Co-operatives and Socialism: The Promises and Contradictions of a System of Worker Ownership

Worker co-operatives are surplus-generating firms in which decision-making power is held by the workers collectively and there are no shareholders who are not also workers within the firm. This chapter assesses the possibility of a co-operative economy as a means of transcending capitalist social relations and moving beyond neoliberalism. It begins with a review of Jaroslav Vanek’s conception of the labour-managed firm as the only truly socialist form of the cooperative, but one that requires new forms of financing and ownership. It then presents the benefits of co-operative ownership in terms of alienation, drawing on Marxist theory and arguing that differences in the division of labour, the removal of capitalist social relations within the firm and the softening of market relations outside the firm present a possibility for non-alienating production. The chapter goes on to address the prospects of co-operatives within capitalism, addressing arguments around degeneration in capitalist markets and suggesting that institutional arrangements for co-operative financing, whether within a form of market socialism or participatory economics, are key to unlocking the potential of worker ownership at the systemic level. The chapter concludes by presenting co-operatives as an amelioration of the worst effects of neoliberal capitalism, as revolutionary consciousness-raising institutions, and as interstitial bodies able to bring about economic and social change. The overall argument is that the co-operative model shows promise at both the micro and macro levels but requires political action to create supportive institutions for its growth if it is to truly transform society.