Friday, April 28, 2017

Cooperatives and John Stuart Mill

John Stuart Mill was an important utilitarian classic liberal thinker from the 19th Century.  Taking utilitarianism and personal freedom to its logical conclusions, Mill is one of the early proponents of Economic Democracy.  If you think that working for a wage curtails personal freedom and that cooperatives can be more efficient than capitalist companies, then it follows that a system based on coops should offer a higher utility maximization point for society.

His classic "Principles of Political Economy" (1848), was utilized as the main text for Political Economy studies until the advent of Alfred Marshall's book in 1890. From the title of Book IV: "Influence of the Progress of Society on Production and Distribution", we can infer that the most important aspects of the economy are not "the market" and "the consumer" but the progress in the production of goods and services and a better distribution of those goods and services and the profits derived from them.

In said Book, the Chapter VII is titled "On the Probable Futurity of the Labouring Classes".  Language is important, we are not speaking about a "low" class, but a class of people for which work is their main characteristic, as opposed to the "Leisure Class" (a parasitic class).  Here starts his treatment of a cooperative economy.

Progressive is the word that comes to mind when reading Mill. He asks for the social independence of women, since education and work can stop the problem of possible over-population.   We should remember that the over-population threat was a common theme between English intellectuals since Malthus.  One can hardly expect Mill to imagine the changes in the relationship between genders that would occur in the next century and a half.  He was, effectively, one of the first feminists.

Mill prefers the manual laborers to be "self-dependent", thus rejecting the paternalism of the private well-off charities. He also expects that (1) with the extension of the political franchise to the working class they will shown their own interest,opposed to that of their employers.  He also thinks that (2) workers` education and just laws will bring a better deal in the distribution of the production, and that (3) workers will cease to be content as wage laborers

We know,at least for the situation in the early 21st Century, that he was wrong in these three cases: (1) Workers often vote against their own interests,due to their individual identification with the ruling class; (2) the rise of dysfunctional meritocracy means the reification (become concrete,solid) of social hierarchies where those at the top utilize academic accreditations as entrance barriers, with parts of the population underqualified and others overqualified for the available work, and (3) a longing for the days of stable wage work against the current instability of the project-based industry (especially in high-tech) and the perils of increased automation.  The road from feudalism to Economic Democracy is not straight at all.

Mill`s main objective is not the total independence of the individual (often confusedly called "freedom" in libertarian forums), "but to enable them [people] to work with or for one another in relations not involving dependence" [pg. 768]. Workers would be independent by forming cooperation ties with other workers or,in certain cases, even with capitalists (which we can see in German companies with worker participation in decisionship).

In the following section Mill describes the development of various contemporary examples of the burgeoning cooperative movement and the mechanism by which they would be created and operated.  I recommend reading this section straight from the original since his explanation is detailed and functions as a primitive economic anthropology of sorts.  Some names are widely known, such as the pioneer Rochdale society. Mill`s optimism is contagious, there is not even malice against capitalists, but admiration for those coops that grew from the effort and small capital investments of their own members.

Since Mill thinks that cooperatives are efficient, and as we saw he expects workers to follow their own interests, he supposes that once there is a sufficient number of cooperative companies the system will turn towards a mixed economy: "capitalists (...) will gradually find necessary to make the entire body of labourers participants in profits".  Finally, we would reach a stage where all of society would enjoy the benefits of a full-blown economic democracy.  In his views it is composed by the  rewards for personal extortion and the benefits brought by competition.  The main enemy for Mill is generalized idleness and stagnation.  His ideal seems closer to the modern concept of Market Socialism than the Socialist State of the 20th Century.


It is disheartening to know that most of these movements did not made significant progress since Mill`s writings, and that gigantic capitalist oligopolies, being producers or just financial entities, became the norm in our current world. It seems that the limitations for the development of better organizations are not simply economic but instead political.  The discussion of progressive economic models often feels useless.  Still, we talk, we imagine, we write on blogs, and we plan for the future.  More than one hundred and fifty years have passed, and the dream is still not dead.  Knowledge persists, and that alone is a reason to continue developing it.  Political and economic crisis often the chance of paradigm shifts, and we should be ready to apply a previously developed model when opportunity arises.

In the next post I will talk about a couple of articles by Justin Schwartz about Mill and the failure of the cooperative project.  I am especially interested in debunking some explanations that different writers (between them Schwartz) utilize to justify the lack of cooperative companies on the market and the degeneration into capitalist enterprises of existing coops.  I can`t afford to be a fatalist about this subject: we need to see a workable and widely available workplace democracy in our lifetimes.

Added to Accumulated Bibliography: (press to access)

MILL, John Stuart (1848, revised 1852): Principles of Political Economy: with some of their applications to social philosophy. Book IV,Chapter 7. John W.Parker, London.

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