“Potentials and Risks of Cooperatives for a Socialist Construction” by Camila Piñeiro Harnecker

Camila Piñeiro Harnecker

“Potentials and Risks of Cooperatives for a Socialist Construction” by Camila Piñeiro Harnecker, (Cuba) researcher and professor at the Center of Studies on the Cuban Economy, University of Havana. Listen to the audio file in Spanish. Read the original Spanish presentation.

[Translation of her presentation at the First Global Prout Conference in Venezuela, “Building a Solidarity Economy based on Ethics and Ecology”, July 7-9, 2011, Caracas.]
Good morning and thank you for the invitation to be here with you. Actually in these few minutes I will not talk about cooperatives in Cuba, I will talk in general about what I think cooperatives can contribute in the building of socialism. I also want to clarify what I mean by these terms. Tomorrow afternoon in my workshop, we will have more time. There I can share Cuba’s experience with cooperatives, and what is happening there now, and what is still left to do, which I know is of great interest.

I’m going to start my presentation here as a good academic, with definitions. I will focus on producer cooperatives. As we know there are also consumer cooperatives. Producer cooperatives can offer both goods and services, and these are the most important for me. When we think about a cooperative, it is not the legal ownership of the means of production that is most important I think, but it is useful for it to be at the service of the cooperative members. We should bear in mind that a cooperative is nothing more than a group of people gathered to reach a common goal, but in a certain manner. Most important, I think, is that they achieve this goal in a democratic way, managing or administering the enterprise democratically amongst the members. The most complex item to this subject of building socialism and cooperatives – and mostly due to the interpretations of socialism that have been made in historical experiences and that still permeate significantly the vision of people today – is the fact that a cooperative is an autonomous organization that the State cannot control directly, because that would be against its principle of autonomy.

Then, what does this non-state management mean? Is it the same as private management, that is, for the benefit of a particular group of people –who are the cooperative owners– with narrow interests? Or could it also have a social character or outlook? This is one of the most important questions when we think about whether cooperatives are useful or not for building socialism.

You will see in my presentation that the fact that cooperatives are in fact autonomous organizations, and thus that the State cannot control them directly, does not mean that they cannot have a social outlook. That is, it does not mean that they cannot respond to the social interests of other communities outside the cooperative membership. Let’s see, what does it mean to gauge whether cooperatives are useful in building socialism, in advancing towards a better society than the one we live in today; that we have called capitalism, due to the way it is organized and thus the social relations that predominate.

Here in Venezuela you have come a long way. I think that most people here realize that when we talk about socialism, we are not talking about the development of the productive forces (or technology), nor about increasing the role of the traditional State, as was thought before by theoreticians and those who lived in socialism. What we want instead is human development; that happiness that, as it has been said here today, Latin American independence. What we want is that all people can develop fully as human beings. This perspective emphasizes the spiritual part, because we are human beings who have both material needs as well as spiritual needs for personal realization, to feel happy with our brothers and sisters in the community where we live. This is the goal of the society we want to build.

What are the means to achieve the full human development that socialism aims for? Here (in Venezuela) you have also the importance of democratic participation to achieve this goal. The day-to-day participation that results in people’s transformation. This has to start within each one of us, as Prout suggests. Prout is a theory I don’t really know, but I’m grateful that I have been invited here and I hope to also learn from you.

Another means to achieve the development we want, is that people also require that the economy is controlled by society – this is important in Marxist theory about socialism, is what is known as “socialization” –, and not the other way around, as Nora Castañeda pointed out. Now, we are all pieces of an international economy that does not necessarily respond to our needs. Rather, we are here for them to generate and accumulate profit.

Now, thinking about the suitability of cooperatives for socialism, we have to take into account that Marx saw socialism as a society made of freely associated producers joined by a common plan. Since cooperative members operate through relations of association, we have to think about the role of cooperatives. Also because Lenin said that socialism was nothing but a society made of educated (or cultured) cooperativists.

When we think of the convenience of cooperatives for building a socialist society, I argue that cooperatives can have a socialist character, because one of the characteristics of socialism –or of a society that has a commitment or mission to reach socialism– is the kind of social relations that are established among people, which are manifested in our daily practice, in how we organize our lives in our workplaces and communities. And the democratic management that happens in cooperatives is fundamental to establish these relations of associated work. Therefore, cooperatives are useful for socialism to the extent that they really implement their principles in practice, that they are really democratically managed – we know that there are some that are cooperatives only in name and are not democratically managed. And they avoid doing what many cooperative in the world do, have democratic management for their members, but instead hire many salaried workers that remain as employees of the cooperative, under relations of subordination instead of association.

It is also important – and this is where the subject becomes more complicated – how to make a cooperative respond not only to the interests of its members, but also to the interests at least of the neighboring communities, of the social groups they affect with their activity. Because we must understand that the neo-classical economic theory, the hegemonic theory in the world, does not consider the externalities that any economic activity has, which relate to the environment, the families of the workers, or the communities where the companies are located. We have to see that the interests of these communities that are affected by the economic activity are somehow represented and considered in the management of those enterprises.

How can this happen? It is not easy to explain quickly. I am only going to mention the importance of democratic planning or coordination to articulate social interests, and to create an incentive system that orients cooperatives towards the fulfillment of those interests that are democratically identified.

Now, the fact that cooperatives must be autonomous could be seen as a problem. This concern has become evident in Venezuela. I believe that in Venezuela has happened a bit of what happens in Cuba. We Cubans have a saying: “either we come up short or we overshoot”. I know that the situation (of cooperatives) is very complex here in Venezuela, and I would like to learn about what is the vision about cooperatives here now. Because it is true, I think, that we have to consider whether, by defining cooperatives as autonomous organizations, they may not be the best way to organize some activities to produce basic goods and services where communities should have more direct control. Because, for those activities, we cannot leave it to a decision of a group of people who might, for example, someday decide to stop producing this and instead produce something else. So we have to bear in mind that cooperatives, as traditionally understood, are not a panacea.

We also have to consider other forms of self-management beyond the enterprise, and I believe there has been progress in some experiences here. We have to consider the ideas of franchising, leasing – which in Cuba is been considered – and co-management models. There have been different interpretations and experiences of co-management, although unfortunately they have not been very successful. But I still think it is important to consider this and the other alternatives.

What is the importance of cooperatives? I am going quickly over things that we can consider more fully later. As I said, the social relations within cooperatives, which according to Marx characterize the new society, the relationship of associated work. We all know that this is related to the democratic practice, and all the positive effect that it brings regarding the sense of belonging; which in “real” socialism was lost because the worker did not feel that he or she really owned the company. This relates to motivation and capacity development through participation. Then whether or not we consider suitable to the building of socialism the cooperative, and democratic management in general, depends on whether we see the hiring of a workforce as an obstacle to the human development that we want. This is also a complicated subject.

Now, regarding the relation of the cooperative to the rest of society, we have to think in how to change the logic of market exchange, where the guiding logic is profit maximization. We have to socialize these relations of exchange, which is also complicated. I have mentioned the importance of democratic planning (to identify social interests) and that an incentives system has to be established in order to materialize the satisfaction of those identified needs. The importance that we give to the need that enterprises have a social outlook, depends on whether we see the enterprise as a little box, a money bag to extract money through taxes, or whether we expect the enterprise itself, by its own activities, to satisfy social needs.

In short, the suitability of cooperatives for building that better society we all want rests fundamentally with two aspects. First, the democratic administration that should take place in them. Second, the fact that it is possible to organize local economies – in different ways, there is no one single model – so that cooperatives respond to social interests.

The cooperative is also important because it allows us to pay attention to both material and spiritual interests. Sometimes we see a false dichotomy between productivity and the development of values, between the spiritual and the material. And the good thing, I believe, about cooperatives is that they allow us to combine the need of the enterprise to be productive, with the need to foster the personal development of the workers, which is both material and spiritual.

These other potentials of cooperatives I list here relate to what is happening in Cuba. We are considering small and medium-sized enterprises that do not have to be directly managed by the State. Cooperatives, as small and medium-sized enterprises, have advantages that large state-owned companies do not have. They can create more jobs, they have the capacity to adapt to consumer preferences and changes in inputs, they can help to develop skills in people, and are key for local development.

To conclude, cooperatives can also represent or produce risks for a socialist project, or for any type of society. For example, when there are policies to promote cooperatives that are perhaps not designed in the best way – although it is true that practice is always more complicated than we would like – we have to be careful not to create cooperatives that are only on paper, or cooperatives that are not made of real cooperativists. Sometimes it is better to advance step-by-step with quality, instead of advancing massively and encountering many problems and losing the way. Another risk is the fact that cooperatives can hire employees – which is, as I mentioned, a common practice among cooperatives in the world. Also cooperatives can ignore or violate social interests if they follow the logic of profit. And finally, another risk is that, as has happened here too, many can fail because the minimum necessary conditions for their success are not created.

Thank you very much.
[Translated by Eugenio Mendoza. Revised by Camila Piñeiro 10/13/2011.]

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