that they can outbuy the landlords on their own acres. The fallacy of this is proved by the fact, that out of the annual income of the empire, a by far greater portion is absorbed by the rich than by the working classes (a fact too well known to need statistics)—a fact most forcibly conveyed to us by the recollection, that during the last fifty years, while the savings of the working classes (a great portion of the same, however, belonging to the middle classes) have been £43,000,000, the rich classes have increased their capital by £2,414,827,575. It is, therefore, an error to say, that capital against capital—pence against pounds—the cooperation of the working classes can beat down the combination of the rich, if their power of so doing is argued on the ground, that they possess more money collectively.

But, it may be objected, “the facts you adduce prove the extent to which profitmongering has progressed, and still more forcibly point to the necessity for co-operation.” — Agreed.— “Again,” say they, “admitting that our capital is smaller than that of our masters, we do not merely intend to balance capital against capital as it stands, and there to stop, but so to employ whatever capital we possess, as to make it reproduce itself, while the effect of our success is to impoverish the great employer, and thus daily lessen the discrepancy in our relative resources.”

It must, however, be recollected, that while the working classes are trying to do this with their little capital, the monied classes will be trying to do the same thing with their enormous riches; that the monied classés, further, have the advantage of being already far ahead in the race—that they wield all the national power—that they

are, to a great extent, independent of home trade—that their cannonballs open new markets, of which they will take good care to maintain exclusive possession—that they control the entire monied and commercial system, and can, therefore, expand or contract the currency, raise or depreciate the various interests, glut or restrict the market, and create panic upon panic whenever their interest is enlisted in the measure. It may be said, that they would injure themselves by resorting to some of these means for crippling working class co-operation: granted. But, remember! they can afford to lose—you cannot! That which would but pinch their little finger would amputate your entire arm. Thus they would counteract the expansion of your capital by reproductive means. Again—never lose sight of this: they wield all the political power as well! If they should fail in other ways, they can destroy you by new laws—they can throw legal obstacles in the way of co-operation that would prove insurmountable: in this the middle class would support them, every shopkeeper, little or large, every profitmonger, down to the smallest, would be against you—for you profess to put an end to profitmongering—you profess to supersede the shopocratic class. It is amusing to remark, that many of those who advise a union with the middle classes are strenuous supporters of the present co-operative system; they seek the support of the middle class, and tell us to expect it—with the same breath shouting to the world, that their “co-operation” will destroy the shopkeepers! That destruction, however, proceeds but very slowly, co-operation on their plan has now been long tried—is widely developed, and they tell us it is locally successful—yet, never in the same period, has the monopolist reaped such profits, or extended his operations with such giant strides. Do we find Moses, or Hyam, waning before the tailors—Grissel, or Peto, shrinking before the builders—Clowes, or Odell, falling before the printers? Everywhere they are more successful than before!—Why! because the same briskness of trade that enables the co-operators to live, enables the monopolists, with their far greater powers, to luxuriate.

Thus much for the inequality of the contest—an inequality that might almost deter from the attempt. But that attempt may triumph, if those forces which we really do possess are but directed aright.

This brings me to the consideration of the co-operative plan by which you endeavour to effect the regeneration of society.

The co-operative power you hâve evoked can be applied to only three objects:

1. To the purchase of land;

2. To the purchase of machinery, for the purpose of manufacture;

3. To the establishment of stores, for the purposes of distribution.

1. The Land. Consider, firstly, the enormous amount you must subscribe for the purchase of land in sufficient quantity to relieve the labour market of its competitive surplus. Secondly, remember that the more an article is in demand, the more it rises in price. The more land you want, the dearer it will become, and the more unattainable it will be by your means. Thirdly, recollect that your wages have been falling for years, and that they will continue to fall; consequently, while the land is rising in price on the one hand, your means of purchase are diminishing on the other. Fourthly, two parties are required in every bargain—the purchaser and seller. If the rich class find that the poor are buying up the land, they won’t sell it to them—we have had sufficient instances of this already. They have sagacity enough not to let it pass out of their hands, even by these means. Fifthly, never lose sight of this fact: only a restricted portion of the land ever doescome into the market—the laws of primogeniture, settlement, and entaillock up the remainder; a politicallaw intervenes, that political power alone can abrogate.

It may, however, be urged, in answer to the first objection, that the capital invested in the purchase of land would reproduce itself. I answer, reflect on how our forefathers lost the land—by unequal legislation. It was not taken from them by force of arms, but by force of laws — not by direct legal confiscation,but they were taxed out of it. The same causes will produce the same effects. If you re-purchase a portion of the land, you would re-commence precisely the same struggle fought by your ancestors of yore—you would wrestle for a time with adversity, growing poorer every year, till holding after holding was sold, and you reverted to your old condition. This can be obviated only by a re-adjustment of taxation—a measure that can be enforced by political power alone.

2. Machinery and Manufacture. The second object to which co-operation is directed, consists in the purchase of machinery for purposes of manufacture. It is argued, “we shall shut up the factories, and competing with the employer, deprive him of his workmen, who will flock to us to be partakers of the fruits of their own industry.” It is impossible for you to shut up the factories, because the great manufacturer is not dependent on hometrade—he can live on foreign markets; and in all markets, both home and foreign, he can undersell you. His capital and resources, his command of machinery, enables him to do so. Is it not an undeniable fact, that the working-men’s associations—the co-operative tailors,printers, &c.,are dearer than their monopolising rivals’? And must they not remain so, if their labour is to have a fair remuneration? It is impossible to deprive the employer of workmen to such an extent as to ruin him—the labour surplus is too great; and were it even smaller, the constantly developed power of machinery, which he can always command the readiest, would more than balance the deficiency you caused.

If, then, we do not shut up the factories, we only increase the evil by still more overglutting the market. It is a market for that which is manufactured, far more than a deficiency of manufacture under which we labour. If we add to manufacture we cheapen prices; if we cheapen prices we cheapen wages (these generally sink disproportionately)—and thus add to the misery and poverty of the toiling population. “But,” you may argue, “we shall make a market—create home-trade, by rendering the working classes prosperous “ You fail a leverage: the prosperity of the working classes is necessary to enable your co-operation to succeed; and, according to your own argument, the success of your co-operation is necessary to make the working classes prosperous! Do you not see you are reasoning in a circle? You are beating the air. You want some third power to ensure success. In fine, you want political power to re-construct the bases of society. Under the present system, on your present plan, all your efforts must prove vain—have proved vain—towards the production of a national result.

3. Co-operative Stores.— By these you undertake to make the working-man his own shopkeeper, and to enable him to keep in his own pocket the profits which the shopkeeper formerly extracted from his custom.

These stores must be directed towards the distribution of manufactures or of food. If the former, you must either manufacture your goods yourselves, or else buy them of the rich manufacturer. If you manufacture them yourselves, the evil consequences, alluded to in the previous paragraph, meet you at the outset. If you buy them, the manufacturer can undersell you, because the first-hand can afford to sell cheaper than the second—and recollect the wholesale dealer is every year absorbing more and more the retailing channels of trade.

We then suppose your stores to be for the retailing of provisions. Under this aspect, their power, as a national remedy, is very limited. Food is wealth—money is but its representative; to increase the real prosperity of a country, you must increase its wealth, whereas these stores do not create additional food, but merely distribute that which is created already.

But the question is here raised: “If the working-man has to pay a less exorbitant price for the articles he wants, he will have so much more of his wages left to purchase land, and otherwise emancipate himself from wages’ slavery. Therefore the co-operative stores are the very means for obviating one of the objections urged: they are the very means for counteracting the threatened fall of wages, and consequent diminution of subscriptions.”

This observation brings me to the second division of the subject, as in that the answer is contained; and here again I admit that co-operation on a sound basis is salutary, and may be a powerful adjunct towards both social and political emancipation. The solution of this question, however, depends not only on the means at command, but also on the way in which those means are used—and I contend:

II. That the co-operative system, as at present practised, carries within it the germs of dissolution, would inflict a renewed evil on the masses of the people, and is essentially destructive of the real principles of co-operation. Instead of abrogating profitmongering, it re-creates it. Instead of counteracting competition, it re-establishes it. Instead of preventing centralisation, it renews it—merely transferring the rôle from one set of actors to another.

1. It is to destroy profitmongering: Here I refer you to the confessions at the recent meeting of Co-operative Delegates; it was the boast contained in every reported speech, that the society to which the speaker belonged had accumulated a large capital—some as high as £2,000 and £3,000 in a very short space of time—some having started with a capital as small as £25, others having borrowed large sums (in one instance as much as £9,000) from rich capitalists, a measure not much calculated to emancipate co-operation from the thraldom of the rich.

But to revert to the accumulated capital; how was this sum accumulated? By buying and selling. By selling at cost price? Oh no! By buying for little, and selling for more—it was accumulated by profits, and profits to such an extent, that in one case, 250 members accumulated a capital of £3,000 in a very short space of time! “Down with profitmongering!”

What is this but the very same thing as that practised by the denounced shopocracy? Only that it has not yet reached so frightful a stage. They are stepping in the footprints of the profitmongers, only they are beginning to do now what the others began some centuries ago.

2. It is to put an end to competition, but unfortunately it re-creates it. Each store or club stands as an isolated body, with individual interests. Firstly, they have to compete with the shopkeeper—but, secondly, they are beginning to compete with each other. Two or more stores or co-operative associations are now frequently established in the same town, with no identity of interests. If they fail, there is an end of it, but if they succeed, they will spread till they touch, till rivalry turns to competition—then they will undermine each other—and be either mutually ruined, or the one will rise upon the ashes of its neighbour. I ask every candid reader—is not this already the case in several of our northern towns?

3. It is to counteract the ntralisation of wealth, but it renews it. We proceed one step further—the fratricidal battle has been fought in the one town,—the one association has triumphed over the others, it absorbs the custom of its neighbours—the co-operative power falls out of many hands into few— wealth centralises. In the next town the same has been taking place—at last the two victor-associations dispute the prize with each other—they undersell each other—they cheapen labour—the same results attend on the same causes, and the working classes have been rearing up a strong, new juggernaut, to replace the worn out idol under which they bowed before.

Let us reflect, what are the great canal-companies, joint-stock companies, banking companies, railway companies, trading companies—what are they but co-operative associations in the hands of the rich? What have been their effects on the people? To centralise wealth, and to pauperise labour. Where is the essential difference between those and the present co-operative schemes? A few men club their means together. So did they. Whether the means are large or little, makes no difference in the working of the plan, otherwise than in the rapidity or slowness of its development. But many of our richest companies began with the smallest means. A few men start in trade, and accumulate profits. So did they. Profits grow on profits, capital accumulates on capital—always flowing into the pockets of those few men. The same with their rich prototypes. What kind of co-operation do you call this? It is the co-operation of Moses and Co., only a little less iniquitous—but, based on the same principle, who guarantees that it will not run to the same lengths? What benefit are the people to derive from this? What is it to us if you beggar the Moseses and the Rothschilds to-morrow, and create another Rothschild and Moses in their place? My idea of reform is not to ruin one man to enrich another—that is merely robbing Peter to pay

Paul. As long as there are to be monied and landed monopolists in the world, it matters little to us, whether they bear the name of Lascelles or of Smith. Such is the present system of co-operation,—a system unstable in itself, and, if successful, injurious to the community. A system that makes a few new shopkeepers and capitalists to replace the old, and increases the great curse of the working classes, the aristocracy of labour.

III. Then what is the only salutary basis for co-operative industry? A national one. All co-operation should be founded, not on isolated efforts, absorbing, if successful, vast riches to themselves, but on a national union which should distribute the national wealth. To make these associations secure and beneficial, you must make it their interest to assist each other, instead of competing with each other—you must give them unity of action, and identity öf interest.

To effect this, every local association should be the branch of a national one, and all profits, beyond a certain amount, should be paid into a national fund, for the purpose of opening fresh branches, and enabling the poorest to obtain land, establish stores, and otherwise apply their labour power, not only to their own advantage, but to that of the general body.

This is the vital point: are the profits to accumulate in the hands of isolated clubs, or are they to be devoted to the elevation of the entire people? Is the wealth to gather around local centres, or is it to be diffused by a distributive agency?

This alternative embraces the fortune of the future. From the one flows profitmongering, competition, monopoly, and ruin; from the other may emanate the regeneration of society.

Again—the land that is purchased, should be purchased in trust for the entire union—those located thereon being tenants, and not exclusive proprietors, of the farms they cultivate. Freehold landsocieties, companies, etc., but perpetuate the present system—they strengthen the power of landlordism. We have now 30,000 landlords—should we be better off if we had 300,000? We should be worse off—there are too many already! The land can be more easily and more rapidly nationalised, if held by merely 30,000 than if possessed by ten times that amount. And, again, the rent would increase the national fund—while the contributions of the freeholders would be but a chimerical treasure.

Such a union, based on such a plan of action, might hope for success. The present co-operative movement, I repeat, must perish as its kindred have done before it—and, if not, its success would be a new curse to the community. Why do the rich smile on it? Because they know it will prove in the long run harmless as regards them—because they know it has always failed, hitherto, to subvert their power. True the attempts often succeed in the beginning—and why? Because the new idea attracts many sympathisers—while it is too weak to draw down the opposition of the money lord. Thence the co-operators are enabled to pick up some of the crumbs that fall from the table of the rich. But what is the £3,000 of Rochdale amid the proud treasures of its factory lords? Let the shock come among the mighty colossi of trade, and the pigmies will be crushed between them.

A national union, on the plan suggested, does not run these dangers. A national fund thus established, would, in all probability, be a large one—and place a great power in the hands of the association. Persecution would be far more difficult. Now each society stands isolated, and is attacked in detail by the combined forces of monopoly—then to touch one would be to touch all. The national centralisation of popular power and popular wealth (not its local centralisation), is the secret of success. Then restrictive political laws would be far more difficult, for they would encounter a gigantic union, instead of a disorganised body. Then the combination of the rich would be far less formidable—for, though superior in wealth, they would be far inferior in numbers. So they are now—but the numbers at present are without a connecting bond; nay, in but too many cases, essentially antagonistic.

I entreat the reader calmly and dispassionately to weigh the preceding arguments. They are written in a hostile spirit to no one at present concerned in co-operative movements—but from a sincere and earnest conviction that the opinions here expressed are founded upon truth. I have given the difficulties in the way of the co-operative movement—not with a view to discouragement—but that by seeing the dangers, we may learn how to avoid them. As it is we are falling from Scylla into Charybdis.

If, then, you would re-create society, if you would destroy profitmongering, if you would supplant competition by the genial influence of fraternity, and counteract the centralisation of wealth and all its concomitant evils,

NATIONALISE CO-OPERATION.