We can consider it as proved that the co-operative society has shown itself to be an economic factor of importance, and if other countries are behind England in this, it has taken firm root in Germany, France, Belgium, etc., and gains ground more and more. I forebear quoting numbers because the fact is well known, and continual figures are wearisome. Of course legal trickery can hinder the spread of co-operative societies and the full development of their innate possibilities, and their success is again dependent on a certain degree of economic development; but here, we are above all concerned with showing what co-operation can do. And if it is neither necessary nor possible that the associations as we know them to-day can ever take possession of all production and distribution of commodi- ties, and if the widening domain of public service in the state and the municipal and district councils puts limits on the other side, yet on the whole a very wide field is open to co-operation, so that, without lapsing into the co-operative Utopias I have referred to, we are justified in expecting very much from it. If in a little over fifty years out of the movement which began with the £28 of the weavers of Rochdale an organisation has developed which handles a capital of ^20,000,000, it would need great courage to be willing to prophesy how near we are to the point of time when the limit of its growth is reached, and what forms of the movement are still slumbering in the unknown years of the future.
To many socialists the co-operative move- ment is not quite acceptable because it is too 11 bourgeois.' ' There are salaried officials and workmen employed for wages; profits are made, interest is paid, and disputes occur about the amount of the dividends. Certainly if one kept to forms, the public elementary school, for example, is a much more socialistic institution than the co-operative society. But the develop- ment of public services has its limits and needs time, and meanwhile the co-operative society is the easiest accessible form of association for the working class, just because it is so 11 bourgeois/ y As it is Utopian to imagine that the community could jump into an organisation and manner of living diametrically opposed to those of the present day, so it would also be Utopian to make a beginning with the most difficult form of associated organisation.
Meanwhile co-operative production also will be realised though probably in other forms than the first theorists of the co-operative system imagined. For the present moment it is the most difficult form of the realisation of the co-operative idea. It has already been mentioned that the English co-operators handle more than I2Ö the;£i 5,000,000 which Lassalle demanded for his scheme of association. And if the matter were only a financial question other pecuniary resources would be at their disposal. The friendly societies, the trade unions hardly know where to invest their accumulated funds. But it is not exactly, or not only, a question of financial resources. Nor is it a question of erecting new factories for a market already supplied. Opportunity is not lacking for buying existing and well provided factories. It is now to a great extent a question of organisation and management, and therein much is still lacking. " Is it, in the first place, capital that we need," we read in an article in the Co-operative News, the central periodical of the British Society; and the writer of the article answers the question with a decided negative. " As it appears, we have at present at our disposal some ^10,000,000, which are only waiting to be employed in a co-operative way, and a further ^10,000,000 could doubtless be quickly pro- cured if we were fully in a position to apply it usefully in our movement. Do not let us, therefore, conceal the fact — for it is a fact — that even at the present hour in the co-operative world there is a greater need of more intelli- gence and capacity than of more money. How many among us would buy nothing that was not made and finished under co-operative con- ditions, if it were possible to live up to this ideal? How many of us have not again and again attempted to use goods made by co- operators without being perfectly satisfied?* * December 3rd, 1898.
In other words, financial means alone will not solve the problem of co-operative work. It needs, leaving other hypotheses out of the question, its own organisation and its own leaders, and neither are improvised. Both must be sought for and tried, and it is, therefore, more than doubtful whether a point of time in which all feelings are heated and all passions excited, as in a revolution, can be in any way conducive to the solution of this problem which has already proved to be so difficult in ordinary times. In human judgment the contrary must be the case.
I have not here to enlarge on other forms of the co-operative system (loan societies, credit societies, raw materials, and warehouse associa- tions, dairy farm associations, etc.), for these are of no importance to the wage-earning class. Nevertheless owing to the importance which the question of small farmers (who also belong to the working classes even if they are not wage earners) has for social democracy, and in view of the fact that handicrafts and small trades play a still noticeable part, at least according to the number of persons employed in them, I must point out the advance which the co-opera- tive system has attained in these directions. The advantages of the co-operative purchase of seeds, of the co-operative purchase of machines, and the co-operative sale of produce, as well as the possibility of cheap credit, cannot save peasants already ruined, but they are a means of protecting from ruin thousands and tens of thousands of small peasants. There can be no doubt of that. There are unusually abundant opportunities to-day for the acquisition of small holdings. It would be rash to say, as some writers do, that for agriculture, with reference to the advantages of large and small under- takings, exactly the opposite law holds good as for industry. But it is not too much to say that the difference is quite extraordinary, and that the advantages which the large farm, powerful in capital and well equipped, has over the small are not so important that the small holding could not make up for them to a great extent by a fuller use of the system of co- operation. The use of mechanical power, the procuring of credit, the better security of sale — co-operation can make all these accessible to the peasant whilst the nature of his farming makes it easier for him to overcome occasional losses than is possible for the larger farmer. For the great masses of peasants are not always simply producers of commodities; they themselves raise a considerable share of their necessary food.* In all countries of advanced civilisation the co-operative system quickly increases in extent and scope. Belgium, Denmark, France, Hol- land, and lately also Ireland, show herein no different picture from Germany. It is important that social democracy instead of fishing out of statistics proofs for the preconceived theory of * In Prussia, from 1895 t0 I9°7» tne small holdings of 3 to 20 hectares (7J to 50 acres) have increased from 698,357 to 760,315, and the area they cover has also considerably increased, whilst that of the larger holdings has decreased.
the ruin of the class of small farmers should examine searchingly this question of the co-operative movement in the country and its importance. The statistics of forced sales, mortgage incumbrances, etc., are in many respects misleading. Undoubtedly landed pro- perty to-day is more mobile than ever; but this mobility does not work only from one side. Until now the openings which the forced sales have made have always been filled again.
As far as the agricultural classes are con- cerned we are face to face with the fact that however many co-operative arrangements they have made, one thing in co-operation has always hitherto been withheld from them: the cultivation of the land itself, that is the farming of field and meadow and actual cattle rearing. Different kinds of work linked with farming and attached to it are carried on co-operatively, or at least for co-operative societies, but farming itself withdraws here and elsewhere from co-operative work. Is co-operation less advan- tageous for it than for other industries? Or is it simply the peasant's landed property that stands in the way?
The fact has already been emphasised often that the division of the land among many owners is a great hindrance to the co-operative cultivation of the soil. But it does not form the only hindrance, or, to express it differently, it increases its real difficulties but is not usually the cause of them. The separation by distance of the workers, as well as the individualist char- acter of a great part of agricultural work, plays likewise a part. It is possible that the peasants' syndicates which are still so young may get over these hindrances in their further development, or — which seems to me most probable — they will be driven gradually beyond their present limits. Meanwhile they cannot yet be reckoned with.
Even agricultural production for co-operative societies is at the present time an unsolved problem. The English co-operative stores have done no worse business with any undertakings than with their farms. Nowhere do the peasants gain greater profit from the soil than in Scot- land. The figures of profit for wheat, oats, etc., per acre are much higher in Scotland than in England. But a farm of Scottish co-operators furnished with good machines representing a capital of ^12,500 has proved a great failure. For 1894 it made a profit of six-tenths per cent., for 1895 a loss of 8.1 per cent. But how does it stand with the associations of agricultural labourers? Does the productive co-operation of agricultural labourers offer better prospects than the productive co-operation of industrial workers?
The question is all the more difficult to answer because sufficient practical examples are wanting. The classical example of such a co-operative society, the celebrated association of Ralahine, lasted too short a time (1831 — 1833), and whilst it lasted was too much under the influence of its founder Vandeleur and his agent Craig for it to be able to serve as a valid proof of the living power of independent associations of workers on the land. It only shows the great advantages of association under certain circumstances and assumptions.
The experiences of the communistic colonies are the same. These latter succeed in actual or practical isolation for a long time under circumstances one would consider most un- favourable. But as soon as they attained a greater degree of prosperity and entered into more intimate intercourse with the outer world they decayed quickly. Only a strong religious or other bond, a sectarian wall raised between them and the surrounding world, apparently, will keep these colonies together when they have attained wealth. But the fact that it is necessary for men to be limited in their develop- ment in some way, in order that such colonies should flourish, proves that they can never be the general type of associated labour. They stand for Socialism at a stage of pure industrial productive association. But they have acted as a glowing proof of the advantages of co- operation.
On the basis of all these facts and of the experiments which intelligent landlords have made with co-operative leases, sharing profits with agricultural labourers, etc., Dr. F. Oppenheimer has developed in the already mentioned volume the idea of an agricultural association which he calls " Siedlungsgenos- senschaft " (Colonising Co-operative Associa- tion). It is to be an association of agricultural labourers, or, is to begin as such, and is to combine individual with co-operative manage- \ \ ment — that is, small farming with associated work on a large scale, as is the case to-day on large estates where plots on the outskirts are let off in allotments at a more or less high rent, and which are often managed in a more exem- plary manner. Oppenheimer conceived of a corresponding division in his Siedlungsgenos- senschaft Association, only, that here the intention naturally is not to lower the price of labour for the central farming round which those small holdings are grouped, but really that opportunity shall be given to every single member to enjoy on a sufficiently large piece of land all the material and other charms of a farm of his own and to employ in its culture all the labour power not needed for the central farm of the association, which promises him the best returns or otherwise best suits his individu- ality. But for the rest the association is to utilise all the advantages of the modern large enterprise and all co-operative and mutual arrangements are to be adopted for the business needs, etc., of the members.
This is not the place to examine more closely the Oppenheimer proposal and the theory on which it is based. But I think I must just observe that they do not seem to me to deserve the contempt which has been their portion in some of the social democratic publications. One can doubt whether the thing can or will be worked out quite exactly in the form developed by Oppenheimer. But the funda- mental thoughts which he develops depend greatly on the scientific analysis of the forms of management and agree moreover with all the experiences of co-operative practice, so that one can indeed say that if the co-operative method of farming is ever brought to pass, it can scarcely happen in any form materially different from the one worked out by Oppenheimer.* The expropriation on a larger scale which is mostly thought of in the criticism of such pro- posals cannot in any case produce organic creations in a night by magic, and therefore the most powerful revolutionary government would be compelled to face the task of looking for a practical theory of co-operative work in agriculture. For such a work Oppenheimer has brought together most abundant materials and has submitted them to a sharp systematic analysis, which by itself made the " Siedlungs- genossenschaft M worth studying.
There is still one more remark to make with regard to agricultural co-operation. As far as the Socialist is a party politician he can only greet with satisfaction the present immigration from the country into the towns. It concen- trates the masses of workers, revolutionises * In the congress of the British Co-operative Society (Peterborough, May, 1898) a delegate, Mr. J. C. Gray, of Manchester, read a report on co-operation and agriculture, in which he, after an objective examina- tion of all experiments made in England, finally makes a proposal which is wonderfully like Oppenheimer's project. M The soil is to be common property, the providing of all stock is to be co-operative and so is the sale of all products. But in the cultivation of the soil the individual interests must be attended to with due regard against interference with the interests of the Community." — [Co-operation and Agriculture, Manchestheir minds, and at any rate furthers emancipa- tion. But as a theorist who thinks beyond the present day the Socialist must also say that this migration in the course of time may become too much of a good thing. It is well known to be infinitely easier to draw country people into the towns than to draw dwellers in towns into the country and accustom them to agricultural work. Thus the stream of immigration into the towns and industrial centres does not only increase the problems of the present rulers. Let us take, for example, the case of a victory of the working class democracy which brings the Socialist Party to the helm. According to all experience hitherto its immediate result would presumably be first of all to increase markedly the stream into the great towns, and it is in some measure doubtful whether the M industrial armies for agriculture " would allow them- selves to be sent more willingly into the country than in France in 1848. But apart from that, the creation of co-operative associations capable of life and guidance will be under all circum- stances a heavy task the further the depopulation of the country has advanced. The advantage of the existence of models of such associations would not be bought so very dearly at the price of a somewhat slower rising of the monstrous towns.* * I see with pleasure that Kari Kautsky in his work on the agricultural question which has just appeared, has taken the problem of co-operation on the land seriously into examination. What he says of the obstacles that hinder the conversion of the peasants' small holdings into large associations for carrying on i3S (c) Democracy and Socialism.
" On February 24th, 1848, broke the first dawn of a new period of history. p * 11 Who speaks of universal suffrage utters a cry of reconciliation. " Lassalle, Workers* Programme.
The trade unions concern themselves with the profit rate in production as the co-operative stores concern themselves with the profit rate on the sale of goods. The fight of the workmen organised in trade unions for the improvement agricultural work, fully agrees with what Oppenheimer works out on the same subject. Kautsky expects the solution of the problem from the influence of indus- trial developments and the conquest of political power by the proletariat. He says evolution brings the peasants to-day always more and more into dependence on capitalistic enterprises, as distilleries, breweries, sugar factories, flour mills, butter and cheese factories, wine cellarages, etc., and makes them casual or tem- porary workers in other kinds of capitalist undertakings, such as brickfields, mines, etc., where to-day small cultivators take temporary work in order to make up for the deficit of their holdings. With the socialisation of all these undertakings the peasants would become " co- operative workers," temporary workers of socialistic associated undertakings, whilst on the other side the proletarian revolution would lead to the conversion of large agricultural holdings, on which to-day a great number of the small cultivators are dependent, into co-operative undertakings. Thus the small agricultural holdings would lose their consistency more and more, and their combination into co-operative holdings would meet with fewer difficulties. Nationalisation of mort- gages and cessation of militarism would facilitate this evolution.
In all this there is much that is right, only Kautsky appears to me to fall into the error of considerably over- estimating the forces working in the direction desired by him. Some of the industrial undertakings which he enumerates are not on the high way to control industrially of their standard of life is from the standpoint of the capitalist a fight between wage rate and profit rate. It is certainly too great an exag- geration to say that the changes in the rates of wages and the hours of labour have no influence at all on prices. If the wages of workers in a certain industry rise, the value of the corres- ponding products rises in a corresponding ratio as against the value of the product of all indus- tries which experience no such rise in wages, and if the class of employers concerned do not succeed in meeting this rise by an improvement small farms, but to become dependencies of agricultural associations and with others, as, for example, the brew- ing business, their connection with agricultural holdings is too loose for a change in their nature to exercise a strong reaction on the forms of the latter. It is just the largest sugar factories that belong, in Germany, to associations of big and small cultivators. Further, Kautsky allows himself, in my opinion, to be led away too much by the strong words which he now and then uses, to conclusions which would be correct if those words were true generally; but as they are only partially true, they cannot claim general acceptance. To make this clearer: In Kautsky the life of small farmers appears a sort of a hell. That can be said with justice of a great number of small farmers, but of another large number it is gross exaggeration, just as to-day in many cases one is not now justified in speaking of small farmers as " modern barbarians." It is a similar exaggeration to call the work which the small farmer performs on neighbouring estates, because his holding does not occupy him fully, slaves' work. By the use of such expressions assumptions are maintained which allow feelings and tendencies to be assumed to be general in those classes when, in reality, they are only exceptional.
If I cannot agree with all Kautsky 's conclusions on the probable development of small farming, I am all the more at one with him in the principles of his agrarian political programme to be carried out by social demo- cracy.
of machinery, they must either raise the price of the product concerned or suffer a loss in the profit rate. In this respect the different industries are very differently placed. There are industries which, on account of the nature of their products or of their monopolistic organisation, are fairly independent of the world market, and then a rise in wages is mostly accompanied by a rise in prices also, so that the profit rate does not need to fall but can eveo rise.* /in industries for the world market, as in all other industries where commodities produced under various conditions compete with one another, and only the cheapest command the market, the rise in wages almost always results in a lowering of profit ratej The same result occurs when, by the resistance of organ- ised workers, an attempt fails to neutralise by a proportional lowering of wages, the lowering of prices rendered necessary by the struggle to sell. After all, a fight of the workers for wages can, in fact, be but a fight against the rise in the profit-rate at the cost of the wage-rate, however little the fighters are conscious of it at the moment.
There is no need to prove here that the fight regarding hours of labour is similarly a fight over the profit-rate. If the shorter day of labour does not directly cause a diminution in the amount of work done for the wage given * Amongst others Carey relies on this partial truth in his Doctrine of Harmony. Certain extractive industries — mines, etc. — afford examples of it.
hitherto — in many cases it is known the reverse happens — yet it leads by a side way to an increase in the workers' demands for better conditions of life, and so makes a rise in wages necessary.
A rise in wages leading to an increase in prices does not, under certain circumstances, need to be an injury to the whole community; but is, however, more often harmful than use- ful in its effect. To the community, for instance, it makes no particular difference whether an industry exacts monopolist prices exclusively for a handful of employers, or whether the workers of that industry receive a certain share in such booty squeezed out of the public in general. The monopoly price is just as much worth fighting against as the cheapness of products which can only be achieved by the lowering of wages below the average minimum rate. But a rise in wages which only touches profit-rate must, under the conditions of the present day, be advanta- geous for the community in general. I say in general expressly, because there are also cases when the contrary is the case.
Fortunately, such extreme cases are very rare. Usually the workers know quite well how far they can go in their demands. The profit-rate, indeed, will bear a fairly strong pressure. Before the capitalist gives up his undertaking he will rather try every possible means to get a greater output for wages in other ways. The actual great differences of profit-rates in different spheres of production show that the general average profit-rate is constructed more easily in theory than even approximately realised. Instances are also not rare where even new capital that enters the market needing to be utilised does not seek the spot to which the highest profit-rate points, but, like a man in choosing his calling, allows itself to be guided by considerations in which the amount of profit takes a secondary place. Thus, even this most mighty factor for levelling profit-rates works irregularly. But the capital already invested, which greatly preponderates in each case, cannot for purely material reasons follow the movement of the profit-rate from one field of production to another. In short, the result of a rise in the price of human labour is, in by far the largest majority of cases, partly the greater perfection of machinery and the better organisation of industry, partly the more equable division of the surplus product. Both are advantageous to the general well-being. With certain limitations one can for capitalist countries modify Destutt de Tracy's well-known saying to: " Low profit- rates indicate a high degree of well-being among the mass of the people. M [The trade unions are the democratic element in industry. Their tendency is to destroy the absolutism of capital, and to procure for the worker a direct influence in the management of an industryjf It is only natural that great differences of opinion should exist on the degree of influence to be desired. To a certain mode of thought it may appear a breach of principle to claim less for the union than an unconditional right of decision in the trade. The knowledge that such a right under present circumstances is just as Utopian as it would be contrary to the nature of a socialist com- munity, has led others to deny trade unions any lasting part in economic life, and to recog- nise them only temporarily as the lesser of various unavoidable evils. There are socialists in whose eyes the union is only an object lesson to prove the uselessness of any other than political revolutionary action. [As a matter of fact, the union to-day — and in the near future — has very important social tasks to fulfil for the trades, which, however, do not demand, nor are even consistent with, its omnipotence in any wayj