John Maclean Internet Archive
Transcribed by the John Maclean Internet Archive

Co-operation and Trusts

by John Maclean

Source: The British Socialist, Vol. 1, No. 4 April 1912, p.156-162
Transcription: Ted Crawford
HTML Markup: Brian Reid
Copyleft: John Maclean Internet Archive ( 2007. Permission is granted to copy and/or distribute this document under the terms of the GNU Free Documentation License.

It is to the lasting credit of our organisation that it was the first to draw the attention of the trade unions to the rise in prices since 1896, unaccompanied by an equivalent rise in wages, whilst surplus value has leaped upwards by unprecedented leaps and bounds. This tendency of latter-day capitalism it is which has served as cause of and justification for the industrial strikes so popular at present. That prices shall still further rise is likely from the continuous increase in the output of gold in reduced time. This I venture to predict in spite of Professor Ashley, whose little pamphlet, “The Rise in Prices and the Cost of Living,” ought to be spread among every section of the working class.

We must also have the credit of showing co operators how this upward movement of prices, restricting the purchasing power of the workers, not only nullifies the benefits of the dividend, but likewise drives hard-pressed housewives past co-operative shops to those of the multiple firms. It has been customary in the past to look askance at Co-operation on the ground that it is run on capitalist lines, that the benefit of the dividend is elusive, in so far as it is neutralised by reduced wages, and that the movement has no ideal outside the wages system. To my mind such arguments are insufficient as excuses for indifference to this great popular movement, as I will try to show before proceeding further.

Co-operation is certainly run on capitalist lines; it had to be or it would have gone under. But it is democratic in constitution and is composed essentially of wage-earners who can mould it as they choose. Thus it is distinguished from a normal capitalist concern. If employees are badly paid and otherwise maltreated the working class is to blame and the working class can make good again. Share capital and interest can be regulated to suit the ideas of the members, and thus the few need get no overwhelming control. If by getting from a co-operative shop goods of the same price and quality as from an outside source I save 2s. 6d. per £1, obviously that is an advantage, and if I join a union and prevent my wages falling, as otherwise they might do, then I retain the advantage. The return to labour is not a fixed quantity, and no more depends on a fixed standard or cost of existence than prices depend on wages under general circumstances; it can grow although circumstances such as a rise in prices due to gold or trusts may more than neutralise the modest immediate gains accruing from co-operative or trade union effort. Such a rise shows the futility of neither of those popular movements, but solely their limitations and the need for a re-organisation of society on the basis of social ownership. That some men may have exclusively relied on these agencies as the way to the elimination of poverty in no way proves their uselessness, but rather demonstrates the folly of attempting to solve economic problems without a full knowledge of the economic structure and evolution of society.

The early pioneers of Co-operation had the ideal of a commonwealth of co-operative communities more or less self-sacrificing and entirely free from the disbursement of surplus value. On platforms to-day perorations shadow forth the old ideal; but practically Co-operation is run on purely business lines, apart from the funds devoted to educational and charity purposes. Whilst of itself it is impotent to evolve into a non-plunder society, we have to settle with ourselves whether it is not a force working inside modern society that makes for our goal

In the same way that trusts, municipalities and States make for the unification, the centralisation, of production and distribution, so also does Co-operation. That no one would deny. But it can well be urged that multiple shop companies are doing exactly the same, and hence are as valuable from our point of view as co-operative societies. In so far as the latter are working-class organisations, we must undoubtedly see in them weapons of defence in the class war, and of aggression in the expropriation of the capitalists, apart altogether from the training in business methods afforded to so many workers.

Of greatest value to us, distribution is a field where the class war is beginning to break out with a virulence equal to that experienced in the economic and the political fields. Economic necessity drove the weavers of Rochdale into co-operation, and the same cause led to its expansion. Conflicts with the interests of private traders arose, and this, inevitably, produced the boycott and other forms of guerilla warfare. That the traders got the worst of it was a foregone conclusion, as they represented a more primitive system of retailing goods. Some twenty-five years ago, optimistic co-operators anticipated that soon they would monopolise the trade of the working class; but within the last twenty years there has arisen the multiple system alongside a tremendous expansion of the huge emporium system, and these separately (and in the near future, perhaps, conjointly) are beginning to threaten the very existence of the Co-operative movement.

Reference to the “Co-operative Annual” will show the steady growth of the movement in members, sales, and capital; and even to-day, when we make allowance for growth of population, its aggregation in centres supplied by Co-operative societies, and the rise in prices, we see that the sales are on the increase, although not so rapidly as it should be in consequence of the increased variety of disposable commodities. This latter fact shows that co-operators are not as “loyal” as they ought to be; are, in fact, tending to patronise the coming enemy—the multiple concern. The multiple shops have increased most obviously within the last decade, and although reliable statistics anent their number, trade and real profits are not available, yet we are assured that there are over 70,000 of them, against about 30,000 (including branches) co-operative stores. The Maypole Company lately declared a distributable profit of over £492,000: the real profit will be far in excess of that. As this firm boasts of about 700 branches we may reckon the profits of the whole of the companies at anything between £25,000,000 and £50,000,000. That implies a trade over £120,000,000, much in excess of that of the Cooperative movement in the retail department. From this we can deduce that the multiple system is developing twice as quickly as Co-operation, and both are growing at the expense of the private trader, whose day is about past.

I contend that this rapid growth of capitalist retailing has been largely fostered by rising prices and the increasing difficulty housewives have in making ends meet. Many of these firms have as “draws” articles such as tea, butter and margarine, well known to be highly susceptible of adulteration. These articles, actually sold above value, are sold at prices seemingly low, and as a result readily bait the desperate domestic economist. The abnormal profits thus obtained enable other prices to be cut keenly, and so trade expands. It is no wonder, then, that the multiple shops are spreading so rapidly.

These organisations, starting as local businesses, in the end become national, and with funds drawn from their large reserves they can risk opening up new branches here and there to see if profits will arise. This freedom of experimenting, used judiciously by eager managers, also explains the celerity with which the new system has grown and is likely to grow.

Although Co-operation in large centres is slightly feeling the pressure of the new opposition, this has been only incidental to the extension of this system. Very soon the intensive cultivation of the various rival businesses will lead to price-cutting and then amalgamation—exactly what we have witnessed on the productive and wholesale distributive side already. More than that. There is a clear tendency for retailers to take to production, and for manufacturers to take to distribution. This is quite natural in the process of industrial integration, and tends to accelerate the growth of trust control of distribution. Given productive-distributive trusts on a national basis, and an upward movement of prices, it would be quite possible for these, each in its own line, to select a particular area of Britain, and there keep prices below cost price until the Co-operative societies were wiped out. Taken thus in detail, the country might be cleared of Cooperation entirely. By adopting such tactics trusts have already driven rivals out of production. What is possible in production is equally possible in distribution, and the probability is not far distant. Besides that, the wholesale societies are dependent upon shipping and railway companies for the transit of goods, and on other capitalist concerns for raw materials and finished articles. The manipulation of transit charges by the granting of rebates to trusts and the stopping of supplies of raw material or finished goods by other trusts could very soon reduce Cooperation to impotence. These are but a few of the dangers that lie in the path of this movement.

Directors and employees are becoming keenly alive to the menace of the multiple firms, although the majority are content to drift along whilst yet the sales go up. Last year, through my society, I tried to raise the question definitely at the Bradford Congress, but was side-tracked to the Scottish Conference. Not having an adequate opportunity, I was asked to write a paper for the Renfrewshire Conference. This I did. The paper has also to be read at the Glasgow and Suburbs Conference. I have lectured to a few societies on the issue. And again my society is trying to get the issue raised at this year’s Portsmouth Congress.

My desire is to get the Co-operative Union to appoint a Commission to investigate the whole situation and then come forth with proposals that will be applied systematically over the whole country. Already I have suggested that the land here and in the Colonies, and the means of transit, should be socially owned so that the sources of raw material and transit be safeguarded. Agricultural co-operative associations, pledged to trade directly with the people’s societies, ought to be fostered and formed. Co-operative production ought to be largely extended. Retail societies ought to be put on a national basis so as to avert the calamity of extinction through price-cutting. Over and above this the employees ought to link up with those under the capitalists so as to avoid different rates of pay and unfair competition through sweating. Every step possible should be made to get the State to standardise quantities and qualities sold for all commodities liable to adulteration or fraud of any kind. Finally, I uphold the abolition of dividend, as without it the multiple system grows, and the building up of a reserve fund large enough to leave the movement independent of individually-owned capital and the need for the payment of interest.

These are merely thrown out as suggestive expedients to arouse others to the formulation of fresh ones. Here is a large new field for immediate agitation work among the workers before the Congress takes place. It should likewise be a duty to see that the whole issue is thrashed out at the Congress, as much as a means whereby prices might be reduced to suit the people just now as one for the re-adaptation of the structure and methods to meet a new type of opposition.

The more we explain the meaning of the opposition as one of Capital versus Labour, in which the capitalists, with their huge capital already invested in production and transit, and deriving therefrom a surplus-value far in excess of the wages earned by the workers, have every possible advantage when it comes to a real, deadly struggle, the more will co-operators realise that the opposition of the multiple trusts is but another expression of the class war, and the more will they understand that, whilst the movement may live for a time, yet by itself it cannot hope to lift the people into economic salvation, but must simply act as a stand-by until the workers, by political action, seize hold of all land and capital and use these for social production and social distribution.