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What is the history of workers self direction?

Workers Self-Directed Enterprises, in form if not in name, have a history extending back to some of the worlds earliest societies. From modern mankinds hunting parties [1], the origins of work can be traced to its most basic purpose: the enjoyment of the fruits of ones labor. Before work became synonymous with employment, humankind survived in communities through the expenditure of time and energy so that the community could reap what they sowed. No less important than the end product, was the process of work and the psychosocial benefits [2] derived by community members from participation in that process. While it may have been that way in the beginning, the history of work has shown that time does not always equal progress. Economies have integrated and advanced technologically, but over time a greater distance has opened between the workers produced surpluses (the excess of their output over what they themselves consume) and the workers who produced them.

Roots of self-determination
More people are employed [3] today than at any other time in the worlds history. Democracy at Work seeks to restore the appropriation and distribution of surpluses back to the very people who produced them and to make the work itself a genuinely democratic process to that end. Human history provides a long, rich history of communes, cooperatives, labor movements, and progressive thinkers advocating them. These efforts and experiments aimed to change production, to make work better serve peoples needs and interests than existing conditions did.

Even in the dark days of feudalism, important examples of collective labor and collective appropriation and distribution of realized surpluses existed in Chinas well-field system and in Russias mir communities. Preceding the Modern Era, pockets of communal living flourished throughout Europe during the Middle Ages. Southern France saw the Albigneses in the 11th century. In the 14th, the Moravian brethren practiced communally in what is now the Czech Republic while Mennonites , Hutterites , and Dunkards were among the groups in modern-day Germany one century later. Ostracized by the church and other ruling interests, the descendants and practices of many of these groups emigrated to the New World. Before it became the worlds most prominent capitalist society, North Americas native populations often shared their work processes and outputs in the manner of a WSDE with examples not limited to the Lenape , Dakota , and the Iroquois Confederacy . As waves of immigrants arrived on American shores, the continent became a fertile laboratory for experiments in various forms of communal ownership of productive assets, collective work, and/or collective distribution of surpluses. Plymouth operated as a commune and the Commonwealth of Massachusetts was so named because much of the land was communally held. Before the first shots were fired in the American Revolutionary War in 1776, collective-oriented communities were spreading across the continent. The Puritans common-land system survived for

several decades until falling prey to land speculators. In the Spanish-controlled American Southwest, the ejido system of collective land ownership and shared surpluses was implemented among immigrant families just as it was in the old country. Throughout the colonies, escaped slaves and Native Americans formed communal societies known as Maroons , often serving as bases for guerrilla attacks on settlements. Meanwhile, across the pond, the worlds first cooperative was established in 1760 by dockworkers and shipwrights in Woolrich, England. Cooperatives arose in many towns throughout [4] England, though many failed, sometimes owing to sabotage from capitalist competitors.

Revolutions, American & Industrial

Much of the working class discontent that fueled the American Revolution continued into the early days of the United States. Tailors, carpenters, shoemakers, and working men of various occupations combined to achieve feats such as the ten-hour day, better working conditions, and communal warehouses through strikes. Figures such as Langdon Byllesby , Thomas Jefferson , William Leggett , and Thomas Paine were among those advocating for a more equal distribution of wealth or democratic participation in labor, if not both. Some of their ideas approximated the concept of WSDEs, although not so named. While not put into effect generally, such ideas served as inspirations for important oppositional movements in the decades that followed.

Both the world and the nature of work changed drastically in the early decades of the nineteenth century. The Industrial Revolution brought about the obsolescence to many small-scale trades as production shifted to factories. The concomitant growth in population and concentration of wealth in fewer hands drastically decreased the opportunities [5] for a small farmer, especially in England and Wales. Many of the peasants so recently stripped of their land became the wage-earners soon filling the factory floors. With a surplus [6] of available labor and an explosion [7] in profit for industrialists, the gap between the rich and the poor widened [8] starkly. The possibility of self-sufficient economic activity evaporated as more and more were drawn into the global capitalist economy.

From these harrowing conditions arose some of the great thinkers and movements whose influence on economic justice remains strong today. Claude Henri de Rouvroy was one of the first and most prominent to recognize the societal changes brought about by industrialization and proposed the inevitability of workplace equality. While Robert Owen was establishing a communal society at New Lanark , Scotland, French social theorist Charles Fourrier proposed the idea for a new social order based on phalanxes , utopian societies in which workers were compensated commensurate with their contribution. Horace Greeley and Albert Brisbane helped popularize the concept and brought the communal societies to the States, most notably at Brook Farm , outside of Boston. Cooperative stores grew throughout the period, inspiring the trades first newspaper, The Cooperator , and, eventually, the

first sustainable cooperative in the Rochdale Equitable Pioneers Society . Many contemporary cooperatives abide by the principles established during this period.

Eventually these ideas of economic justice grew and deepened to challenge the status quo on a far greater scale. Beginning in France , similarly motivated uprisings under varying conditions culminated in the Revolutions of 1848 , including Austria, Denmark, several German states, Poland, and Switzerland. These revolutions often focused workers resentments, grievances, and angers on their capitalist employers as the main enemy, an historical first. While revolutionary outcomes varied substantially, one widespread result was large-scale emigration to the United States. The consequently relocated class consciousness likely contributed to the abolitionist movement and the American Civil War one decade later.

Karl Marx & The Rise of Labor

Around this time, the contributions of Karl Marx , from his 1848 The Communist Manifesto through his publication of the first volume of Capital , began to work their major influence on theoretical critiques of capitalism and political efforts to go beyond it. They have remained influential to this day, having accumulated the worlds richest repository of criticisms of capitalism and efforts to supersede it. Perhaps his greatest contribution was his focus on exploitation . He showed how slave, feudal, and capitalist economies were exploitative. Each in its distinctive way positioned the mass of workers to produce a surplus (an excess of output beyond what they received back for their consumption) that other people received and disposed of. Exploited workers confronted exploiting other people: slaves vs. masters, serfs vs. feudal lords, and proletarians vs. capitalist employers. Marx advocated the end of exploitation- to abolish it struck him as parallel to abolishing slavery. For him as for his followers across the globe in the 125 years since his death (1883), the goal was communism. They defined this economic system as follows: workers who produced surpluses would likewise collectively receive and dispose of them. They would thus have abolished exploitation. Among steps toward communism, many Marxists have advocated that workers become collective/cooperative owners of the means of production ; that they plan the distribution of resources and products rather than rely on markets, and so on.

The decades following the Civil War were marked by a continued ebb and flow of growth and decline; industry and agriculture; progress and regression. Within the capitalist system, as farmers were increasingly forced to become wage-earners, they struggled for improved wages and working conditions. They formed trade unions (UK) and labor unions . In the U.S., the National Labor Union was formed in 1866 to fight for an eight-hour day, land for settlers, and against the contract and convict labor system. They also endorsed the still growing cooperatives movement [9]. The Knights of Labor and American Federation of Labor both followed as powerful labor unions, exerting influence in many burgeoning industries such as the railroads threading across the country. With predominately French and British counterparts,

the International Workers Association was formed, eventually encompassing millions of members in nearly every industrialized nation. Reflecting the growing power of labor organizations and their growing critical focus on the capitalist economic system, the IWA was outlawed throughout Europe for its participation in the first workers collective/cooperative seizure of state power in Europe, the Paris Commune in 1871.

Organized labor was soon operating at the national level through labor and socialist parties, some of which began embracing Marxist platforms. Britains Labour Party , Australias Labor Party , Germanys Social Democratic Workers Party , several socialist parties in France, and, to an extent, the Socialist Party of America all achieved substantial measures of success at the ballot box after the turn of the century. Many sent sizable delegations of elected socialists to local, regional, and national legislatures. Even when not elected, the Socialists pro-worker policies were often adopted into platforms of mainstream parties. Membership and electoral success continued for many Socialist parties until the outbreak of the First World War.

In some countries, when the working class was unable to advance its cause in the voting booth and/or suffered heavy repression from employers and governments, it opted instead for armed struggle. Centuries of frustration with serfdom and the ruling tsars culminated in the 1917 Bolshevik Revolution in Russia. Led by Vladimir Lenin and Leon Trotsky , the Bolsheviks organized and mobilized workers to wrest control of the state apparatus from the Russian regime that was an amalgamation of the dying feudal remnants and the rising new capitalist class. Similar revolutions and conflagrations would play out in the ensuing century in Cuba, China, Spain, and several dozen countries throughout the world. While there has been much debate about the effectuality of these conflicts, a common, indisputable denominator has been a level of intolerable inequality (economic, political, and capital) between classes.

The Great Depression & Social Solutions

Beginning in 1929, the Great Depression brought the international capitalist economy to its knees. With the stock market crash and the subsequent nosedive of industrial activity [9], the spiraling effects of the crisis were felt throughout the world. Without traditional employers to turn to and widespread unemployment, many people began taking matters into their own hands. In the United States, millions of workers joined industrial unions organized by the Congress of Industrial Organizations (CIO), the greatest unionization drive in U.S. history. In addition, hundreds of thousands joined Self-Help groups [10] based upon barter and mutual aid. In the mainstream economy, President Franklin D. Roosevelt introduced the palliative policies comprising the New Deal to help those suffering through the Depression and to return millions back to work. What is less well-known is that these policies were achieved because of the coordinated pressures of the CIO and the fast-

growing Socialist and Communist parties of the time. Through various New Deal programs, cooperatives formed and flourished in electricity, canneries, dairies, and, above all, in agriculture among other trades. By 1939, more than half of U.S. farmers belonged to a cooperative.

The outbreak of World War II caused a major disruption to the growth in cooperatives. Traditional capitalist industry gained power [11] while many former members of cooperative movements were fighting overseas. Despite the economic and industrial growth of the post-war boom, a larger discontent with the system began to surface in the late 1960s. Many baby-boomers eschewed the traditional life to join urban and rural collectives [12], some of which formed an interconnected network never before seen. In a number of countries including France, Mexico, and the United States, protests begun largely by students soon expanded to include everyday workers and incorporated their demands. In many industrialized nations, the emergence of Employee Stock Ownership Plans arose as a response to worker demands. Some smaller operations adopted cooperative purchasing and selling to achieve otherwise elusive economies of scale. While not as cooperatively integrated as WSDEs, the proliferation of various types of cooperatives shows an enduring appeal despite or perhaps because of the capitalist system.

Post-War & The Emergence of a New Approach

Internationally, the post-war years brought the first truly robust emergence of WSDEs, at least in their modern form. Under the leadership of Tito, Yugoslavia experienced sustained growth when central planning was abandoned and workers were given more authority inside enterprises. In France, the LIP factory [13] was seized by workers in the late 1960s and then following the 2001 economic crisis in Argentina, more than 200 businesses were directly run by workers in what came to be known as autogestion [14]. Inspired by this movement, in 2011 a new bankruptcy law was signed in Argentina that facilitated take overs by workers.

There has been no greater example of Worker Self-Directed Enterprise than in the Basque region of Spain. In a small town still reeling from the Spanish Civil War, Catholic priest Jos Mara Arizmendiarrieta introduced collective cooperative enterprises. These have grown, multiplied, and integrated themselves (now 85,000 members strong) into the Mondragon Cooperative Corporation.

Cooperative movements, big and small, have contributed to a modern society in which collectivity is involved in everyday life. From the industrial giant Mondragon to the microfinance organization Grameen Bank, to the local credit union or grocery cooperative, hundreds of millions of people choose to collaborate collectively and cooperatively with one another. From national legislation to grassroots organizing, the local has become global to the extent that the United Nations declared 2012 to be

the Year of the Cooperative. If history serves as any guide to the present Economic Crisis, global capital will do what it can to assuage the minimum of working class concerns while preserving the larger capitalist structure. As Mondragon and Argentine factories and Chicagos New Era Windows have shown, capitalisms recurring crises provoke workers to remember, revive, and rebuild alternative, noncapitalist enterprises. Now more than ever, the opportunity exists for a major step forward for Workers Self-Directed Enterprises as a creative, positive alternative to capitalisms failures and those of governments to prevent or overcome capitalisms latest deep crisis. Democracy at Work aims to help achieve that forward step.

This article was published in the October/November 1998 Wedge newsletter. The following information may be outdated.

The Industrial Revolution Gave Birth to the Cooperative Movement

By Terry Appleby (adapted slightly) Every October cooperatives around the world celebrate the anniversary of the founding of the Rochdale Society of Equitable Pioneers. This anniversary honors the first cooperative to achieve sustained success. It was the Rochdale Pioneers who developed the formula for success that had eluded hundreds of earlier cooperative entities. This resulted in large part from a set of principles developed by the Society to govern its affairs. These principles were responses to political, economic, and social conditions of the time and drew on ideas and experiences which had percolated within English working-class movements for a century before. This first known cooperative was founded by dockworkers and shipwrights in Woolrich, England as early as 1760. Workers at the shipyards, unable to obtain pure flour, organized a corn mill to meet their needs. The business was successful, but the concern failed when an arsonist alleged to have been a competitor of the cooperative mill burned it down. Other English cooperatives of the period included the first cooperative store, a form of buying club organized by weavers in Fenwick in 1769, and a tailors' cooperative, founded in 1777 in Birmingham. Prior to the founding of Rochdale in 1844, cooperative efforts were common in England, but most failed. Rochdale is located in the north of England, in an area that for centuries was a center of textile manufacturing. The Industrial Revolution brought a shift from domestic, home-based industry to work in factories, changing systems that were centuries old. The new industrialization was exploitative and characterized by low wages and intense competition for jobs. (The growing population, child labor, and large numbers of immigrant Irish created a surplus of labor.) Fierce competition for markets forced firms to keep wages low and constantly cut costs. Market fluctuations made employment unreliable, and workers were turned out in times of low demand or high inventories. In many parts of the country, living conditions during the first four decades of the 1800s were extremely harsh for the working class people, especially in the textile centers. Thousands of families lived in squalor, without sufficient food, clothing, or adequate housing. These conditions gave rise to labor and working class movements that drew great numbers of followers. As threats to the established order, these movements became the targets of restrictive legislation and bloody repression by the government. According to G.D.H. Cole in his book "One Hundred Years of Cooperation," Rochdale was "second only to Manchester and Leeds as a center of working-class activity in the first half of the nineteenth century."

The modern cooperative movement evolved as a criticism of the emerging order. Although the ideal of cooperating for mutual benefit was not new, it gained renewed momentum through the utopian theories of Robert Owen. Owen envisioned a scheme of social reform that was pacific, constructive, educational, and non-political. He believed that a new social order could be achieved not through violent revolution, class movements, or political activity, but rather through a process of educational reform and the creation of utopian communities. Owen argued against the profit motive in favor of a system based on the value of labor and the intrinsic worth of people. He advanced the theory to ameliorate poverty centered on the formation of cooperative communities, each with 1,000 cooperators. Within these communities would be clean, spacious buildings, good food, employment, and shortened workdays. Owen believed that this type of social system would improve the morality of society, thus eradicating exploitation and the desire for the accumulation of wealth. For the founders of the Rochdale Society, the initial impetus for the creation of a business was not only the establishment of a food store, but also the ideal of forming a "Village of Cooperation," where members could live and work together in their own community and create a "New Moral Order" along the lines outlined by Owen. The ideas of Owen and other theorists were the basis of a vigorous movement to establish cooperative societies throughout the 1820s and 30s. Several newspapers and magazines were devoted to the advancement of cooperatives. Dr. William King of Brighton, publisher of an influential newspaper called "The Cooperator" (1828-1830), estimated that the number of cooperative societies grew form nine in 1828 three hundred in 1830. Many of the cooperative societies integrated the ideas of Owen and Dr. King with ideas derived from the Chartist Movement (calling for universal male suffrage), the Trade Union Movement (the 10-hour day and restrictions on child labor), and other progressive movements. Despite the rapid growth of cooperative businesses during the 1830s and 40s, none until Rochdale were able to achieve sustained success. Depressed economic conditions forced many cooperative ventures to sell on credit. Compounded by inefficient business management, this bankrupted many societies. In addition, rather than accumulate excess capital for the development of the business, societies took earnings from their undercapitalized enterprises and divided them among members. The Rochdale Society learned many lessons from the failures of earlier cooperatives and gleaned some important lessons from other progressive movements. By applying practical guidelines for the operation of the Society, the Rochdale founders provided for concrete benefits for members while remaining true to cooperative ideals. First, the Society was open to voluntary membership. Although it was concerned with the rights of working people, it did not restrict membership on the basis of social class, politics, or other affiliations. Open membership would ensure class was not pitted against class, and encouraged men and women to work in concert for the good of all. Second, the organization was democratic. The worth and needs of the individual member were more important than the value of the capital invested. This principle placed the value of the person above the worth of the capital. Democratic organizations advanced the ideals of equality, social ownership, and mutual aid.

Third, consideration was given to the nature of profit. The Society provided for the accumulation of capital through small subscriptions added by each member to a capital fund. Profits from the Society's business would be added to the fund for the benefit of the business and the rest divided among the members according to patronage. King envisioned the creation of cooperative communities through the formation of cooperative businesses. As the businesses became profitable, excess earnings would be used to hire members of the Society for other cooperative businesses, thus enlarging the whole cooperative community. Fourth, education was valued by the Society as a means to improve character, society, and the health of the Society's enterprises. Fifth, a fixed or limited rate of interest was to be paid on capital subscribed to the Society. Sixth, the Society was to deal only in cash transactions, extending no credit. Seventh, the Society would sell only pure, unadulterated goods. And eighth, it would maintain religious and political neutrality. Today the ideals of the Rochdale Pioneers are embodied in the seven Cooperative Principles adopted by the 1995 Congress of the International Cooperative Alliance. They are the model for a system that includes millions of cooperators throughout the world.

Hidden History of Cooperation in America

by Kathy McMahon, originally published by Peak Oil Blues | Mar 30, 2010 Fewer and fewer people are happily employed, according to Derek Bok, former President of Harvard, in his latest book. The only thing Americans hate more than working is commuting, but when he considers how we can get happier, he suggests doing less of neither. Being an unhappy worker seems to be a normal, natural condition, but is it? Our hidden history of working together says it is not. Part of the puzzle in figuring out why income alone doesnt make people jolly can be resolved by examining the active protests that happened when Americans moved from being self-employed to becoming employees. The revolt is part of the hidden history of cooperatives and communialism in America, written in a riveting book by John Curl called For All the People. This book goes a long way to answer the question of what people did during times of trouble. A funny thing happens on the way down the limited resources slide: People get increasingly greedy or people become more cooperative, collective and communal. Think of it this way: wed have pretty dumb genes if, in a group of 100 people, we were all looking to be top dog. What we truly despise is being bottom dog. Wage Slaves Today, few people understand the meaning of my tee-shirt that reads: Work is the blackmail of survival. Today, we understand that work means employment. This would not have been so two hundred years ago. For the American living before 1800, a wage slave was a mere step removed from an actual slave. To be an employee was one step above indentured servitude. You did it when necessity demanded, but only for as short a period of time as possible, and then returned to become more independentyour own boss. The story of how we became wage slaves, and the multiple revolts against this station, is a fascinating one, and part of our untold history. In 1800, few worked as wage-earners. By 1870, over half the workforce were employees; by 1940, over 80% worked for someone else and in 2007, 92% accepted a salary. If increasing wages dont satisfy us, it is, perhaps, because deep within our souls we recognize the fact that wage slave is a low dog position, a vulnerable and dependent state. A wage slave is someone who feels compelled to work in return for wages in order to survive. The notion that wage work is coerced by social conditions, and is actually a form of slavery, is a notion that arose early in the transformation of wage-earning, 1836, as women in Lowell became millworkers.

From that point onward, early American workers planned to accomplish their liberation from wage slavery by substituting for it a system based on cooperative work and by constructing parallel institutions that would supersede the institutions of the wage system. Curl p.3 By the 1880s the population had reached 50 million, and by 1886, 1 in 12 wageearners over 15 years old (1 million) were members of the Knights of Labor. Their goal was not simply to improve working conditions and wages, but to raise members out of wage slavery entirely. Opposition to wages took the form of protective and mutual aid organizations, including unions, cooperatives, and parties. Farmers Revolt Farmers were an essential aspect of this movement. After the Civil War, many small farmers: effectively became financial captives to the railroads, middlemen and bankers, with most of their land in mortgage. To fight back the greatest farmer associations of the 19th centurythe National Grange in the 1870s and the Farmers Alliance in the late 1880salso organized extensive cooperative networks that today would be considered counter-institutional. The Farmers alliance had over three million members, opened the first of an extensive network of cooperatives that they planned as the agricultural backbone of a newly structured cooperative economic system. They were, in the words of historian Michael Schwartz, the most ambitious counter-institutions ever undertaken by an American protest movement. Curl, p. 5. Self-Help Movements When the Great Depression fell upon the American public, Self-Help organizations sprang up as a spontaneous mass movement and became a part of daily life for many people. By the end of 1932, there were self-help organizations in over 37 states with 300,000 members (equivalent to 2.1 million people today). Their work involved direct exchanges of goods and services (partially in cash), cooperative production for sale or trade. The largest group, in Seattle, WA, the Unemployed Citizens League (UCL) had twenty-two local commissaries around the city where food and firewood was available for exchange for every type of service and commodity from home repairs to doctors bills. Local farmers gave unmarketable fruits and vegetables over to their members to pick and people gained the right to cut firewood on scrub timberland. In Pennsylvania, not a jury in the state was willing to convict the 20,000 unemployed miners who formed cooperative teams and trucked out and sold coal on company property. Company police attempting to stop them were met with force. Today Today, over 120 million people in the US are members of 48,000 cooperatives, about 40% of the population. Yet, remarkably, there are only 300 worker cooperative businesses.

We stand on the cusp of one of the bleakest periods in human history when the bright lights of a civilization blink out and we will descend for decades, if not centuries, into barbarity. The elites have successfully convinced us that we no longer have the capacity to understand the revealed truths presented before us or to fight back against the chaos caused by economic and environmental catastrophe. As long as the mass of bewildered and frightened people, fed images that permit them to perpetually hallucinate, exist in this state of barbarism, they may periodically strike out with a blind fury against increased state repression, widespread poverty and food shortages. But they will lack the ability and self-confidence to challenge in big and small ways the structures of control. The fantasy of widespread popular revolts and mass movements breaking the hegemony of the corporate state is just that a fantasy. Chris Hedges Worker cooperatives offer a way for people to get out of the boss system entirely, and to reorganize their lives on a different basis. They still offer this today. They proffer group self-employment to people without the resources to start a business alone. They empower their members through internal democracy and increased job security in place of the typical hierarchical command. Cooperatives provide innumerable goods and services at cost. Beyond the benefits to the lives of the individual members, worker cooperativesand all cooperativesoffer numerous other benefits to community and society. Curl Is the rarity of worker cooperatives a natural outcome of global capitalism or was it destroyed by a coordinated effort by those in opposition to this form of business? Read For All People for one answer. One thing is sure: as the price of oil continues to rise, well have decisions to make about how we want to spend our time and provide for our needs. As we consider the possibilities, we can take heart that we have a long history of rejecting or reluctantly accepting the role of employee. Our Daily Bread Unable to secure Hollywood-studio backing for his Depression-era agrarian drama Our Daily Bread, director King Vidor financed the picture himself, with the eleventhhour assistance of Charles Chaplin. It demonstrated this spirit in a fictional rendition called Our Daily Bread. This film clip will give you a flavor for the kind of spirit that captured the cooperative movement during the Great Depression here or the entire film here. If you enjoy that movie, you may want to purchase the film which also contains numerous other shorts about actual cooperatives and environmental damage that contributed to the Great Depression. The revolution has not been televised or written in our history books. It will not be televised or written about in the future, unless we do so. If you want to see change, you have to join others who are collectively making it. For your own selfish reasons. For your own collective ends.

History of

Work Cooperation in America

Co-ops, Unions, Collectivity and Communalism from Early America to the Present

By John Curl

Below is a short book that I published nearly three decades ago, History of Work Cooperation in America (1980) (ISBN 0-938392-00-X), which was distributed through the then-widespread underground media. My new book, Worker Cooperatives or Wage Slavery, scheduled to be published by PM Press in 2008, covers similar ground, but completely rethought, rewritten, updated, and greatly expanded. The intervening decades, and my research and experience since, have served to confirm andI hopedeepen my understandings and conclusions. Anyway, here is the earlier work.

INTRODUCTION 1. EARLY AMERICAN COOPERATION The Native Tradition - The Colonial Tradition & Religious Communalism 2. THE MOVEMENTS BEGIN (1775-1840) An Overview - Ideological Roots - Religious Communalism - Socialist Communalism - Workers' Parties - Early Stores - National Trades' Union 3. THE MOVEMENTS RENEWED (1840-55) Associationism - Union Cooperatives - Protective Union - Abolitionism 4. AFTERMATH OF THE WAR (1865-'80) National Labor Union Greenbackism - First International - National Grange Sovereigns of Industry - Rochdale 5. CONFRONTATIONS (1880-1900) Knights of Labor - Pittsburgh Commune - Workingmen's Party - Anarchism Communalism - Farmers' Alliance - Populism 6. THE "BLOODY '90s" TO THE GREAT DEPRESSION (1890-1930) Socialist Labor Alliance - Brotherhood of the CC - Socialist Party - Industrial Workers of the World - Cooperative League - Seattle General Strike - Farmers' Union - Farm Bureau - Non-Partisan League - Llano del Rio - Communist Party 7. FROM THE BOTTOM (1930-'60) Unemployed Leagues - New Deal - EPIC - Bayard Land 8. THE CYCLE TURNS AGAIN (1960-'2000) Counterculture - Communes - Collectives - Food Systems - Industrial Cooperatives Rochdale Today - Farmer Cooperatives Today - Last Words BIBLIOGRAPHY & SOURCES

Today the vast majority of people in America are employees,"wage earners," at least the vast majority of those who can find a job at all. This wasn't always the case. There was a time, not so long ago, when the vast majority were self-employed. Being an employee was considered a form of bondage; one submitted to it due to economic hardship, for as short a time as possible, then became once more "free." Today the people who run this world speak about "capitalism","freedom" and "democracy" as if they are all synonymous. Nothing could be farther from the truth. The central root of capitalism is the wage system of labor. Although individuals are "free" to take a job or quit it, for the vast majority there is no viable option to taking a job. Others own all the means of survival, so the only way to survive is to get money, and the only legal way to get money is to find a job. Becoming an entrepreneur, starting a business, is not a realistic option for most people. The entire system is designed to make that impossible. The capitalist system needs a constant supply of cheap labor, and the economic system is geared to provide it. The wealth of the nation is distributed just enough to prevent a general uprising of the dispossessed. It is the need to survive that forces people into the "free" labor pool. The Triumph of Capitalism is blazoned across the banner of this era. And yet, one needs only open one's eyes a crack to see the dismal failure of the capitalist system to provide a decent life for vast numbers of people. It offers illusions and false promises. The only promise it really fulfills is endless wealth for small elites and endless despair for entire populations. Today there seems to be no challenge to this system. Most people in America are unaware that there ever was a challenge to it, a challenge that involved large numbers of working people, a series of social movements involving cooperatives, inextricably tied to the early labor movement and "third" electoral parties. The development of the "two-party system" in America was specifically designed to exclude parties that might challenge the economic system; the development of "labor laws" was specifically designed to exclude unions that might challenge the economic system. This book is a chronicle of those social movement that led the challenge. If the reader comes across information here that goes unmentioned in most history books, I can only say that events that pass almost unnoticed in one era are often later seen as of world-shaking importance, while the same era's headlines commonly become footnotes. *** For the purposes of this history, work will be called "cooperative" when it is organized democratically and it and its fruits are divided equally and fairly among the working individuals. Work will be called a "collective" when it is done by and for the group as a whole, and not necessarily divided up at all. When the group shares a common household, the term "communal" will be used synonymously with "collective." For example, if a group were digging a ditch cooperatively, they might decide that each would spend two hours at it or that each was responsible for finishing

six feet. If they were digging the ditch collectively (or communally, if they lived together), they would just do it and not worry if one did more than another as long as it felt okay. All three terms imply free voluntary democratic equalitarian situations; the only exception is in the category of "religious" communalism, where theocratic organizations will be discussed in this work as well as truly democratic ones. In contemporary usage, a "collective" (or a "work collective") is a group of equals making decisions by consensus; in distinction, a "cooperative" uses majority rule (and can sometimes be hierarchically managerial). There are also hybrid structures such as the "collective-cooperative;" these are discussed in the last chapter. The concept of "class" in this book is close to the perspective of most American workers of earlier centuries. Rather than considering class a simple division into upper-middle-lower according to income and wealth, the determining factor is the person's (or family's) relationship to the mode of work and means of survival. Thus an earlier American working person might have seen two main working classes: "free" and "bond." Free workers were self-employed or cooperatively employed. Those in bondage were slaves, indentured servants, wage-earners and prisoners. Some of these classes were clearly in bondage: the slaves, servants and prisoners at least; while the self-employed were clearly free. In between was the class of wageearners. Wage-earners "voluntarily" submitted to a form of work bondage: they were neither obviously bond nor truly free. But the wage-earners knew of course that it was "voluntary" only in a technical sense, since almost all were forced into it by economic need. Wage-earners were commonly considered "wage-slaves," meant in the most literal sense when they were forced to work long hours under oppressive conditions for almost no pay. Although usually not thought of as a separate class, "free" housewives in working families were commonly doomed, then as now, to the bondage of chores; but "woman's work" was not limited to "free" people, and woman servants, slaves and wage-earners usually had to come home at night to this second bond. In response to this situation, generation after generation of Americans organized visionary social movements to liberate themselves from their bondage, and to abolish bondage. These movements did not limit their sights to just chattel slavery and indentured servantry, but extended to wage-slavery and women's rights. But how could society abolish all these forms of bondage? The answer was, in a Cooperative Commonwealth.



The first Americans to practice collectivity, cooperation, and communalism were of course Indian. Families typically included a number of related adults in the same household, sharing a common store of provisions and tools; groups of families were organized into larger cooperative units, and the collection of these made up the tribe. The concept of individual private property in land was unknown, and tools were commonly shared within the communal group. Hunting and food-gathering peoples followed their food sources around with the seasons; food availability and the methods of gathering determined the size of the living group. At certain times of year, usually scattered groups would join into larger units for cooperative production, using methods not possible in smaller units. These gatherings were not only for mutual aid and cooperative work, but for social connection and celebration, and formed an integral part of societal structure. Typical examples of this are Shoshone rabbit hunts using long nets, only possible when scattered families gathered into a large enough band, and Dakota buffalo hunts, only possible when scattered bands gathered into the tribe. Collectivity and cooperation also formed the backbone of the way of life of sedentary peoples such as the agriculture-based southwestern Pueblos and the fishing-based northwest coast tribes. The latter, such as the Chinook, channeled their entire catch to an elder whose responsibility it was to assure equitable distribution according to need. Some form of collective democracy was part of almost every native social system north of Mexico. The most highly developed on a large scale was perhaps the Iroquois confederacy, whose central Council of Sachems (male elders from the various tribes appointed by female elders) made decisions only by unanimous collective consensus. Variations of the council-consensus system are the most typical form of native political organization. Today, despite the ravages of European invasion, collectivity, communalism, and cooperation remain the dominant texture of Indian life, particularly of those tribes able to hold onto their land; many tribes have production cooperatives, organized on partly traditional, partly "modern" lines.

Collectivity and communalism can be said to be as integral a part of native American culture and religion as the tribe and the land.


For their first three years in America, 1620-1623, the Pilgrims farmed and worked communally, putting all the products of their work into a common warehouse and taking their needs from a common store. Plymouth was a commune. The "Separationist" Puritan sect, of which most were members, had financed the voyage with backing of a corporation in Britain. The corporation claimed the wolf's share of all the fruits of their labor for seven years. It proved to be a tremendous drain, worse so because the corporation was keeping false books and cheating the settlers blind. Plymouth was at first set up as a plantation. While the settlers came in search of freedom, their corporate backers' plan was to use the Separationist sect as a ruling elite over British indentured servants and Indian slaves. More than half the group of about 100 aboard the Mayflower were indentured. But the day before landing, the servants staged an insurrection and declared they were seizing their freedom. The bulk of the Pilgrims, "free" workers, had no interest in siding with the few masters on board. The masters had no choice but to agree. All adult males signed the Mayflower Compact, affirming all were now free, and establishing a government among them where all had equal voice and vote. While the Pilgrims' political system was sexist, it was still a great democratic advance over the military dictatorships of the earlier colonies to the south. Thus the first American colony with even limited democracy was set up at gunpoint of revolutionary servants. But Plymouth's semi-democratic commune lasted only three years. The corporation and the sect back in England (which was falling more and more under control of certain merchants), reasserted their power over the colony. The corporation became ever more a burden than a help, and many colonists wanted to get out from under it. Land was "plentiful," relations with the local tribes were still friendly and cooperative, and a growing number saw greater freedom and economic success in setting up separately on their own. Masters gained the right to import new shiploads of servants, who would not be declared "free." Finally Plymouth bought out the corporation and dissolved the communal economic system. Soon a theocratic oligarchy was in full control and there were property qualifications for voting. Still mutual-aid and cooperation remained a basic substance of their way of life. The first major industry in the colony was a fishing cooperative. The Pilgrims were soon joined by other Puritans who founded the Commonwealth of Massachusetts. Under their system, much of New England was communal property. Each village had a large commons like a medieval estate. This land belonged to the community as a whole and was assigned to landless individuals and families to use. The early Puritan system saw it as society's duty to assure that no one was alienated from this most basic means of survival.

Britain was a brutal place at the time, with hundreds of minor offenses punishable by death. Revolutionary sentiment and anger were everywhere among the working population. Just as the monarchical church-state was an integrated religious, economic and political organization, the workers' organizations combined religion, economics and politics, and became cells of organized resistance. The Puritan "non-conformist" sects were based on an ideology of struggle for liberty and equality, with an end of making life on earth "as it is in heaven," which they saw as sharing and cooperating. A "commonwealth" and not an autocracy. They were millenarian, and looked forward to an imminent Second Coming, when the money-changers would be driven from the temple for good, the meek would inherit the earth, the first would be last. They saw the actual Coming only as the final act of the victory over the forces of evil; in the meantime the faithful should model their lives and society on the future "kingdom" as much as possible, even though this meant conflict with the established order. Basically they were part of the "anabaptist" movement. Anabaptism imitates early "Apostolic" Christianity. "All whose faith had drawn them together held everything in common" (Acts 3:43). The entire Jerusalem Church, of which Jesus' brother James was bishop, lived communally, both clergy and laity, until they were wiped out by the Romans. In this communalism they were following the tradition of Jesus' band, in turn in the tradition of the Essenes and of Israel in the Wilderness. Rome was a slave empire and Christianity took hold as a slave religion; they turned to millennial religion only after decades of great revolutionary activity had ultimately failed. But when Rome fell a new empire was erected on its skeleton, the Catholic Church becoming state religion in the fourth century, with bishops part of the government. The Church of Rome was not communalist. Although the commune was still recognized as "the holy life," it was made the privilege of monks and nuns, and denied to society until the Second Coming, which was no longer imminent but put off to a remote future, the year 1000, which would issue in the "millennium." Until then all were to accept their lots in life: slaves should happily slave. Christianity had been turned around from a slave to a master religion. As the year 1000 approached, much of Christianity awaited the Coming, and when it didn't happen on schedule, they went through a period of shock. The working people were mostly serfs by then, no longer total slaves but tied to a master and a plot of land for life; in most areas there were also "free" small farming peasantries, "free" but still poverty-stricken and oppressed. Among the serfs and peasants "heresies" began to sprout and grow. Almost all the heresies attempted to get back to Apostolic Christianity and saw the Church as the oppressor, the Anti-Christ disguised as the pope. All were met with violence by aristocratic state Catholicism, and most groups organized resistance, some leading extensive armed revolutionary struggles. When these failed, many of the of survivors went off to form separatist communal groups. Thus the Albigneses in the 11th century, renewed by the Waldenses in the 12th, both begun in Southern France; the Moravian (Czech) brethren, founded on the ashes of the Bohemian peasant revolution of 1414; the Brethren proceeded to assimilate the Waldenses, hiding from persecution in mountain colonies for over two hundred years. Later the Reformation loosed anabaptism in opposition both to Rome and to Luther; from the defeat of the German peasantry in the revolutionary war of 1515, arose the Mennonites, Hutterites, Schwenkfelders and Anabaptists (Dunkards). A couple decades later the Russian Dukbors arose, also meeting persecution. All of these communal groups would follow the Pilgrims and Puritans to America.

The Puritans began in secret and practiced economic mutual-aid among members, were met with bloody repression but took deep root and spread. While the Separationist Pilgrims chose to emigrate and set up a "commonwealth" in America, the vast majority of Puritans chose to stay in Britain and try to set up their commonwealth right there. That is why the British rulers opened up America to the sects, as a safety valve against revolution. It didn't work. Twenty-nine years after the Pilgrims landed, Puritan sects organized a revolutionary army and overthrew the British monarchy, abolishing the office of king and the House of Lords, and declaring the Commonwealth of Britain. But there was an internal struggle in the revolutionary movement. The "Levelers," fighting for a fair redistribution of the land, were crushed by the merchant-capitalist Cromwellians; Cromwell's version of a "commonwealth" turned out to be rule by a religious-military-capitalist oligarchy. It lasted only a decade, until 1659; then the new money-rich merchants and the old land-rich nobles inter-married and joined fists to bring back the monarchy and the House of Lords. In New England, land speculators eventually destroyed the Puritan common-land system, using control of the government, which had become in effect a church-state dictatorship, although less than 20% of the population were church members. The Puritan Congregationalist church would not be disestablished in Massachusetts until 1833. Cooperation permeated the entire way of life in rural colonial America among the "free" population, mostly small and subsistence farmers. Houses and barns were raised, fields were plowed and fences built cooperatively and collectively. Mutual-aid events like corn husking bees, log rolling bees (to clear land), sewing bees, apple paring bees, grain rings (threshing), bull rings (slaughtering) and ship launchings were also social structures and gatherings that served to weld together the fabric of the working community in the same way that similar gatherings did among the Indians. Barter and labor exchange were widely practiced. Money was scarce and often used sporadically. Early country stores were mostly barter centers. From the beginning worker cooperation in America had two faces, economic and political. The same workers not only joined in labor to survive, but also joined together to defend themselves from the ruling moneyed classes. Small farmers commonly organized "squatters' associations" to fight off the land speculators who were reeking havoc in their rural communities. In the Southwest, at this time ruled by Spain, the ejido system was in use. Large tracts not being actively used by Indians, were granted to groups of immigrant families, usually twenty or more, mostly in what is now northern New Mexico. These groups held about 90% of their granted land in common, including pasture and forest, for collective use. The common land could not be sold. Beyond that, each owned a house and a farmable plot. The ejidos were self-governing and all males had a vote in biennial elections. Much work was done cooperatively and on occasions the whole village joined in projects for the common good, such as annual repair of irrigation systems and roads. Tools were often collectively owned and used. The ejido system

had once been in use in large parts of Spain, and was fully developed in America by 1700. All the southeastern British colonies had been set up as plantations by the monarchy, earlier than Plymouth, under the dictatorial rule of big corporations untempered by any religious sect. At first they planned to exploit the wealth of America with the labor of Indian slaves and British servants. Indentured servants made up between onehalf and two-thirds of the workforce in British America throughout the 17th century. Many thousands signed themselves into servantry in exchange for passage, in ultimate hope of a better life; many other thousands were sentenced to it for "crimes" such as unemployment or debt, or kidnapped into it by labor contractors, "soul drivers," including many children. Only when it became clear that the Indians could not be made into profitable slaves on their ancestral soil, did the corporations switch over to a policy of genocide and begin replacing them with blacks. The first black slaves in British America were dragged to the corporate military plantation of Virginia in 1610, a year before the Mayflower landed. Mutual-aid and survival cooperation both among slaves and among servants were almost universal. Their cooperative networks, invisible to the masters, eventually became used as channels for organized resistance. There were over 250 recorded slave insurgencies until emancipation, many of the early ones involving servants too. Escaped slaves set up communal settlements and villages in forests and swamps throughout the colonies. Many were used as bases for guerrilla raids on the slavers. These "maroon" outlaw communes, many with both black and Indian members, appeared wherever slavery spread. Meanwhile Christianity became for much of the slave population what it had been for the slaves in Roman times and the Puritans in England. At "hush-hush" meetings at night in swamps or forests, elected ministers preached a religion of liberation. These were also mutual-aid gatherings where people attended to each other's survival. Many revolts and escapes were planned at these meetings, and the ministers were often leaders. So up until the American and French Revolutions, the main western tradition of social revolution was anabaptist, and the tactics vacillated between holy war and separationism. But the failures of the movement, especially of the Puritans during their decade of power in Britain, drove large segments of the people to distrust political movements in religious clothes. When revolution next flared it was a secular movement, based on concepts of the natural rights of all people and no longer on the anabaptist millennium. In Puritan New England, separationism became a dominant tradition. The discontented in a community would band together and "hive" (like bees) into a new spot deeper in the wilderness. New settlements tended to be collective or communal at first, like Plymouth. When each family staked a separate plot, they still retained their cooperative way of life. Most of these people were former servants who had worked off their indentures, descendants of serfs. Both North and South they filled the mountains and created a culture that was based on community cooperation. They were fierce defenders of liberty and freedom; in the South their descendants eventually

formed many of the tracks of the Underground Railway that secreted escaped slaves from the lowland plantations to the North; there were very few slaves anywhere in the mountains. The Labadists, a commune of Protestant separationists, arrived in New York from Holland in 1683, and set themselves up at Bohemia Manor, where about one hundred lived for fifteen years. The restored British monarchy opened America to other "non-conformist" sects. In 1683 they put Pennsylvania in the hands of Quakers. The Quakers too had begun in secret, practicing mutual-aid among members, and were mostly from the working classes. They were adamantly anti-slavery and later played an important role in the Abolitionist movement. Like the other sects though, merchants tended to acquire power in their organizations. The Quakers invited all the various German anabaptist communalists to immigrate. The Mennonites (which include the Amish) started coming in 1684. Then the Moravian Brethren. The Schwenkfelders. A group of millennial Pietists formed the Women in the Wilderness Community in 1694. Two groups of Anabaptists united in America to form the Dunkards. Later a group broke away to found Ephrata colony. Soon there were religious communalists throughout the colonies, involving a sizable portion of the population. A millennial spirit blazed through the "New Light" Baptist "Great Awakening" that overtook America's frontier communities between 1730 and 1740. Recognizing no authority between an individual or congregation and God, the Awakening was a major force leading to the Revolution. Many "independent" ministers were agitators for liberty, equality and independence.

2. The Movements Begin (1775-1840)

Robert Owen & Frances Wright

At the time of the Revolution in 1776 independent self-employed workers formed the backbone of the "free" American population. The vast majority of these were small and subsistence farmers. Benjamin Franklin estimated one hundred small farmers to every artisan, mechanic or laborer. But not all Americans were "free." Slaves formed a fourth of the workforce. The largest number by this time were black, but in some areas Indian slavery could still be found. White indentured servants, slaves with a time limit on their bondage, usually four to seven years, had been the main form of labor through most of the colonial period and still made up a large portion of the newer immigrants. Wage-workers --employees--were only a tiny sector of the population. Most were former indentured servants. As long as hand tool production predominated and land was readily available, independence was within the grasp of almost all "free" workers. Wave after wave of immigrant servants worked off their bondage, winding up penniless; the vast majority then took jobs as wage-earners for a few years, just long enough to raise a stake or learn a trade, then either disappeared into the wilderness to become small farmers or remained in more settled areas to become self-employed in some productive way. Working for a boss was viewed as a form of bondage -"voluntary" but still bondage; only due to absolute necessity would anyone submit to it for long. Close community survival cooperation was the settler way of life in "free" areas, as it was among the Indians. Only through cooperation and sharing were the incessant waves of displaced humanity able to find warmth and shelter on these troubled shores; mutual-aid for survival, not competition, was the dominant chord resounding across the continent among the working population. The decade before the Revolution was one of hard times for all American workers. The British rulers were trying to place the burden of their first capitalist depression on the colonies as much as possible. Our local rulers passed the burden down onto the backs of the workers. In 1768 twenty journeymen tailors in New York City walked out because of a reduction in pay. This was the first recorded wage-earners' strike against a boss in America. They had no strike fund. Their impromptu organization was their only union. The first on-going union in America had not yet been organized. To help support themselves during the strike, the tailors set up their own cooperative "house of call" in opposition to their masters. Finding themselves locked out and their jobs filled by scabs, they tried to make a go of their cooperative.

The action of these tailors would be repeated time and again in the following century. Striking workers forming cooperatives was a common pattern in the early labor movement. It was repeated over and over in many places because it was a natural and logical reaction to conditions. Soon workers would no longer wait until striking to from cooperatives, but would organize them in preparation for strikes and ultimately with an eye to never having to strike again. The wage-earner cooperative, in its turning away from boss-domination and workbondage, can be seen as separationist, stemming from the same thrust toward freedom that impelled so many colonists to separate from Europe and create cooperative communities throughout America. When this turning-away was blocked ever more thoroughly as the 19th century progressed, increasing numbers of American workers turned back, to social revolution. The strike-to-cooperative transformation of the New York journeymen tailors of 1768 can be seen as a microcosm of the strategy of the national general strike to cooperative commonwealth of one wing of the mass movement that followed. Wage-earners had few rights. "Free" meant that one was not forced to submit to workbondage, unless forced by need. The bondage was technically voluntary. "Free" workers could choose their bosses and quit their jobs. Their bondage was only between specified hours and for agreed-upon pay. In the trades the boss-system was not yet fully developed. Journeymen and apprentices worked for and with masters, not "bosses." The master was a worker too. As long as tools were simple it was within almost any worker's grasp to become a master. Not until the 19th century did most masters take a step more removed and become "bosses," no longer workers but simply businessmen exploiting workers' labor. For the entire decade before the Revolution, revolt was growing everywhere, among all productive workers: "free" small and subsistence farmers, artisans, mechanics and laborers, wage-earners as well as servants and slaves, men and women. In both cities and frontier communities the working people were being pressed hard by a social system ruled by and favoring the rich. Even where "free people had won some degree of local self-government as in New England, the vast majority were still excluded from voting and holding office due to property and sex qualifications. The general uprising that culminated in the American Revolutionary war was not only against British domination, but against domination by the local landed and merchantcapitalist ruling cliques who were everywhere in control. Large numbers of these wound up fleeing to Canada. It was the rank-and-file laborers, artisans, mechanics, small farmers and traders, members of the Sons of Liberty and other groups, who formed the main support of the Revolutionary movement and insisted on the more radical demands. They could not be kept down, and their constant demonstrations, boycotts, riots and sabotage led to the eventual break. The Declaration of Independence, drafted by Jefferson, provided a rallying point that unified many struggles already going on against Britain and the ruling Tories. Its ideas were the grandchildren of those behind the Puritan revolution. While Locke, the Puritan ideologist, had proposed that all "men" had the natural right to life, liberty and property, Jefferson struck out "property" and added the brash claim of a natural

equality among all at birth. Nor did he think that equality should stop the minute after birth or be limited to legal formalities. He advocated society adopting whatever "devices for subdividing property" as were necessary to "prevent the accumulation and perpetuation of wealth in select families." "Whenever there are in a country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate the natural right. The earth is given as a common stock for man to labor and live on." "I sincerely believe, with you," he wrote to a friend, "that banking establishments are more dangerous than standing armies." He advocated a constitutional convention every twenty years when each new generation could agree to a new social contract. His original draft of the Declaration condemned the slave trade, but this was stricken out by representatives of the slavocracy. Thomas Paine, journeyman printer whose pamphlet Common Sense rallied the working people to the revolutionary cause and was the clearest voice to call for a democratic republic to replace the old tyranny, called for equalization of the wealth in Agrarian Justice, suggesting how this could be done through inheritance taxes. "In what does real power consist?" Noah Webster wrote, examining the newlyproposed Constitution. "The answer is plain and short -in property. A general and tolerably equal distribution of landed property is the whole basis of national freedom...An equality of property, with a necessity of alienation constantly operating to destroy combinations of powerful families, is the very soul of a republic. While this continues, the people will inevitably possess both power and freedom; when this is lost, power departs, liberty expires, and a commonwealth will inevitably assume some other form." The Revolutionary victory brought the working people few immediate advantages. In the place of ruling Tory merchant-capitalists, land speculators and plantation owners, were ruling "patriot" merchant-capitalists, land speculators and plantation owners. The propertyless were still totally disenfranchised; there were enormous gulfs between wealth and poverty; workers still labored under the various forms of bondage. Servantry was still widespread among the immigrant population, now mostly Irish and German. Democratic gains soldiers thought they had won in battle were being whittled away. Alarmed at the situation, the Boston Committee became active again and flooded their area with leaflets urging "all believers in natural law" to form committees guarding against further encroachments on their liberties. Strikes, riots and revolts began to flare again. In western Massachusetts small farmers rose to halt foreclosures and oppression of debtors; with the leadership of Daniel Shays they staged an armed insurrection, seizing the centers of merchant power in the eastern seaboard for a short time. It was these revolts that finally won the Bill of Rights. Nonetheless slavery was written into the Constitution and permitted to spread to the Southwest Territory. Speculators and slavers were permitted to seize almost all the western lands. Unions were still persecuted as "conspiracies in constraint of trade." There were still property qualifications for voting. All the participants at the Continental Congress were white men of property: slave owners, land speculators, creditors, manufacturers, merchants and lawyers. There were no small farmers, artisans or laborers, and no women. They wrote a constitution with the working people considered only to the minimum degree necessary to gain

their acceptance of it. The Revolution had not fulfilled its promises of equality, democracy, or even liberty for all. Both Jefferson and Paine were out of the country during the Congress and upon return were both shocked at how deeply the forces of money were in control, with the Southern plantation owners on top. In 1791, two years after the U. S. Constitution was ratified, a year before the first fullfledged trade union in America was organized, a group of journeymen carpenters in Philadelphia walked out. To help support themselves during their strike, they formed a cooperative and tried to undercut their boss by charging 25% less, announcing that they were eliminating his profit. They were striking for the ten hour day and gave it to themselves, a great advance over the prevailing sun-to-sun system, the 75 hour week. But the cooperative was planned to last only as long as the strike. In 1792 the first on-going union in America was formed. The early unions grew out of mutual-aid societies being organized in almost every trade in the coastal cities, and at first usually specialized in sickness and death benefits. In 1794, journeymen shoemakers in Baltimore also organized the first cooperative factory in the U.S. Meanwhile the French revolution see-sawed from "left" to "right," and waves of French refugees poured onto American shores, setting up cooperative structures among them. In 1798 the United Irishmen rose and met defeat, many also seeking refuge in America. They joined the French in the seaboard cities and similarly gained a toehold through mutual-aid and cooperation, as would all the waves of immigrants who followed. Soon "Democratic societies" modeled after the Sons of Liberty began forming in all the major centers. These came together in a movement to put Jefferson in the presidency, an uprising of small farmers and urban workers. But the aristocratic Federalists met them by staging America's first "red scare." They charged that the Democratic societies were part of a vast secret international conspiracy called "The Illuminati," financed by "Paris gold" with the aim of "subverting the government and wiping out religion." Nevertheless in 1800 Jefferson's Democratic-Republican (later just Democratic) Party swept into power. During his presidency democracy was extended, the African slave trade outlawed, and the Louisiana territory partly opened to homesteaders. Still the plantation slavocracy retained basic control of the federal government. Although a slave-owner himself, Jefferson advocated emancipation on a social scale; he led the fight to stop the spread of slavery into the west; his aim and vision was to create a true democratic republic with a general equality in land through free homesteads. In 1806 Philadelphia journeymen shoemakers, with the leadership of Peter Polin and Undriel Backes, unionized and struck for higher wages. The boss had them arrested for conspiracy. The judge instructed the jury to find them guilty, which they proceeded to do. Beaten but unbowed, the shoemakers refused to slink back to a boss and organized a cooperative boot and shoe factory instead.

In the early 19th century productive work was still done almost entirely with hand tools. During this period workers ordinarily collectivized skills, shop space, resources (including credit to obtain raw materials), and distribution facilities. It was not until the 1840s that the factory system and expensive machinery made hand tool production almost universally obsolete; it was only then that cooperative workers collectivized most of their major tools. Wage-earners were not the only ones forming cooperatives. Individual self-employed producers were caught between the banks and the merchants, and were being squeezed dry. Artisans could not get raw materials at prices they could pay, and the banks would not give them credit. On the other end, the wholesalers and store owners took the biggest bites of the selling prices. These individual producers, facing impoverishment, organized cooperative "warehouses" to get raw materials at reasonable cost and to distribute their products without middlemen. There was a thriving cooperative warehouse in Baltimore as early as 1809. The Pittsburgh and Vicinity Manufacturing Association opened a warehouse in 1818, doing much barter of industrial products for farm produce. The New England Society for the Promotion of Manufactures and the Mechanic Arts organized several in Massachusetts beginning in 1825. Thus the two classes of wage-earners and independent workers both formed cooperatives. One class was struggling to raise themselves out of wage-bondage, the other to keep from falling down into it. These two classes met in the cooperatives and became one. Worker cooperatives were ladders across a class boundary, between dependence and independence, bondage and real freedom.

The nineteenth century brought industrialization. While the vast productive power unleashed by these technological advances promised real freedom and plenty for all, industrialization under the capitalist system forced an ever-growing number of workers to become wage-earners permanently. Hand tool production was soon obsolete and the new machines and processes were both prohibitively expensive and could be operated only by ever-larger numbers of coordinated workers. Workers could no longer make a living using the old tools, and had no choice but to find bosses and "voluntarily" submit to wage-slavery. Meanwhile land costs skyrocketed: the road to independence as a small farmer was quickly being closed. Vast new areas were continually annexed to the U. S. (by "purchase," genocide and imperialist war), but instead of that enormous wealth going for the equal enrichment of all the people, it went mostly for the further enrichment of a small number of land speculators, ultimately the same financiers who were behind the factories in the North and the plantations in the South. While good land was plentiful and tools simple, individual ownership of these means of production meant a real freedom for the "free" American working people; this was the greatest attraction of America to European workers. The land of course was plentiful only at the price of genocide of the Native peoples. As hand tools gave way to machinery and all farmable land was fenced off, individual ownership of these means of production effectually came to mean virtual slavery for ever-greater

numbers. Control of all means of survival was being concentrated in fewer and fewer hands while the population expanded many times over. America was being transformed from a land where almost all "free" workers had control of their basic means of survival, to one where the great majority was alienated from and denied these means, and exploited and controlled by those who had them. Meanwhile the money-power, in control of the government, proceeded to transform the wealth of the American continent into private profits, permitting only a bare minimum to flow back into the pockets of the workers who were indispensable in creating it, for the capitalist bosses needed a labor pool, a sufficient number of people who were scarcely making it and who therefore would "voluntarily" submit to wage-slavery. The cycles of depression and boom were very high and low all through the nineteenth century. The first major depression began in 1819; others followed in 1837, 1857, 1873, and 1893; besides these there were smaller breakdowns in between. Fully half the years between the Civil War and the turn of the century were depression, interspersed with years of recovery. There were five breakdowns between 1902 and '21, and then of course the big one in '29. The economy bottomed out in '33 when the New Deal took over, but collapsed again four years later and only really pulled out of its slump when the country geared for World War II. Every war brought on a boom followed in peacetime by recession and depression. Unionization and radical worker and farmer movements, usually involving cooperatives, followed these cycles. Some cooperative movements would be destroyed by the collapses, driven to bankruptcy, others by the booms, no longer utterly essential to their members. As the classes of servant and slave became legally abolished in 1832 and 1865, due mainly to the continual uprisings and abolitionist movements of the bonded workers and their "free" compatriots, the former enslaved classes rose a notch to "free" status, mostly becoming "free" wage-slaves (or unemployed) in the cities and "free" tenant farmers in the countryside. Only the very smallest number made it up to independence and self-employment. In 1800 just a few percent of the workforce were employees. By 1860, 30%. At the turn of the century 52% of the American workforce were employees. This figure rose slowly but steadily until in 1940 it reached 60%. Then it escalated sharply until by 1970 over 85% of all American workers were employees. Today this figure is probably well over 90%. Correspondingly, the percentage of workers in control of their means of production - of their jobs - diminished. The class of wage-earners, like those of chattel slaves and indentured servants, did not accept their bondage docilely. To carry out their struggle they created a variety of organizations, most of which can be categorized as unions, parties and cooperatives. Many were all three. Cooperatives were established along with the first unions, as a way for workers to cross the class boundary between employee and self-employed The greatest labor associations of most of the 19th century - the National Trades' Union, the National Labor Union, the Knights of Labor - strove not only to better their members' income and working conditions, but were also abolitionist organizations, and strove to raise their members out of wage-slavery entirely and to abolish the wage-slave class. To achieve this, each of these in turn organized and supported movements of worker cooperatives of their members. Their hope was that these cooperatives would grow and spread in every industry across America, until

they eventually exerted workers' democratic control over the entire economic system. Their plan was to destroy the capitalist money-power and transform the country into what they called a "cooperative commonwealth, in which the promises of our founding documents, promises of equality, liberty, freedom and democracy, could at last become living reality. Time and again the money-power attacked the cooperators with economic and physical violence. But the union cooperators were not alone. Small farmers had become captives to the railroads, middlemen and bankers, with most of the land in mortgage. To fight back they too organized into cooperatives, through the National Orange and then the Farmers' Alliance, but they too were wrecked. Beginning in the late 1860s the farmer and union cooperators began to unite into "farmer-labor" parties to try to take state power and clear the way for their embattled cooperative movements.

The intense suffering of the depression that began in 1819 led to America's first visionary radical movements. The ground was laid by four thinkers: Cornelius Blatchly, Langdon Byllesby, Thomas Skidmore, and George Henry Evans. Blatchly, a New York physician, published An Essay on Common Wealth in 1822, in which he asserted society's right to withdraw its "gift" of private property and restore to people their "natural equality." To bring this about he advocated "pure communities" where collective good and cooperation would replace selfishness and competition; these could be formed from small beginnings, eventually spread and take in the whole population; while the repressive and obsolete old society faded away, out of these communities a new America would rise. The Essay and the Society for Propagating Communities, which he founded two years earlier, laid the foundations for the Socialist communal movement that followed beginning with Robert Owen's New Harmony in 1825. Byllesby, a Philadelphian printer, criticized the Blatchly-Owen idea as unrealistic in application and, in Observations on the Sources and Effects of Unequal Wealth (1826), advocated instead that wage-earners withdraw their labor from the capitalist system and join into cooperatives in every industry and trade, which could then federate, grow large enough to draw in the entire working population, and so create a new economic system in America free of poverty and inequality. This laid the base for the National Trades' Union's cooperative movement of the mid-1830s, and for the union cooperative movements that were to follow. Skidmore and Evans both advocated political action, and their ideas led to America's first independent Workers' Parties in the late 1820s, which were instrumental in helping win the Jacksonian extension of democracy. Skidmore, a machinist, in The Rights of Man to Property! (1829) called for a new constitutional convention to decree that all property belonged to the nation, to abolish inheritance and cancel all debts; the state would assign each citizen a fair and equal share upon maturity. Evans

published the Working Man's Advocate, a New York newspaper, beginning in the mid-'20s, in which he advocated free homesteads, "abolition of chattel slavery and wages slavery," and "equal rights for women and men in all respects." These movements were all connected, as were the later movements they spawned, which would carry on through the entire century. All considered themselves Jeffersonians, and considered that their ideas simply represented the fulfillment of the promise of America; they formed the roots of the native socialistic and at semisocialistic movements that loomed increasingly large as the century progressed, all intimately connected with cooperatives and worker cooperation.


After the United States won independence, offshoots of Quakerism renewed the movement, now among the American-born. First came Jerusalem Community, begun in 1788 in upper New York State, organized after a vision of Jemima Williamson, a Quaker. They had 250 members a decade later and lasted over thirty years. In 1793 the first Shaker commune was formed, by the New Light followers of Ann Lee, an immigrant English factory worker and a Quaker. At their height 50 years later there would be eighteen Shaker communes dotting the north-east and mid-west, with around 8,000 members. The United Society of Believers in Christ's Second Appearing, as they called themselves, attained almost complete self-sufficiency and practiced decision-making equality between the sexes. While most anabaptist groups based themselves in the biological family, the Shakers were celibate and had to constantly take in new members, which was a factor in their eventual decline. Shaker songs (c. 1795) We love to dance, we love to sing, We love to taste the living spring, We love to feel our union flow, Which round, and round, and round we go. (Millennial Praises) * Whoever wants to be the highest, Must first come down to be the lowest; And then ascend to be the highest, By keeping down to be the lowest. The German separationists kept coming: the Rappites in 1805, founding Harmony, Indiana; the Separatists from Wurttemberg forming the village of Zoar, Ohio, in 1817; the Hutterites; the True Inspirationists. Each set up a colony or colonies mostly scattered across the northern states. In the early 1840s a communal colony of German Catholics, St. Naziaz Community, was founded in Wisconsin; German Protestants formed Amana in upper New York in 1842 (later moving to six connected villages in Iowa), Bethel in Missouri, and Aurora in Oregon in '44; Bishop's Hill was organized by Swedish anabaptists in Illinois in '46. Even though they all generally kept to themselves and made no attempt to recruit new members from outside, they still had tremendous influence on the areas they lived in. Most eventually dispersed or gave up communalism, becoming cooperative; the Amana Inspirationists and the Hutterites are still flourishing. Some centered around charismatic leaders who tended to run their

groups autocratically, like "Father" Rapp; others, like the Hutterites, have been at least semi-democratic. There are about fifty Hutterite communal colonies in the U. S. today, mostly in South Dakota and Montana, organized on a patriarchal consensus system.

Between 1825 and '30 was the first concerted attempt of urban workers to escape deteriorating city conditions and wage-slavery through acquiring land cooperatively and setting up cooperative communities and communes, primarily based in agriculture. Skyrocketing land prices were putting the traditional transition from wage-worker to small farmer out of the reach of ever-growing numbers. Since land is the basic means of production for farmers, this development mirrored the skyrocketing cost of means of production in manufacturing, which made the transition from wage-earner to independent worker out of reach of ever-growing numbers too. Workers turned to both production cooperatives and rural cooperative communities for the same reasons. The transition to community was the more difficult one, as it also necessitated a change in locale, usually from city to country, and usually also a change of jobs. Even then many city workers knew little about farming; they tried to make it by pooling their knowledge, skills and resources. The movement was sparked by America's first full homegrown depression, which ravaged the working class communities in the eastern cities. Its ideological base was laid by Blatchly's Society for Propagating Communities and his Essay, which contained long excerpts from a work by Robert Owen, a Britisher, A New View of Society, in which Owen originated the idea that the capitalist system of worker poverty and wage-slavery could be destroyed by the creation of cooperative communities everywhere, part agricultural and part industrial, on which all the unemployed could settle along with all wage-slaves who wanted their freedom, all producing for each others' needs and for exchange with the outside world. These cooperative villages would grow, spread and federate "in circles of tens, hundreds and thousands," eventually transforming the whole of society around the world. From inside the shell of "the old immoral world" a "new moral world" would arise, where all were free and equal and true democracy ruled. He called this "Socialism," adding a new word to the languages of the world, and founded the Association of All Classes of All Nations to try to bring it about through peaceful means. Blatchly and his group began preparations to found their first communities, meanwhile getting in touch with Owen. Owen had been a wage-earner starting at the age of nine, a shop assistant at a drapers. Keeping his eye on the boss, he figured out the capitalist system, becoming a mill manager then part owner. Meanwhile New Lanark became famous as the only mill in England where a large portion of the income was plowed back into high salaries, good working conditions and fringe benefits for workers. In 1817 Owen went to the House of Commons, unveiling his plan to replace capitalism and requesting government assistance to set up the first of these Villages of Cooperation or Home Colonies, as he called them. They would not only solve the problems of poverty and inequality, he claimed, but would rejuvenate all of society. He estimated the best size as about 1200 people on 1000 to 1500 acres. According to his plan, the government would help set them up then get out, leaving them autonomous and self-supporting. The capitalists in control of Commons rejected

him out of hand. Scarcely five years had passed since their former colonies in America had whipped them in a second war; now this former wage-earner wanted to set up "home" colonies right in Britain. Owen turned to wealthy individuals, appealing to their "moral sensibilities," but got the same response. He decided that a self-supporting movement could be created, without any further outside help, once the first few got off the ground. He and his friends began gathering resources to start one in Scotland. But Blatchly caught his ear and Owen was soon convinced that America was the most fertile ground for Socialism to develop first. At that moment it happened that George Rapp and his group of a thousand immigrant communalists decided to sell their home, Harmony, in Indiana, and move to a new site in Pennsylvania. Owen put his money on the line and set sail for America. And so the first movement in the world to call itself Socialist was about to take place, in the U.S.A., while the generation of Karl Marx was going to kindergarten. In the Spring of 1825 New Harmony was opened to any and all. Within a short time over 900 had crowded in, mostly urban working people. For a year the community thrived. They had 20,000 acres, large tracts under cultivation, a cooperative silk factory, woolen mill, brick yard, distillery, oil mill and die works. They functioned under a cooperative system, each being responsible for balancing debits from the community store with work-credits on an annual basis. This plan was to be in effect two years, under direction of a committee, at the end of which the community would work out a permanent constitution. Between 1825 and '26 New Harmony was thriving, and received nationwide publicity, along with Owen's theories, which inspired the founding of a good number of other cooperative communities across the northern states into the mid-west. Fragmentary histories of at least nine are recorded, the most successful being Kendal and Yellow Springs in Ohio, Valley Forge in Pennsylvania, Blue Springs in Indiana, and Franklin and Coxsakie in New York. During most of the first nine months Owen himself was not there, but was touring the country speaking about Socialism, leaving the people at New Harmony space to work out their own destiny. When he returned, the community was functioning so well that he decided to spring early what he had expected to present at the end of the two year period. He offered a plan for a "community of equals." All would be resolved into a democratic family of equals, holding means of survival in common and working all for each others' needs. They would switch from a cooperative community to a commune, from each receiving material benefits according to work performed, to each receiving according to need. Owenite Socialist songs (c. 1825) Brothers, arise! behold the dawn appear / of Truth's bright day, and Love's Millennial Year! *** Mankind shall turn from Competition's strife, To share the blessings of Communal life. Justice shall triumph -- leagued oppression fail -- And Universal happiness prevail. The community, excited at the prospect, decided to dive in head first. They met with disaster. The community was barely on its feet as a cooperative, a great achievement

for 900 people who mostly did not know each other to begin with. There was a wide range of people from the most varied backgrounds: working families, middle-class "intellectuals" and lumpen vagrants. The transition to commune was premature at the least, and resulted in factions and feuds; open struggle among people of differing class backgrounds and outlooks, splitting the community beyond repair. Even after they retreated back into a cooperative system, the personal wounds could not be healed. New Harmony split into several different cooperative communities and some separate families, dividing the land. Owen, undefeated, decided to try his plan again in Mexico, where he soon bumped into the Catholic Church. One of the participants during the successful first period was Frances Wright, one of America's early women's suffragists. A few months after she left New Harmony, she founded Nashoba Community in Tennessee. While Owen's concept strove toward the liberation of all people from wage-slavery, Wright tried to apply the concept to chattel-slavery. She considered it one last hope for the liberation of black people short of violent insurrection. Communes of blacks and whites producing for their common needs and raising funds to found new communes and liberate more blacks. She wrote to Thomas Jefferson, trying to get him involved. He answered with encouragement and support but said this was a job for young people, while he was near his end. Nashoba survived for three years, despite harassment from local racists. But the 1828 depression hit them hard, and the next year they could not meet their land payments. The now-free blacks shipped off to "liberated" Haiti, while Wright, together with Owen's son Robert Dale Owen, became active in the New York Workingmen's Party, giving up the socialist community strategy as impracticable at the time. Just as anabaptism had two wings, one separationist and one social-revolutionary, with the same ultimate goal but with different roads toward it, the separationists going off cooperatively and communally to live among themselves, the revolutionaries trying to take over state power and transform the whole of society directly, so the socialist movement could be viewed as the secularization of anabaptism, mirroring the secularization of the whole of Western society, the separation of church and state. While the church-state used religious authority to back up arbitrary power, the mass socialist movement grew out of the democratic tradition and attempted to extend democracy and equality to the economic life of society, instead of its remaining formalistically limited to politics and law. This vacillation between socialist communities and socialist parties would be later followed by other socialist leaders in America, including Weitling, Haskell and Debs. The union-based worker cooperative movement stood with one foot firmly planted in each of these wings, and was a bridge between them. Many expected New Harmony to act as both a seed-pod and a bank for the movement, gathering capital that could be used to start numerous other communes. Its failure meant that only by individual workers combining resources could many small communities get started. This worked well for several years, but without a center, the movement lost direction. Almost all the communities were absorbed into the larger surrounding farm communities after a number of years. Apart from common land ownership, the new arrivals were mostly repeating in microcosm the already-existing cooperative work networks in much of rural America. They found many of the same problems in the countryside that they'd hoped to leave behind them in the cities. Becoming part of a land cooperative or a commune meant changing classes for most,

as they'd usually been tenants and wage earners in the cities and now they were joint land-owners and collectively self-employed. But the banks, middlemen and land speculators were squeezing small farmers dry. It was becoming increasingly difficult for people who'd known farming all their lives to make a living; so much more so for these former city people. Besides, for the most part the banks still owned the land, and the communalists remained slaves to large mortgage payments for many years. The worsening of the depression and the disheartenment of New Harmony's collapse brought a temporary end to socialist communalism as a movement. While money was scarce and getting scarcer, not even the top layers of the working population could afford land, even with collectivizing resources. It would be another decade before economic conditions would permit the movement to burst forth again. By 1830 all of these early communities had faded into the rural landscape and were gone. Josiah Warren, who had been a participant during New Harmony's first year, went on to become America's major exponent of mutualism. He organized the Cincinnati Labor for Labor Store in 1827, better known as the "Time Store." It attempted to undercut the market and money systems by basing the value of a product to be bartered at the store on the labor-time contained in it. The member-worker would get time-credit for each product deposited, which could be used toward the barter of other products. An hour's work was considered worth an hour's work; no adjustment was made to account for the different hourly values of every different type of work on the capitalist market. Warren's store inspired the Producers' Exchange Association in Philadelphia, which opened three similar stores beginning the following year. Soon however, all these warehouses began accepting money also, as the producers preferred this flexibility, and were opened to non-member cash buyers, retaining barter among members. They all lasted into the 1830s. Warren went on to found mutualist cooperative communities in Ohio (Equity in '34 and then Utopia in '46) and New York (Modern Times in 1850), with no government from above but simple mutual-aid structures from below. Equity community was soon struck with malaria, but Utopia and Modern Times both lasted over twenty years, never disbanding but simply merging with the surrounding communities that had grown about them.


American-born religious communal groups kept forming. The Mormons were first organized in 1831 in upper New York. They lived communally at first, as a "United Order," but this system was abandoned after less than two years, in favor of separate cooperative households. In 1874, by then long-entrenched in Utah, a new attempt was made to create a United Order, on a larger scale than the first. Twenty-five families joined together, founding Orderville, which soon had a population of over 500. All members drew necessities from a common fund; all surpluses and debts were canceled once a year. Within the next decade several other semi-communal settlements were organized. But the patriarchal theocratic Church, by then committed to capitalism, disclaimed them, leading to great internal strife and to the eventual dissolving of the communes and division of property after twenty-five years. Between 1864 and 1882 the Mormon Church organized a chain of cooperative stores, extending to almost every community, 146 branches in 126 towns at its peak. But the

wholesale, like the Church, was organized theocratically and the stores were set up under a stock system with votes not limited to one per person, so eventually control shifted to an ever-smaller number of members. The church hierarchy decided in 1882 to abandon the goal of a cooperative distribution system, and opened the area to "regular" capitalist stores for the first time. The Mormons of course grew to be the largest of all the separatist communities, eventually joining the U.S. as essentially a separate state. Hopedale was begun in 1841 by Christian Socialists in Massachusetts, as an expression of their belief that the struggle for social justice was "the true means of salvation." They lasted fifteen years, with 235 members at their height. With Christian Socialism the religious and secular movements dovetailed once again. The Perfectionists established their first commune in Vermont in '46, later moving to New York then branching out into Connecticut; at their height their main commune, Oneida, had over eight hundred members. Unlike almost any other 19th century group they practiced group marriage. After four decades Oneida crumbled on personality clashes and wound up transformed into a capitalist corporation. Oneida Perfectionist hymn (c. 1855) We have built us a dome On our beautiful plantation, And now we all have one home, And one family relation... The Perfectionists, the Mormons and the Shakers were all strong at the same time. Besides being attempts to gain a constructive sense of community by separating from the capitalist wage system, and to lead a "spiritual" life, all were expressions of a widespread dissatisfaction with the bounds and constraints, both economic and social, that accompanied the isolated nuclear family. In capitalist-dominated communities, each family was pitted against each other for survival. In reaction, communalism attempted to restructure society as a cooperating family. Oneida's group marriage, the Mormons' polygamy and the Shakers' celibacy were all attempts to create "improved" internal structures in these new extended families. At mid-19th century, there were at least fifty religious communal groups in the US, averaging about 200 members.

It was during the intense depression years of the late 1820s that wage-earners first organized their own separate parties. In Philadelphia the first Workers' Party won twenty local offices in its first election in 1828; in New York the next year the Workingmen's Party's first candidate, a carpenter, was elected assemblyman. The New York party was split between supporters of Skidmore's equalitarianism, and Evans' free land and abolitionism. R. D. Owen and Frances Wright, the former communalists, were among the leaders of the Evans group, and raised the first call for free public education, on which they pinned much hope. Josiah Warren was active in the Philadelphia party.

These early workers' parties and others like them in other eastern cities were swept into the upsurge of urban workers and western small farmers behind Andrew Jackson, "the foe of monopoly," in the next few years, and disappeared inside the Democratic Party. This would be a recurring pattern for independent worker parties in the U.S.: politics quickly became conducted by professional politicians, who would attempt to enter every new party and entangle it with one of the "major" parties, with the promise of short-term gains; the developing "two party system" was making it very difficult for new parties to get off the ground. During Jackson's presidency, restrictions on voting for male wage-earners and small farmers were almost entirely removed, and servantry outlawed; still the federal government remained basically controlled by the planters. Wage-earners' problems were not at all solved, and in the following years they would be turning to unions and cooperatives to deal with them.

The first recorded cooperative store in the U.S. opened in Philadelphia in 1829. It sold just to members at cost, charging 20 cents per month dues. Later that year another was started in New York City. The separation of producers and consumers by ever-larger distances was resulting in the domination by middlemen; workingpeople turned to buying-cooperatives to eliminate middleman profits as much as possible, reducing their cost of living. In '31 the Massachusetts Workingmen's Party, based in Boston, disbanded and many of its leading members regrouped into the New England Association of Farmers, Mechanics and Other Workers, and organized America's first "consumer" cooperative movement of stores and buying clubs. In '32 there were a half dozen stores around Utica, N.Y. and a newspaper, The Cooperator, the first of a long line of American papers with that name. A very successful cooperative food store was run in the same period by the journeymen shoemakers of Lynn, Mass. Until the 1837 depression hit hard, stores were springing up all throughout the northeast. The disappearance of the stores during the depression did not mean the disappearance of cooperative buying. Groups of neighbors would often do wholesale buying together, and some of the early stores developed out of these buying cooperatives. At first there would usually be a labor requirement for each member. But some members would prefer the alternative of a surcharge. This made for two types of members, working and non-working. It was a small step from there to the workers being put on salary, membership open to the general community, and a store open to members and non-members alike, but with members receiving special discounts or refunds on items purchased. From the other direction, other early stores began as worker cooperatives, with worker-members employing themselves at modest salaries to run the operation, and passing the rest on in lower prices much like today's "collective" stores. Some members were probably former grocery clerks. But the need for capital was a major stumbling block. To get it, they would open up membership to the community and sell shares. Other areas of "consumer" cooperation were appearing at this time also. The 1830s saw the first cooperative building, banking and credit associations. The earliest

"building and loan" cooperative on record was opened in Philadelphia in 1831. Some of these made it through the depression of the late '30s and '40's, only to be wiped out, along with almost every cooperative in the U.S., by the Civil War.


During the early 1830s was the first great rise of unions in the US. Workers' wages were lagging behind prices and cost of living, due to runaway paper-money inflation, and employers also hit workers with wage-cuts and layoffs. They formed trade unions to fight back; many struck and lost, then turned to worker cooperatives. American wage-earners' experience had long taught them that small strikes, guerrilla battles, were not getting them the larger things they wanted even when they won. Offensive strikes, waged when the bosses needed workers (often when the economy was on an upswing), sometimes did win. But even then their gains were usually soon whittled away, by speedup, inflation, by any of a hundred tricks. As soon as recession hit, layoffs and wage-cuts were shoved down workers' throats. Defensive strikes, against these, almost invariably lost. The bosses simply didn't need them any more; unemployment created a large labor pool so workers had to compete furiously to survive and bosses could call all the shots. It was during and after these defensive strikes, that wage-earners first formed cooperatives. Many soon realized that this was a bit late, and unions later formed cooperatives in expectation of hard times. The cooperatives would take in unemployed union members. Less unemployment meant less competition in the labor market and therefore higher wages. In 1834 the Philadelphia cabinetmakers union opened a cooperative warehouse; by '36 it was one of the largest in the city. Soon much of the Philadelphia trade union movement swung to cooperation: the hand loom weavers opened five shops in '36, soon followed by the tailors, hatters and saddlers. That same year shoemakers unions opened cooperatives in New Brunswick, N.J., Cincinnati, St. Louis and Louisville; in the last three cities, tailors unions followed suit. Painters' unions in New York City and Brooklyn lost strikes in 1837, then formed cooperatives. In the early 1830s unions began coming together into city-wide federations, "trades' unions," the first organizations of American wage-earners that cut across trade lines and looked to the interests of wage-earners as a class. Very soon these trades' unions joined into the National Trades' Union, the first national labor organization. The third annual convention of the NTU in 1836 appointed a committee on cooperation, which recommended that all unions investigate setting up cooperatives, because "until a system of Cooperation is adopted by which the producers of wealth may also be its possessors...the great burden of the evils of which we so justly complain, will never be removed." Later that year, the Philadelphia Trades' Union adopted a resolution "to place in the Constitution a clause allowing the funds of the Union to be loaned to the Societies (individual unions) for the purpose of Cooperation." Its official newspaper urged each union to raise a fund through regular member contributions to get capital to begin. At the same time each union was to contribute monthly to the Trades' Union fund to help start cooperatives. A conference of nearly two hundred union delegates in 1837 resolved that each union work out an estimate for setting up a cooperative to support

ten members. But in the middle of this conference, the capitalist financiers panicked, beginning a new depression that temporarily wiped out not only the cooperatives but almost the entire union movement. This depressed state, relieved only slightly during the California gold rush of the early 1850s after the U.S. seized a large part of Mexico, continued until the Civil War was well under way in 1862. Thus from the very beginning unions were emancipationist, abolitionist, and revolutionary organizations, trying to raise their members from wage-slavery, and looking to its abolition in a new cooperative economic system. While hardening times can cause a cooperative movement to blossom, the hardest of times can destroy it, at least in its more visible forms, as the experience of 1837 shows. But the depths of capitalist depression, when cooperatives can no longer pay their rent to landlords and are forced to close shop, does not mean the end of the cooperative movement. It merely forces it to flower on a different level. During the hardest depressions cooperative movements go underground. In almost every community, neighbor cooperation, barter, labor exchange, mutual survival aid of every sort grows. When times are ripe again, the movement resurfaces.



Associationism in America started in 1840 with the publication of The Social Destiny of Man, by Albert Brisbane, editor of the New York Tribune, the most widely circulated newspaper of the time, radical and Abolitionist. This book introduced the ideas of Charles Fourier, the Frenchman, to this country, in a manner similar to the way Owen had been introduced. Brisbane and Horace Greeley, publisher of the paper, felt that the earlier Socialist community movement had not succeeded partly because a successful formula had not been developed for workers to use to collectivize their resources, gather capital, buy land and start their cooperative communities. They did not see the cooperative community as a short transitional step to the full commune, as did Owen before New Harmony's disaster. Rather, the cooperative community was the end in itself. Fourier and the Associationists felt that all could be emancipated and the inequalities and injustices of capitalist society cured by a vast network of these cooperative villages, "phalanxes" or "associations" as they were variously called in Fourier's plan. Once the restraints imposed by capitalism were removed, people would naturally work together in a spirit of cooperation. The phalanxes would spring up all over the country, they hoped, and gradually federate like cells into a growing organism that would eventually transform America and the world. While the movement of the '20s had been, in practice, more oriented toward agriculture and handicrafts, the Associationists, keeping up with the times, stressed industry more. They felt that collective production for trade or sale was necessary for a phalanx to survive. Greeley developed a formula for gathering resources to get phalanxes started and for operating them. They would be incorporated; each member would have one vote no matter how many shares owned; surplus income from their industries would be distributed as dividends. Members received survival needs plus money income varying with the amount of work performed. Outsiders could also buy stock. But while the Tribune supported them, other papers denounced them, as did legislators and various church leaders, as a threat to the social system. Between 1843 and '50 at least thirty-four phalanxes averaging well over a hundred members apiece, sprouted across the northern states from the Atlantic to the Mississippi. The most successful perhaps was the North American Phalanx in New

Jersey, which lasted until '55. The most famous was Brook Farm, in Massachusetts, which had begun as a spiritual commune in 1841, founded by "transcendentalists" coming out of the Unitarian tradition; they became Associationist two years later. By 1844 the movement was progressing so rapidly a National Convention of Associations was held. But the same problems that had stopped the movement in the 1820s stopped it again. Most poor and working people simply could not afford to form phalanxes, even with combining resources. The phalanxes that were started usually remained poor, often strangled by debts they had undertaken, so most workers were not convinced they were the answer to raising the quality of their lives. Rather than move out of their communities like separationists, most saw a more solid road to progress in staying and transforming them. Furthermore, the Greeley system stressed profit sharing at the expense of simple communal sharing. Outside investors had as much say as community members, and the enormous amounts of work members put into the place itself were owned as much by these outsiders too. Some found themselves being strangled by their investors, in much the same way the Pilgrim commune had been 200 years earlier. Associationism was more of a middle-class movement than Socialism, as shown by its focus on the contract form. The Associationist movement had risen in response to the depression that had begun with the panic of 1837. When the economy picked up due to the imperialist war against Mexico, the movement was shaken. The rush for gold in newly-annexed California deflected much of the pent-up social energy that had been behind Associationism. Meanwhile the new flood of immigrants onto the east coast helped a new worker cooperative movement to rise, also publicized and supported by the Tribune. Most phalanxes died by 1850, although the North American Phalanx held on till 1855. After the collapse of Associationism, communalism lost its credibility among the American-born as a method of social change, and did not become a mass movement again until the 1890s. While the Socialists could point to New Harmony's failure as disheartening the movement, the Associationists did not really have one particular community as their focus, so their failure was clearly the failure of some basic assumptions of the entire movement. Communities had shown that they were fragile and dependent for success on a large variety of difficult factors; communal survival had proved no utopia or panacea to most participants. The movement never grew large enough to become an imminent threat to the established order, and most people were satisfied that it never could. It lost heart in thinking of itself as a mass movement, and so lost its center: the movement was to the communities what a shared millennial spirituality was to the religious communalists. In this same period there were several non-Fourierist communities. Skaneateles, in upper New York, was a community of socialists involved with the Abolitionist movement. Northhampton was secular and cooperative. Both had well over a hundred members, but both disintegrated after four years.

The mutualist communities started by groups centered around Josiah Warren in this period, Utopia and Modern Times, both contained many former Associationists, and both made it through these hard years. The bare simplicity of their social structure, just a basic agreement to mutual-aid and cooperation whenever possible, provided a flexibility that helped pull them through. In 1849, 260 French political refugees from the failed revolution of the previous year, led by Etienne Cabet (who'd been a member of the Insurrection Committee during the earlier 1830 uprising), formed a commune in Illinois, taking over the old Mormon community of Nauvoo, eventually rising to about 500. They called it Icaria, after a socialist utopian novel Cabet had written between the two insurgencies. Cabet, like others before him, envisioned a federation of socialist colonies in America involving millions. But he himself grew authoritarian, and the commune expelled him in 1856. A large group followed him to St. Louis, where he soon died, but the others ran several cooperative houses for many years. The original group was forced to leave Illinois due to debt, and moved to Iowa. More French refugees poured into these communities after the defeat of the Paris Commune of 1871. Clashes between older and newer residents caused further splits, resulting in Icaria Esperanza in southern California in 1884, which lasted only a few years. Icaria itself finally folded in 1895. There had also been an attempted revolution in Germany in '48, and refugees from this, led by William Weitling, moved to Iowa to found a commune called Communia, which disbanded after several poverty-stricken years on impossible land.

After 1840 independence was impossible for ever-growing numbers. Technological advances in machinery were making many skills useless, creating unskilled laborers out of formerly skilled workers. These new machines and their expense brought ownership of means of production out of the reach of most "free" workers, and drove them under the domination of the machine-owners. Native-born Americans found themselves competing for factory jobs with the massive influx of new immigrants, mostly unskilled and very poor, predominantly from Germany in the wake of their failed revolution of 1848, and then from Ireland as the potato famine deepened. Immigration had been helping explode the population almost double every twenty years since the American Revolution, when it had been only about 2 1/2 million, up to 23 million in 1850. With complex machines came the necessity of worker coordination on an ever-larger scale. But the capitalist system decreed that this coordination would take place under the centralized autocratic control of a boss, single or corporate, and not through democratic worker cooperation. The work process was being rationalized with crude efficiency, with little thought to the cost in human life. The bosses were incorporating, floating faceless pieces of paper between themselves and the factories. Besides giving them more capital without really having to relinquish control, incorporation provided limited liability and all variety of tax benefits; the bosses themselves wrote the laws making these advantages possible. Meanwhile down at the factory they heated things up with the newly instituted assembly-line. Individual workers were at a tremendous disadvantage against this yoked team.

But a group of cooperating workers, pooling their resources to get machinery and combining their skills to become an efficient team themselves, might be able to make it, and avoid having to sell themselves into slavery. When 1847 brought depression, layoffs, wage cuts and failing strikes, workers turned to cooperation again. Unions had grown fast since 1842, when a judicial decision finally declared they had a right to exist at all. In '47, a year after the South was hit with a wave of slave insurrections, the Iron Molders of Cincinnati struck. The strike, like the insurrections, eventually lost. But wage-earners were "free," and one group chose not to sulk back at lower pay but instead stalked off to organize their own cooperative foundry. They met with immediate success. A group of Pittsburgh foundry workers, inspired by the Cincinnati cooperative, followed their example later in the year. This was also a time when the women's rights movement was gathering steam, with the first Women's Rights Convention, organized by Elizabeth Cady Stanton and Lucretia Mott, who were both also leaders in the Abolitionist movement, which was growing to enormous proportions. By 1849 whole unions began forming cooperatives again, on an unprecedented scale. First iron molders locals in West Virginia, Ohio and several parts of Pennsylvania, followed by the Boston tailors. The next year the Buffalo, N.Y., tailors formed a cooperative for eighty of their members in the wake of a losing strike. In that same city the seamstresses union formed a cooperative too, as did the seamstresses of Philadelphia and Providence. In New York City there were union cooperatives of barrel-makers, hat-finishers, shade-painters, cabinetmakers and tailors. In Pittsburgh of glass-blowers, silver-platers, puddlers and boilers, as well as iron-molders. Many of these were connected with unsuccessful strikes. A new flood of immigrant workers hit American shores, German and French, refugees from their failed revolutions of '48, where a major demand had been large-scale worker cooperatives "social work-shops," financed by the state. These refugees were soon followed by Hungarians and Italians. There was a strong worker cooperative movement among these new Americans, particularly those from Germany, centered around New York City. Soon the German immigrants had functioning cooperatives in seven American cities. In New York they attempted to organize a large scale labor-exchange and barter system centered around a "bank of exchange," aimed primarily at serving individual producers. But capitalist industrialization had made individual production obsolete in most industries. Experience soon proved that exchange and distribution cooperation would not suffice to keep city workers self-employed, and most were forced into the factories. The bank of exchange never got off the ground, despite the efforts of William Weitling, who had been a leader of the revolutionary workers in Germany, along with Marx and Engels. He and others soon joined into a communal group that took off to Iowa to found Communia. Many of the worker cooperatives started in the late 1840 s and early '50s lasted only a few years. Besides scarcely having the resources to get off the ground, they met with

cutthroat capitalist competition. Businessmen's associations did everything they could to wreck them. They were attacked in legislatures and churches. Some states, including Massachusetts and Pennsylvania, refused to charter them. As one legislator said, "It will not do to encourage the journeymen in such movements; it would ruin the employers." Many Protestant ministers and Catholic priests attacked them openly and violently. A common accusation reported in the newspapers was that they were "the first step to Socialism." This attack was not confined to worker cooperatives, but also was directed at the Associationist movement. Both movements were closely connected. Brisbane, Greeley, and the group centered around the Tribune realized that cooperatives had great potential as agencies for social change, and advocated to the workers, particularly strikers, to form them. Greeley came up with a formula for their organization that he thought would meet all the needs of the movement. The cooperatives could variously be either ends in themselves, cell-units in larger industrial organism, or steps toward gathering resources to eventually form phalanxes. The Tribune did not start or invent the movement of the late '40s but gave great aid in publicizing its successes. The Greeley formula was essentially the same for worker cooperatives or phalanxes. It was a profit-sharing system, oriented toward capitalist conditions, with the first goal of gathering enough resources to get started. They would be incorporated and float stock, which not only worker-members but anyone could buy. Each stockholder got only one vote, no matter how many stocks were owned. Cooperatives would pay workers normal market wages or, rather, a living wage. Over that, investor-members would be paid low interest and dividends. The rest of any surplus income would be divided among the worker-members. What the Greeley formula boiled down to was structuring the movement to fit inside capital corporate law. Until this time, worker cooperatives had been predominantly (technically speaking) unincorporated associations of individual producers. With the coordination of the work-process around machinery, the group as a whole became the predominant entity, and the incorporated cooperative was inevitable under capitalist law. Besides the usual corporate advantages of capital-gathering and limited liability, it was a legal way to separate ownership of the cooperative means of production from changing membership. But the corporate structure also brought great disadvantages with it. Non-worker share-owners were given a say in management. Most beginning cooperatives put tremendous amounts of labor into their shops, which were accumulated as capital and owned as much by the outside investors as by the workers. The cooperative spirit was stifled by being too much counted in dollars and cents. A capitalist foothold was inside the cooperatives, and was wedged further open by some groups hiring nonmembers as extra help, and paying them at lower wages than they paid themselves. The hopes of the cooperators were dashed when many failed as the country sank back into severe depression in the mid-185Os, with the Civil War delivering the final blow.

Greeley would go on to form a political party of his own, the Liberal Republicans, challenge the corrupted Grant in the election of 1872, and garner 44% of the popular vote.

Between 1845 and '60, the first major American "consumer" cooperative movement rose and fell. The Working Men's (New England) Protective Union was begun by John Kaulback, a journeyman tailor and a former member of the New England Association of Farmers, Mechanics and Other Workers, which had organized cooperative buying in the '30s. 1845 was a time of fast-rising prices. In '47 the economy slipped badly again, but by that time there were over 3000 Protective Union members and soon there would be a chain of stores across the north-east. The Union's principles were similar to those of the British Rochdale movement, and were developed separately at about the same time. The first Rochdale store was organized less than a year before the first Protective Union. Union membership was open to the whole community; anyone could buy a share. No matter how many shares owned, each member had only one vote in electing the board that managed each store. Stores were locally controlled but federated for wholesale buying and other mutual-aid. Unlike Rochdale, they sold at near cost instead of giving refunds. Many Unions set up production and service cooperatives for their members. The New York Protective Union, for example, ran a smithy, a wheelright shop and a bakery. By 1852 there were 403 divisions in New England, New York, Michigan, Illinois, Wisconsin and Canada; five years later there were almost twice that number. But in 1853 a schism developed in the organization. Kaulback and his supporters withdrew and started a new organization, which also grew strong, with 350 units in ten states in 1857. But the financiers panicked again in 1857. As the economy plunged, their capitalist competitors hit the Protective Unions with a ferocious attack in many areas at once. They used every weapon in their arsenal: price wars, blacklisting by merchants, employers and suppliers, etc. Soon the Unions were no longer able to meet members' needs, and the membership simply could not afford to support them. By 1860 the Central Divisions of both rival Protective Unions were gone. The Civil War devastated them. Nevertheless a few locals hung on, and one observer in 1886 was able to unearth four still-functioning Union stores. It was the Protective Unions' policy of passing or savings directly to consumers by selling at almost cost that brought the greatest wrath of the capitalist merchants down on their heads. It shook up and threatened the market, which the businessmen would not long permit. It was to their long-run advantage to hit the Unions with unlimited price wars; as soon as the Unions were broken in a locale and out of the way, the merchants were free to raise their prices again. Eventually most of the American "consumer" cooperative movement would turn to the Rochdale system of selling at about market price and refunding savings periodically to members. The capitalist merchants could live with this a little better. That was the only really original contribution of Rochdale. The "consumer" cooperative movement was not imported, but was a native American plant.

With the coming of the Protective Union, cooperatives in America took two distinct forms. One, typical of industrial production cooperatives, had all or almost all members working in the cooperative; the other, typical of purchasing and service cooperatives, had only a small number actually working in the cooperative out of a much larger membership. In the production cooperative, the workers were their own boss; in the "consumer" cooperative, the membership usually elected a board who hired managers who in turn hired and fired workers almost as in a capitalist enterprise. The worker, by this twist, again became a hired laborer. It was not long before workers in consumer cooperatives saw that their interests were not identical with those of the entire membership, and began organizing labor unions. Although consumer cooperatives tended to be good bosses, over the years there have been instances of strikes. But even labor unions themselves have had to confront this seemingly paradoxical situation, as they too have been struck by their employees. In recent times, the "new wave" cooperatives of the 1970s tried to bridge this paradox by having a worker collective (in which all members have equal power and decisions are made by consensus) run the cooperative in its daily functioning.

The Abolitionist movement, based among wage-earners, artisans, small farmers and homemakers among the "free" population, and of course primarily based among the slaves, demanded immediate and uncompensated emancipation. It was a great revolutionary movement that sought to change property relationships by overthrowing an oppressor ruling class. Throughout colonial times "free" blacks and whites commonly aided and helped organize slave insurrections, and began to set up open Emancipation Societies as early as 1775. Both Paine and Franklin as well as Richard Allen and Absolom Jones were among the earliest members and leaders. By 1892 there were societies in eight states, but as slavery rose to enormous proportions in the early 19th century, they lost heart and disappeared for a couple decades. During the entire first half of the century the plantation owners and the Northern factory owners became locked in a death struggle over whether the vast western lands should be slave or "free." The slavers needed the land because they had worn out much of the South with agricultural abuse; the factory owners needed the land to constantly dangle before workers as a possibility of escape, a safety valve to retard the labor movement and keep organized discontent down. The stakes became higher and higher. Propertyless workers were piling up in the eastern cities in ever-greater numbers, becoming correspondingly angrier and more insistent in their demands for decent conditions and control of their own means of survival. Strikes and slave insurrection broke out constantly. Organized Abolitionism surged forth again in the early 1830s, stirred by the revolt in Virginia led by Net Turner, minister. The unions were solidly Abolitionist; experience had shown that the slave system in an area created near-slave conditions for wage-earners and small farmers. By 1850 it had become a true mass movement in the north and west, involving large numbers of people, with many newspapers and organizations, huge meetings and conventions. Their meetings were attacked; halls burnt down; leaders and members jailed, beaten, and murdered; papers harassed and denied use of the mail. They were vilified as "foreign agents." Many women were in the Abolitionist front lines and made good use

of what they leaned in this struggle when they turned again to fight for their own equal rights. As the country hurtled into a great depression, the Abolitionist movement surged to a climax. In 1860 Buchanan vetoed the Homestead Act, calling it "communistic;" Lincoln's election a few months later on the newly-formed Republican Party, financed by Northern industrialists but with grassroot support of all the "free-soil" and antislavery forces, meant that for the first time since the country's founding the slavers had control of the federal government wrenched totally from their grasp, and they responded with secession. In '61 hundreds of thousands of Northern workers and western farmers poured voluntarily into the Union army; the union and cooperative movements were almost entirely disbanded because the workers were gone. Down South the slaver army had to fight with only one hand, as it had to use the other to keep its own workers, the slaves and their allies (centered in the "hillbilly" mountain communities, where there had almost never been slaves, and which were a haven for runaways and draft resistors), off its throat. Ironically, even as "free" workers and slaves struggled against the army of the slavocracy, about ten thousand Asian workers, mostly Chinese, and about three thousand Irish, slaved for Northern employers as contract laborers on the first transcontinental railroad to the west. The Abolitionist movement had deep anabaptist undertones. This can be seen most clearly perhaps in the poem-song Battle Hymn of the Republic, written as the poet watched the Union army marching south singing the Abolitionist anthem, John Brown's Body, and to the same melody: "Mine eyes have seen the glory of the coming of the Lord...His Truth is marching on." Almost half a century later, an IWW poet would take one step further with this tradition, in Solidarity Forever: "We can bring to birth the new world from the ashes of the old, For the Union makes us strong." While the rest of the country hurtled toward Civil War, a religious group turned away from the war to communalism: the Use, first formed in 1861 in upper New York, later moving to California where they called their group Fountaingrove, which did not finally disband until around 1900. Shortly after the South conceded defeat in 1865, days before his assassination, Lincoln said, "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country... Corporations have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic is destroyed." The Union army, returning home thinking itself victorious, found mostly poverty and wage-slavery waiting for them. Their response culminated in the "Great Upheaval," the national uprising centered around the railroad strike of 1877.

The outcome of the war expropriated the slavers of "their private property," and threw four million "freed" blacks onto the labor market, almost all totally impoverished. Few found jobs; most remained destitute and unemployed. Demands to break up the old plantations and distribute "Ten acres and a mule" to each "freed" slave, by Thaddeus Stevens and the Radical Republicans in Congress, were quickly shelved by the rightists who consolidated power as soon as a bullet disposed of Lincoln. The majority of blacks soon wound up as tenant farmers, almost serfs, only slightly better off than before. Although the Homestead Act of 1862 threw open millions of acres for "free" workers to settle on, railroad grants ate up gigantic tracts. The speculators rushed in, reaping immense profits and winding up with most of the land in the end. Only one out of ten families who went west ever actually wound up with a free homestead. This was the ultimate failure of Jeffersonian democracy. Northern capitalists were now firmly in the saddle of government. Under their control an all-enveloping national market quickly developed for the first time. This broke up many regional economies, to the disadvantage of small individual producers, who could not compete with goods made in distant factories. Producers and consumers were separated ever farther, to the advantage of the middlemen. Small farmers had to ship their produce hundreds of miles to market, at freight rates that were often higher than the prices their produce brought. Right after the war, in 1866, recession hit. Amidst the first great wave of American imperialist armed interventions abroad, the country slid slowly down into the disastrous depression of 73, one of the worst ever. This long slide spawned radical movements among both farmers and wage-earners: the National Grange, the National Labor Union, the Sovereigns of Industry, the Knights of Labor, the International: all intimately connected with cooperatives.


Sylvis & Myers


By 1866 the union movement was recovering and reforming. The industrial sector of the labor force was almost as large as the agricultural, and by 1870 would surpass it. There were over five and a half million wage-earners, approaching half the work force, with over two million in factories. Following nationalization of the market and nationalization of employers' associations, truly coast-to-coast unions sprung up in the various trades for the first time. The largest was the Iron Molders, with the leadership of William Sylvis, considered by many to be the first truly great labor leader in the U.S. The Molders set up a cooperative stove foundry in Troy, N.Y., in 1866. It was a fast success. Soon the Molders were embroiled in a bitter nine month strike in Cincinnati. It wound up a disaster for the Molders. But they picked themselves up and the whole organization turned to cooperatives "for relief from the wages system." In the fall of '66, representatives from local unions, city federations, Eight-Hour Leagues and national unions met in Baltimore to form the first American union federation on a coast-to-coast scale, the National Labor Union. It was a loose federation, like its predecessor the National Trades' Union; at its peak it would have 200,000 members. The NLU fought for the eight hour day, for land for settlers, for black and white labor solidarity, for the rights of women, against the contract and convict labor systems, and threw all of its weight behind the cooperative movement. The first Congress of the NLU resolved, "that in cooperation we recognize a sure and lasting remedy for the abuses of the present industrial system, and hail with delight the organization of cooperative stores and workshops in this country, and would urge their promotion in every sector of the country and in every branch of business." At the second Congress, Sylvis was elected president, and called on all workers to form cooperatives "and drive the non-producers to honorable toil or starvation." "Single-handed we can accomplish nothing, but united there is no power of wrong that we cannot openly defy." Worker cooperatives, they hoped, would become labor's biggest weapon, a "substitute for strikes." Strikes were not winning bread-and-butter demands, much less liberation. By the end of '67, NLU newspapers were filled with optimism. "Cooperation is taking hold upon the minds of our members," Sylvis wrote, "and in many places very little

else is talked about." Locals of bakers, coachmakers, shipwrights, printers, barrelmakers, mechanics, blacksmiths, hatters, carpenters and other trades formed cooperatives across the country. Many of these were after lockouts by their former bosses, the result of defensive strikes that failed. Sylvis' Iron Molders Union set up eleven cooperative foundries in 1868. The NLU was soon joined by the National Colored Labor Union, with leaders such as Frederick Douglass and Isaac Myers. Its platform backed worker cooperatives for black people. Besides the usual advantages, cooperatives would help remedy racist exclusion from the skilled trades. Cooperation was taking hold in black communities across the country, rural and urban. One center was in Baltimore, where there were cooperatives of all sorts, including stores, coal yards and small industries run by black people. But all throughout the 19th century, employers were organizing their own associations to preserve the capitalist system and fight the workers. They saw the threat the NLU and NCLU were posing, and moved in combination to destroy the workers' movement, both the cooperatives and the unions themselves. Soon Sylvis was speaking with alarm. Many of the cooperatives were in trouble and were failing. The capitalists were pulling financial strings and this was having a telling effect. Sylvis accused "Wall Street's control of money and credit," and urged all workers to get behind the Greenback program of more and cheaper money, and break Wall Street's control. Under the Greenback plan, government-issued paper money, backed with silver, would replace the then-current system of bank-issued notes backed with gold. The government would offer long-term negligible-interest loans to all citizens in need. This would provide the cheap capital that workers and unions needed to set up the vast system of cooperatives that would lead to liberation. Greenbackism was a direct attack on bank control and private ownership. Through the NLU, Greenbackers organized the first nationwide workers' political party, the National Labor Reform Party, and set their sights on taking national power. Although this party was a still-birth, it set the stage for the great Greenback parties that would follow in a few years. Sylvis was the first American labor leader to actively try to establish relations with the European and international worker movements. He attempted to steer the NLU into the International Workingmen's Association, the "First International," to which many NLU members belonged as individuals. The IWA formed in London in '64, marked the first time wage-earner movements of different countries inter-penetrated and coordinated their ideas and actions, creating a supranational character to the movement. The first IWA American sections were formed in '68; their program called for "The adoption of the principle of associative production, with a view to complete supercession of the present system of capitalist production." It was an open organization, basically for educational and support activities, but geared also to give direct leadership in times of mass struggle. The IWA looked to the unions as the centers of the struggle. Its greatest strength lay in the cities, among the unskilled, the unemployed, and the newer immigrants, mainly German at first but soon also Irish, Bohemian, Scandinavian, and French.

Suddenly Sylvis died in '69 at age 42. Shortly afterward, the NLU, inspired to carry on the work he had begun, voted its "adherence to the principles of the International Workingmen's Association," adding it would "join in a short time." But without Sylvis' visionary leaders'hip, the NLU was splitting apart, one wing trade union, the other wing political party. The unions took great losses in the strike wave of 1871 and 72. The National Labor Reform Party collapsed after the election of '72 and the NLU collapsed on the eve of the great depression of 1873, never having joined the International, which had just moved its central headquarters from London to New York. During the worst depression years most of the cooperatives started under the National Labor Union were wiped out. But not all. In Minnesota barrel-makers organized at least eight cooperative factories after 1874, some lasting till '86. In the same period there were cooperative carpentry shops in New York City. The 60,000 member Knights of St. Crispin, the largest individual union in the world, ran shoemaking cooperatives scattered throughout the northern states, not only factories but almost forty stores and many buying clubs for members; the Crispins began to fade in the late '70s after a rash of losing strikes. The NLU cooperatives were mostly organized under a system similar to the one Greeley had devised two decades earlier. Outsiders could usually buy stock and departing members retain theirs. Although each member could have only one vote no matter how much stock was owned, this still created unbalanced situations over a long period of time, and caused many cooperatives to deteriorate. Thus internal disorders added to the disheartenment the movement felt over its inability to ward off capitalist attacks. For example, Cooperative Stove Works, founded as the result of a strike led by Sylvis in Troy, New York, in 1866, was disbanded twenty-five years later with six people owning more than half the stock. The Cooperative Foundry in Rochester became a capitalist business in 1887 after twenty years, owned by 35 stockholders. Others failed of course for reasons of every sort: the Cooperative Barrel Works, formed in 1874 in Philadelphia, for example, eventually failed because bags replaced barrels in the nearby mill industry; internal personality clashes of course wrecked a share.

The International was organized in 1864 through the initiative of British and French unionists and cooperators to serve as a central medium of communication and cooperation among workers and worker organizations of different countries. Within a few years it became an umbrella for worker movements in almost every country in the industrializing world. These had all followed a pattern similar to the movement in the U.S.: as industry, capitalism and wage-slavery grew, so grew the resistance organizations of the workers--unions, cooperatives and parties. All the union movements were connected to cooperative movements. All schools of thought were represented within the International. Its yearly congresses attempted to hammer out a common program for worker movements everywhere. The concepts of socialism were rooted in the aspirations of every worker movement. With the IWA, these movements inter-penetrated, The largest divisions were between the

"scientific, "anarchist" and "cooperative" schools of thought. Despite their many disagreements about strategy and organization, all agreed that in the end production should be run through a system of coordinated worker cooperatives, and not by an allpowerful bureaucratic "state." The IWA advocated workers forming cooperatives, particularly producer cooperatives over stores (because the mode of production is more basic to the system than the mode of distribution, which flows from it); recommended that all cooperatives devote part of their income to supporting and spreading the movement; suggested that workers, whether members or not, should receive equal salaries; and that excess income should be plowed back into the cooperative instead of divided as "profit." It proposed that the land and resources belong to society; that mines, public transport and agriculture be operated by worker cooperatives with assistance from "a new kind of state subject to the law of justice"; and that it was the fundamental task of workers to destroy the wage system and develop a new social order. But it also warned that the past thirty years experience had demonstrated in many countries that cooperative movements by themselves could not defeat the domination of "private" capital, and that they could not succeed without an allied political movement to change basic property relationships and the general conditions of society. Therefore, the IWA concluded, the ultimate value of producer cooperatives in the present society lay in their conclusive demonstration that wageslaves and a class of employers were unnecessary to large-scale "modern" production. Scientific socialists, led by Marx, had mainly praise and encouragement for cooperatives, criticizing the movement's earlier Owenite and Prudhonian ideologists for not seriously reckoning with the capitalists use of state power to squelch the movement, for not sufficiently allowing for the needs of increasingly complex machinery in their plans, and for not accurately analyzing the laws of money. In 1871 Marx saw the economic system of "communism" to be "united (production) cooperative societies regulating the national production on a common plan, thus taking it under their own control..." By 1871 there were over 5000 American International members, with sections in New York, Chicago, San Francisco, New Orleans, Newark, Springfield, Washington, and Williamsburg. After its role in the defeated revolutionary Paris Commune of '71, when the working people took and held the city for two months, the IWA was outlawed and persecuted in almost every European country. On top of this, it had become racked by internal struggles over the methods and program of social revolution, particularly between factions led by Marx and the anarchist Bakunin, which came to a head over the question of how centralized the IWA and how independent each national section should be. Most national branches pulled out in '72 and formed a new decentralist International, while the old General Council moved to New York. The American Section became very active, organizing large mass meetings and demonstrations of the unemployed, but was itself split between those looking to the unions as centers of struggle and those looking to electoral politics. A group that included Victoria Woodhull left the New York Section to found the Equal Rights Party, fielding the Woodhull-Frederick Douglass ticket in the presidential election of 1872, while scientific socialists centered around F.A. Serge assumed leadership in the IWA.

The Commune of Paris had particular significance in the history of the socialist movement worldwide, as it was viewed as the prototype of the future society by all schools of socialists until after the Russian Revolution. With International members among the leadership, it established the most complete and direct democracy the industrialized world had ever known. All public workers were elected, could be recalled at any time, and received the same pay as the average of productive worker. Most of the factories were taken over by their workers as cooperatives (the employers had abandoned them and fled the city), and the workers were organizing themselves into a vast cooperative union. The Commune decreed the right of all workers "to their instruments of labor and to credit." Marx called its ultra-democracy "the form at last discovered under which to work out the economic emancipation of labor." In 1917 Lenin would hold up the Commune as the vision of the Bolsheviks; yet history would prove that the reality of Bolshevik rule was far removed from what the Commune had offered.

Ceres Adams & Oliver Kelly, Grangers

The first American dairy cooperatives were founded in the Goshen, Connecticut and South Trenton, New York, both in 1810. A decade later a group of Ohio farmers formed America's first agricultural marketing cooperative on record. In 1822 Pennsylvania barley farmers set up the first cooperative brewery. The first cooperative wheat elevator was opened in Dane City, Illinois, in 1847; in '50 the first mutual irrigation cooperatives both in California and by the Mormons in Utah. Before 1860 small farmers were mostly self-sufficient. They produced for their families and for nearby markets. But the end of the war saw a great expansion in farmed land and in mechanization. Extension of the western railroads connected onceisolated communities into a national market. Farm output skyrocketed, pressing prices down. The small farmer became a tiny link in a great chain, dominated and impoverished by bankers, merchants and middlemen, "fleeced coming and going," overpriced purchasing seed, supplies and equipment, and overcharged marketing produce. Oliver Kelly, once a farmer but by the mid-'60s a clerk in the U.S. Bureau of Agriculture, founded the National Grange of the Patrons of Husbandry in 1866, as a secret fraternal order of farmers. (A grange is a farm homestead.) Their Declaration of Principles stated "cooperation in all things," and they soon began organizing cooperatives to meet the needs of their hard-pressed members, coming into the open.

With the Grange, farmer cooperation changed from mostly informal and local, to a wide-spread and well organized movement. The Grange never organized farmworkers, "hired hands." Until the end of the century almost all farm work was still done by members of farm families, which were usually big. Farmworkers did not become a large and important group until decades later, and were first successfully organized by the Industrial Workers of the World in the early 20th century. In their third year the Grange began purchasing and marketing cooperatives in Minnesota. The local Granges were mutual-aid centers, where information about work and survival were shared, and members helped educate each other. In a few years there were Granges throughout the mid-west and south-west. When the economy faltered in 72 and fell the next year, membership soared. The Grange organized cooperative grain elevators, warehouses, shipping stations, processing plants, grist mills, bag factories, brick yards, blacksmith shops, cotton gins, rail and ship transport, mutual insurance, irrigation, machine and implement works, and at least four banks. By 1875 they had 250 grain elevators just in Illinois. Together the Grangers of the west fought a grasshopper plague; in the South they fought floods. The Grange spread to the west coast. The monopolists of the machine industry refused to give them wholesale rates, so beginning in 1872 the Grange tried to have their own line of farm machinery manufactured. But their first attempt, a harvester, proved to have a faulty design and was a financial disaster. In '73 they opened their first store, carrying both farm supplies and consumer goods. Until then they had just organized cooperative wholesale buying. In the beginning the stores sold only to members, but soon they opened to their communities. The stores were organized with member share-holders restricted to Grangers. At first they sold nearly at cost. But capitalists hit them with law suits and price wars. Under great pressure, the stores switched to the Rochdale system of selling to the general community at about market rates and giving members rebates and special discounts, threatening the market less and getting the businessmen somewhat off their backs. Throughout the next decade there were over 500 Grange stores. This was the first Rochdale movement in America. The railroad barons, not satisfied with having taken fully half the western lands, used their control of the government to levy enormous taxes to make the people pay the cost of building the roads. They milked their transportation monopoly for all it was worth, charging huge freight rates. Farmers got little or nothing for their crops, while city people starved because of high food prices. Nine hundred New Yorkers alone died of starvation in the winter of 1873, while 40% of the labor force was unemployed. The Grange struck back. "We hold, declare and resolve that this despotism, which defies our laws, plunders our shippers, impoverishes our people, and corrupts our government, shall be subdued and made to subserve the public interest at whatever cost," the Illinois Grange declared in 1873, in a typical resolution.

Grange song (c. 1870) Oh, the farmer comes to town With his wagon broken down, But the farmer is the man who feeds them all. It would put them to the test If the farmer took a rest; Then they'd know that it's the farmer feeds them all. The farmer is the man, the farmer is the man, Lives on credit till the fall; Then they take him by the hand And they lead him from the land, And the merchant is the man who gets it all. But the Grange was in deep financial trouble and many locals were going bankrupt. With the crash of the economy "Independent" farmer parties sprung up throughout the west, with Grangers in the leadership, reviving the Greenback movement. Membership rocketed. By '77 there were almost 30,000 local Granges, with two and a half million members. Behind slogans like "Down with monopolies" and "Cooperation!" they allied in '78 with the Knights of Labor into the Greenback-Labor Party. With more and cheaper money, the farmer co-operators, like their industrial counterparts, felt they could get on an equal footing with the capitalists. This same alliance of urban and rural workers into an independent electoral party would gather strength in the decades to follow; in all successful instances they would have a base in cooperatives. The Greenback-Labor Party elected 15 congressmen in 1878, and numerous candidates to state office, particularly in Illinois, Minnesota, Iowa and Wisconsin, tallying over a million votes. But in many places, especially throughout the South, members were met with violence, some beaten, some murdered, and on election day they were confronted with stuffed ballot boxes. Their elected candidates were usually ineffectual in making really meaningful changes; although they passed laws regulating freight rates, they found themselves unable to enforce them. The barons struck back: railroads refused to carry Grange shipments, banks refused credit, many gains were overturned by the courts, which remained firmly in conservative hands and over which voters had little control: it became clear the basic Grange program could be instituted only on a national scale. But the early 1880s saw the depression temporarily lessen, the Greenback-Labor Party fade without ever becoming strong enough nationally to enact its program, and the Grange grow conservative. By '83, when the economy slipped again, its leadership was business-oriented and unable to rise to the challenge: within the year it was in fast decline, as it was no longer meeting small farmers' needs. But a new farmers cooperative movement was roaring out of the frontier communities of the west, the Farmers' Alliance, which would eclipse the Grange for a decade.

William Earle, an organizer from the Grange, founded the Sovereigns of Industry in 1874, to serve north-eastern industrial workers. Like the Grange, it began as a secret society. Its plan was to "unite all people engaged in industrial pursuits," both wageearners and individual producers, into local councils which would set up cooperative stores, ultimately to promote "mutual fellowship and cooperative action among the producers and consumers of wealth throughout the earth."

Begun in Massachusetts, by the end of its first year there were 46 Sovereign stores mostly through-out New England, with 40,000 members. By the end of 1875 they were spread through 14 states. Some stores used the Rochdale system; others sold at cost only to members. This as depression deepened and unemployment swelled. But the Sovereigns of Industry grew too large too fast. Merchants hit them with price wars, and wholesalers and bankers cut off credit. Employers turned a part of the labor movement against them: capitalist stores cut their clerks' wages, claiming that competition with the cooperatives forced them to do it, and some unionists joined in the attack, partly in anger because several locals in their unions had dropped out and joined the Sovereigns as lodges. The Sovereigns' only objective, the attacking unionists claimed, was "to buy cheap, if they have to help reduce wages to a dollar a day to do it." The Sovereigns defended themselves, declaring, "we mean to substitute cooperation, production and exchange, for the present competitive system... we war with the whole wage system and demand for labor the entire result of its beneficial toil." Ultimately it was the depression that killed the Sovereigns. Hard times brought them to life and harder times killed them. Few working people had cash at all, so sales volume in most stores plummeted to next to nothing. Some stores tried a credit system, with disastrous results. At the end of 1878, after only four years, the Sovereigns went down. Still individual cooperative stores could be found in communities all over the U.S. throughout the 1880s.

The Rochdale system went on to become the dominant form of cooperative organization in twentieth century America. Begun in England in 1844, the movement was founded by a group of flannel-weavers who had struck and lost; their aim was close to the Owenite Socialist movement. Besides their original store, they planned common housing, production cooperatives, common land for collective agriculture, and "as soon as practicable this Society shall proceed to arrange the powers of production, distribution, education and government; or in other words, to establish a self-supporting Home colony of united interests or assist other Societies in establishing such colonies." They soon held up a banner of the Cooperative Commonwealth. It was their store system that survived best, although a number of their production cooperatives did quite well, and the movement grew large, focused on distribution. Production cooperatives were consumer-member owned and run managerially, like the stores, and as adjuncts to them. Over a quarter of the British people are now members, and they still plan to issue in their version of a Cooperative Commonwealth someday, which is to come about by the movement literally buying everything.

5 CONFRONTATIONS (1880-1900)

Uriah Stephens

The Noble Order of the Knights of Labor was organized in 1869 in sworn secrecy by members of a Philadelphia tailoring cutters local who were being blacklisted after striking. They aimed "to secure to workers the full enjoyment of the wealth they create, harmonize the interests of labor and capital." One of their First Principles was Cooperation. When they were forced out into the open nine years later, they made their goals public: "to establish co-operative institutions such as will tend to supersede the wage-system, by the introduction of a cooperative industrial system." They called for public ownership of railroads and other commercial transport, of telegraph and telephones, water systems, utilities, the eight-hour day, equal pay for equal work, abolition of contract, convict, and child labor, and "that the public lands, the heritage of the people, be reserved for actual settlers; not another acre for railroad speculators." Under the early leadership of Uriah Stephens and James Wright, the Order grew rapidly. They were not a trade union. Their divisions were territorial, not occupational. Whole trade unions that joined, however, did retain their identity. The Knights were the first attempt to organize all American productive workers into "One Big Union" regardless of skill, trade, industry, race or sex. They were divided into Local, District and National Assemblies, with a centralized structure. Three-quarters of each new local had to be wage-earners; their membership also included individual and cooperative workers. The K of L was among the first to organize white and black into the same union. At their peak they had over 50,000 women members, including many "housewives," who were recognized by them as workers. Knights of Labor songs (c. 1875) One sure way to make a cure And solve this labor question; With heads and hands to tie the bands In steps of Co-operation. * Toiling millions now are waking See them marching on. All the tyrants now are shaking Ere their power's gone. Storm the fort, ye Knights of Labor, Battle for your cause: Equal rights for every neighbor, Down with tyrant laws! During the depression that began in 1873, the capitalist bosses busted almost every union in the country except those underground. Blacklisting was rampant; workers were forced to sign "iron-clad oaths," agreeing to immediate firing if they should ever

join a union. In 1877, at the height of the depression, the country exploded in America's first great railroad strike, which quickly turned into a nationwide confrontation between capital and labor, between the government and the working population. Beginning as a wildcat, the strike quickly spread across the country, involving tens of thousands. Large numbers of workers from every trade and the unemployed helped out. Farmers, many Grangers, disgusted with enormous freight rates, poured out of the hills bringing large amounts of food. State militia in many places refused to obey orders to break the strike and instead fraternized with the strikers. The workers took Pittsburgh, Chicago and St. Louis, in the latter shutting down communication between east and west coasts for a week. For five days the working people of Pittsburgh held the city and organized survival by neighbor helping neighbor; this has been called the Pittsburgh Commune. President Hayes called out federal troops 'to prevent national insurrection." A Republican, Hayes had been elected through fraudulent vote counts in the South, done under Northern troops' protection,to compensate for having lost the support of Northern workers. To appease the Southerners' anger, he made a deal: they recognized his presidency and he withdrew the occupying army and gave them a free hand to deal with blacks. Under his order, the army broke the strike all across the country. All told, over 1000 strikers were jailed, over 500 wounded, over 100 killed. This was the first peacetime use of federal troops to suppress a strike. Congress, frightened by an angry population, quickly voted funds to construct large armories in all the major cities, to be used for domestic control; these still exist today. Many states quickly passed anti-union conspiracy laws. Knights had been a major force in the strike, along with the Workingmen's Party, formed from the defunct IWA the previous year; both had been in leadership positions across much of the country, although neither had instigated the strike, which had been a spontaneous eruption of long-seething anger. But now both were being blamed for it in the capitalist press and from the pulpit. The Knights were charged with being a center for sedition and communism. They could no longer continue as a secret organization and decided to come into the open. They also felt that secrecy had hurt and hampered their organizing abilities over the years, perhaps more than it had helped. Until then their very name had been so secret that members were sworn to never publicly utter it, and even their existence was only speculated on by outsiders. The Knights quickly went into electoral politics, joining the Grangers' Greenback Party in 1878 to form the Greenback-Labor Party, electing six congressmen from the north-east, six from the mid-west, and three from the South. But during the comparative prosperity between 79 and '82, the party faded. Soon after the International Workingmen's Association had moved its General Council to New York, it became clear that it was dead internationally, although it was on the rise in the U.S. In July, 1876, a brutal depression year, almost all socialistic groups in America met in a conference in Philadelphia soon after the Centennial. There they officially laid to rest the "First" International and formed the Workingmen's Party of the US, reuniting the movement in America a few days before the Oglala Sioux, with the leadership of Crazy Horse and Sitting Bull, met George Custer's soldiers at the Little Big Horn.

The program of the Workingmen's Party included the eight hour day; abolition of prison and child labor; free public education; workers' compensation; public ownership of telegraph, railroads and all transportation; and "all industrial enterprises to be placed under control of the Government as fast as practicable, and operated by free, cooperative trade unions for the good of the whole people." Within a year there were 10,000 members in 25 states, with very large numbers attending their mass meetings and demonstrations. Like the IWA before them, they were not electorally oriented, and looked to the unions as the main centers of struggle for social change. But following their success in the Great Upheaval of 1877, they decided to go electoral under a new name, the Socialist Labor Party (SLP), fielding candidates in '78 and receiving thousands of votes in many cities, electing several in Milwaukee. But in the following elections they joined with the Greenback-Labor Party and faded with them. The left wing had its fill of electoral politics by 1880, broke away, and formed the Revolutionary Socialist Labor Party (RSLP). The RSLP stated that its aim was to establish a "free society based on cooperative production," with cooperative associations federating to take care of public affairs in place of a state-type government. They planned to bring it about through "direct action." The differences between the SLP and the RSLP were typical of those in socialist movements in many countries at this time, reflecting the ideological struggle between "social-democrats" and "anarcho-communists." The anarchists would attack the capitalist state directly and do away with it immediately; the social-democrats would take over the capitalist state electorally and use that power to socialize the economy, retaining the structure of a centralized government to take care of public affairs until society advanced to where this structure was unnecessary. The RSLP saw the trade unions and the Knight assemblies as the basic cells of the new order. These would transform themselves into "autonomous communes" once capitalist ownership of the means of production and the capitalist-controlled state machinery of repression were swept away by a revolutionary uprising of workers. American "anarchist" thought, in the Jeffersonian tradition, demanded the abolition of laws in conflict with "natural rights," that is, laws enforcing privilege and private property. With these laws eliminated, individuals and society would be left "free" to exercise their natural rights, returning to their state of natural equality. This same line of thought also lay behind Associationism. The early 1880s were a time of industrial expansion, with machinery introduced on an unprecedented scale. The factory system became general and led to an increase in unskilled and semi-skilled workers. The market expanded over an ever-wider area. Domination of the wholesalers over the smaller manufacturers produced cutthroat competition and pressed wages down. Over five million immigrants, mostly unskilled, arrived in the '80s, the peak of the flood from northern Europe and the beginning of the tide from southern and eastern Europe. The frontier line disappeared: from Atlantic to Pacific all was at least partially settled. American labor was "permanently" shut up in an all-pervading wage system. It was during this period that the Knights began opening cooperative stores. In 1883 there were between 50 and 60 of them, run by locals. It was not unusual for a Knight hall to have a store on the first floor and meeting rooms upstairs. Members got special

discounts. Surplus income went for swelling strike war-chests and, in the following years, for starting production cooperatives. During the early '80s unskilled workers were almost totally unorganized. Each trade was coping separately with its own bosses; solidarity of labor was hardly practiced. When the economy slipped again and fell in 1883, this situation changed. The Knights had 50,000 members then. Wages were being lowered by 15% to 40%. In 1883 the Knights organized their first major production cooperative, a coal mine in Illinois, to be run directly by their central organization. The mine was to be the first link in the economic backbone of the new society. But the railroads refused to lay tracks up to it or to haul the coal. The Knights quickly switched over to a decentralized plan, urging member initiative. Some were formed and managed by local assemblies, and some by groups of individual members. They thought these would be easier to start and be safer from attacks. By '85 enthusiasm was high. "It is to cooperation that the eyes of the workingmen and workingwomen of the world should be directed, upon cooperation their hopes should be centered..." Terence Powderly, successor to Stephens as Grand Master Workman, urged, "By cooperation alone can a system of colonization be established in which men may band together for the purpose of securing the greatest good for the greatest number, and place the man who is willing to toil upon his own homestead." Knight cooperatives were springing up across the US, mostly in the east and midwest. By 1885 Powderly was complaining that "many of members grow impatient and disorderly because every avenue of the Order does not lead to cooperation." By the middle of the next year there were between 185 and 200 Knight cooperatives. Most were on a comparatively small scale. More than half were mines, foundries, mills and factories making barrels, clothes, shoes and soap. There were cooperative printers, laundries and furniture-makers; factories making boxes, nails, underwear, brooms, pipe, stoves; cooperative potters and lumberjacks; almost every industry and numerous products. But from the first the money-power hit the cooperatives hard, making it difficult or impossible for them to obtain credit, supplies and markets. But still most persisted. They tried unsuccessfully to drive a wedge between the wage-earner Knights and the cooperator Knights, blaming the cooperatives every time they laid speedup, wage cuts and layoffs on their employees, claiming this was the only way they could compete. But it wasn't until 1886 that they let them have it with both barrels. Two years earlier, in 1884, the Knights won the greatest union victory in American history up to that time, striking and defeating the Union Pacific Railroad. Incredible numbers of workers began joining, mostly unskilled and semi-skilled, many immigrants, many formerly skilled workers now reduced to apprentices by new machine techniques. By 1886 between 750,000 and a million Americans were Knights, making them the largest labor organization not only in the US but in the world. They had to call a temporary halt to accepting new members, due to the organizational chaos this was creating.

At the same time, the newly formed Federation of Organized Trades and Labor Unions (soon to become the American Federation of Labor), had only 150,000 members, less than a fifth of the Knights. There was a bitter rivalry between the two organizations and their conflicting structures. The Federation, under the domination of Samuel Gompers, was white-only, skilled-worker-only. They espoused a philosophy of "trade-unionism, pure and simple," and limited themselves to bread-and-butter issues. They were against worker cooperatives because of past failures; because obscuring the line between employee and employer confused their role as bargaining agent, which they saw as the unions' basic identity, with the contract the eternal goal; and because cooperatives were associated with radicalism and radical movements, of which they wanted no part. They harbored no ideas of a Cooperative Commonwealth, and were the first important labor association in America to accept and support the wage system as permanent, and not fight for its abolition. The Federation was organized with each trade fighting separately against its own employers for its own advantage, while the Knights felt they could not accomplish their goals unless they brought all workers, skilled and unskilled, into the same organization, and used the tactical strength of the skilled for the benefit of all. So the Knights of Labor, although it was the older organization, was the aggressor, periodically trying to separate whole unions from the Federation and bring them into the K of L. Worker solidarity and the embryonic network of cooperatives were great threats to the employers, their labor market, and to the whole capitalist system. Across the nation the employers formed associations on an unprecedented scale, consolidated their strength, and set their sights upon destroying the Knights. The Eight-Hour movement was sweeping the country. Twelve-hour, fourteen-hour and even sixteen-hour workdays were still prevalent in many industries and areas. The Eight-Hour Leagues had originated in Boston with the leadership of Ira Stewart, a common laborer. They resolved "that cooperation in labor is the final result to be obtained..." The eight-hour day was to be a first step. They organized nationally and called for a national general strike set for May first, 1886, to last until all had won the eight-hour day and the 48-hour week with no loss in pay. This act marked the origin of what later became the international workers' holiday, Workers' May Day. While the Federation officially endorsed the strike, the Knight national organization decided to take no official stand; each local and regional was left to decide on its own. Across the country Knights were in the leadership of the movement, and did much more of the local organizing than Federation members. The Revolutionary Socialist Labor Party was also very active. By 1886 they had 6000 members, with branches in New York, Philadelphia and Chicago. The largest was in Chicago, where they won control of the Central Labor Council. Many Knights were members. The RSLP became a leading force in organizing the national strike. The RSLP was secret, and based in cells of nine members, each a partly autonomous collective. In '81 they had affiliated with the International Working People's Association, a loose federation of worker movements from different countries that many sections of the old "First" International formed when they split off a decade earlier. The Icarian communities were also associated with the IWPA as were the core group of San Francisco labor leaders and radicals who would form Kaweah Cooperative Colony a few years later.

On May Day almost 200,000 struck, with almost twice that number participating in marches and demonstrations across America. But on the fourth day of the strike, violence exploded in Chicago when police shot six workers in the back at the McCormick Harvester plant. That evening the police tried to break up a protest meeting in Haymarket Square, were met with a bomb and fired wildly into the crowd, killing and wounding a large number. Police terror swept Chicago and spread across the country, breaking the strike. In New York, Pittsburgh and St. Louis, Knight leaders were charged with conspiracy. In Chicago, Albert Parsons, a Knight, leader of the Eight-Hour League and member of the RSLP, together with six other RSLP members, were sentenced to death for the bombing, with no evidence against them except their ideas. Only after five were hanged, did a new governor clear them all and release the survivors; still, the party was wiped out. The employers took the opportunity of the Haymarket "Affair" to hit the Knights with everything they had. They did not touch the American Federation of Labor though; they saw their advantage in separating skilled from unskilled workers and race from race. They came down hard on the cooperatives: railroads refused to haul their products; manufacturers refused to sell them needed machinery; wholesalers refused them raw materials; banks wouldn't lend; police, goon and vigilante violence was everywhere; customers were afraid to patronize them. Their entire operations were sabotaged and paralyzed. Within two years of Haymarket, almost all of the larger cooperatives were forced to close shop. Many rank-and-file members were angry at the national leadership for not endorsing the national strike and then not supporting the "Haymarket martyrs." This and the violence caused workers to pour out of the Knights as quickly as they had poured in. A year later the K of L was down to 200,000 members. After 1889 the Knights gave up attempting to organize the great mass of unskilled workers, and fell back on their base of small independent producers, mostly in medium-size and small towns. These artisans had been comparatively immune from the violence. The organization picked itself up and became mainly concerned with organizing supply-purchasing and marketing cooperatives among them. The Knights' defeat by the AFL marked the a ascendancy of business-unionism in the US. This was the only stand that the ruling capitalists were willing to live with now. Thereafter control of the AFL national bureaucracy fell into increasingly conservative hands, despite periodic uprisings of its membership, and the AFL became a Loyal Opposition to monopoly. The destruction of the Knights' industrial cooperatives marks the end of the era when wage-earners and labor leaders looked to these as a strategy for liberating the wageclass from bondage. Experience had demonstrated to the satisfaction of most that industrial worker cooperatives on a national scale could come only after the movement controlled state power, not as the road to it. Besides the cooperatives' vulnerability to attack, the cooperative strategy proved impractical because the dominant means of production had become so costly that they were out of reach of even a large group of workers. Never again would the businessmen permit worker

cooperatives to get a broad foothold in heavy industry, the stronghold of American capitalism. Still, the Knights were not quite dead yet. In 1892, down to about 75,000 members, they joined the farmer cooperators of the Farmers' Alliance to form the Populist Party, to try to take control of the government and clear the way for the movement, as the Greenback-Labor Party had tried a decade earlier. They nearly succeeded, almost electing a president in collaboration with radical Democrats in '96, but then collapsing and slowly fading to nothing. The eight-hour day was finally won with the New Deal. Apart from the Knights, there were production cooperatives in immigrant enclaves throughout this period, as throughout American history, and they were touched less by these events. An observer in 1888 noted their particular prevalence in San Francisco's Chinatown.


The fall of Associationism did not mark the end of secular communalism. Groups of immigrants still commonly formed co-operative colonies. In California alone in the early 1870s there were new colonies of Swedes (Kingbury), Danes (Selma) and English (Rosedale). Usually they sent an advance party to buy the land and make all the arrangements; they would be very collective and cooperative at first, but almost invariably divided up the land into individual lots when they became well settled, and chose to assimilate into the surrounding society rather than remain permanently set apart. Communities continued to be formed by radicals, but in the late 19th and early 20th centuries they redefined their ideological meaning. Most socialists (from socialdemocrats to anarchists) began to see them as attempts to demonstrate the viability of the principles of cooperation and socialism, adjuncts to the mass movement rather than the basic stratagem of it. Many communities in the late '80s were formed by participants in failed mass political movements, in separationist fashion; but rather than aiming for personal escapes, the communalists were trying to create living visions that they hoped would stimulate new political movements. They invariably found their communities harassed and attacked by the same forces that wrecked their political organizations. Between 1882 and '86 an autonomous group of socialists affiliated with the International Working People's Association was very active in the San Francisco area. After Haymarket, they disbanded, and many members and leaders, including Burnette Haskell and J.J. Martin (founder of the local seamen's union), organized Kaweah Cooperative Colony in Tulare County, California. Their idea was "to illustrate and validate the premises on which the labor movement was based." Their concept of the aim of socialist communalism was very influenced by Lawrence Gronlund's book The Cooperative Commonwealth (1884), generally considered the first book to put many of the ideas of scientific socialism into a true American idiom; he called colonization "one way to bring a State to the threshold of Socialism." The Kaweahns, varying

between 50 and 300 in number, homesteaded a tract of 600 acres. By 1890 they'd constructed an eighteen mile road and a ferry, published a weekly magazine, and operated a sawmill, besides building homes, orchards and gardens. They functioned under a system of labor-checks based on the amount of time worked; the checks were convertible for any item at the community-run store. But reactionary forces in the state took note and, at their initiative, Congress quickly passed a bill creating Sequoia National Park out of Kaweah, with the unfounded justification that the original filings for homesteads had been technically deficient. Two years later the Kaweahns were driven from the land by US cavalry and arrested. The Puget Sound Cooperative Colony was founded in '86 at about the same time as Kaweah, by a similar group. Almost all were working people from Seattle and neighboring cities, many previously involved with labor struggles, the Knights of Labor, and the International. After martial law was declared in Seattle over the issue of the importation of Chinese contract laborers to break strikes, many of the leading agitators led a large group into communalism. By the end of the first year there were 400 colonists at the Puget Sound Cooperative Colony, and 500 at its peak. Like all the colonies in the area that were to follow, their main industry was lumber, and they soon had an operating sawmill; they built and operated their own steamship as well. They were set up on a system they called Integral Cooperation (also in use in Topolobampo, a short-lived colony formed on the west coast of Mexico by North Americans); the colony was incorporated and managerial; officers had wide powers; there was only limited worker control; meals were in common but each family had separate sleeping and living quarters. They had immediate problems from growing too large too fast; this was made worse by differences between workers and managers. The colony created a boom in the nearby town of Port Angeles, and many members, disillusioned by too much bureaucracy, moved over there, with the ultimate result that the town dominated the colony, which became insolvent and dispirited, changed into a joint-stock company, and finally dissolved in 1894, swallowed by the town as a community of homesteaders. Many members went on to participate in the populist and socialist movements. In 1886 Henry George ran for mayor of New York on a coalition party formed by the Socialist Labor Party and several trade unions. George was the author of Progress and Poverty, which had appeared a number of years earlier. In it he advocated that the government impose a single tax on the land equal to its real use-value. This would make speculation and landlordism unprofitable, and result in the eventual socialization of the land, which the government would make available to all. The tax, he claimed. would be all that would be needed to run the federal government, and all other taxation could be dispensed with. The George campaign, pretty hot itself, took place in the heat of the Eight-Hour movement. George probably got the most votes, but Tammany Hall was counting. After his narrow defeat and after Haymarket, many of his supporters went off into communalism. "Singletaxer" colonies were formed in the 1890s at Arden, Pennsylvania, and Fairhope, Alabama. Fairhope, a large town today, is still strongly influenced by its origins.


The Farmers' Alliance flooded across rural America between 1887 and '90. It originally grew out of farmers' clubs that were organized spontaneously in many

frontier communities of the west and southwest between 1840 and '70, for mutual protection from "land sharks" (speculators) and cattle barons. It began as a coordinated movement in 1874, organizing cooperative purchasing and marketing, like the Grange. While the Grange was strong, many were swept into it and disappeared. But some retained their independence and, when the Grange began to fall apart and hard times were upon them, the Alliance stepped into the vacuum with enormous energy. By 1890 there were three large separate but connected organizations, one in the north and west, two in the South due to racial segregation. The Northern Alliance (actually mostly in the west), with Milton George in the leadership, had more than a million members; the Southern Alliance, with C. W. Macune, had almost three million; the Colored Farmers' Alliance, with H.S. Doyle leading, had one and a quarter million members, the largest organization of American blacks ever, mainly share-croppers and tenant-farmers. At first they did mostly cooperative buying of supplies and machinery, and marketing of cotton and grain. Like the Grange before them, they soon added groceries and all sorts of dry goods. Farmers were able to purchase supplies on security of their crops. Getting credit from the Alliance freed them from the banks and capitalist suppliers, who would give them crop-liens at huge interest rates, meaning strangulation by everincreasing debts, virtual serfdom. Each local Alliance unit usually had a cooperative store, grain elevator, cheese factory or cotton gin, depending on their area. By the 1890s they had reached California, where they also operated flour mills and in one location a tannery. Farmers Alliance song (c. 1890) I was once a tool of oppression, And as green as a sucker could be And monopolies banded together To beat a poor hayseed like me. But now I've roused up a little, And their greed and corruption I see, And the ticket we vote next November Will be made up of hayseeds like me. (Arthur L. Kellogg) In 1887 the Southern Alliance organized its first big marketing cooperative, the Texas Farmers' Exchange, based in Dallas, dealing mostly in cotton. But it hardly got off the ground. They desperately needed credit but the banks wouldn't advance it, and refused to accept Alliance security notes except at impossibly large discounts. Alliancemen were soon charging there was a conspiracy of bankers, wholesalers, implement dealers and manufacturers set on destroying them. Although it did a million-dollar volume in its second year, the Exchange could not stand up to the constant economic blows it was being hit with, and folded in 1890, charges of internal corruption in management driving in the last nail. But exchanges were soon set up in eighteen other states, trying out several variations of structure. They were all unlike the Grange cooperatives in that they did not issue shares. They rejected the Rochdale systems and preferred to pass on savings directly to members. They were regional in scope, while the Granges were local. In every case the Exchanges were attacked by the banking and business people, and destroyed.

Everywhere farmers were losing their land to the banks, merchants and speculators, and being driven down into tenancy. Half the farmers in the South were tenants after 1890, and so were a quarter of the farmers in the mid-west and much of the east. Spurred by the destruction of the Exchanges in the midst of the worsening depression, Alliancemen began to run for office to change the laws that permitted the banks to rule. "What is life and so-called liberty if the means of subsistence are monopolized?" The Farmers' Alliance, the newspaper coming out of Lincoln, Nebraska, asked. "The corporation has absorbed the community. The community must now absorb the corporation...A stage must be reached in which each will be for all and all for each. The welfare of the individual must be the object and the end of all effort." Alliancemen and candidates supported by the Alliance won four governorships, took the state legislature in nine states and sent three senators and 43 congressmen to Washington in 1890. The Knights of Labor had helped the Alliance write their platform. But bringing about real change was harder than electing candidates, as the Greenbackers had found out earlier. Although bills were passed in Nebraska and North Carolina regulating the railroads, they did not make a dent in the actual freight rates. Bank control remained untouched. It had to be done on a national scale. Soon Tom Watson, new representative from Georgia, presented a plan to Congress prepared by the Alliance by which the government would become responsible for food distribution, paying farmers 80% of its market value. The government would issue new greenbacks to pay for it, whose value would be based on the food itself, not on gold. When this "subtreasury" plan was laughed down as "potato banks" and its advocates as "hayseed socialists," the Alliance turned from both "major" parties and organized a new national party. In 1892 the Farmers' Alliance, the Knights of Labor and several smaller cooperative movements, including the Agricultural Wheel, the Patrons of Industry and the Farmers' Mutual Benefit Society, united to form the People's Party, known as Populist. "Wealth belongs to him who creates it," the Populist program stated, "and every dollar taken from industry without an equivalent is robbery...The interests of rural and civil labor are the same, their enemies are identical." The program called for public ownership of the railroads, telephone and telegraph; for abolition of the private banking system; for public control of the money system on a silver standard; for adoption of their "subtreasury" food distribution plan; for reclaiming all corporateowned land "in excess of their actual needs" and for turning over this land to settlers since "the land, including all natural sources of wealth, is the heritage of the people and should not be monopolized for speculative purposes the adoption of initiative, referendum and recall; and an effective graduated income tax. "We expect to be confronted with a vast and splendidly equipped army of extortionists, usurers and oppressors.. " James Weaver of Iowa, their presidential

candidate, cried, initiating the campaign with $50 in the party treasury. "Corporate feudality has taken the place of chattel slavery and vaunts its power in every state...We have challenged the adversary to battle and our bugles have sounded the march... " They forged an alliance between white and black. 'The white tenant lives adjoining the colored tenant," said Tom Watson. "Their houses are almost equally destitute of comforts. Their living is confined to bare necessities...Now the People's Party says to these two men, 'You are kept apart that you may be separately fleeced of your earnings. You are made to hate each other because upon that hatred is rested the keystone of the arch of financial despotism that enslaves you both.'" But like the Greenbackers they were met with terror and fraud in many areas, particularly in the South; in Georgia fifteen were killed. Still Weaver won in Colorado, Idaho and Kansas, and got over a million counted votes. The strength of the party continued to grow as the depression of '93 hit rock bottom. In 94, a few months after America's second great railroad strike, one and a half million Populist votes were counted, and they won governorships in Kansas and Colorado. But as they prepared for a major assault on the presidency in the next election, the left-wing of the Democrats staged a coup against renominating the corrupt incumbent Cleveland, and nominated instead the upstart William Jennings Bryan on a platform of free silver, part of the Populist program. Though terribly split, the People's Party decided to back Bryan, but with their own Tom Watson as runningmate. This move possibly saved the Democratic Party from extinction, as it had already been virtually eliminated in the west and northwest. Meanwhile the old Democratic machine bolted the party, leaving Bryan without financial support and dependent in many areas on the energy of the Populists. Even though Bryan got almost 47%, the election turned out to be a catastrophe for populism, as the People's Party was now beyond repair as an independent force. With the collapse of the party, the Alliance fell too, as did the other farmer cooperative associations. The party had drained off most of their energy; they had run out of strategies. The Knights continued to fade to nothing. The Democratic Party soon flopped back under control of its right wing. Most local and state-wide Populist legislation was overturned in the courts under the guise of "upholding precedent" and of the fourteenth amendment. The latter, which forbade states to "deprive any person of life, liberty or property without due process of law," had been set up to protect former slaves, but was turned around by the imaginative court ruling that corporations were "legal people." When the Alliance collapsed, the Grange revived in the mid-west, far west and north. By 1908 it would approach the half million mark again, and would remain strong until the Great Depression, when it was again unable to meet its members needs and declined, but again the Grange came back and continues today.


The "Bloody '90s" to Depression (1890-1930)



Debs & Haywood

Throughout the 1890s there was tremendous labor strife. The coal fields of Tennessee were constantly exploding with open warfare. 1892 saw the strike at Carnegie's Homestead steel plant near Pittsburgh, where strikers defeated Pinkertons in a gun battle but then met defeat by state militia. In New Orleans was a general strike. In Idaho martial law was declared against silver mine workers. By this time the trustification of the US was almost complete. The enormous spoils in the wake of the Civil War had long been dished out, and financiers and industrialists settled down to ruling different sections of the country like medieval barons from behind various corporate facades, sometimes feuding with each other, sometimes collaborating. The largest contributed heavily to both "major" parties, the Republicans and Democrats, who had made their peace as twin pillars of the capitalist system. The so-called Sherman "Anti-Trust" Act of 1890 was used to break strikes twelve times in the decade, but never once to break a trust. As a political observer said, "What looks like a stone wall to a layman, is a triumphal arch to a corporation lawyer." In 1893 the economy collapsed again, a financial panic throwing the country deeper than ever into depression. Morgan, Rockefeller, Carnegie, Harriman, Mellon and other millionaires added immense new holdings to their gigantic fortunes, while farmers got thrown off their land and the unemployed starved. Meanwhile unions of a new type were being organized, by industry instead of by trade, and therefore including a broad spectrum of skilled and unskilled workers in their organizations. Eugene Debs was instrumental in getting the railroad workers well organized for the first time, into the American Railway Union; "Big" Bill Haywood, at the same time, was helping organize the Western Federation of Miners. In June 1894 America's second great railroad strike erupted, in support of the workers at the company town of Pullman, where they built rail cars. When the railroads stopped, America stopped. There was tremendous support of the strike among the general working population; again small farmers helped in many areas, bringing food. This strike quickly became like the first, a nationwide confrontation between workers and capitalists. In Chicago, the hub of the action, the Central Labor Council voted for a general sympathetic strike, but before it was to take effect, the corporations called in the army to take charge. There was general warfare between strikers and troops in Chicago. Confronted with overwhelming odds, Debs called for a national general strike, which Gompers and the AFL leadership refused. Debs wound up in jail for six months and the Railway Union was destroyed.

*** Although after the demise of the Knights of Labor, industrial cooperatives were no longer a major factor in America, they could still be found scattered around the country. An observer in 1896, for example, noted that several barrel factories organized by the coopers' union decades earlier in the mid-west were still thriving. Among small producers the labor exchange system made recurrent come-backs. Between 1889 and about 1906 there was a chain of Labor Exchanges mostly in small towns, extending to 32 states at its peak, with 135 locals. Members received "laborchecks" for the estimated wholesale value of the products they contributed; they could use these checks to trade for any other product. The newly organized Afro-American League, with radical leadership at first, was promoting cooperatives of all sorts in black communities throughout the country through the 1890s. In the early '90s there was a movement of Southern blacks to emigrate to Oklahoma and create a black state. By '92 seven towns had been established, eventually 25, based on "close communal life and cooperation," as one resident put it. But the area was poor; they were largely surrounded by Indian land, and there was inescapable competition between the two groups. Still many hung on and their descendants are there today.


Between 1895 and '99 the Cooperative Union of America, based in Massachusetts, made the first attempt to create a national federation of consumer cooperatives. At its peak there were 14 member stores from Maine to New Jersey. A few were old Protective Unions. The CUA joined the International Cooperative Alliance, marking the first time American consumer cooperation was tied to the international movement. But '99, a year of ferocious depression, destroyed many stores and the Union with them. In 1896 the AFL came out in support of Rochdale-style consumers co-ops, while retaining their opposition to production cooperatives: "trade-unionism and cooperation are twin sisters... where one exists the other is almost compelled by nature's inexorable laws to follow... therefore be it Resolved, That (the AFL) recommend to all affiliated bodies... the Rochdale System... and wherever favorable conditions exist to give their aid to such cooperative efforts." Over the next decades, unions around the country began forming them, most notably miners; between 1916 and the depression of '21 it would happen on a large scale.

The mid-90s saw a revival of socialist communalism as a true mass social movement on a national scale, tied directly to another renewal of the mass political movement. Both were stimulated by the ideas of Edward Bellemy and Julius A. Wayland, as well as Gronlund. Bellemy's novel Looking Backward (1887) predicted a benevolent

managerial state socialism in America, brought about peacefully; there were soon over 160 Bellemyite Nationalist Clubs around the country, with thousands of members; they were basically educational groups aimed at helping the new Nation to be born. Daniel DeLeon, Debs, and Helena Blavatsky were all early members. Wayland published The Coming Nation beginning in '93, a socialist weekly which soon had unprecedented circulation, 760,000, never equaled to this day. The paper was instrumental in uniting forces for social change into a new national organization in '97 with a communalist program, the Social Democracy of America. Meanwhile the Socialist Trade and Labor Alliance would carry on in the tradition of the K of L.


After Haymarket and the fall of American anarchism, the Socialist Labor Party (SLP) came back, and in the '90s was no longer dominated by German and other immigrants, but became fully Americanized; until then the majority of their publications were in other languages. With the leadership of Daniel DeLeon, the SLP soared from 21,000 votes in 1892 to 82,000 in 1898, with candidates winning local offices around the country. Their plan at first was to forge an alliance with both the Knights and the AFL: there were strong socialist sectors in both, and DeLeon led the largest Knight local in New York. But by '94 both labor organizations decisively rejected them, and the Knights expelled DeLeon's whole local for its conflicting loyalties. The SLP turned away and formed a new organization, the Socialist Trade and Labor Alliance (STLA), which it hoped would assimilate the entire labor movement. The STLA was structured on industrial lines (not trade), and was modeled after the Knights. The STLA was to assimilate the old unions while the SLP won control of the government through the ballot; together they would bring forth the cooperative commonwealth as a republic of industrial unions. At their height in 1898, the STLA had 30,000 members and 228 affiliated organizations; some had seceded from the AFL and K of L to join them. But the older unions, especially the AFL, effectively attacked them for " dual-unionism," causing fratricidal warfare from which all workers wound up the losers. Ironically, while the SLP was finally getting a quickly growing mass following among the native-born, the inner party was growing increasingly rigid, overly centralized and authoritarian, with DeLeon turning to a doctrinaire "Marxism" that was making the SLP increasingly a sect. In 1898 there was a great internal revolt, resulting in a split from which the SLP and STLA never recovered. The STLA marks a basic change in the radical labor movement's relationship to cooperatives: while they saw cooperativization as the solution to their problems, they put off instituting their plan until after their sister party had gained state power; and then they would not form new alternative industries, but laid claim to the already existing ones. Not long after their fall, many former members would help organize a new, stronger, more independent organization with a similar perspective, the Industrial Workers of the World.


In '94 J. A. Wayland helped gather a group to form Ruskin Cooperative Colony near Cave Mills, Tennessee, where they opened the world's first socialist college, and published The Coming Nation.. Ruskin crumbled after five years on personality clashes, but not before The Coming Nation was used to organize communitarian radicals across the country into an organization called the Social Democracy of America. The Brotherhood of the Cooperative Commonwealth (BCC) was first conceived of by two Maine Populists, Norman Lermond and Ed Pelton. Their plan was to colonize a western state, introduce socialism there, and use it as a base for a national movement. They compared themselves to the freesoilers who colonized Kansas prior to the Civil War. Soon after their founding they connected with a small group centered around Gene Debs which was all that was left of the once-great American Railway Union in the wake of their crushing defeat in the Pullman strike of 1894. Through The Coming Nation, the two groups jointly organized a convention in Chicago aimed at founding a new organization to house the scattered American workers' movement. In June 1897 unionists, socialists, communitarians, Nationalists and radicals of every sort attended and set up the Social Democracy of America (SDA), with a program essentially the Brotherhood's. In the following months Debs worked to raise money for the land, but eventually joined a growing group inside the organization that felt that the colonization project was quixotic and wanted to form a new electoral party instead. The next year, when the Brotherhood-Social Democracy went off to Washington State to found two cooperative communities, the Debs group stayed behind and gave birth to the Social Democratic Party and ultimately to the Socialist Party of America. The Brotherhood and the Social Democracy were closely connected but retained separate identities; the BCC created Equality Colony in '97 and the SDA close-by Burley Colony a year later. The BCC was the larger organization, with 130 local "unions" of supporters around the country, and about 3500 dues-paying members by 1898. Puget Sound, where they chose to settle, was already a radical communalist area. Besides the Puget Sound Cooperative Colony, there was the Glennis Cooperative Industrial Company, both however by then dissolving, and soon Home anarchist colony. There were quickly over 300 colonists at Equality. They lived in large communal houses, with success in farming, milling, fishing, dairying, and other small industries, on 600 acres. But there was soon dissension between the colonists and the national organization, which saw Equality as just the first of many colonies to be organized, but soon realized that the whole project's survival meant a focus of forces on this first one. The colony soon gained complete autonomy; it was structured democratically, through general assemblies; one major debate was whether "Voluntary Cooperation or

Business Methods" should prevail. The national program remained the sphere of the BCC, but, depleted of resources to start further colonies, it soon ceased to exist as a national organization. Meanwhile the Social Democracy of America changed its name to the Cooperative Brotherhood, purchased 260 acres nearby, and founded Burley. By 1900 it had 145 residents, and 1200 member-supporters around the country. But they were having problems similar to the BCC: there was strife between local and national organizations, and differences between directors and workers, which included a large group of anarcho-communist miners from Colorado, who saw things differently from the social-democratic oriented organizers, one of whom left to join the Theosophist colony at Point Loma. Like the other groups in the area, Burley centered around logging. The movement was shaken by the Spanish-American war of 1898, but still held on. Equality's population declined to about 120 by 1900, and continued to fall, due mainly to poor economic conditions in the colony and greatly improved ones outside, with promises of higher income elsewhere luring workers away. They were not close enough to their markets to create any thriving industry, and so produced insufficient money income; there were too many unproductive members. A spin-off from Equality was Freeland Island, begun in 1900 as a group of homesteaders committed to mutual aid and free community cooperation. They soon had 60 members and a Rochdale store, and developed into a permanent community that continues today. In 1905 an anarchist group took over Equality, quickly transforming it from a centralized colony to community of voluntaristic small groups, and changed the name to Freeland. But this caused strife that was never resolved and led to the dissolving of Equality-Freeland in 1907. One legacy of Equality was its very successful newspaper Industrial Freedom, edited by Harry Ault, who would go on to edit the Seattle Union Record and play an important role in the 1919 General Strike. In 1904 Burley Community, losing its spirit, reorganized partly as a joint-stock company, with a Rochdale store. Stagnation continued and in 1913 the community dissolved. The Glennis Cooperative Industrial Company was a highly structured cooperative community in the same area in Washington between 1894-'96. When it fell on discord due in part to its being overly organized, several former members, Oliver Verity among them, formed the anarchist community of Home in 1898, with an association for landholding and mutual aid, and a single-tax plan. By 1905 there were 120 residents, and five years later almost double that. But when McKinley was assassinated by an immigrant who considered himself an anarchist, a wave of persecution hit the colony, both from local vigilantes and the US government; one leader, Jay Fox, was jailed for two months for mailing "obscene" literature advocating "free love." Many important activists in the mass movement, Wobblies and communists as well as anarchists, visited and stayed at Home, including Wm. Z. Foster, Emma Goldman, Elizabeth G. Flynn, and Bill Haywood. Foster was a frequent visitor, worked regularly on their newspaper The Agitator, and finally married a

resident (he was soon to lead the Great Steel Strike and become leader of the new Communist party). In 1919 the Mutual Home Association was ordered dissolved by a judge for financial insolvency, but the community, about 300 strong, remained to become a more conventional community, which continues today. In 1898 the Christian Commonwealth Colony was opened to any and all in Georgia, by a group of Christian Socialists on a former slave plantation, as a cell in "the visible Kingdom of God on earth." The Society of Christian Socialists had been started seven years earlier in Boston, by a group of clergymen, to help bring about a cooperative commonwealth in America; many had been members of Nationalist Clubs. At first the Society did educational and support activities, working with the Populists and other insurgent groups including the strikers at both Homestead and Pullman. But class struggle in "the bloody '90s" was being played for keeps, and as the workers were met with increasingly violent defeats, one group of Christian Socialists drew back and went separationist. Near Columbus, mostly hill and swamp, 150 struggled to survive in harsh and hostile conditions until in the middle of their fourth year their crops failed and they were hit with a terrible malaria epidemic. Other communities of the period: Washington Colony (1883: 25 Kansan families go west and are skinned by a land developer), Union Colony (Greeleyites in Colorado), Altruria (1895: in Oakland, CA., inspired by the W. D. Howells novel), Christian Cooperative Colony (1898: mid-westerners emigrate to form Sunnyvale in Washington; mutual-aid), Roycroft Community (Elbert Hubbard in upper New York).


A large group broke from the old dying SLP, and joined with Debs' Social Democratic Party to found a new party that was to unite most political radicals in the country behind its program within a few years, the Socialist Party of America (SP). "The earth for all the people. That is the demand," wrote Debs. "The machinery of production and distribution for all the people. That is the demand. The collective ownership and control of industry and its democratic management in the interests of all the people. That is the demand. The elimination of rent, interest, profit, and the production of wealth to satisfy the wants of all the people. That is the demand. Cooperative industry in which all shall work together in harmony as a basis of a new social order, a higher civilization, a real republic. That is the demand." The Socialist Party made it clear they were not simply advocating government ownership and control of the economic system; Debs for one distrusted centralized power, and the SP called for a reshaping of government so that it was no longer "above" the people. "Government ownership..." said Debs, "means practically nothing for labor under capitalist ownership of government." In 1900, the first year the SP ran national candidates, Debs received almost 100,000 votes for president; by 1904 it was up to over 400,000.

Socialist Party song (c. 1900) I'11 vote for Debs, for the Faith I have That we'll reach the promised land; A joyous vote and a splendid vote, And a clasp of a comrade's hand. The SP established a Cooperative Information Bureau and over the next two decades were instrumental in organizing cooperatives--mostly stores--all over the country. In the AFL there were two camps: the Gompers right-wing was still predominant, but the socialist left was continually gaining strength, supported by about a third of the unions. The SP's position was to turn the AFL to a socialist direction as soon as they had a majority, which they expected to win soon. But some SP members, Debs included, felt a new organization was needed, one that would organize the unorganized and unskilled militantly and on an industrial basis. The labor aristocracy would never get behind the movement, they thought, and the AFL leadership would sink ever deeper into collusion with the employers. In 1905 a group of 200 labor leaders and socialists including Debs, DeLeon, Mother Jones, Lucy Parsons, Bill Haywood and Charles Moyer met in Chicago. Haywood called it "the Continental Congress of the Working Class." There they formed the Industrial Workers of the World, 'one great industrial union embracing all industries..." which would "...develop the embryonic structure of the co-operative up within itself the structure of an Industrial Democracy...which must finally burst the shell of capitalist government, and be the agency by which the workers will operate the industries, and appropriate the products to themselves." They adopted the old nickname of the Knights of Labor, the OBU, One Big Union: but unlike the Knights (and unlike DeLeon's Labor Alliance) the IWW had a decentralized structure. Much of the Socialist Party did not support the IWW. They feared their party would be the victim in the inevitable war between the IWW and AFL. The SP officially dissociated itself. Within a short time the IWW was splitting apart internally, over questions of the value of electoral politics and of the role of violence and sabotage. In 1907 an uprising of the western left-wing, led by Haywood of the Western Federation of Miners, took over the organization. Under this group the IWW denounced elections entirely, relying only on "direct action" in the streets and in the factories, and ultimately on a national general strike. "A strike is an incipient revolution. Many large revolutions have grown out of a small strike." Thus the strike-to-co-operative transition of early American workers became a microcosm of the national strike to bring about the cooperative commonwealth, which was threatened by the very structure of the IWW. They denounced contracts with employers and declared they would never sign one, reserving the right to walk out at any time. State ( i.e., government) ownership was not part of their program; this was a basic difference with the Socialist Party. The Wobblies would do away with the political "state" (that is, power structures above and separated from the whole actual people)

immediately and entirely; the administration of society's survival would be organized from below, by the workers themselves through their own coordinated organizations. In this way they were in the Associationist and anarchist tradition (the French would call a similar movement "syndicalist"). They thought that by turning workplaces into political organizations, organizing all workers industrially and socializing all industry, the people could gain direct political power and "abolish the state" immediately. At this time many major industries were still totally unorganized, and the AFL was doing little to change that. With great energy the IWW leaped in and began to Organize the Unorganized. In the east they became strongest in the ghettos, among immigrant groups. In the west they were strongest among mine, lumber and migrant workers, and in port towns. They waged "free-speech" struggles up and down the west coast, flooding the jails of many towns with great numbers of migrant workers, to win the right to speak and organize. Many immigrants, blacks, Chicanos and women belonged. They led strikes of miners in the west, lumberjacks in the northwest and south, construction workers on the west coast and in Canada, dock workers on both coasts and the Great Lakes, steel and textile workers in the northeast, farmworkers in the west and mid-west. Wherever Wobbly migrants went they set up large camps with cooperative survival networks. Local organizations were very independent and loose, making an accurate count of membership impossible. At their height in 1917 the government estimated that about 200,000 Americans were Wobs, although others have estimated half that. Membership tended to soar after a victory then slip away, partly due to this lack of a strong organizational structure. IWW songs (c. 1905) Then up with the masses and down with the classes, Death to the traitor who money can buy. Cooperation's the hope of the nation, Strike for it now or your liberties die. * In the gloom of mighty cities, Mid the roar of whirling wheels, We are toiling on like chattel slaves of old, And our masters hope to keep us Ever thus beneath their heels, And to coin our very life blood into gold. But we have a glowing dream Of how fair the world will seem When each man can live his life secure and free; When the earth is owned by labor And there's joy and peace for all In the Commonwealth of Toil that is to be. (Ralph Chaplin) But from the first the IWW met with goon, vigilante and government violence. As the Wobs grew, so grew the violence. Meanwhile, the Socialist Party was also growing in strength. In 1912 Debs received over 900,000 votes, the SP had about 120,000 members, elected the mayor of Milwaukee and of 80 other cities and towns around the country, 12,000 local and state representatives, and sent its first congressman to Washington. Republicans and Democrats merged in many areas to fight them. The largest single block of votes came from populist country, small farmers west of the Mississippi; the Oklahoma party had about a third of the state's votes. But in 1914 the national leadership, afraid that too strong a flood of farmers into the party would dilute their wage-earner

orientation, chose to delay mass recruitment in rural areas until after they'd consolidated their urban base. Thus they weakened their forces, while a group of impatient farmers broke away and formed the enormously successful Non-Partisan League in North Dakota. Woodrow Wilson, elected as a peace candidate, was leading the country into World War I, an enormous clash over world markets. The war was tremendously unpopular among workers and there were great outcries against the US jumping in. The IWW resolved, "We as members of the industrial army, will refuse to fight for any purpose except the realization of industrial freedom." After Congress declared war, the IWW took the moderate course of advising members to register for the draft as "IWW opposed to war." The Socialist Party was by then affiliated with the "Second" International, founded in 1889, made up of autonomous workers' parties around the world. They had all agreed to try to prevent another imperialist war, and to not support it should one break out. Yet when it did, all the workers' parties lined up behind their governments, all except the Italians, the Russian Bolsheviks and the Socialist Party of America. The American party was split and many "social-patriots" resigned. But the majority stayed firm and the SP chose to "advise" workers everywhere to resist their governments by "mass action," because the war could only bring "wealth and power to the ruling class, and suffering, death and demoralization to the workers." But the AFL supported the war, and Gompers joined the government, using his position to try to wipe out all opposition to his dominance over the labor movement. The Espionage Act was quickly passed and used to jail almost all IWW and SP leaders and many members for long sentences. At least 2000 were imprisoned in the worst conditions, many for as long as two years without trial. Free speech was almost totally suppressed. The entire radical press was shut down, including The Masses, arguably the best cultural magazine in the country, published cooperatively for eleven years. In the fall of 1917 nationwide local elections took place, while suppression of dissenters was coming down all over the country, just after the "Green Corn Rebellion" (when poor farmers of the South Canadian Valley, Oklahoma, mostly members of the Socialist Party, rose in arms to try to stop the war). Despite persecution and accusations of treason, the Socialist Party made great gains, with hundreds being elected around the nation. After the war, government repression of radicals did not cease but expanded. On January 2, 1920, simultaneous raids were made in 30 cities, and over 10,000 were arrested, most released without charge but still receiving severe beatings. J. Edgar Hoover cut his eyeteeth in these raids. The newly-formed Communist Party was violently attacked along with the IWW and SP. Still, ten months later Gene Debs got almost a million votes running from a jail cell for president. In 1924 the SP joined forces with almost all the non-Communist left behind La Follette and the Progressive Party, polling nearly five million votes; but the coalition quickly collapsed.

By the mid-1920s both the IWW and the Socialist Party were beyond repair, crippled not only by the government, by goon squads and by the AFL right-wing bureaucracy, but by internal feuds, by feuds with each other and with the Communists.

The Cooperative League of the USA was founded in 1916 in Boston, as an umbrella organization to unite and develop the movement, with the Rochdale version of the cooperative commonwealth as their goal. With the leadership of James Warbasse, they set their first step to try to unite the then-thriving store systems with the farmer cooperative federations. "Cooperative (farm supply) purchasing and consumers' cooperation are one and the same thing." But the farmer cooperators rejected the League's program of socialization of the land (through purchase by gigantic cooperative corporations), which would inevitably lead to the farmers' eventual transformation into employees. It was not until 1934, the height of the depression, that the merger would be accomplished, at the ideological price of the "cooperative commonwealth." In 1916 AFL affiliates in several industries began organizing Rochdale co-ops on a large scale. Miners (coal, copper, and iron) from Minnesota to West Virginia; textile workers in New England; railroad workers across half the country. Most were organized separate from the unions themselves; the United Mine Workers (UMW), however, ran them directly. By 1921 there were 70 UMW branches, run by miner committees. But two years later they were destroyed by financial maneuvers and arson. In the depression of 1921-'23, almost all the union coops went down, and the AFL became much more guarded in support. The Farmer-Labor Exchange, based in Chicago, was organized in 1922 just as many stores were going down. Over the next decade they marketed produce, coal, and other products through unions and coops. In the early 20th century there were hundreds of cooperative stores in the US. In the far west the Pacific Coast Cooperative Union, the California Rochdale Company, and the Pacific Cooperators League operated wholesales with many affiliated stores. In the northeast was the Right Relationship League. Many immigrant groups ran cooperatives in the east and mid-west, including Finnish, Swedish, Czech, German, Lithuanian, Jewish, Polish, French and Belgian. In the northwest was the Cooperative Wholesale of America. The National Cooperative Association was the first attempt to create nationwide wholesale operation.


Around Seattle between 1917 and 79 there was a great mushrooming of cooperatives. Many were connected with unions. The Consumer Cooperative Association, the largest group, ran eight groceries, a coal yard, and two tailor shops. Less than two weeks after the armistice ending World War One, 35,000 AFL shipyard workers in Seattle struck to raise wages for the lower-paid unskilled. The government sent a secret telegram to the yard owners telling them to resist any raise. But the messenger carrying it delivered it to the union "by mistake." In response all the city's unions

voted sympathetic strike. The cooperatives provided much help during the general strike. For a week the workers ran the city through the Central Labor Council, providing all the necessities of survival. This was one of America's great worker cooperations. Besides the existing cooperatives adding their forces, workers in each trade and industry organized themselves and made contributions. Twenty-one eating places were set up around town and 30,000 meals a day served to whomever needed one. Milkwagon drivers obtained milk from small farmers and distributed it. Garbage, hospitals, even barbers and steamfitters reopened worker control. The Labor War Veteran's patrolled the streets keeping order without using force. "...95 percent of us agree that the workers should control the industries," the Seattle Union Record, a union-owned paper, stated. "Some of us think we can get control through the Cooperative movement, some of us think through political action, and others think through industrial action...If the strike continues, Labor may feel led to avoid public suffering by reopening more and more activities UNDER ITS OWN MANAGEMENT. And that is why we say we are starting on a road that leads--NO ONE KNOWS WHERE!" But faced with a military confrontation and tremendous pressure from the AFL International headquarters, the General Strike Committee finally voted to go back. Almost immediately the union press, the Socialist Party and IWW were raided and many arrested, although the IWW and the SP had not even led the strike. In 1920 the Seattle Consumer Cooperative Association, under tremendous pressure, collapsed, followed by most of the cooperatives in the area. Depression hit the country hard, and by the end of 1921 almost every chain and federation went bankrupt; by the mid-'20s there were few cooperative stores anywhere in the US.


After defeating the People's Party and wrecking the Alliance, big business moved to prevent a populist uprising and to break the traditional small farmer-wage earner alliance. One way they tried to do this was by co-opting the farmer cooperative movement. They moved to reorganize the movement on a "business" basis, getting small and larger farmers into the same cooperatives, while numerically depleting the small farmer class. Between 1900 and 1914 "farmer institutes," part of the new Department of Agriculture "extension" program of "education," organized many farmer cooperatives. In 1911 the earliest Farm Bureau was set up in Broome County, New York, by the local Chamber of Commerce, a railroad, and the federal government, as simply part of the Chamber of Commerce, to "educate" the farmers on capitalist business methods. They hired a "county agent" to do the work. This system quickly spread, funded by a Rockefeller endowment, by railroads and business men's associations. In 1914 it was recognized by federal law and put into nationwide practice. Organizing a Farm Bureau was made a prerequisite for the government installing a county agent in most states. The Bureaus included all farmers, rich and poor. They were given member control, but under supervision.

The Farm Bureau, by allying small and large farmers, served to prevent the former from uniting with wage-earners for independent political action. The larger farmers, employers themselves, had no basic class interests different from employers in the production industries. These led the Bureau to become the bitter foe to farm labor it is today. Meanwhile farms had to be ever more mechanized to survive. Small farmers of one decade often found themselves to be wage-earners in the next. Although the government and chambers of commerce tried to restrict the Farm Bureaus to education, locals had member-control, and in many poorer areas began to take a head of their own, and organized cooperatives directly. Soon locals formed state federations and in 1919 they created a national structure "as an instrument to solve marketing problems on a nationwide cooperative plan." For several years a somewhat radical group gained control of the new Federation, and joined with the Farmers' Union in the depression of the early '20s to try to create a national centralized marketing system of various commodities, with the goal of gaining market control; but after three years their system collapsed. The federal government quickly stepped in with "assistance" in setting up a nationwide system under a board chaired by a big manufacturer, dropping the goal of market control, while conservatives took over the Farm Bureau Federation. The Society of Equity, begun in 1902, had over 40,000 members in 400 locals by 1920, mostly in the northwest; but like the Farm Bureau it included larger as well as small farmers, giving it a different character from the earlier cooperative movements. The Farmers' Educational and Cooperative Union was first organized at the same 1902 harvest, and also grew strong through the mid-'20s. But the Farmers Union was patterned after the old Alliance and renewed the militant small farmer tradition. By 1920 it covered the cotton belt, the mid-west and the west coast, organizing purchasing, marketing, credit, grain elevators and stores. Together with the Grange and a few newer organization, they are among the most progressive small farmer organizations today. During this period the number of independent farmer cooperatives grew enormously. In 1890 there were about a thousand of these, most patterned after the Alliance "state agencies," about 700 dairy, 100 each of grain, vegetables, and fruit. By 1915 there were over 12,000 independent farmer cooperatives, mostly in regional federations. But in the early '20s a large number went down. The 1900s brought enormous changes to rural America. The last years of the 19th century brought telephones--many cooperative--and free mail delivery. By 1910 autos were widespread; by 1920 there would be a good highway network across most of the country. The first rural electrical cooperative was formed in 1914: within a decade these co-ops had brought electricity to numerous areas of the US. In the same period the full effects of mechanized farming were first felt. Meanwhile the percentage of workers in farming declined drastically. While in 1875 agricultural workers made up half the workforce, by 1900 they were down to one-third; by 1920 they were down to one-fourth; by 1930, down to one-fifth. Small farmers were continually losing their land and becoming proletarianized. In the South three out of four labored under the yoke of tenant-farming, share-cropping or cash-lien. Farm labor was replacing the farm family as the basic mode of agricultural production.

In 1911 North Dakota farmers set up Equity Cooperative Exchange, for marketing. But when big business refused them trading rights on the Grain Exchange, they decided to go into politics like their predecessors to try to clear the way. At first many were members of the Socialist Party, but when the SP decided against mass recruitment of farmers in 1914 (ironically because it had been too successful too quickly, and threatened to alter the nature of their party), a group led by A.C. Townley broke away and formed the Non-Partisan League. By 1918 the League had won the governorship and control of both state legislative houses, and began to enact their program of state-run elevators, packing plants, flour mills, a state bank. But in the depression of 1921 the bank and a number of their industries failed financially. Private banks refused help. In '22 the League almost entirely collapsed; but during the 1930s it revived and returned to power during the worst depression years. The League also had strength in adjoining states, but never became dominant. In power it found that it could never really achieve its goals as long as it was an island in a national capitalist market economy, and its projects remained subject to the fluctuations and coercions of the market. (A similar progression was followed by these grain-growers' cousins just over the border in Canada: the struggles of cooperators led to the Cooperative Commonwealth Federation, which took over the government of Saskatchewan in 1944 and united with the Canadian Labour Congress in 1961 to form the New Democratic Party, today still vying for national power.)


During this period a number of cooperative communities were formed. In 1906 Upton Sinclair, author of The Jungle, founded a commune in New Jersey, Helicon House, which was destroyed by fire after only two years. Sinclair would go on to lead the EPIC movement in California in '33. Llano del Rio Co-operative Colony was organized in 1914 on a large plot of land about 45 miles north of Los Angeles. One of its main founders was Job Harriman, who had been Debs' running mate in the 1900 national election and in 1911 narrowly missed being elected as LA's first Socialist mayor. A year after its founding Llano had 150 members and by 1917, about a thousand. It operated a print shop, a shoemaking shop, cannery, laundry, machine shop, blacksmith, rug factory, soap factory, fish hatchery, as well as cattle, hogs, rabbits, a bakery, a cabinet shop, brick makers and many other shops, crops and industries. But they were continually harassed by authorities, had constant organizational and managerial problems, let themselves grow too large too fast, found they had over-extended themselves and did not have the water to support themselves in this location. Llano sold shares, like the old Greeley system, and this, along with its managerial structure and internal factionalism, was part of its undoing; even more, its failure simply reflected that of the mass movement. In 1917 they found new land in Louisiana and the next year, while the Socialist Party was being torn apart for its opposition to World War I, left California and founded New Llano. In Louisiana they had their ups and downs, finally disbanding in 1936.

Another socialist community similarly structured, Fellon, was begun in 1916 in Nevada, but quickly collapsed with the war. Japanese immigrants formed the cooperative colony of Livingston in California in 1910. They did so well that they both scared and inspired state planners, who began proposing that the state set up colonies of non-Japanese nearby. Returning veterans from World War I were militantly demanding a share of America's wealth and land. This led, in California, to two cooperative land settlements in 1919, Durham and Delhi, under the auspices of the state government and with the planning of the state university. But the land was very poor, and turned out to be not capable of supporting the colonists. The sites had been chosen with the racist side motivation of using colonies to limit the expansion of Japanese immigrant farmers in the area. The economic planning of the "experts" was equally poor, and the post-war deflation brought the colonies to ruin. They finally disbanded in 1931, as the country was sinking toward the bottom of depression. In the mid-20s there were at least two urban cooperative complexes set up in New York City: Hudson View Gardens and the United Workers Cooperative Colony. The Gardens were founded by an immigrant German doctor in '24; besides 354 apartments, the cooperative operated a commissary, laundry, restaurant, barber and tailor shops, and other services; they continue today, by local standards "middle class." The Workers Colony was organized in '27 in the Bronx by a group connected with the Communist Party; they were the largest co-op housing project in the country, with 743 apartments and many service and buying cooperatives; with the depression came foreclosure, but the residents retained management control until 1943. The Theosophist movement ran three communal schools in California between 1897 and the mid-1930s. Helena Blavatsky, co-founder, had belonged for a while to a Bellemyite Nationalist Club. Two of the communal schools were organized theocratically, but the third, Halcyon, was run on democratic principles; there were clashes among them. Theosophists were active in the EPIC movement. The Come-Outers were a religious congregation who separated from the rest of society onto Lopez Island in Puget Sound in 1912 as a communal sect of 175 members. Pisgah Grande was an evangelical pentecostal commune in California between 1914 and '21. Among their many undertakings was a "freestore," similar in essence to those of the mid-1960s.

The Russian Revolution turned the socialist movement around in the US, as it did throughout the world. For the first time a radical socialist group gained real state power. Widespread cooperatives played an important role in the revolutionary process, and for a while were almost the only economic sector functioning; but a new type of organization was serving as the primary cell of revolution, the workers' council. The Socialist Party of America welcomed the Bolsheviks' triumph, and when the Communist "Third" International was organized in 1919, asked to be admitted as

the US member party. But the Bolsheviks demanded that all parties: reorganize on their system of "democratic-centralism," with semi-military discipline; subordinate to their own International Central Committee; give up all participation in elections; and lead their working classes to take power "at once" through "mass action" and establish "proletarian dictatorships." When the SP leadership refused, still committed to democratic socialism through elections, the Comintern rejected them and called on the left-wing of the party to either take over or destroy them and form a new party. The left-wing of the SP, young and idealistic, jumped in with great energy and began winning control of locals all over the country. There were about 110,000 members at this time. The old guard struck back, expelled 40,000 members, suspended 30,000 more, and invalidated the elections. Angered at this undemocratic procedure, many additional members quit, and by 1921 the SP was down to 25,000 members and slipping fast. Many of these former members and former Wobblies quickly organized themselves into two parties: the Communist Labor Party, an open mass party of mostly American-born, and the Communist Party (CP), a cadre organization of mostly Russian immigrants, each with about 35,000 members. Both participated in the great post-war strike wave, and organized workers' councils in many cities, with most success in Portland, Butte and Seattle. But the government raids of 1919 destroyed the councils, drove both parties underground, and decimated their membership. The parties joined forces, down to about 10,000, reorganized on the Bolshevik system and affiliated with the Comintern. Ironically, by that time the Bolsheviks had given up the call for immediate revolution, in favor of the old Second International strategy of working in the unions and participating in elections; the new American CP found themselves quickly doing these very things they had violently denounced. Still, unlike the SP (or the SLP), the CP worked secretly in the unions; it was this, together with their domination by the Comintern (until it was dissolved in '43), that made them so susceptible to conspiracy charges. They quickly fell into the role of apologists for almost any act of the Bolsheviks. Meanwhile the Soviet Union was hardening into a highly centralized state run by the Party; with militarized compulsory labor, the "proletariat" was enormously broadened instead of abolished, no longer employees to private bosses but to the all-enveloping state, with "workers' control" relegated to mean indirect control over managers instead of direct collective democracy in the workplace. This is what the American Communist Party wound up pointing to as the prototype of "socialism" in place of the ultra-democracy of the Paris Commune and a free democratic cooperative commonwealth. While Wm. Z. Foster, former Wobbly and leader of the organization of Great Steel, was running for president on the Communist Party, assisted by his wife Esther, whom he'd met at Home Colony, another comrade from the old IWW and from Home, Bill Haywood, was going off into separationist communalism to escape persecution. He joined with 200 other American citizens to found Kuzbas Colony in 1924 in revolutionary Russia, only to clash almost immediately with the new "workers' state," resulting in "Big" Bill's expulsion and in many other colonists choosing to leave. Meanwhile another American separationist group was forming Seyatel (Seattle) Commune in the Caucasus, with 87 members; in the 1930s they were reorganized into a collective farm and today are a farming community of about 1500.


Throughout the 1920s the CP was deeply involved in the consumer cooperative movement, organized and led many co-ops, and became a strong force in the Cooperative League. Under its influence, the CL congress of 1924 proclaimed the coop movement to be part of the general labor movement, with the goal of "cooperation of all workers' movements for the benefit of the exploited toilers," over objections of the conservative board. The CP's greatest strength in consumer co-ops was in the East, in Jewish enclaves, and in the Lake Superior region, among immigrant Finns. The Finnish groups formed for a while a dominant section in the regional Cooperative Central Exchange; twenty of their member co-ops were aligned with the CP: five in Michigan, eleven in Minnesota, and four in Wisconsin. But the Cooperative League's conservative wing moved to purge the Communists from their organization. In the League congress of '28 they were able to make pass a resolution affirming the Rochdale movement's "traditional neutrality in politics," and banning any further discussion of "Communist, Socialist, and other political and economic theories." Two years later the Cooperative Central Exchange conservatives forced the Communist co-ops out of the wholesale, causing the latter's economic strangulation; at the League congress later that year, the CP co-ops were stonewalled out, leaving the League dominated by "pure and simple" cooperators. This purge paved the way for the 1934 alliance between farmer and store systems. The League dropped its original goal of socialization of the land and changed its policy to support of individual ownership, replacing 'the cooperative commonwealth" in its program with "the cooperative sector of the economy," and redefining the basic aim of the movement "not to supersede other forms of business but to see that they are kept truly competitive." Thus the Cooperative League bought a truce with big business. With the alliance, National Cooperatives, the farmers' nation-wide wholesaling, distributing and manufacturing organization, set up five years previously, was opened to urban stores. Today the League remains the major umbrella organization of Rochdalestructured cooperatives.

7. FROM THE BOTTOM (1930-1960)

SouthernTenant Farmers Union

In the '30s there were large numbers of small semi-visible cooperatives. "Self-help" cooperatives, mutual-aid and barter became widespread. Exchanges between laborers and farmers, work for produce, became part of daily life in many areas across the country. In Seattle the Unemployed Citizen's League organized larger scale mutual-aid. Through them the fishermen's union found boats for the unemployed to use cooperatively; local farmers gave unmarketable fruit and vegetables over to their members to pick; they gained the right to cut firewood on scrub timberland. The League had 22 local commissaries around the city, where this food and firewood was used to exchange for every type of service and commodity, from home repairs to doctor bills. The Unemployed Exchange Association (UXA), based in Oakland, California, brought together 1500 into a self-help producer-consumer barter cooperative, providing members with farm produce, medical and dental benefits, auto repair, housing and other services. It ran a foundry, a machine shop, and lumber mills in Oroville and the Santa Cruz mountains.The Self-Help movement was also very large in southern California; state-wide networks were set up. By the end of 1932 there were similar "Self-Help" barter organizations in 37 states with over 300,000 members. But the limitations of trying to subsist from the scraps of a collapsing society were great. In Pennsylvania unemployed coal miners formed cooperative teams to seize their means of survival. They dug coal on company property, trucked it out and sold it. It has been estimated that at least 20,000 miners were involved. Company police trying to stop them were met with force; not a jury in the state was willing to convict them. In the pacific northwest, several cooperative plywood factories were started. They made it through very difficult times and by 1980 there were eighteen of them, producing about 12% of the plywood in the US. They are structured with workers electing managers to oversee the operation but leaving the workers much control. They have given themselves salaries 35% higher than workers in capitalist factories, better safety conditions, health and dental care, lunches, insurance paid by the cooperative, gasoline at wholesale rates, and other side benefits.

In 1932 small farmers and wage-earners joined once again into their traditional alliance, and together won the New Deal. There was a resurgence of the left parties too, with Norman Thomas getting almost 900,000 on the Socialist ticket and Foster 100,000 on the Communist in 1932; this election marked the end of serious national electoral threats from the left until Henry Wallace got a million votes on the Progressive ticket in '48. One of the New Deal's first acts set up a Division of Self-Help Cooperatives, providing technical assistance and grants to cooperatives and barter associations. In some, the cooperators were able to receive pay for producing articles for their own use. Their rural program of "community projects" included setting up cooperative industries such as a wood mill, a tractor assembly plant, a paint factory and hosiery mills. But the program was under-financed and the industries usually met with antagonism and often sabotage from their local business "communities." The New Deal's Works Progress Administration (WPA) offered a small cash income for make-work labor, but had a destructive influence on many cooperatives, particularly Self-Help barter co-ops. Cooperators asked the New Deal administrators to let work in the Self-Help co-ops count as WPA hours, but they refused. The result was that large numbers left the co-ops to get the small cash income that the WPA offered. Many co-ops folded, including Oakland's U.X.A. Then when the WPA was also closed down, many former cooperators were left unemployed. Within a year three subsistence homestead colonies were in partial operation in the southwest. Casa Grande, Arizona was the largest. The land was farmed through a centralized cooperative, while each family had its own subsistence plot. There were cooperative handicrafts, food processing and other forms of mutual-aid. This project, like most other New Deal cooperative projects, was burdened by bureaucratic paternalism and under-capitalization, while being attacked as "socialistic" and was soon discarded. The New Deal's Farm Security Administration (FSA) helped organize around 25,000 cooperatives among about 4 million low-income farmers, usually providing loans to get the co-ops started. Besides supply purchasing and product marketing, the FSA backed cooperatives for farm machinery, breeding stock, veterinary services, insurance, water and medical care. The Tennessee Valley Authority organized electricity and fertilizer cooperatives, as well as canneries, mills, dairies and craft cooperatives. In the South were many "lend-leasing" cooperatives, where small farmers leased whole plantations together. The most significant effect of the New Deal on the farmer cooperative movement was created by Banks for Cooperatives. This became a member-controlled system of financing farmer cooperatives, as well as telephone and electric cooperatives. After having been set up with government seed-money, the Farm Credit Administration became self-supporting. It is a dominant organization today, and includes twelve banks solely for funding farmer cooperatives.

By 1939 half the farmers in the US belonged to cooperatives, and most were large and incorporated. But the movement, along with the number of small farms, was shrinking. In '37 the New Deal "greenbelt town" project was begun: cooperative villages surrounded by wide belts of common land to be left permanently undeveloped. Sixty were planned, but only three completed by '39, when the project was abruptly shut down and much of it sold off to speculators. The cooperative traditions in the towns remained however, and Greenbelt, Maryland, is today the largest concentration of consumer co-ops in the US. The Tennessee Valley Authority planned a total regional cooperativization of the area beginning in '37. One of their first projects was to build the town of Norris for employees at the dam. Norris was to become totally cooperative, a demonstration project to train people in cooperative principles to provide leadership for a vast cooperative movement the New Deal projected for the mountain people. But Norris never got past being a government project and a company town. Thus the legacy of the New Deal toward cooperatives was very ambivalent: in many cases it was very helpful, but in others it offered only false promises or a kiss of death.

In '33 Upton Sinclair outlined a plan for ending the depression in California, in a widely-distributed pamphlet. His plan, EPIC (End Poverty In California), was to create "land colonies whereby the unemployed may become self-sustaining" in the countryside, while in the cities EPIC would procure "production plants whereby the unemployed may produce the basic necessities required for themselves and for the land colonies, and to operate these factories and house and feed and care for the workers." These two groups, in the cities and countryside, would "maintain a distribution system for the exchange of each others products. The industries will (constitute) a complete industrial system, a new and self-sustaining world for those our present system cannot employ." EPIC planned to incorporate the widespread "self-help" cooperatives into the program. The plan's supporters began forming EPIC clubs; in less than a year Sinclair won the Democratic Party nomination for governor, dumping out the "regular" machine. With the slogan Production for Use, Sinclair and EPIC waged an uphill campaign against both the Republicans and the Democratic machine, who joined to defeat him, spending twenty to thirty times as much and controlling virtually every major newspaper and radio station in the state. Roosevelt promised privately to come out in support, but then never did. Still, Sinclair got 38% of the votes while the Progressive candidate received another 13%. But the old machine politics were soon back in the driver's seat. With the collapse of the campaign, numerous EPIC clubs turned their energies to organizing co-operatives, mostly stores and buying clubs, reviving the consumer movement. Consumers Cooperative of Berkeley, which became the largest consumer

cooperative in the continental US, with 100,000 members, stemmed from the joining of groups of EPIC and of Finnish immigrant cooperators.

During the depression many small farmers, particularly Farmers' Union members, turned to radical actions. In '34 blacks and whites in the Arkansas cotton belt, dominated by huge plantations, formed the Southern Tenant Farmers' Union in semisecrecy. The Union championed cooperatives, organized buying clubs and ran a large cooperative farm. As growers began switching over to wage-labor and evicted tenants land in large numbers, the Union responded with strike, which the growers in turn answered with a reign of terror assisted by the National Guard.

The '30s were a time of great workers' struggles. In 1934, the San Francisco general strike; '36 the sit-down strike--factory occupation--to organize General Motors and the wave of sit-downs that followed across the country; '37 was the organization of Little Steel. Socialists, Communists and former Wobblies were among the leadership of all of them, helping win social security, unemployment insurance, accident compensation, aid to the needy, employees' right to organize, and helping lead the organization of the giant industrial unions of the CIO, probably American labor's greatest triumph. Nevertheless, the socialist movement in the US was falling apart. This can be attributed partly to the repression, partly to the continued splits, and partly to the failures of the Soviets. The movement fell into a state of great confusion, and lost much of its sense of direction and vision. Many people had hoped the New Deal would lead ultimately to a form of democratic socialism, but Roosevelt's programs served to strengthen monopoly capitalism in the end. "Bread and butter" demands were acceded to, heading off any mass independent movement of wage-earners and small farmers, while radicals were assimilated and coopted. Roosevelt's programs were not able to pull the economy out of its depressed state; this happened only when the country geared for war. As in World War I, the government took charge of the economy and it became in effect planned (but for corporate benefit, not for citizens' equal needs).

The Catholic Worker Movement organized numerous collective and communal projects beginning in the '30s, including a collective farm in upper New York, which continues today, Tivoli. Sunrise Community, organized by a Jewish group in 1933 in Michigan, grew to over 300 quickly but collapsed on ideological struggle after three years. Celo Community, founded in the mountains of North Carolina in '37 by a group of cooperative-socialists, continues today.

Bayard Land Community was begun in 1936 in Pennsylvania, with 17 families homesteading on community-owned land, practicing cooperation and mutual-aid, and trying to be ecologically sound. Connected with the community was the School of Living, organized by Ralph Borsodi. Out of the School and Bayard came a number of cooperative communities in the early 1940s: Van Houten Fields and Skyview Acres in New York State, Bryn Gweled and Tanguy Homesteads in Pennsylvania, May Valley Cooperative Community in Washington State, Melbourne Village in Florida. All of these are still functioning successfully, ranging in size from about ten to fifteen families apiece. In the late 1960s a new generation of School of Living communities would be born. Religious communalists continued however to turn away from mass society and form communities, many of which survive today. The Vale, in Ohio, was founded in 1940 by a group of fifteen families, mostly Quaker, committed to cooperation on common land. Koinonia Farm was begun in '42 not far from Plains, Georgia, practicing "partnership" cooperative farming on communal land, surplus income from each member's crops going into a communal fund. When they took in their first black members in 1957, they were met with physical and economic violence. About 60 strong, they still hang on. Zion's Order, in Missouri, begun in '52 by a group of Hutterite background, is now an interracial community of about 40. The Bruderhof, a Christian group in the Hutterite tradition, formed in 1920 in Germany, fled Hitler, and immigrated to the US in 1954; today they have large communes in upper New York, Pennsylvania and Connecticut; unlike most earlier immigrant anabaptist groups, they take in outsiders, and are today made up of people from a wide variety of backgrounds. Reba Place Fellowship was founded in 1957 by a group of Mennonites, and is today a community of about 250 living as an extended family neighborhood in Evanston, Illinois.

As soon as the US entered World War II, almost the entire American left enlisted, the opposite of their action in the First World War. The Communists went so far as to disband for the duration, supporting Roosevelt. Ironically, while the American people were fighting for democracy and freedom, American big business was fighting for power and markets. While small farmers and their sons were dying overseas, agribusiness was rising back home: it staged a major attack against the Farm Security Administration, by '44 had it crippled and two years later managed to shut it down. The number of small farms continued to drop. And while unionists and their sons and daughters were dying overseas, rightists stayed behind and took control of the unions. There was a boom in co-op stores during World War II, and many farm-supply regional co-ops began handling groceries too. The United Auto Workers in Detroit and the United Rubber Workers in Akron organized cooperative store systems. But with the war's end consumer-goods' prices dropped, and there were widespread failures, including several mid-western regional wholesales and the UAW group. This rise and fall followed a pattern similar to that around World War I. As soon as the war was over, big business launched the "cold war," purging the few remaining militants out of the unions entirely, instituting anti-communist oaths, kicking thousands out of jobs and blacklisting many thousands more. Federal troops

brought the great post-war strike wave to a cold stop. The Taft-Hartley Act, written by the National Association of Manufacturers, virtually repealed the New Deal's Wagner Act, went far towards destroying internal union democracy, and paralyzed the movement. Like Northern veterans returning home after the Civil War, veterans returning home after World War II often didn't know what hit them: after bleeding for freedom and democracy, they often found wage-slavery waiting for them. The unions they'd fought so hard to win were now often being used against them. The Attorney General declared hundreds of organizations "subversive;" a million members were kicked out of the CIO as the right wing took control and merged with the AFL; Eisenhower gave away huge amounts of public land, resources, plants and power installations to corporations, while discharging 7,000 government workers as "security risks." Under the Internal Security Act freedom of speech was restricted and the FBI authorized to compile lists of "risks" to be rounded up "in event of a national emergency." By 1950 there were very few consumer or industrial cooperatives in the US, with only several notable exceptions. It may have looked to an observer in the late 1950s that American capitalism would remain without serious challenge for a long time to come. But the 1960s were just around the corner.


Bay Warehouse Collective

Farm workers were still almost totally unorganized when the National Farm Workers Association (soon to become the UFW) was formed in 1962. Among its first acts was to set up community mutual-aid associations, among which were a cooperative store and a credit union in Delano, California. Full-time boycott workers usually lived in union-run communal houses. The Poor People's Corporation was organized in Jackson, Mississippi, by a former field worker of the then-active SNCC in 1965.Within four years they were running thirteen producer cooperatives and a marketing co-op, producing sewing, leather-and wood-crafts and candles, with over 800 members, mostly former sharecroppers. The 1964-'65 black voter registration drives and the Selma to Montgomery "march for Freedom" led by M. L. King had one result in the formation of the South West Alabama Farmers Cooperative Association. Within a few years it included 1800 families, making it the largest agricultural co-op in the South. Originally eight of the families were white. But harassment by racist politicians and businessmen followed, and banks and suppliers refused to deal with them until the whites withdrew. The "inter-communalist" Black Panther Party, begun in 1966 in Oakland, organized a host of "survival programs pending political revolution." In the late '60s and early '70s these included distribution of free shoes (from their own factory), clothing, food, health care, plumbing repair, pest control, and transportation for the aged. Communal houses provided survival for party workers they promoted cooperative housing for the community. La Cooperativa Agricola del Pueblo de Tierra Amarilla was formed in 1967 by twenty families in northwestern New Mexico, in the wake of the armed raid on the local courthouse by the Alianza de Mercedes, in an attempt to secure the return of stolen ejidos (guaranteed by US treaty to traditional groups of cooperative settlers). They pooled over 600 acres of land for collective farming and grazing, for selfconsumption. They soon had a clinic, law office, job service and shoe store.

The first "hippie" comune was started in Trinidad, Colorado in 1965. "Drop City: To sponsor and create the avant garde of civilization, utilizing all the remnants, at least of art, science, technology, etc." The Drop City Newsletter, 1966 The Community for Non-Violent Action, deeply connected with the Committee of the same name (developed in the late '50s in opposition to the spread of nuclear weapons and plants), organized a communal farm of their 40 acres in Connecticut during the '60s and took in many draft opponents and resisters during the war; in '68 they were attacked by a squad of armed "Minutemen," but held their own during a pitched battle. "We create the seeds of the new society in the struggle for the destruction of the empire. For our generation that has meant the birth of communalism and collective work in the most individualist, competitive society in the world. Revolution is the midwife bringing the new society into being from the old." Weather Underground, 1974 COUNTERCULTURE Beginning in the mid-1960s, thousands of people, mostly young, moved out of the cities into rural cooperative communities and communes, and tens of thousands stayed in their own communities and worked to create a survival network outside of and against the capitalist system, with a common ideological base of working to build a new social system based on cooperation and sharing "within the shell of the old.' At first the mass media called it the "counterculture" or "alternative." Although most of its participants, the author included, did not know it at the time, it was stemming from one of America's oldest and deepest traditions, while we thought we'd come upon something new. The roots of the counterculture go back to the late 1950s, when young people in cities around the country began moving into inexpensive neighborhoods, creating at first simply loose networks of scattered friends and acquaintances helping each other survive as best they could, joined together by their alienation from the dominant society. Most were also underground cultural centers. Among the earliest were in New York and San Francisco; by 1960 their centers began to move from the "bohemian" and "beat" Greenwich Village and North Beach, over to the lower East Side and the Haight-Ashbury, which became the early nuclei of the "hippie" movement and the counterculture. Between '65 and '66 cooperative and collective apartments and houses became common, the first underground newspapers appeared, the first rural "open" commune formed. Then the enormous explosion of '67-'68 centered around the Haight: the freestores, free clinics, schools and universities, the Diggers' free food projects, the legal collectives; then the food conspiracies, collective stores, worker collectives and cooperatives. By 1970 there were countercultural organizations around the country. The basic idea was to withdraw energy from the system of competition and exploitation, and use it to create a new system based on cooperation, which could expand to embrace all of society when the old system collapsed, as many naively expected to happen imminently.


The "left's" rediscovered the "collective" form of organization during the early Civil Rights and student movements of the 1960s. A collective is a work group in which all members have equal power and decision is by consensus (that is, with unanimous consent). A collective can be formed for almost any purpose, short or long term. Many American Indian tribes have traditionally used the collective form in their councils. Kids all over the world naturally form collectives to play games. Groups such as the Quakers and Mennonites have used the collective form for hundreds of years. It is the traditional form of the anarchist affinity group. A collective is unbureaucratic, anti-hierarchical, based on the most direct participatory democracy and genuine equality. It gained great popularity in the 1960s and '70s and stimulated the movement so much because it helped break through the type of formalistic "democracy" that too often turned out to be a sham, both in its capitalist form and in its "democratic-centralist" form. The collective system can create a stronger closer work group than either the majority rule system or the boss-system, and can help prevent factions from forming. In conjunction with councils and committees, collectives have been used as large group organizations, such as the Iroquois Confederacy, some of the "new wave" Food Systems, the anti-nuclear Livermore Action Group, Earth First! From the Civil Rights and student movements, the collective form found its way to the anti-war movement, the New Left, the counterculture, the women's movement, the ecology and anti-nuclear movements. Almost all the early countercultural forms such as freestores, communes, "underground" newspapers "free" schools and universities, collective gardens, cooperative houses and food conspiracies, chose the collective form instinctively. From these developed the organizational technology that laid the base for the worker collectives and collective-cooperatives that appeared in many areas of America in the 1970s. Collectives began to be used to organize a wide variety of activities: small industries, stores,education, childcare, art, communications, counseling, legal services, recycling. Collectives doing community service work were often "open," so almost anyone could join or participate. Like the open commune, the open collective had limitations but was irreplaceable for projects that attempted to draw in as much community energy and input as possible. Most of the participants in these were unpaid volunteers. Worker production collectives, on the other hand, were generally "closed," with membership by invitation. Some of the early counterculture organizations, such as free clinics, would continued for decades in a few cities. But most of the early counterculture would a natural death after a few years, giving birth to new and changed institutions. "Free universities," for example, gave way to a large variety of "alternative" educational organizations. At the same time, older cooperative movements were changed by the new; from the first there were inter-connections between the old and new wave cooperatives and cooperators. The consumer cooperative store movement greatly expanded during the 1960s and '70s, while the farmer cooperatives continued shrinking and merging. Very old forms of cooperation found rebirths, such as in the pacific northwest, where the traditional barter fair was revived in the 1970s.

The counterculture in the cities and towns in the 1960s and '70s paralleled that in the countryside. Many of the early work collectives tried to provide basic social services that were not being supplied by capitalist society. The free clinics, law collectives and free schools were mostly formed by young professionals. Others were connected to political movements, like the Young Patriots' clinic in Chicago and the Black Panthers' in Oakland. Most clinics functioned through a collective of physicians, paraprofessionals and volunteers. Almost all had some combination of control by the worker collective and the community. Most survived through donations and grants. Freestores were run entirely on collective energy. The idea was simple: people could bring and take what they wanted and needed. The result in many places however turned out to be that most were soon being destroyed by people who would come at favorable hours and clean out anything saleable. Most freestore collectives burned out this way, and the system usually gave way to free boxes scattered around the community, a more efficient method. The San Francisco Diggers' system of gathering necessities from where they were bottled up in the community, and giving them away, also burned out because the need was endless and the strategy limited. Across the Bay, the Panthers in a more organized way (partly by long boycotts) convinced community businesses to recycle some of their profits back into the community through the Panthers' social projects. "Alternative" news media grew to mass proportions around the country by the late '60s, filled with information that was impossible to come by in the capitalist media. Besides newspapers, radio collectives were formed in some areas. The organizing force was almost always people with connections to sources of money; but the projects themselves were staffed by people coming from all social classes. The class problem ran through all countercultural organizations, including rural communities: since it was only people with access to money who could gather the resources to get the projects started, they usually wound up in control, at least in the beginning. Many founders never relinquished control, and those projects never became truly cooperative. Communal and cooperative living became an urban as well as rural movement. The main motivations behind it were both to live a more collective life-style and to have affordable housing. The movement was deeply motivated by the insight that "the personal is political": in order to change society we must change the ways we relate to each other in our daily lives, many of which changes need not be delayed until after a political revolution; on the contrary, "the revolution" has to be waged in daily life today. One group combining personal and political struggle was the Movement for a New Society, a network of small autonomous living collectives in seven cities, working for non-violent radical social change. They came out of the anti-war movement in 1971 and were active in the anti-nuclear movement. Their largest center was Philadelphia, with about a hundred members in twenty communal houses in 1979.

Very few communal houses really developed into long-term extended families, as some of the early ideologists had hoped; there was usually continual turnover in collective houses. Collective living did not seriously undermine monogamous sexual coupling, which continued despite premature forecasts of its demise, although sometimes in a looser form. Similarly, monogamous coupling continued in the rural communes and communities too. Sexual practices in communal living were scarcely idistinguishable from practices in the larger society. The vast majority of communalists eventually became involved in a couple relationship and a biological family household. This pattern did not undercut the collective living movement, which continued. However, the structure of a non-sexist cooperating family household, carried over into mainstream society. Today the biological family household is commonly organized on more egalitarian principles, no longer rigidly divided by sex-roles.

The earliest work collectives were mostly connected with radical communication media: presses, book stores and film. This reflected the social movement they were coming out of. These were followed by artisan and industrial collectives and cooperatives beginning around 1970, both in urban and rural areas. They differed from earlier American industrial cooperatives mainly in that they chose worker control through the collective consensus decision-making system over the majorityrule managerial system predominant since the early 19th century. They went beyond profit-sharing schemes to the degree that most thought of themselves as part of a larger social movement. They were generally committed to doing good work at fair prices, not whatever the market would bear. Although often isolated from other groups, most still felt that they would connect with the rest of the movement further down the road. They differed from communes of course in that the members worked but did not all live together. Like the communes they could be seen as both microcosms and cells of a new potential system, at the same time that they retained an identity as part of the old. The worker collective is centralized both in terms of the work-process and economically, with each worker paid through the enterprise; the collectivecooperative is decentralized, and simply maintains the means of production which the workers use individually or in sub-groups. The worker collective is adaptable to almost any field, while the collective-cooperative is usable mainly by skilled artisans and craft workers. Let me clarify this by personal example. The woodshop I work in was originally organized as a centralized collective, part of Bay Warehouse Collective. The collective as a whole took in all work and was responsible for it, and we paid ourselves salaries. Later, because it better suited our changed situation, we decided to switch over to a cooperative system whereby we are each responsible for a fair share of shop maintenance and expenses, while the economics of any particular job is handled individually by the actual worker or workers. Thus we became a cooperative economically while we retained the collective structure of group organization. The centralized work collective and the collective-cooperative are probably about equally common in the US today.

There are uncounted numbers of these cooperative and collective work groups around the country. Almost all are small. Most were formed with few resources, by the workers involved, in fields that require no great outlay of capital for machinery and raw materials. The workers in many started out semi-skilled. By pooling energy, resources and skill they found they could do together what few could have done alone, gain at least partial independence and freedom from capitalist work-bondage. There are collective and cooperative bakers, teachers, truckers, mechanics, farmers, carpenters, printers, food-handlers, cabinet-makers, taxi-drivers, medical workers, sellers, artists, technicians, machine-operators, cooks, editors, etc: almost everywhere in production, distribution and services except heavy industries. They exist under a variety of legal forms: incorporated cooperatives, jointpartnerships, non-profit corporations, unincorporated associations. Many have no legal existence at all, and operate in the fringe areas of the economy. Since capitalist law requires all group "enterprises" to conform to a corporate or partnership structure, the collective structure is forced into an underground existence; most collectives use an "acceptable" structure as a front. Cities which had the largest concentrations of worker collectives and cooperatives in the 1970s and '80s were the San Francisco Bay Area, the Boston area, Seattle, Portland, Minneapolis, New Haven, Austin and Madison. Not surprisingly, many found that the price of freedom was hard work for low pay, at least until a collective or cooperative got their skills and organization together. Wage slavery in the same area depresses working conditions for cooperative, collective and individual workers too. Among the earlier work collectives in the Boston area were the New England Free Press, Red Book (store), and Newsreel (films). these were followed by New Hamburger Cabinetworks, Walrus Woodworking and Cambridge Auto Co-op, around 1970. By 1980 there were over fifty worker collectives in and around Boston. Besides real worker collectives and cooperatives, phony ones cropped up too: these were often formed by young businesspeople with a small amount of idealism and not quite enough capital to get their businesses off the ground. To compensate, they would try to exploit the efficiency of collective labor, and attempt to convince workers to accept low salaries in exchange for a certain amount of collective control of their job situations. The owners would likewise accept a low salary, but also retain the growing capital of the enterprise, which would eventually accrue into a large amount if it were a success. Most of these wound up with the workers rebelling, the enterprise quickly dropping any collective pretense and becoming a standard business. In Berkeley-Oakland, one of the earliest collectives was Taxi Unlimited, collectivized in 1965, in time to play a role in the Free Speech Movement; others included Build (carpentry), Uncle Ho's Mechanix Rainbow, Movement Motors, Alternative Food Store, and the Cheeseboard, all formed between 70 and 72. In 1980 there were over 150 collectives and collective-cooperatives in the San Francisco Bay Area. Bay Warehouse Collective, where I worked, was founded in Berkeley, California in 1972. As centralized collective we ran an auto repair shop, a print shop, and a

woodshop out of a large warehouse. All shop income went to the central collective, which paid workers a salary based partly on need. At its height Bay had about 35-40 members, and also operated a pottery shop, a food conspiracy, a theater, an electronics shop, a collective garden, and let space to a legal collective. Bay Warehouse Collective was formed out of the wreckage of an "alternative" trade high school (Bay High) formed in 1970. The school was nominally structured as a democratic collective, but a sharp struggle soon developed between shop workers and academic workers (who were also the legal administrators) over real control and over the academic workers' refusal to do manual maintenance work. Some of the teachers didn't want to sweep the floor. The shop workers staged an insurrection, took over, kicked out the administrators, disbanded the school and, shortly after I joined, we organized Bay Warehouse Collective. Each shop (auto, print and wood) made internal decisions that affected its separate functioning, as a smaller collective inside the larger one; new members were taken in by each separate shop. We were about equally divided between women and men, with men in the majority in auto and wood, women in the majority in print. There was a lot of struggle revolving around sexism; the women were very supportive of each other, and only the men who were seriously trying to struggle with the problems were around for very long. Our average skill level was not high: far too many were scarcely beyond an apprentice level; but together we combined our knowledge, corrected each other's mistakes, and turned out reasonably professional work. The print shop did a lot of work for many progressive groups in our area, some free, some almost free; all three shops contributed our skills to the community at times, and gave many people supervised access to tools. Like most countercultural organizations, there was no one ideology, at least in words: the organization itself contained most of the ideas. For some it was enough to work in a non-bossist non-sexist shop, although salaries were pathetically low; others saw us becoming more communal and buying large houses to live in, eventually branching out into the country; still others dreamed of us growing large and strong enough to become--in federation with other collectives and cooperatives--a challenge to the capitalist order, with the final goal to be able to do our work for where it was most needed by society, not for those who could afford it. We did not have a share system; the ongoing collective and not individuals "owned" the capital: members who left had no claim to a share, and new members did not have to 'buy in." This was in effect a machine and tool "trust," and functioned to stabilize the Collective in the same way a land trust stabilizes a community, giving it a life of its own. But the warehouse we inherited from the school was too costly for our needs and abilities; we simply did not find ways to make our energy outflow flow back to us transformed into enough dollars to provide for our needs and pay our exorbitant rent, so we folded after a year and a half. Yet we did not really fail. We disbanded the larger Collective into three autonomous worker collectives, each of which found a smaller space. The print shop retained its centralized collective structure. The auto shop became a joint-partnership. The woodshop became a collective-cooperative. Inkworks, CarWorld and Heartwood all continue today.

Three other collective spinoffs from Bay Warehouse were Nexus and Seven Sisters in Berkeley, and Coastfork Artisans Guild in Cottage Grove, Oregon, all doing woodworking and construction. Worker collectives and cooperatives have become an accepted part of the American scene in many places. They keep a vision of a different and feasible system alive in daily practice, while providing survival for their members free of wage-slavery (but not however free of landlords and the market), and offer part of a strategy for deep social change. They represent the embedding of the counterculture in the working population; their ultimate structural meaning is workers' control and selfmanagement.

Collectives and cooperatives connected with food cut across rural-urban lines, became the most inter-connected, the most ideologically developed, and had the most farreaching effects of all the counter-cultural organizations. In the late 1960s buying clubs - "food conspiracies," as they were called in many places - were formed in cities and towns across the country. Most were based on member energy and labor requirements, and run through democratic and collective systems. Many were connected with small local and regional organic farms, and made "natural" foods available in their areas for the first time, while providing the farms needed outlets. Between five and ten thousand were formed across the country by 1975. In the early '70s "new wave" co-op stores began appearing, run by worker collectives, many stemming from food conspiracies. They differed from the earlier co-op stores in that they were non-managerial; in some the worker collective comprised the entire membership, while in others workers and member-customers shared control. When co-op stores began appearing in an area, the conspiracies generally took a dive, as most of the same products were being provided almost as cheaply, and with some added convenience. Meanwhile, "regular" markets also began stocking organic lines, providing competition at the alternative system's strongest point; the conspiracies and stores, due to their small size, were unable to be competitive with the supermarket chains in almost any other area. In response, wholesales began being formed, some by independent collectives, some by federations of stores and conspiracies. Trucking collectives connected the whole into broad interlocking networks on both coasts and the mid-west. City-wide and regional "Food Systems" attempted to grow large enough to create a stable economic base for the whole movement and to create a viable alternative to the capitalist food chains. From the Seattle Workers' Brigade and the Portland Area Food System, down to the Southern California Cooperating Communities, across to the Tucson Peoples' Warehouse, the Austin Community Project, Minneapolis Peoples' Warehouse, the Federation of Ohio River Cooperatives (extending over a six state area), and the New England People's Cooperatives, in the mid-1970s the Food System stretched coast to coast. The Food System movement, based in "new wave" wholesales and regional federations around the country, became central to the entire counterculture movement, and as such was the center of ideological struggle over the aims and strategy of the

movement by the mid-70s. Some saw the movement as primarily part of an overall struggle against the capitalist system, thought that it should be focused to serve the working population basically, should be anti-profit, and that the movement's capital should not be "privately" owned, neither by groups of workers or consumers. Others saw the movement as primarily economic and serving all classes, with "ownership" remaining decentralized in worker and consumer groups, which could decide questions of "profit" or "non-profit" as they saw fit. There were not two clear-cut camps, as each organization had its own variation of worker vs. consumer control, federation vs. centralization, etc.. There were often different viewpoints within the same organization. The mid-1970s were also a time of crisis for Food Systems around the country. When many small collectives and cooperatives attempted to federate into larger organizations, they came up against the problem of how to grow large enough to be economically viable without becoming managerial bureaucracies like many of the older co-ops started in the 1930s. This, together with the economic recession and runaway inflation of the decade, caused most to remain on shaky foundations. The Austin Community Project was begun in 1972 to develop alternative distribution of natural foods. In three years it expanded to include two co-op stores, two buying clubs, four organic farms, and collectives doing distribution, baking, canning, recycling, a restaurant, etc.. with 1,000 to 1,500 members. But in 1976 the Project collapsed from over-extension and disbanded, many of the member groups along with it; but other groups carried on. In Seattle the Workers' Brigade, formed in '74, brought together into a joint organization a group of collectives doing baking, food distribution, bookkeeping and a maintenance and trucking collective; it continued into the 1980s. Some, like the Federation of Ohio River Cooperatives and the Arcata (CA.) Co-op, became consumer-owned and collectively operated, combining worker control and social responsibility in a democratic manner. A few, such as the San Francisco Common-Operating Warehouse, took a democraticcentralist structure. Democratic-centralism means elected and recallable representatives forming a central directing committee with a wide latitude of power, its majority decisions binding on all members. Democratic-centralism, when it is true, can combine (hierarchical) democracy with efficiency. All too often however groups have called themselves democratic-centralist when in reality they were merely centralist, with no structure making leadership truly responsible to membership, and real power residing in a self-perpetuating clique atop a helpless bureaucratic pyramid. Small groups describing themselves as "democraticcentralist " attempted to take control of Food Systems in several cities, in order to turn the Food Systems into part of their larger agendas and programs. By mid-1975 the Food System movement had reached an ideological crisis in many areas, and exploded first in the Minneapolis People's Warehouse, sending shock waves around the country. The ideological issues were quickly buried in a fog of conflicting personalities and rhetoric as commonly happens in factional struggles. In

the Minneapolis People's Warehouse it involved a "collective" which probably wasn't really very collective, and a "democratic-centralist" group which demanded worker control, used force to get it, then took on three new workers but soon fired them when they demanded that worker control include them too. When the "democraticcentralist" group staged an occupation of the Warehouse, many of the member co-ops and collectives left and formed a new competing warehouse. Food Systems and warehouses around the country took sides, with each or both Minneapolis warehouses being boycotted by various other groups in different cities. The store movement in the area was not big enough to support both, and both warehouses tottered on the verge of financial extinction until a court ordered legal violence to reinstate the original group after about six months. The movement in the area and around the country was badly shaken. The San Francisco Haight-Ashbury Food Conspiracy was begun in 1968, reaching 150 member houses in '73; across the Bay, the Berkeley-Oakland Organic Food Association had some 21 affiliated neighborhood conspiracies. But by 1976 both had lost most of their membership and were in a state of near collapse. Meanwhile however the San Francisco People's Food System was being formed, by some of the most active people leaving the Conspiracy. By '76 the Food System was growing large and strong, with member collectives and co-ops on both sides of the Bay. But factional strife erupted in 1977, partly a spillover from struggles in the prison movement, and perhaps instigated by outside forces trying to wreck the System. At the time there was an "indeterminate sentence" system in California prisons. A prisoner who had a job waiting on the outside could often get an early release. Some collectives in the San Francisco People's Food System began working with prisoner organizations and taking in former prisoners, particularly people in prison for political reasons. But in the prisons were competing and mutuallyantagonistic prisoner groups and organizations, often accusing each other of being infiltrated by police agents. Their feuds spilled over into the Food System, resulting in a shoot-out in one of the most successful stores, Ma Revolution, on the corner of Telegraph Avenue and Dwight Way in Berkeley. Ma Revolution immediately folded and took the San Francisco People's Food System down with it. At the time, many participants thought that the San Francisco People's Food System had been a target of government undercover agents, who had infiltrated, disrupted and destroyed so many other progressive organizations in that decade. The following year, in 1978, the old Food Conspiracy was reorganized by the communal-socialist White Panther Party, and revived as a communal enterprise, with all member-customer energy requirements removed; under this system it grew to sizable proportions in the Bay Area for a few years. All together there were about two dozen "new wave" warehouses around the country and about a thousand stores in 1980, doing a half billion dollars annual volume, with state-wide federations in many areas, and interstate cooperation. A network of connection and federation among food collectives, co-ops and small organic farms extended nationwide. Still the movement remained on a shaky financial basis, and was kept alive more by people's energy and visions, than by accumulated capital.

The commune movement of the '60s had elements of both separationism and social revolution, both secular and "spiritual." Although there have been communes and cooperative communities in the US throughout its entire history, this was the first time in this century that communalism became a mass social movement. It stemmed from a deep rejection by many young people, of what America had become, and an equally deep faith that something better was possible, something more in harmony with the planet and with the best in human nature. The counterculture expressed a conviction that if enough people decided that social change should happen, they could made it happen. In its separationist aspect it embraced the philosophy of "dropping out," having as little dependence as possible on the existing system. In its social revolutionary aspect it saw large numbers abandoning the dying cities and moving out onto "liberated" land; this land could serve as a chain of revolutionary bases, where the energy withdrawn from the old system could be used to build a whole new world. There was a millennial atmosphere about the movement at first. The early movement was inextricably tied to the movement against the war in Vietnam. The first "open commune" of the '60s was Drop City, begun in the spring of 1965. Three young people, taking the "Dropper names" of "Curly Bensen," "Drop Lady" and "Clard Svenson," bought a small plot of former goat pasture in southern Colorado, moved onto it and declared it open to anyone to live there with them as a communal family, leaderless in structure, with no preconceived or permanent rules, sharing resources, work, survival. They had met at the University of Kansas. Clard was from the area, from a Mennonite family; Curly and Drop Lady were from New York, second generation American socialist Russian Jews. They began building domes to live in; this was the first use of them for community housing. The next year when the commune had between fifteen and twenty members, myself among them, and several dome completed, we began receiving national attention, first in the underground press, then in the mass media. This publicity touched off the explosion of communes and communities in the following years. Because the domes were a technological innovation arguably better for housing than traditional construction, in a very visible way they seemed to symbolize a new and better society, of which Drop City's communal social system and collective democracy were the microcosm. The domes also referred back to the ideas of Buckminster Fuller, inventor of the geodesic dome and advocate of the rational use of technology for the common good of the whole people and planet. Drop City was utopian in that its declaration of openness to all people was in direct contradiction to its small physical size, which could not possibly hold very many. But we also advocated the practical course of others starting similar communes and communities, which could be done on a comparative shoestring, as we were doing, on inexpensive land, using scavenged and recycled materials, and connecting with the good will and survival cooperation of the people in the surrounding community. We made decisions collectively: nothing was considered decided until everyone was satisfied enough to go along with it. This system took into account depths of feeling as well as numbers, unlike the majority-rule system. It worked pretty well, even when the group grew larger (our height was about fifty);there were frustrating times, usually when two individuals had an ego problem, but over all, most things (a couple notable exceptions jump immediately to mind) got straightened out. We treated all except

very personal possessions as common property, and had a common clothing room where any traveler in need could be supplied. In the fall of 1966 we formed a nonprofit corporation to hold the land, with outside friends as officers to look after the long-run preservation of the community, and with the directors changing with the current membership. From the first, we saw ourselves as part of the growing mass movement that was arising spontaneously all around us, created by the same forces for social change that were forming the other movements of the '60s. There was talk of Drop City as the first of many inter-connected communes around the country, where people could go who wanted out of the old culture and into something better; communes could be decompression chambers from the old into the new society, where the best in people could be freed and permitted to blossom into a truly revolutionary force; they could be test-tube societies of the future and cells of the new society, bases for the spread of these revolutionary ideas as well as bases for the people practicing them. The old oppressive system could die of its own dead weight if a new generation chose not to join. Communes began quickly sprouting in the southwest and around the country. In New Mexico, Drop South, its spin-off the Lower Farm, and New Buffalo were all begun the following year. They were "open communes" like Drop City, and also very influenced by the Indian Pueblos and the Chicano ejidos. Tolstoy Farm, in Washington State, had begun earlier in 1963 as a cooperative community based on the principles of Gandhi and Tolstoy. As Brook Farm had been swept up into the Associationist movement, Tolstoy Farm was swept up in the Counter-culture. It was declared "open land" in '66, and soon had one large communal group and many smaller ones and individuals scattered on the land. The "open land" concept was different from that of the "open commune." Anyone could move onto the land but there was no communal commitment. Residents could share and cooperate as they chose. The next year Morningstar in Sonoma County, California, was "opened;" and nearby Wheeler Ranch followed. Soon all of these were enormously over-crowded. Almost all the early communes and open land used the collective consensus system for decision-making (to the degree they had any identifiable system at all). Most tried to retain what was useful and humane from modern technology, while returning as much as possible to basics and to the soil. While most had gardens or farms and small craft industries, probably all maintained outside incomes by members working or by other means. None evidently developed an adequate and reliable source of income. Many of the communities connected with older cooperative structures in the larger communities in which they were situated. Drop City got its water and electricity from the local cooperatives that had been serving the area for decades. Without the help and mutual-aid of neighbors and friends throughout the local population, we never would have survived as well as we did. Most nearby communities established cooperative relations with each other. Drop City helped New Buffalo with planting

and harvesting, for example, and New Buffalo gave us use of their tractor; we shared wholesale buying and members crossed over regularly between groups. The concept of "openness" started out as a strength in the movement but eventually turned into a weakness. Open communes proved to be generally unlivable in the long run because they were too unstable. Since people did not choose each other, they were often not committed to each other. Not every two people can share the same bathroom and kitchen in peace. The communes attracted not only people willing to work for their survival, but also people looking for free trips. Within a couple years all the open communes decided to set population limits, declare the land "closed" and begin taking in new members by invitation only. But the momentum was not lost and by 1968 a new wave appeared. These were mostly closed from the beginning. A similar progression had taken place 140 years earlier: New Harmony had been "open" at first and had attempted to go to the extreme sharing of a commune; when this proved an unworkable combination they retreated to "closed" cooperation. The second wave of communities in both the earlier and the present movement ranged from full communes to land cooperatives. Among these "second wave" communities were Libre in Colorado, Twin Oaks in Virginia (with an elected managerial system), Reality Construction Company, Morningstar East and Lorien in New Mexico, Mullein Hill in Vermont, Wooden Shoe Farm in New Hampshire, The Farm in Tennessee, Cerro Gordo in Oregon. A new generation of communities inspired by the School of Living sprang up, including Heathcote Center in Maryland and Deep Run Farm in Pennsylvania, both of which helped to develop the land-holding system of the "community land trust," probably the most developed system, designed to give the community true permanence apart from the individuals participating in it at any given time while retaining membercontrol. After the flood of publicity Drop City received in the summer of '67 (the so-called "Summer of Love"), we set a population limit and became in effect a "closed" community. But this did not stop us from being overwhelmed by the unending stream of visitors the publicity brought. While in the early days the main spirit of Drop City had been hard work for collective survival, a carnival atmosphere began to smother us; notoriety brought an easy cash flow, hindering us from developing some selfsupporting industry and becoming a stable extended-family type community, as almost all of the early group had wanted. We had made an early decision never to throw anyone out: this created an impossible situation when an impossible person refused to go; the rest of the group chose to be true to that non-violent commitment when push came to shove. This disharmony over an extended period of time took its toll, and we never recovered the unity of spirit we once had. Curly and Drop Lady left after two years, seeing it had become unlivable for them and their young daughter, and one by one the other early Droppers followed. I left in the summer of '69, after three years. Drop City continued as a commune until 1973, after going through a continual turnover of residents, then was finally abandoned, having never overcome the instability that the "open" concept fostered.

The movement reached a numerical peak around 1970, with about 3500 land cooperatives and communities according to a generous estimate.But by 1980 only about 1000 were left. The Farm was the largest, with over a thousand members. Twin Oaks, Libre, Mullein Hill, Tolstoy Farm, U and I (Missouri) and Renaissance (Mass.) all continued strong. Twin Oaks together with East Wind and a few smaller communities formed the Federation of Egalitarian Communities. Drop South, Morningstar, Wheeler and the Lower Farm each lasted only two to four years. Buffalo went through several turnovers, then stabilized and developed a steady income as a dairy farm. There were deep connections between the early communes and the other movements of the social upheaval of the '60s. They were a haven for draft resisters and formed part of the underground railroad to Canada, a refuge for "criminals" such as under-age runaways. The FBI made regular rounds of them; many were harassed by their local authorities, business establishments and vigilantes; some were bulldozed, some raided. Many got flack from their surrounding regions because they were seen as a sort of advance-guard for a wave of newcomers squeezing in where there was hardly room already, depressing conditions either because they were willing to work too cheap, or because they didn't seem to work at all and drew food stamps, welfare, or had no visible means of support. But in general, those communities that made friends and connections in their areas thrived, while those that didn't became isolated in a new type of alienation perhaps as bad as what they were trying to escape. Drop City and most of the other early communities were pretty spiritual places, although they were basically secular in structure. The same forces that created them, created others outwardly religious and spiritual. Some began to appear that were communal in form but the opposite in spirit. A commune or cooperative community is democratic and equalitarian; these were run autocratically by charismatic "spiritual" leaders. A few of the most bizarre figures and their "communal" dictatorship-cults hit the headlines in deadly ways. Although the mass media often equated them with the communes, they could not be farther apart; tragically many people were drawn to them in search of community, only to find themselves caught in miniature fascist states. The mixture of mysticism and communalism, like that of mysticism and nationalism, has often led to unfortunate results. Truer spiritual communities however were fortunately much more common; among those coming out of the late '60s were Lama, Renaissance, and The Farm. Besides these, there were other religious communal centers, including Hindu (Kripalu Yoga Ashram in Pennsylvania; New Vrindiban Community in California), Buddhist (Karme-Choling Meditation Center in Vermont; Karma Dzong in Colorado), and Sufi (Abode of the Message, in the old Shaker village at New Lebanon, New York). Christian socialisism has had many rebirths. An Islamic tradition parallels the Christian anabaptist one, hitting the headlines today with the millennial Shiite sect. There is no recognition of a separation of church and state here, as in the modern European tradition; fundamentalist Islam claims to be allencompassing, like the early Catholic church. The Black Muslims can be seen in this communal tradition and, at one point at least, set their sights on taking over a southwestern state.

Millenarianism is still strong in America and on the rise again.


Contemporary labor unions have organized and supported food co-ops, housing complexes, credit unions and various service co-ops, but virtually no worker industrial cooperatives. Their attitude is mainly the long-standing AFL-CIO policy of opposing any blurring of the line between employer and employee, accepting basic employer-control of the workplace in exchange for contracts (and, for many bureaucrats, safe jobs in union hierarchies). The AFL holds that any clouding of employee-management lines confuses their own role as bargaining agent and weakens the union, and they point to the many profit-sharing schemes that employers have offered their workers over the past century, which were geared to accomplish exactly that. Also there are numerous examples of how risky large industrial cooperatives are in a capitalist market economy, and of large industrial cooperatives that failed. Lastly, some experiments in partial democratization of the workplace, which have been acceded to by companies from time to time, have ironically resulted in layoffs because they increased production. The United Auto Workers was one of the few unions that raised any of the issues of worker control in the 1970s, notably in the Lordstown assembly plant strike of '72 and they support several experiments in workplace reorganization. Chrysler workers at one point attempted to take over the company. A corporate experiment in limited selfmanagement was tried at a General Foods plant in Kansas, with great success for the workers, but was shut down because it was too threatening to management. Most large industrial cooperatives in the 20th century have been the result of workers taking over bankrupt or near-bankrupt companies; this is of course a shaky situation to begin with. The hope is that the industry can continue to support its workers when there is no longer any necessity to provide bosses with profit on top of that. Historically many have proven to be in dying industries which continued to go down, with bankers winding up the only real winners. The two most notable exceptions are United Airlines and Avis Car Rentals.

In larger industry, but most "worker cooperatives" are really "Employee-Owned" corporations. A Senate report in 1980 listed 150 of these. Employee-Ownership describes a share-holding system, differing from a standard corporation only in that it includes a method through which most of the stock is transferred to employees' hands over a period of time. Outsiders may buy shares and individuals have as many votes as shares. The most common system of Employee-Ownership is the Employee Stock Ownership Plan (ESOP).

A typical firm set up on this scheme is McKeesport Steel Casting, in Pennsylvania. To provide employees with enough capital to buy the stock, 25 percent of salaries goes into a trust, which borrowed money to buy the stock; the stock is transferred to a retirement fund in the name of each employee; workers cannot draw proceeds for at least ten years, and not then unless all debts of the company are paid. Other recent examples are Yellow Cab in San Francisco; South Bend Lathe, in Indiana; Sarasota Knitting Mills and Herkimer Woodworking in New York; the Vermont Asbestos Group; United Airlines and Avis. Under Employee Ownership, workers usually have considerable power both in electing managers, and in creating good salaries, job security, safe working conditions and side benefits; still they are half-way houses, with banks holding all the trump cards, and power accumulating in individuals holding the most stock. Not all the workers are necessarily stockholders; in the case of Yellow Cab, for example, less than half. Many of those mentioned were taken over by their workers after shut-downs, many after long strikes. It is usually not easy to get banks to finance even this moderate system. The community of Youngstown, Ohio, for example, in 1979 tried to take over the shutdown Youngstown Sheet and Tube, a steel company, the largest enterprise in the city, as a worker-community joint enterprise, but the bankers refused adequate funding. The Industrial Cooperative Association was formed in 1978 in Boston to develop worker-owned-and-controlled cooperatives. It has developed a much truer model of self-management organization than Employee Ownership. The ICA plan defines an industrial worker cooperative as self-governing, with one vote per member-worker, and based on the principle that all workers should receive the fruits of their labor within the framework of social and community responsibility for the resources used. They make an exception to all-worker-ownership with retail stores, for which they support the decision-making structure to possibly extend to community representation. With their guidance, the workers took over the shut-down Colonial Press in Clinton, Massachusetts, in 1978, and transformed it into the first true large industrial cooperative formed in the US in twenty years. The following year, the ICA helped the workers of International Poultry in Willimantic, Connecticut, to become the next. In cooperation with a neighborhood Community Development Corporation in Dorchester, they transformeed a shut-down supermarket into a community-worker cooperative, with each group having 50% control.

The Cooperative League remains the main educational, coordinating, and lobbying organization of the Rochdale movement today. Its members include consumer stores, farm supply, housing and insurance cooperatives, and it is supported by credit unions, health and rural electric cooperatives. The League represents the US in the International Cooperative Alliance, which has a membership of cooperatives from most countries in the world and is attached to the United Nations. In 1980 one out of four Americans belonged to a cooperative, according to League statistics. About six million were members of farmer cooperatives, one million consumer goods cooperatives (mostly stores), 40,000 handicraft, 5.6 million health

care, nine million rural electric, one million rural telephone, 1.5 million housing, 40 million credit, and many more belonging to service cooperatives such as childcare:, auto repair, insurance, cable tv, legal services, funeral, optical care and student services. There were over 900 consumer co-op stores in the US in 1980, but only 300 more than a few years old. The 1970s were a time of both advance and retreat. Areas of concentration included northern California (particularly the Bay Area), BaltimoreWashington, Puerto Rico, Minnesota, Wisconsin, Chicago, and Greater New York. Uni-Co-op in Puerto Rico was the largest, followed by Berkeley, with Greenbelt Cooperative in the District of Columbia third. Co-op City in the Bronx, New York was the largest cooperative housing development, with 60,000 residents and many cooperative services, and also the scene of prolonged struggle between tenant groups and management. In 1979 Congress set up a National Consumer Cooperative Bank, to provide technical and financial assistance to consumer cooperatives. Started with government seed money, the plan was for the Bank to become independent, following the pattern set by the agricultural Banks for Cooperatives. Through the bank, capital would be far more easily available to help consumer cooperatives get started and to help existing ones get through difficult times. There were provisions in the bill that 35% of the loans must go to groups with a majority of low-income people. The bill also set up an Office of Self-Help Development and Technical Assistance to provide information and technical help. Included were producer (artisan and craft) marketing co-ops. The major force behind the bill was the Cooperative League, with support from the Carter Administration. Under Carter, federal government loans through other agencies such as the Farmers Home Administration and the Urban Development Grant Program also became available in some instances to co-ops. These were instrumental in setting up Employee-Owned Bates Fabric in Maine, and Path Packing in Iowa. Still, the scale of this government backing remained so small and slow that it made little overall impact. And the Small Business Administration remained forbidden to lend assistance to worker cooperatives, which still had no banks of their own. Then, during the Reagan years, some of the most notable beneficiaries of the National Consumer Cooperative Bank were on the level of Kentucky Fried Chicken chains. Rochdale-structured consumer cooperatives remain important. By getting goods and services to people at an honest cost and of good quality; and by giving people democratic control over part of their distribution system, the consumer cooperative movement performs much-needed services and brings about significant progress. A consumer cooperative in an area ordinarily has the effect of making capitalist stores honest and profit margins low; in this almost-invisible way consumer cooperatives serve to keep middleman costs to a minimum for their entire communities. However, consumer co-ops depend largely on community spirit to sustain them in hard times; this spirit arises primarily from their aspect as part of a progressive social movement; but when they have no social vision beyond themselves, the community tends to desert them. In the San Francisco Bay Area I have seen a number of co-ops

deteriorate like this and fall, exemplified by a "co-op" book store, Books Unlimited, run by a small group, dealing almost entirely with the mass distributors, and refusing to stock all but a few of the publications coming from its own community. When it hit hard times, the local writing and publishing community had no reason to come to its aid, so let it fall. Consumer Cooperatives of Berkeley grew to become the largest most successful consumer co-op in the continental US. But reckless expansion undertaken in closeddoor sessions by a conservative board, without membership input or approval, brought it to ruin. The Berkeley Co-op expanded into surrounding areas where there was no base of support, simply taking over other (and already failing) supermarkets. Although the Co-op often supported progressive causes, there was also a strong conservative wing, and control of the Co-op see-sawed back and forth between the progressives and the conservatives. One of the Rochdale principles is "neutrality in politics;" the progressives took that to mean not endorsing electoral candidates, while the conservatives took it in the broadest sense. For example, the Co-op's conservatives saw no reason why the stores should not stock scab products, to "give shoppers more of a choice," while the progressives insisted that the stores support the United Farm Workers' grape boycott. Despite brave efforts from the more progressive forces, and some help from the National Consumer Cooperative Bank, the whole house of cards came tumbling down in 1987, and after 50 years, the Berkeley Co-op filed for bankruptcy and dissolution.

Cooperatives did about a third of the total farm production and marketing in the US in 1980, with 7500 farmer co-ops and almost six million members. But these numbers have been shrinking continually through the century. Twenty-five years previously there were 1600 more farmer co-ops with 1.6 million more members. There are many less freeholding farmers today than there were a hundred years ago, although our population has multiplied over six times. Most rural people today are no longer independent farmers as they once were, but wage-earners, part of a fast-growing "rural proletariat." The agricultural banks for cooperatives, set up with government seed money from the New Deal but then becoming independent cooperatives themselves, have been helpful but still the smallest farmers have been continually expropriated and proletarianized, driven off their land and forced into wage-slavery and unemployment, while agribusiness has been reorganizing American farming on a monopoly capital basis, with control from seed to supermarket. Most of today's major farm organizations are connected in some way with cooperatives. Besides the National Farmers' Union and the Grange, are the National Farmers' Organization (formed in the 1960s, handling collection, dispatch, and delivery services nationwide for grain, livestock, milk and other products), the US Farmers Association and the American Agricultural Movement, all usually fairly progressive organizations. Aligned against them is still the Farm Bureau Federation, still a major enemy of farm labor and tenant farmers, still serving to co-opt the cooperative movement from the hands of small farmers and to pave the way for agribusiness. Much larger than the other organizations, due mostly to the side benefits they can offer through their

support by bankers and industrialists, the Farm Bureau is acceptable to corporate America because they are run similar to a big corporation, by a giant managerial bureaucracy far above their average members. The same could be said of large agricultural cooperatives such as Sunkist and Farmland: seven of these are listed among the "top 500" corporations today. Huge mid-western dairy co-ops were exposed giving enormous bribes to Nixon. At the same time, small farmers are turning, as ever before, to co-ops to help solve their problems. Examples occur daily. A group of Hmong strawberry, sugar peas and bean farmers from Laos who settled near Fresno, California in the 1980s, began to realize that they were being cheated by middlemen brokers in the mid-1990s. In 1997 they formed the California Highlander Co-op to sell their produce directly to the customer.

So much of American history still lies buried like treasure deep in our country's marrow. The histories of American cooperatives and unions are inextricably entwined with each other. The cooperative movement has rendered unique service to the union movement at critical moments, as when the Grangers helped the railroad strikers in 1877, the co-ops joined arms with the unions in the Seattle General Strike in 1919, and when the Farmers' Union brought truckloads of food to striking coal miners whose food stamps had been cut off in 1977. The histories of American cooperatives and unions are also inextricably entwined with the larger history of America itself. They can be seen as aspects of the larger movement for democracy, equality, freedom, justice and community While there is an official government of the US, there is also a backroom government, consisting of all the biggest financiers and manufacturers; they plan America's economy with the aim of maximizing corporate profits, and they plan industrial worker cooperatives out of it. Under their rule, advanced technology has enriched only those who have controlled it, while impoverishing and virtually enslaving most of those who don't. There are few fields where many independent workers can still survive, and there are still only a comparative handful of collectives and cooperatives, leaving the vast majority of workers with a choice between wage-slavery and unemployment. Meanwhile unionization has shrunk from over one in three in the late '30s, to less than one in five today. Although on the surface of our country today capitalism, competition, and the wage system seem unchallenged, history may someday show that beneath the surface the working population was quietly gathering strength for its next challenge. Involuntary bondage is supposed to be abolished in America, yet how many would remain wageslaves if they felt they had any choice? The corporations still fear industrial cooperatives, for the same reasons they have feared them and used their power to put them down throughout American history. The corporations know that they must prevent the average worker from having the right to choose between working as an employee or being one's own boss, becoming a cooperator. They know that few would choose bossism and bondage over freedom, democracy, and equality.

Whoever controls the basic means of survival controls society. There is no such thing as democracy or equality without the people having collective control of these means, both on a large scale, nationwide, and on a small scale, in the neighborhood and the workshop. Cooperatives give people control over their lives and democratize the products and the process of work. Cooperatives have proved to be a strong base for movements for progressive social change, since by their very nature they demand changes in the general conditions of society, and empower and embolden their worker-members. But consumer co-ops are not enough. Even though employees and tenants may own part of the distribution system cooperatively, they still remain in bondage. The fortress of capitalist power is in production, not distribution, and even a widespread co-op distribution network is by itself no real threat: as long as capital rules production, all gains can be taken away in a different form. We need banks not only for farmer and consumer cooperatives, but for real industrial cooperatives and collectives: cooperativization on a national scale is a question of the most basic freedom for our whole population. If America is ever to become truly free, the organized power of the people must be used to ensure that everyone has an alternative to being forced into wage slavery. That choice can only be through worker cooperatives. It may be that good old fashioned traditional American worker cooperation may still prove stronger and deeper here than capitalism, and will be the force to ultimately abolish it along with its unique system of work bondage. For without cooperation replacing competition as our most basic force, the USA will not survive, except in a form of our nightmares. The way of competition offers only increasing bondage, while the way of collectivity and cooperation offers real freedom. *** "The poverty of the country is such that all the power and sway has got into the hands of the rich, who by extortious advantages, having the common people in their debt, have always curbed and oppressed them in all manner of ways." Nathaniel Bacon 1676 "Every age and generation must be as free to act for itself, in all cases, as the ages and generations which preceded it." Thomas Paine "Where wealth is hereditary, power is hereditary; for wealth is power. Titles are of very little or no consequence. The rich are nobility, and poor plebeians in all countries. And on this distinction alone the true definition of aristocracy depends. An aristocracy is that influence or power which property may have in government; a democracy is the power or influence of the people or members, as contradistinguished from property. Between these two powers -the aristocracy and democracy -that is, the rich and the poor, there is constant warfare." A Farmer in the Maryland Gazette 1783 "I hope we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country." Thomas Jefferson

"The strongest bond of human sympathy, outside of the family relation, should be one uniting all working people of all nations, tongues and kindreds." Abraham Lincoln "If you and I must fight each other to exist, we will not love each other very hard." Eugene Debs

SELECTED BIBLIOGRAPHY BOOKS Adams, H. B. (ed), History of Cooperation in the US, Baltimore: Hopkins, 1888 Aptheker, Herbert, American Negro Slave Revolts, NY: International, 1947 Bartiz, Loren (ed), The American Left, NY: Basic Books, 1971 Boyer, R. O. & Morals, H. M., Labor's Untold Story, NY: United Electrical Workers, 1955 Brecher, Jeremy, Strike!, San Francisco: Straight Arrow,1972 Buber, Martin, Paths in Utopia, Boston: Beacon, 1949 Brunthal Julius, History of the International, NY: Praeger, 1967 Cahn, Wm., A Pictorial History of American Labor, NY: Crown, 1972 Case, J. & Taylor, R. (eds), Co-ops, Communes & Collectives, Pantheon, 1979 Commons, John R., History of Labor in the US, NY: MacMillan, 1926 Daniels, John, Cooperation, An American Way, NY: Covici-Friede, 1938 Fried, Albert (ed), Socialism in America, NY: Doubleday, 1970 Hedgepeth, Wm. and Stock, Dennis, The Alternative-Communal Life in America, NY: MacMillan, 1970 Hicks, J. D., The Populist Revolt, U. of Minnesota Press, 1931 Hillquit, Morris, History of Socialism in the US, NY: Funk & Wagnalls, 1910 Holloway, Mark, Heavens on Earth, NY: Dover, 1966 Houriet, Robert, Getting Back Together, NY: Coward, McCann & Georghegan, 1971

Infield, Henrich, Cooperative Communities at Work, London: Began Paul, 1947 Knapp, Joseph, The Rise and Advance of American Cooperative Enterprise, (2 vols.) Danville: Interstate, 1969, 1973 Laidler, Harry W., History of Socialism, NY: Crowell, 1968 LeWarne, Charles P., Utopias in Puget Sound, 1885-1915, Seattle: U. of Wash. Press, 1975 Lipset, S. M., Agrarian Socialism, Berkeley & LA: U. of Cal. Press, 1971 Marshall, R. & Godwin, L., Cooperatives and Rural Poverty in the South, Baltimore: Hopkins Press, 1971 Marx-Aveling, Eleanor, The Working-Class Movement in America, (1888), NY: Arno, 1969 McMath, Rbt. C., Jr., Populist Vanguard, NY: WW Norton, 1977 Mead, Margaret (ed), Cooperation and Competition Among Primitive People, NY: McGraw-Hill, 1937 Mercer, T. W., Toward the Co-operative Commonwealth, Manchester: Cooperative Press, 1936 Nordhoff, C., TheCommunistic Societies of the US, (1875), NY: Dover, 1966 Parker, Florence, The First 225 Years, Superior, Wise: Co-op Pub. Assn., 1956 Perlam, Selig, History of Trade Unionism in the US, NY: Augustus Belly, 1950 Rexroth, Kenneth, Communalism, NY: Seabury Press, 1974 Roy, E. P., Cooperatives: Today and Tomorrow, Danville: Interstate, 1964 Schnapper, M. B., American Labor, Wash. DC: Public Affairs Press, 1972 US Dept. of Commerce, Historical Statistics of the US, Wash. DC: 1975 Warbasse, J. P. Cooperative Democracy, NY: Harper, 1936 Wasserman, Harvey, History of the US, NY: Harper, 1972 Weinstein, James, The Decline of Socialism in America, NY: Vintage, 1969 Woodcock, George, Anarchism, Cleveland & NY: World,1962 MAGAZINES AND PAMPHLETS

Beyond lsolation, Las Trucaderos Collective, Oakland: Free Spirit, 1975 Collective Directory, Oakland: Directory Collective, 1977,1980 Common Ground (Newsletter), Oakland: Free Spirit, 1975-77 For Democracy Where We Work, DeLeon, D., Baltimore: Research Group One, 1977 Groundswell, Cecil & Connell (eds), SF: Earthwork, 1979 Guide to Cooperative Alternatives, New Haven: Community Pubs. Coop, 1979 Communities, Louisa, VA: Communities Pubs. Coop No Bosses Here, Vocations For Social Change, Cambridge,1976 How The Old Co-ops Went Wrong, CJiese, Paula, Madison, Wisc; ICC Ed. Project PICTURE SOURCES Bancroft Library, U. C. Berkeley; Bermack, Richard; British Museum, London; Docunentary History of Am. Industrial Society; Commons 1910; Indiana Historical Society; Int. Molders & Allied Workers Union; Int. Typographical Union; Leslie's Illustrated Weekly (1871); (1886) Library of Congress; NY Historical Society; NY Journal (1896); NY Public Library; Pa. State U. Library; Photo History Magazine(1937); Poor Richard's Almanac c. 1765; Solidarity; State Historical Society of Wise; U. of Washington Library

Cooperative Economy in the Great Depression

Entrepreneurs of cooperation Before Social Security and the WPA, the Unemployed Exchange Association rebuilt a collapsed economy By Jonathan Rowe May 8, 2006 Yes! Magazin

The mood at kitchen tables in California in the early 1930s was as bleak as it was elsewhere in the United States. Factories were closed. More than a quarter of the breadwinners in the state were out of work. There were no federal or state relief programs, nothing but some local charityin Los Angeles County, a familyof four got about 50 cents a day, and only one in 10 got even that. Not long before, America had been a farming nation. When times were tough, there was still the land. But the country was becoming increasingly urban. People were dependent on this thing called the economy and the financial casino to which it was yoked. When the casino crashed, there was no fallback, just destitution. Except for one thing: The real economy was still there paralyzed but still there. Farmers still were producing, more than they could sell. Fruit rotted on trees, vegetables in the fields. In January 1933, dairymen poured more than 12,000 gallons of milk into the Los Angeles City sewers every day. The factories were there too. Machinery was idle. Old trucks were in side lots, needing only a little repair. All that capacity on the one hand, legions of idle men and women on the other. It was the financial casino that had failed, not the workers and machines. On street corners and around bare kitchen tables, people started to put two and two together. More precisely, they thought about new ways of putting twoand two together. Building a reciprocal economy In the spring of 1932, in Compton, California, an unemployed World War I veteran walked out to the farms that still ringed Los Angeles. He offered his labor in return for a sack of vegetables, and that evening he returned with more than his family needed. The next day a neighbor went out with him to the fields. Within two months 500 families were members of the Unemployed Cooperative Relief Organization (UCRO). That group became one of 45 units in an organization that served the needs of some 150,000 people. It operated a large warehouse, a distribution center, a gas and service station, a refrigeration facility, a sewing shop, a shoe shop, even medical services, all on cooperative principles. Members were expected to work two days a week, and

benefits were allocated according to need. A member with a wife and two kids got four times as much food as someone living alone. The organization was run democratically, and social support was as important as material support. Members helped one another resist evictions; sometimes they moved a family back in after a landlord had put them out. Unemployed utility workers turned on gas and electricity for families that had been cut off. Conventional histories present the Depression as a story of the corporate market, foiled by its own internal flaws, versus the federal government, either savvy mechanic or misguided klutz, depending on your view.The government ascended, in the form of the New Deal; and so was born the polarity of our politicsand the range of our economic possibilitiesever since. Yet there was another story too. It embodied the trusty American virtues of initiative, responsibility, and self-help, but in a way that was grounded in community and genuine economy. This other story played out all over the U.S., for a brief but suggestive moment in the early 1930s. The UCRO was just one organization in one city. Groups like it ultimately involved more than 1.3 millionpeople, in more than 30 states. It happened spontaneously, without experts or blueprints. Most of the participants were blue collar workers whose formal schooling had stopped at high school. Some groups evolved a kind of money to create more flexibility in exchange. An example was the Unemployed Exchange Association, or UXA, based in Oakland, California. (The UXA story was told inan excellent article in the weekly East Bay Express in1983, on which the following paragraphs are based.) UXA began in a Hooverville (an encampment of the poor during the Depression, so-called after the president) called Pipe City, near the East Bay waterfront. Hundreds of homeless people were living there in sections of large sewer pipe that were never laid because the city ran out of money. Among them was Carl Rhodehamel, a musician and engineer. Rhodehamel and others started going door to door in Oakland, offering to do home repairs in exchange for unwanted items. They repaired these and circulated them among themselves. Soon they established a commissary and sent scouts around the city and intothe surrounding farms to see what they could scavenge or exchange labor for. Within six months they had 1,500 members, and a thriving sub-economy that included a foundry and machine shop, woodshop, garage,soap factory, print shop, wood lot, ranches, and lumber mills. They rebuilt 18 trucks from scrap. AtUXAs peak it distributed 40 tons of food a week. It all worked on a time-credit system. Each hour worked earned a hundred points; there was no hierarchyof skills, and all work paid the same. Members could use credits to buy food and other items at the commissary, medical and dental services, haircuts, andmore. A council of some 45 coordinators met regularly to solve problems and discuss opportunities. One coordinator might report that a saw needed a new motor. Another knew of a motor but the owner wanted a piano in return. A third member knew of a piano that was available. And on and on. It was an amalgam of enterprise and cooperationthe flexibility and hustle of the market, but without the encoded greed of the corporation

or the stifling bureaucracy of the state. The economics texts dont really have a name for it. The members called it a reciprocal economy. The dream fades It would seem that a movement that provided livelihood for more than 300,000 people in California alone would merit discussion in the history books. Amidst the floundering of the early 1930s, this was something that actually worked. Yet in most accounts the self-help co-ops get barely a line. The one exception is Upton Sinclairs campaign for governor in 1934. Sinclair was a kind of Ralph Nader of his day. He based his campaign on a plan he called End Poverty in California, or EPIC, which was based in turn on the self-help cooperatives, UXA in particular. It would have taken the states idle farmland and factories and turned them into worker co-ops. The idea of a genuine economy shorn of Wall Street contrivance touched a chord. Some 2,000 EPIC clubs sprang up. Sinclair won the Democratic primary, but Californias moneyed establishment mustered $10 million dollars to pummel him. EPIC died with his campaign, and the idea has been associated with quixotic politics ever since. To say UXA and the other cooperative economies faced challenges is to put it mildly. They were going against the grain of an entire culture. Anti-communist Red Squads harassed them, while radicals complained they were too practical and not sufficiently committed to systemic change. But the main thing that killed the co-ops was the Works Progress Administration and its cash jobs. Those WPA jobs were desperately needed. But someof them were make-work, while the co-op work was genuinely productive. The co-ops pleaded with FDRs Administration to include them in the WPA. Local governments were helping with gasoline and oil. But the New Dealers werent interested, and the co-ops melted away. For years they were period pieces, like soup lines and Okies. Or so it seemed. Today, the signs of financial and ecological collapse are mounting. We are strung out on foreign debt and foreign oil, and riding real estate inflation that wont last forever. Add the impendingc ollapse of the natural life support system, and the 30s could seem benign by comparison. In this setting, the economics of self-help are increasingly relevant. The possibility of creating such an economy, though, might seem remote. In the 1930s, there still were farms on the outskirts of citiesfamily operations that could make barter deals on the spot. Factories were nearby too. Products were simple and made to last, and so could be scavenged and repaired.

All that has changed. The factories are in China, the farms are owned by corporations, and you cant walk to them from Los Angeles anymore. Products are made to break; the local repair shop is a distant memory. Hyper-sophisticated technology has put local mechanics out of business, let alone backyard tinkerers. An idea resurfaces Yet there are trends on the other side as well. Energy technology is moving back to the local level, by way of solar, wind, biodiesel and the rest. The popularity of organics has given a boost to smaller farms. Theres also the quiet revival of urban agriculture. Community gardens are boomingsome 6,000 of them in 38 U.S. cities. In Boston, the Food Project produces over 120,000 pounds of vegetables on just 21 acres.Then consider the unused land in U.S. cities: some 70,000 vacant parcels in Chicago, 31,000 in Philadelphia. Large swaths of Detroit look like Dresden afterthe firebombing. A UXA could do a lot with that. Im not getting gauzy here. Anyone who has been part of a co-op I once served on the board of one knows it is not a walk in the park. But it is not hard to see the stirrings of a new form of cooperative economics on the American scene today. You cant explain Linux, the computer operating system developed community-style on the web, by the tenets of the economics texts. Nor can you so explain Craigs List, the online bulletin board that people use at no or minimal cost. The cooperative model seems to defy what economists call economic lawthat people work only for personal gain and in response to schemes of personal incentive and reward. Yet the Depression co-ops did happen. When the next crash comes, the self-help movement of the 1930s may be just as important a model as the New Deal. Todays best ideas are often to be found among those rejected in the past. We are not going back to barter, Carl Rhodehamel of UXA once said. We are going forward into barter. We are feeling our way along, developing a new science. Jonathan Rowe is a YES! contributing editor and director of the Tomales Bay Institute

Forthcoming in the Encyclopdia Britannica Christina D. Romer December 20, 2003

Great Depression
worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world. Although the Depression originated in the United States, it resulted in drastic declines in output, severe unemployment, and acute deflation in almost every country of the globe. But its social and cultural effects were no less staggering, especially in the United States, where the Great Depression ranks second only to the Civil War as the gravest crisis in American history.

Economic history
The timing and severity of the Great Depression varied substantially across countries. The Depression was particularly long and severe in the United States and Europe; it was milder in Japan and much of Latin America. Perhaps not surprisingly, the worst depression ever experienced stemmed from a multitude of causes. Declines in consumer demand, financial panics, and misguided government policies caused economic output to fall in the United States. The gold standard, which linked nearly all the countries of the world in a network of fixed currency exchange rates, played a key role in transmitting the American downturn to other countries. The recovery from the Great Depression was spurred largely by the abandonment of the gold standard and the ensuing monetary expansion. The Great Depression brought about fundamental changes in economic institutions, macroeconomic policy, and economic theory.

Timing and severity

In the United States, the Great Depression began in the summer of 1929. The downturn became markedly worse in late 1929 and continued until early 1933. Real output and prices fell precipitously. Between the peak and the trough of the downturn, industrial production in the United States declined 47 percent and real GDP fell 30 percent. The wholesale price index declined 33 percent (such declines in the price level are referred to as deflation). Although there is some debate about the reliability of the statistics, it is widely agreed that the unemployment rate exceeded 20 percent at its highest point. The severity of these declines becomes especially clear when they are compared with Americas next worst recession of the 20th century, that of 198182, when real GDP declined just 2 percent and the unemployment rate peaked at under 10 percent. Moreover, during the 1981 82 recession prices continued to rise, although the rate of price increase slowed substantially (a phenomenon known as disinflation). The timing and severity of the Great Depression varied substantially across countries. Table 1 shows the dates of the downturn and upturn in economic activity in a number of countries. Table 2 shows the peak-to-trough percentage decline in annual industrial production for countries for which such data are available. Great Britain struggled with low growth and recession during most of the second half of the 1920s, due largely to its decision in 1925 to

return to the gold standard with an overvalued pound. Britain did not slip into severe depression, however, until early 1930, and the peak-to-trough decline in industrial production was roughly one-third that of the United States. France also experienced a relatively short downturn in the early 1930s. The French recovery in 1932 and 1933, however, was short-lived. French industrial production and prices both fell substantially between 1933 and 1936. Germanys economy slipped into a downturn early in 1928 and then stabilized before turning down again in the third quarter of 1929. The decline in German industrial production was roughly equal to that in the United States. A number of countries in Latin America slipped into depression in late 1928 and early 1929, slightly before the U.S. decline in output. While some less developed countries experienced severe depressions, others, such as Argentina and Brazil, experienced comparatively mild downturns. The depression in Japan started relatively late (in early 1930) and was, by comparison, mild. The general price deflation evident in the United States was also present in other countries. Virtually every industrialized country endured declines in wholesale prices of 30 percent or more between 1929 and 1933. Because of the greater flexibility of the Japanese price structure, deflation in Japan was unusually rapid in 1930 and 1931. This rapid deflation may have helped to keep the decline in Japanese production relatively mild. The prices of primary commodities traded in world markets declined even more dramatically during this period. For example, the prices of coffee, cotton, silk, and rubber were reduced by roughly half just between September 1929 and December 1930. As a result, the terms of trade declined precipitously for producers of primary commodities. The U.S. recovery began in the spring of 1933. Output grew rapidly in the mid-1930s: real GDP rose at an average rate of 9 percent per year between 1933 and 1937. Output had fallen so deeply in the early years of the 1930s, however, that it remained substantially below its longrun trend level throughout this period. In 193738 the United States suffered another severe downturn, but after mid-1938 the American economy grew even more rapidly than in the mid1930s. U.S. output finally returned to its long-run trend level in 1942. Recovery in the rest of the world varied greatly. The British economy stopped declining soon after Britains abandonment of the gold standard in September 1931, though genuine recovery did not begin until the end of 1932. The economies of a number of Latin American countries began to strengthen in late 1931 and early 1932. Germany and Japan both began to recover in the fall of 1932. Canada and many smaller European countries started to revive at about the same time as the United States, early in 1933. On the other hand, France, which experienced severe depression later than most countries, did not firmly enter the recovery phase until 1938.

Causes of the Great Depression

The fundamental cause of the Great Depression in the United States was a decline in spending (sometimes referred to as aggregate demand), which led to a decline in production as manufacturers and merchandisers noticed an unintended rise in inventories. The sources of the contraction in spending in the United States varied over the course of the Depression, but they cumulated into a monumental decline in aggregate demand. The American decline was transmitted to the rest of the world largely through the gold standard. However, a variety of other factors also influenced the downturn in various countries.

Stock market crash

The initial decline in output in the United States in the summer of 1929 is widely believed to have stemmed from tight U.S. monetary policy aimed at limiting stock market speculation. The 1920s had been a prosperous decade, but not an exceptional boom period; wholesale goods prices had remained nearly constant throughout the decade and there had been mild recessions in both 1924 and 1927. The one obvious area of excess was the stock market. Stock prices had risen more than fourfold from the low in 1921 to the peak reached in 1929. In 1928 and 1929, the Federal Reserve had raised interest rates in hopes of slowing the rapid rise in stock prices. These higher interest rates depressed interest-sensitive spending in areas such as construction and automobile purchases, which in turn reduced production. Some scholars believe that a boom in housing construction in the mid-1920s led to an excess supply of housing and a particularly large drop in construction in 1928 and 1929. By the fall of 1929, U.S. stock prices had reached levels that could not be justified by reasonable anticipations of future earnings. As a result, when a variety of minor events led to gradual price declines in October 1929, investors lost confidence and the stock market bubble burst. Panic selling began on Black Thursday, October 24, 1929. Many stocks had been purchased on margin, that is, using loans secured by only a small fraction of the stocks value. As a result, the price declines forced some investors to liquidate their holdings, thus exacerbating the fall in prices. Between their peak in September and their low in November, U.S. stock prices (measured using the Cowles Index) declined 33 percent. Because the decline was so dramatic, this event is often referred to as the Great Crash of 1929. The stock market crash reduced American aggregate demand substantially. Consumer purchases of durable goods and business investment fell sharply after the crash. A likely explanation is that the financial crisis generated considerable uncertainty about future income, which in turn led consumers and firms to put off purchases of durable goods. Although the loss of wealth caused by the decline in stock prices was relatively small, the crash may also have depressed spending by making people feel poorer. As a result of the drastic decline in consumer and firm spending, real output in the United States, which had been declining slowly up to this point, fell rapidly in late 1929 and throughout 1930. Thus, while the Great Crash of the stock market and the Great Depression are two quite separate events, the decline in stock prices was one factor causing the decline in production and employment in the United States.

Banking panics and monetary contraction

The next blow to aggregate demand occurred in the fall of 1930, when the first of four waves of banking panics gripped the United States. A banking panic arises when many depositors lose confidence in the solvency of banks and simultaneously demand their deposits be paid to them in cash. Banks, which typically hold only a fraction of deposits as cash reserves, must liquidate loans in order to raise the required cash. This process of hasty liquidation can cause even a previously solvent bank to fail. The United States experienced widespread banking panics in the fall of 1930, the spring of 1931, the fall of 1931, and the fall of 1932. The final wave of panics continued through the winter of 1933 and culminated with the national bank holiday declared by President Franklin Roosevelt on March 6, 1933. The bank holiday closed all banks, permitting them to reopen only after being deemed solvent by government inspectors. The panics took a severe toll on the American banking system. By 1933, one-fifth of the banks in existence at the start of 1930 had failed. By their nature, banking panics are largely irrational, inexplicable events, but some of the factors contributing to the problem can be explained. Economic historians believe that

substantial increases in farm debt in the 1920s, together with U.S. policies that encouraged small, undiversified banks, created an environment where such panics could ignite and spread. The heavy farm debt stemmed in part from the response to the high prices of agricultural goods during World War I. American farmers borrowed heavily to purchase and improve land in order to increase production. The decline in farm commodity prices following the war made it difficult for farmers to keep up with their loan payments. The Federal Reserve did little to try to stem the banking panics. Milton Friedman and Anna J. Schwartz, in the classic study, A Monetary History of the United States, argue that the death of Benjamin Strong, the governor of the Federal Reserve Bank of New York, was an important source of this inaction. Strong had been a forceful leader who understood the ability of the central bank to limit panics. His death left a power vacuum at the Federal Reserve and allowed leaders with less sensible views to block effective intervention. The panics caused a dramatic rise in the amount of currency people wished to hold relative to their bank deposits. This rise in the currency-to-deposit ratio was a key reason why the money supply in the United States declined 31 percent between 1929 and 1933. In addition to allowing the panics to reduce the U.S. money supply, the Federal Reserve also deliberately contracted the money supply and raised interest rates in September 1931, when Britain was forced off the gold standard and investors feared that the United States would devalue as well. Scholars believe that such declines in the money supply caused by Federal Reserve decisions had a severe contractionary effect on output. A simple picture provides perhaps the clearest evidence of the key role monetary collapse played in the Great Depression in the United States. Figure 1 shows the money supply and real output over the period 1900 to 1940. In ordinary times, such as the 1920s, both the money supply and output tend to grow steadily. But, in the early 1930s, both plummeted. The decline in the money supply depressed spending in a number of ways. Perhaps most importantly, because of actual price declines and the rapid decline in the money supply, consumers and business people came to expect deflation that is, they expected wages and prices to be lower in the future. As a result, even though nominal interest rates were very low, people did not want to borrow because they feared that future wages and profits would be inadequate to cover the loan payments. This hesitancy, in turn, led to severe reductions in both consumer spending and business investment spending. The panics surely exacerbated the decline in spending by generating pessimism and a loss of confidence. Furthermore, the failure of so many banks disrupted lending, thereby reducing the funds available to finance investment.

The gold standard

Some economists believe that the Federal Reserve allowed or caused the huge declines in the American money supply partly to preserve the gold standard. Under the gold standard, each country set a value of its currency in terms of gold and took monetary actions to defend the fixed price. It is possible that had the Federal Reserve expanded greatly in response to the banking panics, foreigners could have lost confidence in the United States commitment to the gold standard. This could have led to large gold outflows and the United States could have been forced to devalue. Likewise, had the Federal Reserve not tightened in the fall of 1931, it is possible that there would have been a speculative attack on the dollar and the Unites States would have been forced to abandon the gold standard along with Great Britain. While there is debate about the role the gold standard played in limiting U.S. monetary policy, there is no question that it was a key factor in the transmission of the American decline to the rest of the world. Under the gold standard, imbalances in trade or asset flows gave rise to

international gold flows. For example, in the mid-1920s intense international demand for American assets such as stocks and bonds brought large inflows of gold to the United States. Likewise, a decision by France after World War I to return to the gold standard with an undervalued franc led to trade surpluses and substantial gold inflows. ( balance of trade.) Britain chose to return to the gold standard after World War I at the prewar parity. Wartime inflation, however, implied that the pound was overvalued, and this overvaluation led to trade deficits and substantial gold outflows after 1925. To stem the gold outflow, the Bank of England raised interest rates substantially. High interest rates depressed British spending and led to high unemployment in Great Britain throughout the second half of the 1920s. Once the U.S. economy began to contract severely, the tendency for gold to flow out of other countries and toward the United States intensified. This took place because deflation in the United States made American goods particularly desirable to foreigners, while low income reduced American demand for foreign products. To counteract the resulting tendency toward an American trade surplus and foreign gold outflows, central banks throughout the world raised interest rates. Maintaining the international gold standard, in essence, required a massive monetary contraction throughout the world to match the one occurring in the United States. The result was a decline in output and prices in countries throughout the world that also nearly matched the downturn in the United States. Financial crises and banking panics occurred in a number of countries besides the United States. In May 1931 payment difficulties at the Creditanstalt, Austrias largest bank, set off a string of financial crises that enveloped much of Europe and were a key factor forcing Britain to abandon the gold standard. Among the countries hardest hit by bank failures and volatile financial markets were Austria, Germany, and Hungary. These widespread banking crises could have been the result of poor regulation and other local factors, or simple contagion from one country to another. In addition, the gold standard, by forcing countries to deflate along with the United States, reduced the value of banks collateral and made them more vulnerable to runs. As in the United States, banking panics and other financial market disruptions further depressed output and prices in a number of countries.

International lending and trade

Some scholars stress the importance of other international linkages. Foreign lending to Germany and Latin America had expanded greatly in the mid-1920s. U.S. lending abroad then fell in 1928 and 1929 as a result of high interest rates and the booming stock market in the United States. This reduction in foreign lending may have led to further credit contractions and declines in output in borrower countries. In Germany, which experienced extremely rapid inflation (hyperinflation) in the early 1920s, monetary authorities may have hesitated to undertake expansionary policy to counteract the economic slowdown because they worried it might re-ignite inflation. The effects of reduced foreign lending may explain why the economies of Germany, Argentina, and Brazil turned down before the Great Depression began in the United States. The 1930 enactment of the Smoot-Hawley tariff in the United States and the worldwide rise in protectionist trade policies created other complications. The Smoot-Hawley tariff was meant to boost farm incomes by reducing foreign competition in agricultural products. But other countries followed suit, both in retaliation and in an attempt to force a correction of trade imbalances. Scholars now believe that these policies may have reduced trade somewhat, but were not a significant cause of the Depression in the large industrial producers. Protectionist policies, however, may have contributed to the extreme decline in the world price of raw

materials, which caused severe balance-of-payments problems for primary-commodityproducing countries in Africa, Asia, and Latin America and led to contractionary policies.

Sources of recovery
Given the key roles of monetary contraction and the gold standard in causing the Great Depression, it is not surprising that currency devaluations and monetary expansion became the leading sources of recovery throughout the world. There is a notable correlation between the time countries abandoned the gold standard (or devalued their currencies substantially) and a renewed growth in their output. For example, Britain, which was forced off the gold standard in September 1931, recovered relatively early, while the United States, which did not effectively devalue its currency until 1933, recovered substantially later. Similarly, the Latin American countries of Argentina and Brazil, which began to devalue in 1929, had relatively mild downturns and were largely recovered by 1935. In contrast, the Gold Bloc countries of Belgium and France, which were particularly wedded to the gold standard and slow to devalue, still had industrial production in 1935 well below its 1929 level. Devaluation, however, did not increase output directly. Rather, it allowed countries to expand their money supplies without concern about gold movements and exchange rates. Countries that took greater advantage of this freedom saw greater recovery. The monetary expansion that began in the United States in early 1933 was particularly dramatic. The American money supply increased nearly 42 percent between 1933 and 1937. This monetary expansion stemmed largely from a substantial gold inflow to the United States, caused in part by the rising political tensions in Europe that eventually led to World War II. Worldwide monetary expansion stimulated spending by lowering interest rates and making credit more widely available. It also created expectations of inflation, rather than deflation, and so made potential borrowers more confident that their wages and profits would be sufficient to cover their loan payments if they chose to borrow. One sign that monetary expansion stimulated recovery in the United States by encouraging borrowing was that consumer and business spending on interest-sensitive items such as cars, trucks, and machinery rose well before consumer spending on services. Fiscal policy played a relatively small role in stimulating recovery in the United States. Indeed, the Revenue Act of 1932 increased American tax rates greatly in an attempt to balance the federal budget, and by doing so dealt another contractionary blow to the economy by further discouraging spending. Franklin Roosevelts New Deal, initiated in early 1933, did include a number of new federal programs aimed at generating recovery. For example, the Works Progress Administration (WPA) hired the unemployed to work on government building projects, and the Agricultural Adjustment Administration (AAA) gave large payments to farmers. However, the actual increases in government spending and the government budget deficit were small relative to the size of the economy. This is especially apparent when state government budget deficits are included, because those deficits actually declined at the same time that the federal deficit rose. As a result, the new spending programs initiated by the New Deal had little direct expansionary effect on the economy. Whether they may nevertheless have had positive effects on consumer and business sentiment remains an open question. United States military spending related to World War II was not large enough to appreciably affect total spending and output until 1941. The role of fiscal policy in generating recovery varied substantially across other countries. Great Britain, like the United States, did not use fiscal expansion to a noticeable extent early in its recovery. It did, however, increase military spending substantially after 1937. France

raised taxes in the mid-1930s in an effort to defend the gold standard, but then ran large budget deficits starting in 1936. The expansionary effect of these deficits, however, was counteracted somewhat by a legislated reduction in the French workweek from 46 to 40 hoursa change that raised costs and depressed production. Fiscal policy was used more successfully in Germany and Japan. The German budget deficit as a percent of domestic product increased little early in the recovery, but grew substantially after 1934 as a result of spending on public works and rearmament. In Japan, government expenditures, particularly military spending, rose from 31 to 38 percent of domestic product between 1932 and 1934, resulting in substantial budget deficits. This fiscal stimulus, combined with substantial monetary expansion and an undervalued yen, returned the Japanese economy to full employment relatively quickly.

Economic impact
The most obvious economic impact of the Great Depression was human suffering. In a short period of time world output and standards of living dropped precipitously. As much as onefourth of the labour force in industrialized countries was unable to find work in the early 1930s. While conditions began to improve by the mid-1930s, total recovery was not accomplished until the end of the decade. The Depression and the policy response also changed the world economy in crucial ways. The Great Depression hastened, if not caused, the end of the international gold standard. Although a system of fixed currency exchange rates was reinstated after World War II under the Bretton Woods system, the economies of the world never embraced that system with the conviction and fervour they had brought to the gold standard. By 1973, fixed exchange rates were abandoned in favour of floating rates. Both labour unions and the welfare state expanded substantially during the 1930s. In the United States, union membership more than doubled between 1930 and 1940. This trend was stimulated both by the severe unemployment of the 1930s and the passage of the National Labor Relations (Wagner) Act (1935), which encouraged collective bargaining. The United States established unemployment compensation and old age and survivors insurance through the Social Security Act (1935), which was passed in response to the hardships of the 1930s. It is uncertain whether these changes would have eventually occurred in the United States without the Depression. Many European countries had experienced significant increases in union membership and had established government pensions before the 1930s. Both of these trends, however, accelerated in Europe during the Depression. In many countries, government regulation of the economy, especially of financial markets, increased substantially during the Great Depression. The United States, for example, established the Securities and Exchange Commission in 1934 to regulate new stock issues and stock market trading practices. The Banking Act of 1933 (also known as the Glass-Steagall Act) established deposit insurance in the United States and prohibited banks from underwriting or dealing in securities. Deposit insurance, which did not become common worldwide until after World War II, effectively eliminated banking panics as an exacerbating factor in recessions in the United States after 1933. The Depression also played a crucial role in the development of macroeconomic policies intended to temper economic downturns and upturns. The central role of reduced spending and monetary contraction in the Depression led British economist John Maynard Keynes to develop the ideas in his General Theory of Employment, Interest, and Money (1936). Keyness theory suggested that increases in government spending, tax cuts, and monetary expansion could be

used to counteract depressions. This insight, combined with a growing consensus that government should try to stabilize employment, has led to much more activist policy since the 1930s. Legislatures and central banks throughout the world now routinely attempt to prevent or moderate recessions. Whether such a change would have occurred without the Depression is again a largely unanswerable question. What is clear is that this change has made it unlikely that a decline in spending will ever be allowed to multiply and spread throughout the world as it did during the Great Depression of the 1930s.

TABLE 1 Dates of the Great Depression in Various Countries (In Quarters) Country United States Great Britain Germany France Canada Switzerland Czechoslovakia Italy Belgium Netherlands Sweden Denmark Poland Argentina Brazil Japan India South Africa Depression Began 1929:3 1930:1 1928:1 1930:2 1929:2 1929:4 1929:4 1929:3 1929:3 1929:4 1930:2 1930:4 1929:1 1929:2 1928:3 1930:1 1929:4 1930:1 Recovery Began 1933:2 1932:4 1932:3 1932:3 1933:2 1933:1 1933:2 1933:1 1932:4 1933:2 1932:3 1933:2 1933:2 1932:1 1931:4 1932:3 1931:4 1933:1

TABLE 2 Peak-to-Trough Decline in Industrial Production in Various Countries (Annual Data) Country Unites States Great Britain Germany France Canada Czechoslovakia Italy Belgium Netherlands Sweden Denmark Poland Argentina Brazil Japan Decline 46.8 % 16.2 % 41.8 % 31.3 % 42.4 % 40.4 % 33.0 % 30.6 % 37.4 % 10.3 % 16.5 % 46.6 % 17.0 % 7.0 % 8.5 %

Real GDP in billions of 1982 $ (logarithms) 4.0 1900 1905 1910 1915 Real GDP 1920 Years 1925 1930 1935 1940 1.5 2.0 2.5 3.0 Money Supply Money supply in billions of $ (logarithms) 3.5 4.0 4.5 5.0 5.5 4.5 5.0 5.5 6.0 6.5 7.0 7.5

Money and Output in the United States

The Great Depression in the United States
MILTON FRIEDMAN and ANNA JACOBSON SCHWARTZ, A Monetary History of the United States, 18671960 (1963, reissued 1993), chapter 7, The Great Contraction, is the single most important study of the Great Depression in the United States, detailing ways in which banking panics and monetary contraction contributed to the economic downturn. Scholarly studies that analyze the role of particular factors in the American Depression include: BEN S. BERNANKE, Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression, American Economic Review, 73(3):257276 (June 1983); STEPHEN G. CECCHETTI, Prices During the Great Depression: Was the Deflation of 1930-1932 Really Unanticipated? American Economic Review 82(1):141-156 (March 1992); CHRISTINA D. ROMER, The Great Crash and the Onset of the Great Depression, Quarterly Journal of Economics, 105(3):597624 (August 1990); and PETER TEMIN, Did Monetary Forces Cause the Great Depression? (1976). JOHN KENNETH GALBRAITH, The Great Crash, 1929 (1954, reissued 1997), is a riveting account of the 1929 stock market crash, one of the events leading up to the Great Depression in the United States.

World Depression
BARRY EICHENGREEN, Golden Fetters: The Gold Standard and the Great Depression, 19191939 (1992, reissued 1995), is a monumental study of the functioning and effects of the international gold standard in the interwar era. W. ARTHUR LEWIS, Economic Survey, 19191939 (1949, reissued 1969), while somewhat dated, is an exceedingly useful survey of the nature and causes of the Depression in Great Britain, Germany, Russia, France, Japan, and the United States. Other works analyzing the Depression outside the United States include: HAROLD JAMES, The German Slump: Politics and Economics, 19241936 (1986); CHARLES P. KINDLEBERGER, The World in Depression, 19291939, rev. and enlarged ed. (1986); and ROSEMARY THORP (ed.), Latin America in the 1930s: The Role of the Periphery in World Crisis (1984).

Recovery from the Great Depression

LESTER V. CHANDLER, Americas Greatest Depression, 19291941 (1970), provides a detailed description of the many programs implemented to deal with the Depression in the United States. BARRY EICHENGREEN and JEFFREY SACHS, Exchange Rates and Economic Recovery in the 1930s, Journal of Economic History, 45(4):925946 (December 1985), discusses how devaluation and monetary expansion contributed to economic recovery from the Depression in many countries. Two studies that examine the role of policy in ending the American Depression are: E. CARY BROWN, Fiscal Policy in the Thirties: A Reappraisal, American Economic Review, 46(5):857879 (December 1956); and CHRISTINA D. ROMER, What Ended the Great Depression? Journal of Economic History, 52(4):757784 (December 1992).

Impact of the Depression

MICHAEL D. BORDO, CLAUDIA GOLDIN, and EUGENE N. WHITE (eds.), The Defining Moment: The Great Depression and the American Economy in the Twentieth Century (1998),

includes a series of papers by distinguished scholars on the long-run impact of the Great Depression in the United States. JOHN MAYNARD KEYNES, The General Theory of Employment, Interest, and Money (1936, reissued 1997), is the pathbreaking work of economic theory that was inspired by the Great Depression and led to the rise of stabilization policy in the postwar era.

Sources used
Bernanke, Ben S. Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression. American Economic Review 73 (June 1983): 257-276. Bernanke, Ben, and Harold James. The Gold Standard, Deflation, and Financial Crises in the Great Depression: An International Comparison. In Financial Markets and Financial Crises edited by R. Glenn Hubbard. Chicago: University of Chicago Press for NBER, 1991, pp. 33-68. Bordo, Michael D., Claudia Goldin, and Eugene N. White. The Defining Moment Hypothesis: The Editors Introduction. In The Defining Moment: The Great Depression and the American Economy in the Twentieth Century edited by Michael D. Bordo, Claudia Goldin, and Eugene N. White. Chicago: University of Chicago Press for NBER, 1998, pp. 1-22. Brown, E. Cary. Fiscal Policy in the Thirties: A Reappraisal. American Economic Review 46 (December 1956): 857-879. Cameron, Rondo. A Concise Economic History of the World. New York: Oxford University Press, 1993. Campa, Jos Manuel. Exchange Rates and Economic Recovery in the 1930s: An Extension to Latin America. Journal of Economic History 50 (September 1990): 677-682. Cecchetti, Stephen G. Prices During the Great Depression: Was the Deflation of 1930-1932 Really Unanticipated? American Economic Review 82 (March 1992): 141-156. Chandler, Lester V. Americas Greatest Depression, 1929-1941. New York: Harper & Row, Publishers, 1970. Cowles, Alfred, and Associates. Common-Stock Indexes. Bloomington, Indiana: Principia Press, 1939. della Paolera, Gerardo, and Alan M. Taylor. Economic Recovery from the Argentine Great Depression: Institutions, Expectations, and the Change of Macroeconomic Regime. Journal of Economic History 59 (September 1999): 567-599. Daz Alejandro, Carlos F. Latin America in the 1930s. In Latin American in the 1930s: The Role of the Periphery in World Crisis edited by Rosemary Thorp. New York: St. Martins Press, 1984, pp. 17-49. Eichengreen, Barry, and Jeffrey Sachs. Exchange Rates and Economic Recovery in the 1930s. Journal of Economic History 45 (December 1985): 925-946.

Eichengreen, Barry. Golden Fetters: The Gold Standard and the Great Depression, 1919-1939. New York: Oxford University Press, 1992. Freeman, Richard. Spurts in Union Growth: Defining Moments and Social Processes. In The Defining Moment: The Great Depression and the American Economy in the Twentieth Century edited by Michael D. Bordo, Claudia Goldin, and Eugene N. White. Chicago: University of Chicago Press for NBER, 1998, pp. 265-296. Friedman, Milton, and Anna Jacobson Schwartz. A Monetary History of the United States, 1867-1960. Princeton, NJ: Princeton University Press for NBER, 1963. Friedman, Milton, and Anna Jacobson Schwartz. Monetary Statistics of the United Sates: Estimates, Sources, Methods. New York: National Bureau of Economic Research, 1970. Friedman, Milton, and Anna Jacobson Schwartz. Monetary Trends in the United States and the United Kingdom: Their Relation to Income, Prices, and Interest Rates, 1867-1975. Chicago: University of Chicago Press for NBER, 1982. Galbraith, John Kenneth. The Great Crash, 1929. Boston: Houghton Mifflin, 1988. Gordon, Robert J. and James A. Wilcox. Monetarist Interpretations of the Great Depression: An Evaluation and Critique. In The Great Depression Revisited edited by Karl Brunner. Boston: Martinus Nijhoff, 1981, pp. 49-107. Irwin, Douglas A. The Smoot-Hawley Tariff: A Quantitative Assessment. Economics and Statistics 80 (May 1998): 326-334. Review of

James, Harold. The German Slump: Politics and Economics, 1924-1936. New York: Oxford University Press, 1986. Kindleberger, Charles P. The World in Depression, 1929-1939. Berkeley, CA: University of California Press, 1986. League of Nations. World Economic Survey, 1931-32. Geneva, 1932. League of Nations. World Economic Survey, 1932-33. Geneva, 1933. League of Nations. World Production and Prices, 1935/36. Geneva, 1936. Lewis, W. Arthur. Economic Survey, 1919-1939. London: George Allen and Unwin Ltd., 1949. Meltzer, Allan H. A History of the Federal Reserve. University of Chicago Press, 2003. Volume 1: 1913-1951. Chicago:

Richardson, H.W. Economic Recovery in Britain, 1932-9. London: Weidenfeld and Nicolson, 1967. Romer, Christina D. The Prewar Business Cycle Reconsidered: New Estimates of Gross National Product, 1869-1908. Journal of Political Economy 97 (February 1989): 1-37. Romer, Christina D. The Great Crash and the Onset of the Great Depression. Quarterly Journal of Economics 105 (August 1990): 597-624. Romer, Christina D. What Ended the Great Depression? Journal of Economic History 52 (December 1992): 757-784. Romer, Christina D. The Nation in Depression. Journal of Economic Perspectives 7 (Spring 1993): 19-40. Schwartz, Anna J. Understanding 1929-1933. In The Great Depression Revisited edited by Karl Brunner. Boston: Martinus Nijhoff, 1981, pp. 5-48. Temin, Peter. The Beginning of the Depression in Germany. Economic History Review, New Series, 24 (May 1971): 240-248. Temin, Peter. Lessons from the Great Depression. The Lionel Robbins Lectures for 1989. Cambridge, MA: MIT Press, 1989. U.S. Board of Governors of the Federal Reserve System. Banking and Monetary Statistics. Washington, D.C.: U.S. Government Printing Office, 1943. U.S. Bureau of the Census. Historical Statistics of the United States: Colonial Times to 1970. Washington, D. C.: U.S. Government Printing Office, 1975. U.S. Bureau of Economic Analysis. The National Income and Product Accounts of the United States, 1929-82: Statistical Tables. Washington, D.C.: U.S. Government Printing Office, September 1986. U.S. President. Economic Report of the President, 2001. Washington, D.C.: U.S. Government Printing Office, 2001.

The American Economy during World War II

Posted Fri, 2010-02-05 11:19 by backend

Christopher J. Tassava
For the United States, World War II and the Great Depression constituted the most important economic event of the twentieth century. The war's effects were varied and far-reaching. The war decisively ended the depression itself. The federal government emerged from the war as a potent economic actor, able to regulate economic activity and to partially control the economy through spending and consumption. American industry was revitalized by the war, and many sectors were by 1945 either sharply oriented to defense production (for example, aerospace and electronics) or completely dependent on it (atomic energy). The organized labor movement, strengthened by the war beyond even its depression-era height, became a major counterbalance to both the government and private industry. The war's rapid scientific and technological changes continued and intensified trends begun during the Great Depression and created a permanent expectation of continued innovation on the part of many scientists, engineers, government officials and citizens. Similarly, the substantial increases in personal income and frequently, if not always, in quality of life during the war led many Americans to foresee permanent improvements to their material circumstances, even as others feared a postwar return of the depression. Finally, the war's global scale severely damaged every major economy in the world except for the United States, which thus enjoyed unprecedented economic and political power after 1945.

The Great Depression

The global conflict which was labeled World War II emerged from the Great Depression, an upheaval which destabilized governments, economies, and entire nations around the world. In Germany, for instance, the rise of Adolph Hitler and the Nazi party occurred at least partly because Hitler claimed to be able to transform a weakened Germany into a self-sufficient military and economic power which could control its own destiny in European and world affairs, even as liberal powers like the United States and Great Britain were buffeted by the depression. In the United States, President Franklin Roosevelt promised, less dramatically, to enact a "New Deal" which would essentially reconstruct American capitalism and governance on a new basis. As it waxed and waned between 1933 and 1940, Roosevelt's New Deal mitigated some effects of the Great Depression, but did not end the economic crisis. In 1939, when World War II erupted in Europe with Germany's invasion of Poland, numerous economic indicators suggested that the United States was still deeply mired in the depression. For instance, after 1929 the American gross domestic product declined for four straight years, then slowly and haltingly climbed back to its 1929 level, which was finally exceeded again in 1936. (Watkins, 2002; Johnston and Williamson, 2004)

Unemployment was another measure of the depression's impact. Between 1929 and 1939, the American unemployment rate averaged 13.3 percent (calculated from "Corrected BLS" figures in Darby, 1976, 8). In the summer of 1940, about 5.3 million Americans were still unemployed far fewer than the 11.5 million who had been unemployed in 1932 (about thirty percent of the American workforce) but still a significant pool of unused labor and, often, suffering citizens. (Darby, 1976, 7. For somewhat different figures, see Table 3 below.) In spite of these dismal statistics, the United States was, in other ways, reasonably well prepared for war. The wide array of New Deal programs and agencies which existed in 1939 meant that the federal government was markedly larger and more actively engaged in social and economic activities than it had been in 1929. Moreover, the New Deal had accustomed Americans to a national government which played a prominent role in national affairs and which, at least under Roosevelt's leadership, often chose to lead, not follow, private enterprise and to use new capacities to plan and administer large-scale endeavors.

Preparedness and Conversion

As war spread throughout Europe and Asia between 1939 and 1941, nowhere was the federal government's leadership more important than in the realm of "preparedness" the national project to ready for war by enlarging the military, strengthening certain allies such as Great Britain, and above all converting America's industrial base to produce armaments and other war materiel rather than civilian goods. "Conversion" was the key issue in American economic life in 1940-1942. In many industries, company executives resisted converting to military production because they did not want to lose consumer market share to competitors who did not convert. Conversion thus became a goal pursued by public officials and labor leaders. In 1940, Walter Reuther, a high-ranking officer in the United Auto Workers labor union, provided impetus for conversion by advocating that the major automakers convert to aircraft production. Though initially rejected by car-company executives and many federal officials, the Reuther Plan effectively called the public's attention to America's lagging preparedness for war. Still, the auto companies only fully converted to war production in 1942 and only began substantially contributing to aircraft production in 1943. Even for contemporary observers, not all industries seemed to be lagging as badly as autos, though. Merchant shipbuilding mobilized early and effectively. The industry was overseen by the U.S. Maritime Commission (USMC), a New Deal agency established in 1936 to revive the moribund shipbuilding industry, which had been in a depression since 1921, and to ensure that American shipyards would be capable of meeting wartime demands. With the USMC supporting and funding the establishment and expansion of shipyards around the country, including especially the Gulf and Pacific coasts, merchant shipbuilding took off. The entire industry had produced only 71 ships between 1930 and 1936, but from 1938 to 1940, commission-sponsored shipyards turned out 106 ships, and then almost that many in 1941 alone (Fischer, 41). The industry's position in the vanguard of American preparedness grew from its strategic import ever more ships were needed to transport American goods to Great Britain and France, among other American allies and from the Maritime Commission's ability to administer the industry through means as varied as

construction contracts, shipyard inspectors, and raw goading of contractors by commission officials. Many of the ships built in Maritime Commission shipyards carried American goods to the European allies as part of the "Lend-Lease" program, which was instituted in 1941 and provided another early indication that the United States could and would shoulder a heavy economic burden. By all accounts, Lend-Lease was crucial to enabling Great Britain and the Soviet Union to fight the Axis, not least before the United States formally entered the war in December 1941. (Though scholars are still assessing the impact of Lend-Lease on these two major allies, it is likely that both countries could have continued to wage war against Germany without American aid, which seems to have served largely to augment the British and Soviet armed forces and to have shortened the time necessary to retake the military offensive against Germany.) Between 1941 and 1945, the U.S. exported about $32.5 billion worth of goods through Lend-Lease, of which $13.8 billion went to Great Britain and $9.5 billion went to the Soviet Union (Milward, 71). The war dictated that aircraft, ships (and ship-repair services), military vehicles, and munitions would always rank among the quantitatively most important Lend-Lease goods, but food was also a major export to Britain (Milward, 72). Pearl Harbor was an enormous spur to conversion. The formal declarations of war by the United States on Japan and Germany made plain, once and for all, that the American economy would now need to be transformed into what President Roosevelt had called "the Arsenal of Democracy" a full year before, in December 1940. From the perspective of federal officials in Washington, the first step toward wartime mobilization was the establishment of an effective administrative bureaucracy.

War Administration
From the beginning of preparedness in 1939 through the peak of war production in 1944, American leaders recognized that the stakes were too high to permit the war economy to grow in an unfettered, laissez-faire manner. American manufacturers, for instance, could not be trusted to stop producing consumer goods and to start producing materiel for the war effort. To organize the growing economy and to ensure that it produced the goods needed for war, the federal government spawned an array of mobilization agencies which not only often purchased goods (or arranged their purchase by the Army and Navy), but which in practice closely directed those goods' manufacture and heavily influenced the operation of private companies and whole industries. Though both the New Deal and mobilization for World War I served as models, the World War II mobilization bureaucracy assumed its own distinctive shape as the war economy expanded. Most importantly, American mobilization was markedly less centralized than mobilization in other belligerent nations. The war economies of Britain and Germany, for instance, were overseen by war councils which comprised military and civilian officials. In the United States, the Army and Navy were not incorporated into the civilian administrative apparatus, nor was a supreme body created to subsume military and civilian organizations and to direct the vast war economy.

Instead, the military services enjoyed almost-unchecked control over their enormous appetites for equipment and personnel. With respect to the economy, the services were largely able to curtail production destined for civilians (e.g., automobiles or many non-essential foods) and even for war-related but non-military purposes (e.g., textiles and clothing). In parallel to but never commensurate with the Army and Navy, a succession of top-level civilian mobilization agencies sought to influence Army and Navy procurement of manufactured goods like tanks, planes, and ships, raw materials like steel and aluminum, and even personnel. One way of gauging the scale of the increase in federal spending and the concomitant increase in military spending is through comparison with GDP, which itself rose sharply during the war. Table 1 shows the dramatic increases in GDP, federal spending, and military spending.

Table 1: Federal Spending and Military Spending during World War II (dollar values in billions of constant 1940 dollars)
Nominal GDP Federal Spending Year total $ 1940 101.4 Defense Spending

% of % of total % % of % total % federal increase $ increase GDP $ increase GDP spending 9.47 9.34% 1.66 1.64% 17.53% 47.15%

1941 120.67 19.00% 13.00 37.28% 10.77% 6.13 269.28% 5.08%

1942 139.06 15.24% 30.18 132.15% 21.70% 22.05 259.71% 15.86% 73.06% 1943 136.44 -1.88% 63.57 110.64% 46.59% 43.98 99.46% 32.23% 69.18% 1944 174.84 28.14% 72.62 14.24% 41.54% 62.95 43.13% 36.00% 86.68% 1945 173.52 -0.75% 72.11 -0.70% 41.56% 64.53 2.51% 37.19% 89.49%

Sources: 1940 GDP figure from "Nominal GDP: Louis Johnston and Samuel H. Williamson, "The Annual Real and Nominal GDP for the United States, 1789 Present," Economic History Services, March 2004, available at (accessed 27 July 2005). 1941-1945 GDP figures calculated using Bureau of Labor Statistics, "CPI Inflation Calculator," available at Federal and defense spending figures from Government Printing Office, "Budget of the United States Government: Historical Tables Fiscal Year 2005," Table 6.1Composition of Outlays: 19402009 and Table 3.1Outlays by Superfunction and Function: 19402009.

Preparedness Agencies
To oversee this growth, President Roosevelt created a number of preparedness agencies beginning in 1939, including the Office for Emergency Management and its key sub-organization, the National Defense Advisory Commission; the Office of Production Management; and the Supply Priorities Allocation Board. None of these organizations was particularly successful at generating or controlling mobilization because all included two competing parties. On one hand, private-sector executives and managers had joined the federal mobilization bureaucracy but continued to

emphasize corporate priorities such as profits and positioning in the marketplace. On the other hand, reform-minded civil servants, who were often holdovers from the New Deal, emphasized the state's prerogatives with respect to mobilization and war making. As a result of this basic division in the mobilization bureaucracy, "the military largely remained free of mobilization agency control" (Koistinen, 502).

War Production Board

In January 1942, as part of another effort to mesh civilian and military needs, President Roosevelt established a new mobilization agency, the War Production Board, and placed it under the direction of Donald Nelson, a former Sears Roebuck executive. Nelson understood immediately that the staggeringly complex problem of administering the war economy could be reduced to one key issue: balancing the needs of civilians especially the workers whose efforts sustained the economy against the needs of the military especially those of servicemen and women but also their military and civilian leaders. Though neither Nelson nor other high-ranking civilians ever fully resolved this issue, Nelson did realize several key economic goals. First, in late 1942, Nelson successfully resolved the so-called "feasibility dispute," a conflict between civilian administrators and their military counterparts over the extent to which the American economy should be devoted to military needs during 1943 (and, by implication, in subsequent war years). Arguing that "all-out" production for war would harm America's long-term ability to continue to produce for war after 1943, Nelson convinced the military to scale back its Olympian demands. He thereby also established a precedent for planning war production so as to meet most military and some civilian needs. Second (and partially as a result of the feasibility dispute), the WPB in late 1942 created the "Controlled Materials Plan," which effectively allocated steel, aluminum, and copper to industrial users. The CMP obtained throughout the war, and helped curtail conflict among the military services and between them and civilian agencies over the growing but still scarce supplies of those three key metals.

Office of War Mobilization

By late 1942 it was clear that Nelson and the WPB were unable to fully control the growing war economy and especially to wrangle with the Army and Navy over the necessity of continued civilian production. Accordingly, in May 1943 President Roosevelt created the Office of War Mobilization and in July put James Byrne a trusted advisor, a former U.S. Supreme Court justice, and the so-called "assistant president" in charge. Though the WPB was not abolished, the OWM soon became the dominant mobilization body in Washington. Unlike Nelson, Byrnes was able to establish an accommodation with the military services over war production by "acting as an arbiter among contending forces in the WPB, settling disputes between the board and the armed services, and dealing with the multiple problems" of the War Manpower Commission, the agency charged with controlling civilian labor markets and with assuring a continuous supply of draftees to the military (Koistinen, 510). Beneath the highest-level agencies like the WPB and the OWM, a vast array of other federal organizations administered everything from labor (the War Manpower

Commission) to merchant shipbuilding (the Maritime Commission) and from prices (the Office of Price Administration) to food (the War Food Administration). Given the scale and scope of these agencies' efforts, they did sometimes fail, and especially so when they carried with them the baggage of the New Deal. By the midpoint of America's involvement in the war, for example, the Civilian Conservation Corps, the Works Progress Administration, and the Rural Electrification Administration all prominent New Deal organizations which tried and failed to find a purpose in the mobilization bureaucracy had been actually or virtually abolished.

However, these agencies were often quite successful in achieving their respective, narrower aims. The Department of the Treasury, for instance, was remarkably successful at generating money to pay for the war, including the first general income tax in American history and the famous "war bonds" sold to the public. Beginning in 1940, the government extended the income tax to virtually all Americans and began collecting the tax via the now-familiar method of continuous withholdings from paychecks (rather than lump-sum payments after the fact). The number of Americans required to pay federal taxes rose from 4 million in 1939 to 43 million in 1945. With such a large pool of taxpayers, the American government took in $45 billion in 1945, an enormous increase over the $8.7 billion collected in 1941 but still far short of the $83 billion spent on the war in 1945. Over that same period, federal tax revenue grew from about 8 percent of GDP to more than 20 percent. Americans who earned as little as $500 per year paid income tax at a 23 percent rate, while those who earned more than $1 million per year paid a 94 percent rate. The average income tax rate peaked in 1944 at 20.9 percent ("Fact Sheet: Taxes").

War Bonds
All told, taxes provided about $136.8 billion of the war's total cost of $304 billion (Kennedy, 625). To cover the other $167.2 billion, the Treasury Department also expanded its bond program, creating the famous "war bonds" hawked by celebrities and purchased in vast numbers and enormous values by Americans. The first war bond was purchased by President Roosevelt on May 1, 1941 ("Introduction to Savings Bonds"). Though the bonds returned only 2.9 percent annual interest after a 10-year maturity, they nonetheless served as a valuable source of revenue for the federal government and an extremely important investment for many Americans. Bonds served as a way for citizens to make an economic contribution to the war effort, but because interest on them accumulated slower than consumer prices rose, they could not completely preserve income which could not be readily spent during the war. By the time war-bond sales ended in 1946, 85 million Americans had purchased more than $185 billion worth of the securities, often through automatic deductions from their paychecks ("Brief History of World War Two Advertising Campaigns: War Loans and Bonds"). Commercial institutions like banks also bought billions of dollars of bonds and other treasury paper, holding more than $24 billion at the war's end (Kennedy, 626).

Price Controls and the Standard of Living

Fiscal and financial matters were also addressed by other federal agencies. For instance, the Office of Price Administration used its "General Maximum Price Regulation" (also known as "General Max") to attempt to curtail inflation by maintaining prices at their March 1942 levels. In July, the National War Labor Board (NWLB; a successor to a New Deal-era body) limited wartime wage increases to about 15 percent, the factor by which the cost of living rose from January 1941 to May 1942. Neither "General Max" nor the wage-increase limit was entirely successful, though federal efforts did curtail inflation. Between April 1942 and June 1946, the period of the most stringent federal controls on inflation, the annual rate of inflation was just 3.5 percent; the annual rate had been 10.3 percent in the six months before April 1942 and it soared to 28.0 percent in the six months after June 1946 (Rockoff, "Price and Wage Controls in Four Wartime Periods," 382).With wages rising about 65 percent over the course of the war, this limited success in cutting the rate of inflation meant that many American civilians enjoyed a stable or even improving quality of life during the war (Kennedy, 641). Improvement in the standard of living was not ubiquitous, however. In some regions, such as rural areas in the Deep South, living standards stagnated or even declined, and according to some economists, the national living standard barely stayed level or even declined (Higgs, 1992).

Labor Unions
Labor unions and their members benefited especially. The NWLB's "maintenance-ofmembership" rule allowed unions to count all new employees as union members and to draw union dues from those new employees' paychecks, so long as the unions themselves had already been recognized by the employer. Given that most new employment occurred in unionized workplaces, including plants funded by the federal government through defense spending, "the maintenance-of-membership ruling was a fabulous boon for organized labor," for it required employers to accept unions and allowed unions to grow dramatically: organized labor expanded from 10.5 million members in 1941 to 14.75 million in 1945 (Blum, 140). By 1945, approximately 35.5 percent of the non-agricultural workforce was unionized, a record high.

The War Economy at High Water

Despite the almost-continual crises of the civilian war agencies, the American economy expanded at an unprecedented (and unduplicated) rate between 1941 and 1945. The gross national product of the U.S., as measured in constant dollars, grew from $88.6 billion in 1939 while the country was still suffering from the depression to $135 billion in 1944. War-related production skyrocketed from just two percent of GNP to 40 percent in 1943 (Milward, 63). As Table 2 shows, output in many American manufacturing sectors increased spectacularly from 1939 to 1944, the height of war production in many industries.

Table 2: Indices of American Manufacturing Output (1939 = 100)

1940 1941 1942 1943 1944

Aircraft Munitions Aluminum Rubber Steel

245 630 1706 2842 2805 140 423 2167 3803 2033 126 189 318 561 474 109 144 152 202 206 131 171 190 202 197

Shipbuilding 159 375 1091 1815 1710

Source: Milward, 69.

Expansion of Employment
The wartime economic boom spurred and benefited from several important social trends. Foremost among these trends was the expansion of employment, which paralleled the expansion of industrial production. In 1944, unemployment dipped to 1.2 percent of the civilian labor force, a record low in American economic history and as near to "full employment" as is likely possible (Samuelson). Table 3 shows the overall employment and unemployment figures during the war period.

Table 3: Civilian Employment and Unemployment during World War II (Numbers in thousands)
1940 All Non-institutional Civilians Civilian Labor Force Total Total Employed 1941 1942 1943 1944 1945

99,840 99,900 98,640 94,640 93,220 94,090 55,640 55,910 56,410 55,540 54,630 53,860 57.2% 58.7% 58.6% 57.2% 47,520 50,350 53,750 54,470 53,960 52,820

% of Population 55.7% 56%

% of Population 47.6% 50.4% 54.5% 57.6% 57.9% 56.1% % of Labor Force 85.4% 90.1% 95.3% 98.1% 98.8% 98.1% Total 8,120 5,560 2,660 1,070 670 5.6% 2.7% 4.7% 1.1% 1.9% 0.7% 1.2% 1,040 1.1% 1.9%


% of Population 8.1%

% of Labor Force 14.6% 9.9%

Source: Bureau of Labor Statistics, "Employment status of the civilian noninstitutional population, 1940 to date." Available at Not only those who were unemployed during the depression found jobs. So, too, did about 10.5 million Americans who either could not then have had jobs (the 3.25 million youths who came of age after Pearl Harbor) or who would not have then sought employment (3.5 million women, for instance). By 1945, the percentage of blacks who held war jobs eight percent approximated blacks' percentage in the

American population about ten percent (Kennedy, 775). Almost 19 million American women (including millions of black women) were working outside the home by 1945. Though most continued to hold traditional female occupations such as clerical and service jobs, two million women did labor in war industries (half in aerospace alone) (Kennedy, 778). Employment did not just increase on the industrial front. Civilian employment by the executive branch of the federal government which included the war administration agencies rose from about 830,000 in 1938 (already a historical peak) to 2.9 million in June 1945 (Nash, 220).

Population Shifts
Migration was another major socioeconomic trend. The 15 million Americans who joined the military who, that is, became employees of the military all moved to and between military bases; 11.25 million ended up overseas. Continuing the movements of the depression era, about 15 million civilian Americans made a major move (defined as changing their county of residence). African-Americans moved with particular alacrity and permanence: 700,000 left the South and 120,000 arrived in Los Angeles during 1943 alone. Migration was especially strong along rural-urban axes, especially to war-production centers around the country, and along an east-west axis (Kennedy, 747-748, 768). For instance, as Table 4 shows, the population of the three Pacific Coast states grew by a third between 1940 and 1945, permanently altering their demographics and economies.

Table 4: Population Growth in Washington, Oregon, and California, 1940-1945 (populations in millions)
% growth 1940 1941 1942 1943 1944 1945 1940-1945 1.7 1.8 1.9 2.1 2.1 2.3 35.3% 1.1 7.0 9.8 1.1 7.4 10.3 1.1 8.0 11.0 1.2 8.5 11.8 1.3 9.0 12.4 1.3 9.5 13.1 18.2% 35.7% 33.7%

Washington Oregon California Total

Source: Nash, 222. A third wartime socioeconomic trend was somewhat ironic, given the reduction in the supply of civilian goods: rapid increases in many Americans' personal incomes. Driven by the federal government's abilities to prevent price inflation and to subsidize high wages through war contracting and by the increase in the size and power of organized labor, incomes rose for virtually all Americans whites and blacks, men and women, skilled and unskilled. Workers at the lower end of the spectrum gained the most: manufacturing workers enjoyed about a quarter more real income in 1945 than in 1940 (Kennedy, 641). These rising incomes were part of a wartime "great compression" of wages which equalized the distribution of incomes across the American population (Goldin and Margo, 1992). Again focusing on three war-boom

states in the West, Table 5 shows that personal-income growth continued after the war, as well.

Table 5: Personal Income per Capita in Washington, Oregon, and California, 1940 and 1948
1940 Washington Oregon California $655 $648 $835 1948 $929 $941 $1,017 % growth 42% 45% 22%

Source: Nash, 221. Adjusted for inflation using Bureau of Labor Statistics, "CPI Inflation Calculator," available at Despite the focus on military-related production in general and the impact of rationing in particular, spending in many civilian sectors of the economy rose even as the war consumed billions of dollars of output. Hollywood boomed as workers bought movie tickets rather than scarce clothes or unavailable cars. Americans placed more legal wagers in 1943 and 1944, and racetracks made more money than at any time before. In 1942, Americans spent $95 million on legal pharmaceuticals, $20 million more than in 1941. Department-store sales in November 1944 were greater than in any previous month in any year (Blum, 95-98). Black markets for rationed or luxury goods from meat and chocolate to tires and gasoline also boomed during the war.

Scientific and Technological Innovation

As observers during the war and ever since have recognized, scientific and technological innovations were a key aspect in the American war effort and an important economic factor in the Allies' victory. While all of the major belligerents were able to tap their scientific and technological resources to develop weapons and other tools of war, the American experience was impressive in that scientific and technological change positively affected virtually every facet of the war economy.

The Manhattan Project

American techno-scientific innovations mattered most dramatically in "high-tech" sectors which were often hidden from public view by wartime secrecy. For instance, the Manhattan Project to create an atomic weapon was a direct and massive result of a stunning scientific breakthrough: the creation of a controlled nuclear chain reaction by a team of scientists at the University of Chicago in December 1942. Under the direction of the U.S. Army and several private contractors, scientists, engineers, and workers built a nationwide complex of laboratories and plants to manufacture atomic fuel and to fabricate atomic weapons. This network included laboratories at the University of Chicago and the University of California-Berkeley, uranium-processing complexes at Oak Ridge, Tennessee, and Hanford, Washington, and the weapondesign lab at Los Alamos, New Mexico. The Manhattan Project climaxed in August

1945, when the United States dropped two atomic weapons on Hiroshima and Nagasaki, Japan; these attacks likely accelerated Japanese leaders' decision to seek peace with the United States. By that time, the Manhattan Project had become a colossal economic endeavor, costing approximately $2 billion and employing more than 100,000. Though important and gigantic, the Manhattan Project was an anomaly in the broader war economy. Technological and scientific innovation also transformed lesssophisticated but still complex sectors such as aerospace or shipbuilding. The United States, as David Kennedy writes, "ultimately proved capable of some epochal scientific and technical breakthroughs, [but] innovated most characteristically and most tellingly in plant layout, production organization, economies of scale, and process engineering" (Kennedy, 648).

Aerospace provides one crucial example. American heavy bombers, like the B-29 Superfortress, were highly sophisticated weapons which could not have existed, much less contributed to the air war on Germany and Japan, without innovations such as bombsights, radar, and high-performance engines or advances in aeronautical engineering, metallurgy, and even factory organization. Encompassing hundreds of thousands of workers, four major factories, and $3 billion in government spending, the B-29 project required almost unprecedented organizational capabilities by the U.S. Army Air Forces, several major private contractors, and labor unions (Vander Meulen, 7). Overall, American aircraft production was the single largest sector of the war economy, costing $45 billion (almost a quarter of the $183 billion spent on war production), employing a staggering two million workers, and, most importantly, producing over 125,000 aircraft, which Table 6 describe in more detail.

Table 6: Production of Selected U.S. Military Aircraft (1941-1945)

Bombers Fighters Cargo Total 49,123 63,933 14,710 127,766

Source: Air Force History Support Office

Shipbuilding offers a third example of innovation's importance to the war economy. Allied strategy in World War II utterly depended on the movement of war materiel produced in the United States to the fighting fronts in Africa, Europe, and Asia. Between 1939 and 1945, the hundred merchant shipyards overseen by the U.S. Maritime Commission (USMC) produced 5,777 ships at a cost of about $13 billion

(navy shipbuilding cost about $18 billion) (Lane, 8). Four key innovations facilitated this enormous wartime output. First, the commission itself allowed the federal government to direct the merchant shipbuilding industry. Second, the commission funded entrepreneurs, the industrialist Henry J. Kaiser chief among them, who had never before built ships and who were eager to use mass-production methods in the shipyards. These methods, including the substitution of welding for riveting and the addition of hundreds of thousands of women and minorities to the formerly all-white and all-male shipyard workforces, were a third crucial innovation. Last, the commission facilitated mass production by choosing to build many standardized vessels like the ugly, slow, and ubiquitous "Liberty" ship. By adapting well-known manufacturing techniques and emphasizing easily-made ships, merchant shipbuilding became a low-tech counterexample to the atomic-bomb project and the aerospace industry, yet also a sector which was spectacularly successful.

Reconversion and the War's Long-term Effects

Reconversion from military to civilian production had been an issue as early as 1944, when WPB Chairman Nelson began pushing to scale back war production in favor of renewed civilian production. The military's opposition to Nelson had contributed to the accession by James Byrnes and the OWM to the paramount spot in the warproduction bureaucracy. Meaningful planning for reconversion was postponed until 1944 and the actual process of reconversion only began in earnest in early 1945, accelerating through V-E Day in May and V-J Day in September. The most obvious effect of reconversion was the shift away from military production and back to civilian production. As Table 7 shows, this shift as measured by declines in overall federal spending and in military spending was dramatic, but did not cause the postwar depression which many Americans dreaded. Rather, American GDP continued to grow after the war (albeit not as rapidly as it had during the war; compare Table 1). The high level of defense spending, in turn, contributed to the creation of the "military-industrial complex," the network of private companies, nongovernmental organizations, universities, and federal agencies which collectively shaped American national defense policy and activity during the Cold War.

Table 7: Federal Spending, and Military Spending after World War II (dollar values in billions of constant 1945 dollars)
Nominal GDP Year Total 1945 223.10 1946 222.30 -0.36% 1947 244.20 8.97% 1948 269.20 9.29% 1949 267.30 -0.71% Federal Spending Defense Spending

% of federal % increase total % increase % of GDP Total % increase % of GDP spending 92.71 1.50% 55.23 -40.40% 34.5 -37.50% 29.76 -13.70% 38.84 30.50% 41.90% 24.80% 14.80% 11.60% 14.30% 82.97 4.80% 42.68 -48.60% 12.81 -70.00% 9.11 -28.90% 13.15 44.40% 37.50% 19.20% 5.50% 3.50% 4.80% 89.50% 77.30% 37.10% 30.60% 33.90%

1950 293.80 9.02%

42.56 9.60%


13.72 4.40%



1945 GDP figure from "Nominal GDP: Louis Johnston and Samuel H. Williamson, "The Annual Real and Nominal GDP for the United States, 1789 Present," Economic History Services, March 2004, available at (accessed 27 July 2005). 1946-1950 GDP figures calculated using Bureau of Labor Statistics, "CPI Inflation Calculator," available at Federal and defense spending figures from Government Printing Office, "Budget of the United States Government: Historical Tables Fiscal Year 2005," Table 6.1Composition of Outlays: 19402009 and Table 3.1Outlays by Superfunction and Function: 19402009. Reconversion spurred the second major restructuring of the American workplace in five years, as returning servicemen flooded back into the workforce and many war workers left, either voluntarily or involuntarily. For instance, many women left the labor force beginning in 1944 sometimes voluntarily and sometimes involuntarily. In 1947, about a quarter of all American women worked outside the home, roughly the same number who had held such jobs in 1940 and far off the wartime peak of 36 percent in 1944 (Kennedy, 779).

G.I. Bill
Servicemen obtained numerous other economic benefits beyond their jobs, including educational assistance from the federal government and guaranteed mortgages and small-business loans via the Serviceman's Readjustment Act of 1944 or "G.I. Bill." Former servicemen thus became a vast and advantaged class of citizens which demanded, among other goods, inexpensive, often suburban housing; vocational training and college educations; and private cars which had been unobtainable during the war (Kennedy, 786-787).

The U.S.'s Position at the End of the War

At a macroeconomic scale, the war not only decisively ended the Great Depression, but created the conditions for productive postwar collaboration between the federal government, private enterprise, and organized labor, the parties whose tripartite collaboration helped engender continued economic growth after the war. The U.S. emerged from the war not physically unscathed, but economically strengthened by wartime industrial expansion, which placed the United States at absolute and relative advantage over both its allies and its enemies. Possessed of an economy which was larger and richer than any other in the world, American leaders determined to make the United States the center of the postwar world economy. American aid to Europe ($13 billion via the Economic Recovery Program (ERP) or "Marshall Plan," 1947-1951) and Japan ($1.8 billion, 1946-1952) furthered this goal by tying the economic reconstruction of West Germany, France, Great Britain, and Japan to American import and export needs, among other factors. Even before the war ended, the Bretton Woods Conference in 1944 determined key aspects of international economic affairs by establishing standards for currency

convertibility and creating institutions such as the International Monetary Fund and the precursor of the World Bank. In brief, as economic historian Alan Milward writes, "the United States emerged in 1945 in an incomparably stronger position economically than in 1941"... By 1945 the foundations of the United States' economic domination over the next quarter of a century had been secured"... [This] may have been the most influential consequence of the Second World War for the post-war world" (Milward, 63).

Selected References
Adams, Michael C.C. The Best War Ever: America and World War II. Baltimore: Johns Hopkins University Press, 1994. Anderson, Karen. Wartime Women: Sex Roles, Family Relations, and the Status of Women during World War II. Westport, CT: Greenwood Press, 1981. Air Force History Support Office. "Army Air Forces Aircraft: A Definitive Moment." U.S. Air Force, 1993. Available at Blum, John Morton. V Was for Victory: Politics and American Culture during World War II. New York: Harcourt Brace, 1976. Bordo, Michael. "The Gold Standard, Bretton Woods, and Other Monetary Regimes: An Historical Appraisal." NBER Working Paper No. 4310. April 1993. "Brief History of World War Two Advertising Campaigns." Duke University Rare Book, Manuscript, and Special Collections, 1999. Available at Brody, David. "The New Deal and World War II." In The New Deal, vol. 1, The National Level, edited by John Braeman, Robert Bremmer, and David Brody, 267309. Columbus: Ohio State University Press, 1975. Connery, Robert. The Navy and Industrial Mobilization in World War II. Princeton: Princeton University Press, 1951. Darby, Michael R. "Three-and-a-Half Million U.S. Employees Have Been Mislaid: Or, an Explanation of Unemployment, 1934-1941." Journal of Political Economy 84, no. 1 (February 1976): 1-16. Field, Alexander J. "The Most Technologically Progressive Decade of the Century." American Economic Review 93, no 4 (September 2003): 1399-1414. Field, Alexander J. "U.S. Productivity Growth in the Interwar Period and the 1990s." (Paper presented at "Understanding the 1990s: the Long Run Perspective" conference, Duke University and the University of North Carolina, March 26-27, 2004) Available at

Fischer, Gerald J. A Statistical Summary of Shipbuilding under the U.S. Maritime Commission during World War II. Washington, DC: Historical Reports of War Administration; United States Maritime Commission, no. 2, 1949. Friedberg, Aaron. In the Shadow of the Garrison State. Princeton: Princeton University Press, 2000. Gluck, Sherna Berger. Rosie the Riveter Revisited: Women, the War, and Social Change. Boston: Twayne Publishers, 1987. Goldin, Claudia. "The Role of World War II in the Rise of Women's Employment." American Economic Review 81, no. 4 (September 1991): 741-56. Goldin, Claudia and Robert A. Margo. "The Great Compression: Wage Structure in the United States at Mid-Century." Quarterly Journal of Economics 107, no. 2 (February 1992): 1-34. Harrison, Mark, editor. The Economics of World War II: Six Great Powers in International Comparison. Cambridge: Cambridge University Press, 1998. Higgs, Robert. "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s." Journal of Economic History 52, no. 1 (March 1992): 41-60. Holley, I.B. Buying Aircraft: Materiel Procurement for the Army Air Forces. Washington, DC: U.S. Government Printing Office, 1964. Hooks, Gregory. Forging the Military-Industrial Complex: World War II's Battle of the Potomac. Urbana: University of Illinois Press, 1991. Janeway, Eliot. The Struggle for Survival: A Chronicle of Economic Mobilization in World War II. New Haven: Yale University Press, 1951. Jeffries, John W. Wartime America: The World War II Home Front. Chicago: Ivan R. Dee, 1996. Johnston, Louis and Samuel H. Williamson. "The Annual Real and Nominal GDP for the United States, 1789 - Present." Available at Economic History Services, March 2004, URL:; accessed 3 June 2005. Kennedy, David M. Freedom from Fear: The American People in Depression and War, 1929-1945. New York: Oxford University Press, 1999. Kryder, Daniel. Divided Arsenal: Race and the American State during World War II. New York: Cambridge University Press, 2000. Lane, Frederic, with Blanche D. Coll, Gerald J. Fischer, and David B. Tyler. Ships for Victory: A History of Shipbuilding under the U.S. Maritime Commission in World War II. Baltimore: Johns Hopkins University Press, 1951; republished, 2001.

Koistinen, Paul A.C. Arsenal of World War II: The Political Economy of American Warfare, 1940-1945. Lawrence, KS: University Press of Kansas, 2004. Lichtenstein, Nelson. Labor's War at Home: The CIO in World War II. New York: Cambridge University Press, 1982. Lingeman, Richard P. Don't You Know There's a War On? The American Home Front, 1941-1945. New York: G.P. Putnam's Sons, 1970. Milkman, Ruth. Gender at Work: The Dynamics of Job Segregation by Sex during World War II. Urbana: University of Illinois Press, 1987. Milward, Alan S. War, Economy, and Society, 1939-1945. Berkeley: University of California Press, 1979. Nash, Gerald D. The American West Transformed: The Impact of the Second World War. Lincoln: University of Nebraska Press, 1985. Nelson, Donald M. Arsenal of Democracy: The Story of American War Production. New York: Harcourt Brace, 1946. O'Neill, William L. A Democracy at War: America's Fight at Home and Abroad in World War II. New York: Free Press, 1993. Overy, Richard. How the Allies Won. New York: W.W. Norton, 1995. Rockoff, Hugh. "The Response of the Giant Corporations to Wage and Price Control in World War II." Journal of Economic History 41, no. 1 (March 1981): 123-28. Rockoff, Hugh. "Price and Wage Controls in Four Wartime Periods." Journal of Economic History 41, no. 2 (June 1981): 381-401. Samuelson, Robert J., "Great Depression." The Concise Encyclopedia of Economics. Indianapolis: Liberty Fund, Inc., ed. David R. Henderson, 2002. Available at U.S. Department of the Treasury, "Fact Sheet: Taxes," n. d. Available at U.S. Department of the Treasury, "Introduction to Savings Bonds," n.d. Available at Vander Meulen, Jacob. Building the B-29. Washington, DC: Smithsonian Institution Press, 1995. Watkins, Thayer. "The Recovery from the Depression of the 1930s." 2002. Available at

Citation: Tassava, Christopher. "The American Economy during World War II". EH.Net Encyclopedia, edited by Robert Whaples. February 10, 2008. URL

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Copyright 1995 The National Endowment for Democracy and The Johns Hopkins University Press. Registered users of a subscribed campus network may download, archive, and print as many copies of this work as desired for use within the subscribed institution as long as this header is not removed -- no copies of the below work may be distributed electronically, in whole or in part, outside of your campus network without express permission ( Contact your institution's library to discuss your rights and responsibilities within Project Muse, or send email to The Johns Hopkins University Press is committed to respecting the needs of scholars -- return of that respect is requested.

Journal of Democracy 6:1, Jan 1995, 65-78

As featured on National Public Radio, The New York Times, and in other major media, we offer this sold-out, much-discussed Journal of Democracy article by Robert Putnam, "Bowling Alone." The Journal of Democracy is at present scheduled to go online in full text in the third year of Project Muse (1997). You can also find information at DemocracyNet about the Journal of Democracy and its sponsor, the National Endowment for Democracy.

Bowling Alone: America's Declining Social Capital

Robert D. Putnam
An Interview with Robert Putnam

Many students of the new democracies that have emerged over the past decade and a half have emphasized the importance of a strong and active civil society to the consolidation of democracy. Especially with regard to the postcommunist countries, scholars and democratic activists alike have lamented the absence or obliteration of traditions of independent civic engagement and a widespread tendency toward passive reliance on the state. To those concerned with the weakness of civil societies in the developing or postcommunist world, the advanced Western democracies and above all the United States have typically been taken as models to be emulated. There is striking evidence, however, that the vibrancy of American civil society has notably declined over the past several decades. Ever since the publication of Alexis de Tocqueville's Democracy in America, the United States has played a central role in systematic studies of the links between democracy and civil society. Although this is in part because trends in American life are often regarded as harbingers of social modernization, it is also because America has traditionally been considered unusually "civic" (a reputation that, as we shall later see, has not been entirely unjustified). When Tocqueville visited the United States in the 1830s, it was the Americans' propensity for civic association that most impressed him as the key to their unprecedented ability to make democracy work. "Americans of all ages, all stations in life, and all types of disposition," [End Page 65] he observed, "are forever forming associations. There are not only commercial and industrial associations in which all take part, but others of a thousand different types--religious, moral, serious, futile, very general and very limited, immensely large and very minute. . . . Nothing, in my view, deserves more attention than the intellectual and moral associations in America." 1 Recently, American social scientists of a neo-Tocquevillean bent have unearthed a wide range of empirical evidence that the quality of public life and the performance of social institutions (and not only in America) are indeed powerfully influenced by norms and networks of civic engagement.


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Researchers in such fields as education, urban poverty, unemployment, the control of crime and drug abuse, and even health have discovered that successful outcomes are more likely in civically engaged communities. Similarly, research on the varying economic attainments of different ethnic groups in the United States has demonstrated the importance of social bonds within each group. These results are consistent with research in a wide range of settings that demonstrates the vital importance of social networks for job placement and many other economic outcomes. Meanwhile, a seemingly unrelated body of research on the sociology of economic development has also focused attention on the role of social networks. Some of this work is situated in the developing countries, and some of it elucidates the peculiarly successful "network capitalism" of East Asia. 2 Even in less exotic Western economies, however, researchers have discovered highly efficient, highly flexible "industrial districts" based on networks of collaboration among workers and small entrepreneurs. Far from being paleoindustrial anachronisms, these dense interpersonal and interorganizational networks undergird ultramodern industries, from the high tech of Silicon Valley to the high fashion of Benetton. The norms and networks of civic engagement also powerfully affect the performance of representative government. That, at least, was the central conclusion of my own 20-year, quasiexperimental study of subnational governments in different regions of Italy. 3 Although all these regional governments seemed identical on paper, their levels of effectiveness varied dramatically. Systematic inquiry showed that the quality of governance was determined by longstanding traditions of civic engagement (or its absence). Voter turnout, newspaper readership, membership in choral societies and football clubs--these were the hallmarks of a successful region. In fact, historical analysis suggested that these networks of organized reciprocity and civic solidarity, far from being an epiphenomenon of socioeconomic modernization, were a precondition for it. No doubt the mechanisms through which civic engagement and social connectedness produce such results--better schools, faster economic [End Page 66] development, lower crime, and more effective government--are multiple and complex. While these briefly recounted findings require further confirmation and perhaps qualification, the parallels across hundreds of empirical studies in a dozen disparate disciplines and subfields are striking. Social scientists in several fields have recently suggested a common framework for understanding these phenomena, a framework that rests on the concept of social capital. 4 By analogy with notions of physical capital and human capital--tools and training that enhance individual productivity--"social capital" refers to features of social organization such as networks, norms, and social trust that facilitate coordination and cooperation for mutual benefit. For a variety of reasons, life is easier in a community blessed with a substantial stock of social capital. In the first place, networks of civic engagement foster sturdy norms of generalized reciprocity and encourage the emergence of social trust. Such networks facilitate coordination and communication, amplify reputations, and thus allow dilemmas of collective action to be resolved. When economic and political negotiation is embedded in dense networks of social interaction, incentives for opportunism are reduced. At the same time, networks of civic engagement embody past success at collaboration, which can serve as a cultural template for future collaboration. Finally, dense networks of interaction probably broaden the participants' sense of self, developing the "I" into the "we," or (in the language of rational-choice theorists) enhancing the participants' "taste" for collective benefits. I do not intend here to survey (much less contribute to) the development of the theory of social capital. Instead, I use the central premise of that rapidly growing body of work--that social connections and civic engagement pervasively influence our public life, as well as our private prospects--as the starting point for an empirical survey of trends in social capital in contemporary America. I concentrate here entirely on the American case, although the developments I portray may in some measure characterize many contemporary societies.


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Whatever Happened to Civic Engagement?

We begin with familiar evidence on changing patterns of political participation, not least because it is immediately relevant to issues of democracy in the narrow sense. Consider the well-known decline in turnout in national elections over the last three decades. From a relative high point in the early 1960s, voter turnout had by 1990 declined by nearly a quarter; tens of millions of Americans had forsaken their parents' habitual readiness to engage in the simplest act of citizenship. Broadly similar trends also characterize participation in state and local elections. It is not just the voting booth that has been increasingly deserted by [End Page 67] Americans. A series of identical questions posed by the Roper Organization to national samples ten times each year over the last two decades reveals that since 1973 the number of Americans who report that "in the past year" they have "attended a public meeting on town or school affairs" has fallen by more than a third (from 22 percent in 1973 to 13 percent in 1993). Similar (or even greater) relative declines are evident in responses to questions about attending a political rally or speech, serving on a committee of some local organization, and working for a political party. By almost every measure, Americans' direct engagement in politics and government has fallen steadily and sharply over the last generation, despite the fact that average levels of education--the best individual-level predictor of political participation--have risen sharply throughout this period. Every year over the last decade or two, millions more have withdrawn from the affairs of their communities. Not coincidentally, Americans have also disengaged psychologically from politics and government over this era. The proportion of Americans who reply that they "trust the government in Washington" only "some of the time" or "almost never" has risen steadily from 30 percent in 1966 to 75 percent in 1992. These trends are well known, of course, and taken by themselves would seem amenable to a strictly political explanation. Perhaps the long litany of political tragedies and scandals since the 1960s (assassinations, Vietnam, Watergate, Irangate, and so on) has triggered an understandable disgust for politics and government among Americans, and that in turn has motivated their withdrawal. I do not doubt that this common interpretation has some merit, but its limitations become plain when we examine trends in civic engagement of a wider sort. Our survey of organizational membership among Americans can usefully begin with a glance at the aggregate results of the General Social Survey, a scientifically conducted, national-sample survey that has been repeated 14 times over the last two decades. Church-related groups constitute the most common type of organization joined by Americans; they are especially popular with women. Other types of organizations frequently joined by women include school-service groups (mostly parentteacher associations), sports groups, professional societies, and literary societies. Among men, sports clubs, labor unions, professional societies, fraternal groups, veterans' groups, and service clubs are all relatively popular. Religious affiliation is by far the most common associational [End Page 68] membership among Americans. Indeed, by many measures America continues to be (even more than in Tocqueville's time) an astonishingly "churched" society. For example, the United States has more houses of worship per capita than any other nation on Earth. Yet religious sentiment in America seems to be becoming somewhat less tied to institutions and more self-defined. How have these complex crosscurrents played out over the last three or four decades in terms of Americans' engagement with organized religion? The general pattern is clear: The 1960s witnessed a significant drop in reported weekly churchgoing--from roughly 48 percent in the late 1950s to roughly 41 percent in the early 1970s. Since then, it has stagnated or (according to some surveys) declined still further. Meanwhile, data from the General Social Survey show a modest decline in membership in all "church-related groups" over the last 20 years. It would seem, then, that net participation by Americans, both in religious services and in church-related groups, has declined


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modestly (by perhaps a sixth) since the 1960s. For many years, labor unions provided one of the most common organizational affiliations among American workers. Yet union membership has been falling for nearly four decades, with the steepest decline occurring between 1975 and 1985. Since the mid-1950s, when union membership peaked, the unionized portion of the nonagricultural work force in America has dropped by more than half, falling from 32.5 percent in 1953 to 15.8 percent in 1992. By now, virtually all of the explosive growth in union membership that was associated with the New Deal has been erased. The solidarity of union halls is now mostly a fading memory of aging men. 5 The parent-teacher association (PTA) has been an especially important form of civic engagement in twentieth-century America because parental involvement in the educational process represents a particularly productive form of social capital. It is, therefore, dismaying to discover that participation in parent-teacher organizations has dropped drastically over the last generation, from more than 12 million in 1964 to barely 5 million in 1982 before recovering to approximately 7 million now. Next, we turn to evidence on membership in (and volunteering for) civic and fraternal organizations. These data show some striking patterns. First, membership in traditional women's groups has declined more or less steadily since the mid-1960s. For example, membership in the national Federation of Women's Clubs is down by more than half (59 percent) since 1964, while membership in the League of Women Voters (LWV) is off 42 percent since 1969. 6 Similar reductions are apparent in the numbers of volunteers for mainline civic organizations, such as the Boy Scouts (off by 26 percent since 1970) and the Red Cross (off by 61 percent since 1970). But what about the possibility that volunteers have simply switched their loyalties [End Page 69] to other organizations? Evidence on "regular" (as opposed to occasional or "drop-by") volunteering is available from the Labor Department's Current Population Surveys of 1974 and 1989. These estimates suggest that serious volunteering declined by roughly one-sixth over these 15 years, from 24 percent of adults in 1974 to 20 percent in 1989. The multitudes of Red Cross aides and Boy Scout troop leaders now missing in action have apparently not been offset by equal numbers of new recruits elsewhere. Fraternal organizations have also witnessed a substantial drop in membership during the 1980s and 1990s. Membership is down significantly in such groups as the Lions (off 12 percent since 1983), the Elks (off 18 percent since 1979), the Shriners (off 27 percent since 1979), the Jaycees (off 44 percent since 1979), and the Masons (down 39 percent since 1959). In sum, after expanding steadily throughout most of this century, many major civic organizations have experienced a sudden, substantial, and nearly simultaneous decline in membership over the last decade or two. The most whimsical yet discomfiting bit of evidence of social disengagement in contemporary America that I have discovered is this: more Americans are bowling today than ever before, but bowling in organized leagues has plummeted in the last decade or so. Between 1980 and 1993 the total number of bowlers in America increased by 10 percent, while league bowling decreased by 40 percent. (Lest this be thought a wholly trivial example, I should note that nearly 80 million Americans went bowling at least once during 1993, nearly a third more than voted in the 1994 congressional elections and roughly the same number as claim to attend church regularly. Even after the 1980s' plunge in league bowling, nearly 3 percent of American adults regularly bowl in leagues.) The rise of solo bowling threatens the livelihood of bowling-lane proprietors because those who bowl as members of leagues consume three times as much beer and pizza as solo bowlers, and the money in bowling is in the beer and pizza, not the balls and shoes. The broader social significance, however, lies in the social interaction and even occasionally civic conversations over beer and pizza that solo bowlers forgo. Whether or not bowling beats balloting in the eyes of most Americans, bowling teams illustrate yet another vanishing form of social capital.


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Countertrends At this point, however, we must confront a serious counterargument. Perhaps the traditional forms of civic organization whose decay we have been tracing have been replaced by vibrant new organizations. For example, national environmental organizations (like the Sierra Club) and feminist groups (like the National Organization for Women) grew rapidly [End Page 70] during the 1970s and 1980s and now count hundreds of thousands of dues-paying members. An even more dramatic example is the American Association of Retired Persons (AARP), which grew exponentially from 400,000 card-carrying members in 1960 to 33 million in 1993, becoming (after the Catholic Church) the largest private organization in the world. The national administrators of these organizations are among the most feared lobbyists in Washington, in large part because of their massive mailing lists of presumably loyal members. These new mass-membership organizations are plainly of great political importance. From the point of view of social connectedness, however, they are sufficiently different from classic "secondary associations" that we need to invent a new label--perhaps "tertiary associations." For the vast majority of their members, the only act of membership consists in writing a check for dues or perhaps occasionally reading a newsletter. Few ever attend any meetings of such organizations, and most are unlikely ever (knowingly) to encounter any other member. The bond between any two members of the Sierra Club is less like the bond between any two members of a gardening club and more like the bond between any two Red Sox fans (or perhaps any two devoted Honda owners): they root for the same team and they share some of the same interests, but they are unaware of each other's existence. Their ties, in short, are to common symbols, common leaders, and perhaps common ideals, but not to one another. The theory of social capital argues that associational membership should, for example, increase social trust, but this prediction is much less straightforward with regard to membership in tertiary associations. From the point of view of social connectedness, the Environmental Defense Fund and a bowling league are just not in the same category. If the growth of tertiary organizations represents one potential (but probably not real) counterexample to my thesis, a second countertrend is represented by the growing prominence of nonprofit organizations, especially nonprofit service agencies. This so-called third sector includes everything from Oxfam and the Metropolitan Museum of Art to the Ford Foundation and the Mayo Clinic. In other words, although most secondary associations are nonprofits, most nonprofit agencies are not secondary associations. To identify trends in the size of the nonprofit sector with trends in social connectedness would be another fundamental conceptual mistake. 7 A third potential countertrend is much more relevant to an assessment of social capital and civic engagement. Some able researchers have argued that the last few decades have witnessed a rapid expansion in "support groups" of various sorts. Robert Wuthnow reports that fully 40 percent of all Americans claim to be "currently involved in [a] small group that meets regularly and provides support or caring for those who participate in it." 8 Many of these groups are religiously affiliated, but [End Page 71] many others are not. For example, nearly 5 percent of Wuthnow's national sample claim to participate regularly in a "self-help" group, such as Alcoholics Anonymous, and nearly as many say they belong to book-discussion groups and hobby clubs. The groups described by Wuthnow's respondents unquestionably represent an important form of social capital, and they need to be accounted for in any serious reckoning of trends in social connectedness. On the other hand, they do not typically play the same role as traditional civic associations. As Wuthnow emphasizes, Small groups may not be fostering community as effectively as many of their proponents would like. Some small groups merely provide occasions for individuals to focus on themselves in the presence of others. The social contract binding members together asserts only the weakest of obligations. Come if you have time. Talk if you feel like it.


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Respect everyone's opinion. Never criticize. Leave quietly if you become dissatisfied. . . . We can imagine that [these small groups] really substitute for families, neighborhoods, and broader community attachments that may demand lifelong commitments, when, in fact, they do not. 9 All three of these potential countertrends--tertiary organizations, nonprofit organizations, and support groups--need somehow to be weighed against the erosion of conventional civic organizations. One way of doing so is to consult the General Social Survey. Within all educational categories, total associational membership declined significantly between 1967 and 1993. Among the college-educated, the average number of group memberships per person fell from 2.8 to 2.0 (a 26-percent decline); among high-school graduates, the number fell from 1.8 to 1.2 (32 percent); and among those with fewer than 12 years of education, the number fell from 1.4 to 1.1 (25 percent). In other words, at all educational (and hence social) levels of American society, and counting all sorts of group memberships, the average number of associational memberships has fallen by about a fourth over the last quarter-century. Without controls for educational levels, the trend is not nearly so clear, but the central point is this: more Americans than ever before are in social circumstances that foster associational involvement (higher education, middle age, and so on), but nevertheless aggregate associational membership appears to be stagnant or declining. Broken down by type of group, the downward trend is most marked for church-related groups, for labor unions, for fraternal and veterans' organizations, and for school-service groups. Conversely, membership in professional associations has risen over these years, although less than might have been predicted, given sharply rising educational and occupational levels. Essentially the same trends are evident for both men and women in the sample. In short, the available survey evidence [End Page 72] confirms our earlier conclusion: American social capital in the form of civic associations has significantly eroded over the last generation.

Good Neighborliness and Social Trust

I noted earlier that most readily available quantitative evidence on trends in social connectedness involves formal settings, such as the voting booth, the union hall, or the PTA. One glaring exception is so widely discussed as to require little comment here: the most fundamental form of social capital is the family, and the massive evidence of the loosening of bonds within the family (both extended and nuclear) is well known. This trend, of course, is quite consistent with--and may help to explain-our theme of social decapitalization. A second aspect of informal social capital on which we happen to have reasonably reliable time-series data involves neighborliness. In each General Social Survey since 1974 respondents have been asked, "How often do you spend a social evening with a neighbor?" The proportion of Americans who socialize with their neighbors more than once a year has slowly but steadily declined over the last two decades, from 72 percent in 1974 to 61 percent in 1993. (On the other hand, socializing with "friends who do not live in your neighborhood" appears to be on the increase, a trend that may reflect the growth of workplace-based social connections.) Americans are also less trusting. The proportion of Americans saying that most people can be trusted fell by more than a third between 1960, when 58 percent chose that alternative, and 1993, when only 37 percent did. The same trend is apparent in all educational groups; indeed, because social trust is also correlated with education and because educational levels have risen sharply, the overall decrease in social trust is even more apparent if we control for education. Our discussion of trends in social connectedness and civic engagement has tacitly assumed that all the forms of social capital that we have discussed are themselves coherently correlated across individuals. This is in fact true. Members of associations are much more likely than nonmembers to participate in


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politics, to spend time with neighbors, to express social trust, and so on. The close correlation between social trust and associational membership is true not only across time and across individuals, but also across countries. Evidence from the 1991 World Values Survey demonstrates the following: 10 1. Across the 35 countries in this survey, social trust and civic engagement are strongly correlated; the greater the density of associational membership in a society, the more trusting its citizens. Trust and engagement are two facets of the same underlying factor--social capital.[End Page 73] 2. America still ranks relatively high by cross-national standards on both these dimensions of social capital. Even in the 1990s, after several decades' erosion, Americans are more trusting and more engaged than people in most other countries of the world. 3. The trends of the past quarter-century, however, have apparently moved the United States significantly lower in the international rankings of social capital. The recent deterioration in American social capital has been sufficiently great that (if no other country changed its position in the meantime) another quarter-century of change at the same rate would bring the United States, roughly speaking, to the midpoint among all these countries, roughly equivalent to South Korea, Belgium, or Estonia today. Two generations' decline at the same rate would leave the United States at the level of today's Chile, Portugal, and Slovenia.

Why Is U.S. Social Capital Eroding?

As we have seen, something has happened in America in the last two or three decades to diminish civic engagement and social connectedness. What could that "something" be? Here are several possible explanations, along with some initial evidence on each. The movement of women into the labor force. Over these same two or three decades, many millions of American women have moved out of the home into paid employment. This is the primary, though not the sole, reason why the weekly working hours of the average American have increased significantly during these years. It seems highly plausible that this social revolution should have reduced the time and energy available for building social capital. For certain organizations, such as the PTA, the League of Women Voters, the Federation of Women's Clubs, and the Red Cross, this is almost certainly an important part of the story. The sharpest decline in women's civic participation seems to have come in the 1970s; membership in such "women's" organizations as these has been virtually halved since the late 1960s. By contrast, most of the decline in participation in men's organizations occurred about ten years later; the total decline to date has been approximately 25 percent for the typical organization. On the other hand, the survey data imply that the aggregate declines for men are virtually as great as those for women. It is logically possible, of course, that the male declines might represent the knock-on effect of women's liberation, as dishwashing crowded out the lodge, but timebudget studies suggest that most husbands of working wives have assumed only a minor part of the housework. In short, something besides the women's revolution seems to lie behind the erosion of social capital. Mobility: The "re-potting" hypothesis. Numerous studies of organizational involvement have shown that residential stability and such related phenomena as homeownership are clearly associated with greater [End Page 74] civic engagement. Mobility, like frequent re-potting of plants, tends to disrupt root systems, and it takes time for an uprooted individual to put down new roots. It seems plausible that the automobile, suburbanization, and the movement to the Sun Belt have reduced the social rootedness of the average American, but one fundamental difficulty with this hypothesis is apparent: the best evidence shows that residential stability and homeownership in America have risen modestly since 1965, and are surely higher now than during the 1950s, when civic engagement and social connectedness by our measures was definitely higher.


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Other demographic transformations. A range of additional changes have transformed the American family since the 1960s--fewer marriages, more divorces, fewer children, lower real wages, and so on. Each of these changes might account for some of the slackening of civic engagement, since married, middle-class parents are generally more socially involved than other people. Moreover, the changes in scale that have swept over the American economy in these years--illustrated by the replacement of the corner grocery by the supermarket and now perhaps of the supermarket by electronic shopping at home, or the replacement of community-based enterprises by outposts of distant multinational firms-may perhaps have undermined the material and even physical basis for civic engagement. The technological transformation of leisure. There is reason to believe that deep-seated technological trends are radically "privatizing" or "individualizing" our use of leisure time and thus disrupting many opportunities for social-capital formation. The most obvious and probably the most powerful instrument of this revolution is television. Time-budget studies in the 1960s showed that the growth in time spent watching television dwarfed all other changes in the way Americans passed their days and nights. Television has made our communities (or, rather, what we experience as our communities) wider and shallower. In the language of economics, electronic technology enables individual tastes to be satisfied more fully, but at the cost of the positive social externalities associated with more primitive forms of entertainment. The same logic applies to the replacement of vaudeville by the movies and now of movies by the VCR. The new "virtual reality" helmets that we will soon don to be entertained in total isolation are merely the latest extension of this trend. Is technology thus driving a wedge between our individual interests and our collective interests? It is a question that seems worth exploring more systematically.

What Is to Be Done?
The last refuge of a social-scientific scoundrel is to call for more research. Nevertheless, I cannot forbear from suggesting some further lines of inquiry. [End Page 75]

We must sort out the dimensions of social capital, which clearly is not a unidimensional concept, despite language (even in this essay) that implies the contrary. What types of organizations and networks most effectively embody--or generate--social capital, in the sense of mutual reciprocity, the resolution of dilemmas of collective action, and the broadening of social identities? In this essay I have emphasized the density of associational life. In earlier work I stressed the structure of networks, arguing that "horizontal" ties represented more productive social capital than vertical ties. 11 Another set of important issues involves macrosociological crosscurrents that might intersect with the trends described here. What will be the impact, for example, of electronic networks on social capital? My hunch is that meeting in an electronic forum is not the equivalent of meeting in a bowling alley--or even in a saloon--but hard empirical research is needed. What about the development of social capital in the workplace? Is it growing in counterpoint to the decline of civic engagement, reflecting some social analogue of the first law of thermodynamics--social capital is neither created nor destroyed, merely redistributed? Or do the trends described in this essay represent a deadweight loss? A rounded assessment of changes in American social capital over the last quarter-century needs to count the costs as well as the benefits of community engagement. We must not romanticize small-town, middle-class civic life in the America of the 1950s. In addition to the deleterious trends emphasized in this essay, recent decades have witnessed a substantial decline in intolerance and probably also in overt discrimination, and those beneficent trends may be related in complex ways to the erosion of traditional social capital. Moreover, a balanced accounting of the social-capital books would need to reconcile the insights of this approach with the undoubted insights offered by Mancur Olson and others who stress that closely knit social, economic, and political organizations are prone to inefficient cartelization and to what


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political economists term "rent seeking" and ordinary men and women call corruption. 12

Finally, and perhaps most urgently, we need to explore creatively how public policy impinges on (or might impinge on) social-capital formation. In some well-known instances, public policy has destroyed highly effective social networks and norms. American slum-clearance policy of the 1950s and 1960s, for example, renovated physical capital, [End Page 76] but at a very high cost to existing social capital. The consolidation of country post offices and small school districts has promised administrative and financial efficiencies, but full-cost accounting for the effects of these policies on social capital might produce a more negative verdict. On the other hand, such past initiatives as the county agricultural-agent system, community colleges, and tax deductions for charitable contributions illustrate that government can encourage social-capital formation. Even a recent proposal in San Luis Obispo, California, to require that all new houses have front porches illustrates the power of government to influence where and how networks are formed.

The concept of "civil society" has played a central role in the recent global debate about the preconditions for democracy and democratization. In the newer democracies this phrase has properly focused attention on the need to foster a vibrant civic life in soils traditionally inhospitable to selfgovernment. In the established democracies, ironically, growing numbers of citizens are questioning the effectiveness of their public institutions at the very moment when liberal democracy has swept the battlefield, both ideologically and geopolitically. In America, at least, there is reason to suspect that this democratic disarray may be linked to a broad and continuing erosion of civic engagement that began a quarter-century ago. High on our scholarly agenda should be the question of whether a comparable erosion of social capital may be under way in other advanced democracies, perhaps in different institutional and behavioral guises. High on America's agenda should be the question of how to reverse these adverse trends in social connectedness, thus restoring civic engagement and civic trust. Robert D. Putnam is Dillon Professor of International Affairs and director of the Center for International Affairs at Harvard University. His most recent books are Double-Edged Diplomacy: International Bargaining and Domestic Politics (1993) and Making Democracy Work: Civic Traditions in Modern Italy (1993), which is reviewed elsewhere in this issue. He is now completing a study of the revitalization of American democracy.

Commentary and writings on related topics:

Nicholas Lemann, Kicking in Groups, The Atlantic Monthly (April 1996). Mary Ann Zehr, Getting Involved in Civic Life, Foundation News and Commentary (May/June 1996). The Foundation News and Commentary is a publication of The Council on Foundations.

1. Alexis de Tocqueville, Democracy in America, ed. J.P. Maier, trans. George Lawrence (Garden City, N.Y.: Anchor Books, 1969), 513-17. 2. On social networks and economic growth in the developing world, see Milton J. Esman and Norman Uphoff, Local Organizations: Intermediaries in Rural Development (Ithaca: Cornell University Press, 1984), esp. 15-42 and 99-180; and Albert O. Hirschman, Getting Ahead Collectively: Grassroots Experiences in Latin America (Elmsford, N.Y.: Pergamon Press, 1984), esp. 42-77. On East Asia, see Gustav Papanek, "The New Asian Capitalism: An Economic Portrait," in Peter L. Berger and Hsin-Huang Michael Hsiao, eds., In Search of an East Asian Development Model (New Brunswick, N.J.: Transaction, 1987), 27-80; Peter B. Evans, "The State as Problem and Solution: Predation, Embedded Autonomy and Structural Change," in Stephan Haggard and Robert R.


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Kaufman, eds., The Politics of Economic Adjustment (Princeton: Princeton University Press, 1992), 139-81; and Gary G. Hamilton, William Zeile, and Wan-Jin Kim, "Network Structure of East Asian Economies," in Stewart R. Clegg and S. Gordon Redding, eds., Capitalism in Contrasting Cultures (Hawthorne, N.Y.: De Gruyter, 1990), 105-29. See also Gary G. Hamilton and Nicole Woolsey Biggart, "Market, Culture, and Authority: A Comparative Analysis of Management and Organization in the Far East," American Journal of Sociology (Supplement) 94 (1988): S52-S94; and Susan Greenhalgh, "Families and Networks in Taiwan's Economic Development," in Edwin Winckler and Susan Greenhalgh, eds., Contending Approaches to the Political Economy of Taiwan (Armonk, N.Y.: M.E. Sharpe, 1987), 224-45. 3. Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993). 4. James S. Coleman deserves primary credit for developing the "social capital" theoretical framework. See his "Social Capital in the Creation of Human Capital," American Journal of Sociology (Supplement) 94 (1988): S95-S120, as well as his The Foundations of Social Theory (Cambridge: Harvard University Press, 1990), 300-21. See also Mark Granovetter, "Economic Action and Social Structure: The Problem of Embeddedness," American Journal of Sociology 91 (1985): 481-510; Glenn C. Loury, "Why Should We Care About Group Inequality?" Social Philosophy and Policy 5 (1987): 249-71; and Robert D. Putnam, "The Prosperous Community: Social Capital and Public Life," American Prospect 13 (1993): 35-42. To my knowledge, the first scholar to use the term "social capital" in its current sense was Jane Jacobs, in The Death and Life of Great American Cities (New York: Random House, 1961), 138. 5. Any simplistically political interpretation of the collapse of American unionism would need to confront the fact that the steepest decline began more than six years before the Reagan administration's attack on PATCO. Data from the General Social Survey show a roughly 40-percent decline in reported union membership between 1975 and 1991. 6. Data for the LWV are available over a longer time span and show an interesting pattern: a sharp slump during the Depression, a strong and sustained rise after World War II that more than tripled membership between 1945 and 1969, and then the post-1969 decline, which has already erased virtually all the postwar gains and continues still. This same historical pattern applies to those men's fraternal organizations for which comparable data are available--steady increases for the first seven decades of the century, interrupted only by the Great Depression, followed by a collapse in the 1970s and 1980s that has already wiped out most of the postwar expansion and continues apace. 7. Cf. Lester M. Salamon, "The Rise of the Nonprofit Sector," Foreign Affairs 73 (July-August 1994): 109-22. See also Salamon, "Partners in Public Service: The Scope and Theory of GovernmentNonprofit Relations," in Walter W. Powell, ed., The Nonprofit Sector: A Research Handbook (New Haven: Yale University Press, 1987), 99-117. Salamon's empirical evidence does not sustain his broad claims about a global "associational revolution" comparable in significance to the rise of the nation-state several centuries ago. 8. Robert Wuthnow, Sharing the Journey: Support Groups and America's New Quest for Community (New York: The Free Press, 1994), 45. 9. Ibid., 3-6. 10. I am grateful to Ronald Inglehart, who directs this unique cross-national project, for sharing these highly useful data with me. See his "The Impact of Culture on Economic Development: Theory, Hypotheses, and Some Empirical Tests" (unpublished manuscript, University of Michigan, 1994). 11. See my Making Democracy Work, esp. ch. 6.


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12. See Mancur Olson, The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities (New Haven: Yale University Press, 1982), 2.



The Roots of the 1960s Communal Revival

Timothy Miller

One of the greatfloweringsof communitarianism in America came with the era of the hippies in the 1960s and early 1970s. The rural hippie communes were media attention-grabbers, full of photo opportunities, wild anecdotes, and the weirdest-looking people most Americans had even seen. Press coverage was massive from about 1969 through 1972, and a string of popular books soon emerged, most of them travelogues of the authors' visits to communes. A fair body of scholarship eventually developed as well. One standard theme in all of that coverage and scholarship, however, was oddly misguided. In case after case, observers of the new communalism seeking to explain the origins of the communes concluded that they were products of the decay of urban hippie life in the Haight-Ashbury, the East Village and other enclaves. The hip urban centers, so the thesis ran, might have briefly been joyous centers of peace and love and expanded consciousness, but they soon devolved into cesspools of hard drugs, street crime and official repression of dissident lifestyles. The hippies at that point fled for the friendly precincts of the countryside, where they built communes as new places for working out the hip vision. Examples of this explanation of the origins of hippie communalism abound in both popular and scholarly writings. Maren Lockwood Carden, for example, writing in 1976, says matter-of-facdy that the hippies* "first communes were created within the urban areas in which they already lived," and that beginning in 1966 "and especially during 1967 and 1968, such community-oriented hippies left the city."1 Helen Constas and Kenneth Westhues purport to trace the history


of the counterculture "from its charismatic beginnings in the old urban bohemias to its current locale in rural communes," concluding that "communes signify the routinization of hippiedom."2 Actually the new communes began to appear before there was a clearly recognizable overall hippie culture, much less a decaying one; rather they represented a new outcropping of the much larger venerable American tradition of alternative culture, a part of which has involved communal living. Catalyzed by shifts in American culture in the late 1950s and early 1960s, the hip communes were not, in the beginning, products of hippiedom, but crucibles that played a major role in shaping and defining hip culture. In other words, the urban hippies did not create the first hip communes; it would be closer to the truth to say that the earliest communes helped create the hippies. While communes were indeed founded by hippies who fled the cities, they were johnnies-come-lately to the hip communal scene. When did the hippiesfirstappear? An argument that the new wave of rural communes predates the rise of the urban hippies depends on the proposition that hippies were not present as a recognizable movement in American cities until thesecondhalf of the 1960s. Of course no one can point to an exact moment at which the first hippie appeared at the corner of Haight and Ashbury streets. The hippies evolvedfromthe beats of the 1950s and the bohemians of the decades before that, but it would be hard to see them as coalescing into anything that amounted to a distinct social movement before about 1966. The Diggers of San Francisco, the altruists who helped penurious hippies survive and whose abodes were sometimes more or less communal themselves, began to take clear shape in that year. Although LSD, whose use became a pivot of the hip experience, had been discovered by a few cultural pioneers (among them Timothy Leary and Ken Kesey) some years earlier, it did not become a symbol of and vehicle for rejecting the dominant culture until mid-decade, when Kesey staged a year of Acid TestsfromNovember 1965 to October 1966. The term "hippie," which seems to have been coined in late 1965,3 was quite obscure even into 1967; it does not appear in such pioneering books on the new dissident culture as J. L. Simmons and Barry Winograd's If s Happening and John Gruen's The New Bohemia (both published in 1966).4 By mid-1967, however, everyone knew who hippies were. The 1966-67 Reader's Guide has no entry for "hippie"; the 1967-68 volume has more than a column of them .5 In sum, it would seem fair to conclude that the cultural phenomenon of the hippies began to take on clear, distinguishing characteristics about 1966 and was widely familiar to the general public by the following year. But communes that were hip already existed by then. Drop City, a full-blown prototype of hip communalism, was established in May, 1965; another community with a notably hip orientation, Tolstoy Farm, was two years older. Ken Kesey

and his Merry Pranksters took their famous bus trip in 1964 and thereafter settled down to a freewheeling communal existence in California and later Oregon.6 Mel Lyman's Fort Hill community adopted communal living in 1966 in Boston, and had been moving toward that model since Lyman had first begun attracting followers in the Boston area about 1963. These communes had been developing new subcultural mores and were helping shape the emerging hip movement. Moreover, other communes that were not "hip" but that in some cases influenced the hippies were also well established at the time. Religious communalism, a staple theme in American history, was a part of the context, with groups dedicated to such diverse centerpoints as Catholicism, various Eastern religions, and the Anabaptist tradition all thriving in the early 1960s. There were also secular communities devoted to radical politics, anarchism, sexual freedom, the sharing of labor, creation of arts and crafts, land development, ethnicity, and a dazzling array of visions of assorted seers and cranks. While American communitarianism has historically had stronger and weaker periods, it has been an ongoing theme in American life for more than three centuries, and it was very much there when a new generation of dissenters decided to give it a whirl.7 That is not to say that every new commune deliberately studies the historic communal tradition and tries to build on it As recent scholarship has pointed out, most communal groups have some independent reason for existence and adopt communal living as a vehicle for the achievement of specific goals.8 Nevertheless, communes have had a more substantial and consistent presence in the United States than many have realized. That ongoing presence has often been overlookedby American historians, who typically see a great surge of colony building in the first half of the nineteenth century, with such groups as the Shakers, the Oneida Community, the Fourierists, the Owenites and many others, but then a near-void until the hippies came along.9 Indeed, several historians working just prior to the sixties communal revival pronounced communitarianism essentially dead as of about the time of the Civil War.10 The hippies by and large disdained the study of history, so they were unaware that what they were doing had long before ceased to exist and in fact had become impossible. Nevertheless, their communes owed a debt to the American tradition of social radicalism and in some cases had distinct ties to communes of earlier times. One could argue that the hippie communal era, like earlier waves of communitarianism before it, represented one of thefrequentoutbreaks of the hubris that began with the Puritans, the belief that mortal humans could actually create perfect communities in which heaven would virtually be achieved on earth, and thus was but a new manifestation of a longstanding cultural motif.11 Less grandly, it at least represented the kind of dissatisfaction with the institutions of mainstream culture that has frequently been manifested not only in the founding of communes but in other kinds of radicalism andbohemianism as well. In short, the communes were more closely related to the tradition of cultural dissent than they were to the breakdown of the hip urban centers.


Moreover, some hip communes did have distinct ancestry in earlier American communalism in that their founders and key members had been involved, directly or indirectly, with communitarianism before becoming hippies. Tolstoy Farm, for example, deliberately built on its founder's affinity for the communityoriented ideas of Tolstoy and Gandhi; the first residents of Drop City all had family ties to communal or collective traditions and deliberately built an art colony, thus becoming part of another pathway in communal history.12 The earlier part of the communal tradition, until 1860 or so, has been well recorded and will not be recapitulated here. And Robert Fogarty's recent excellent overview of the period from 1860 to 1914 demonstrates that communitarianism was quite active during that part of the period of supposed communal declension, so that period will be avoided here as well.13 This minichronicle begins roughly where Fogarty quits, describing a few of the many communities that were active after 1914 and showing that the communal tradition was still alive and well when the hippies joined it.

Religious communities
Christianity, Judaism and other religions provided important centers of communalism in the years preceding the hip era. The largest group of independent communitarians in North America, the Hutterites, grew enormously after their arrival in the United States in 1874, from a few hundred members to perhaps 40,000 in about 350 colonies today. Despite their isolation, the Hutterites have influenced many other communal groupsmost notably the Bruderhof, a communal movement founded in 1920 in Germany in explicit imitation of the classic Hutterite model, but also such other groups as Koinonia Farm, an interracial community founded in Georgia in 1942. The Bruderhof, settling in the United States in the 1950s, has ever since continued to develop its own version of Hutterism, complete with Anabaptist theology, patriarchal leadership, and a completely communal economy.14 Koinonia was founded by the Southern Baptist preacher Clarence Jordan as a place where blacks and whites could live together harmoniously, and Jordan became interested in exploring the beliefs and lifestyles of other communal groups. Soon he forged links with the Hutterites (and later with the Bruderhof); extended visits between Hutterites and Koinonians soon followed, and in fact Hutterite guests at Koinonia provided crucial support for the Georgia colony when it was severely endangered by KKK-inspired economic and physical threats.15 Koinonia, in turn, helped link the older communal traditions with the hippies; many would-be hippie communards flocked to the Georgia farm, which received sympathetic coverage in many of the surveys of hippie communes.16 Meanwhile, other Protestants also founded communes. One of many such groups operating in mid-century was Reba Place Fellowship of Evanston, Illinois, founded in 1957 by Mennonites as a socially radical evangelical Christian community.17 Catholic communitarianism historically has been centered in the religious orders, and as the larger culture shifted in midcentury the winds of change blew 76

through many of them. Changes accelerated under the influence of the reformist Second Vatican Council, which was convened in 1962. Among many new directions tested was an openness to the East; the Benedictine community in Portsmouth, Rhode Island, for example, became widely known for its prior's experiments in what he termed Zen Catholicism.18 There was also important Catholic communitarianism outside the orders, the best-known such phenomenon being the Catholic Worker movement, whichfromthe 1930s operated an extensive string of communal houses and farms in carrying out its mission of serving and enabling the poor. Jews as well as Christians were active in creating new communities. The greatest wave of Jewish communitarianism came in the late-nineteenth century as impoverished immigrantsfromEastern Europe were settled in rural colonies, but experiments continued thereafter. Closer to the hip era the Havurah movement, which began to take shape in the 1950s, spawned a number of communal living groups as young Jews sought warmer fellowship in what they perceived to be sterile synagogues. Moreover, the moving of Hasidic communities from Europe to America in the twentieth century provided intriguing models of close Jewish community, even though the urban Hasidic settlements were not economically communal. Eastern religions were also well represented among the pre-hip communes. Indian religions opened monasteries in America as early as 1895.19 Buddhist communities began appearing in the 1930s.20 The International Society for Krishna Consciousness opened its American phase with the arrival of A. C. Bhaktivedanta S wami from India in 1965, and it quickly became largely communal, drawing much of its initial constituency from the hippies.21 Other Eastern religions also developed communal presences about the same time. Some religious communes grew up independently of the major world traditions. Father Divine's Peace Mission Movement, for example, which focused on a leader who claimed to be God incarnate, grew rapidly during the Depression and was still alive, if dwindling, by the time the hippies arrived on the scene.22 A few years later, in 1945, Lloyd Meeker and a group of his followers founded Sunrise Ranch near Loveland, Colorado, thefirstof what has become a network of a dozen communities in the United States, Canada and elsewhere. Emphasizing mind/body healing and other disciplines that today would be called New Age practices, these Emissary Communities received a flood of inquirers in the late 1960s when thousands of the young hip sought communities in which to settle.23

Secular communities
While the longest-lived American communes have generally been religious in orientation, the nation has had no shortage of secular communities.24 Society has always had those who have gathered in intentional communities as they advanced political causes, promoted social reform, created artwork, homesteaded new land, and pursued any number of common goals. 77

Many socialists frustrated at their inability to gain a major foothold in the national political arena have turned to commune-building as the only conceivable way to put socialism into practice in America. In the twentieth century one of the most prominent socialist communes was Llano del Rio, founded in California in 1914 by Job Harriman. Llano moved to Louisiana in 1918; there, as Newllano, the colony survived for two decades before succumbing to its ongoing financial crisis.25 Similarly anarchists, in their resistance to structured governments, have often turned to cooperative communities as models for human interaction. The Ferrer Colony at S telton, New Jersey, for example, operated an alternative school over a lifespan that covered roughly the period between the world wars.26 Still others have turned to communitarianism, in one form or another, to prove a social theory. In one prominent example, disciples of single-tax advocate Henry George, despairing of political success, decided to test their theories in collective settlements that would reallocate the tax bill for the settlement according to Georgist theory, in effect assessing land and not buildings. The most successful of the single-tax enclaves, Fairhope, in Alabama, still operates today.27 Quite a few of the mid-century communal settlements were devoted to a charismatic leader or some particular point of view. Alfred Lawson, a onetime baseball pitcher and self-proclaimed inventor of the airliner, founded a communal "university" in Des Moines in 1943 where his disciples steeped themselves in his wide-ranging theories and cultivated communal gardens.28 In the 1930s and 1940s a novel group called Mankind United, one wing of which was communal, attracted thousands of Californians with its claim that it would soon establish an earthly paradise for its members.29 The list goes on and on. Artists' colonies, virtually by definition centers of bohemianism, constituted, collectively, a bridge between earlier communitarianism and the hippies. The earliest colonies were simply townsincluding Provincetown, Massachusetts, Old Lyme, Connecticut, and Taos, New Mexicowhere artists congregated. By the turn of the century, however, new colonies with communal features began to appear. The Roycrofters, founded by Elbert Hubbard at East Aurora, New York, in 1893, producedfinebooks (many of them consisting of Hubbard's writings), furniture and other craftworks for a nationwide clientele. Hubbard liked to speak of a common purse as well as shared living facilities, although some critics have found Roycroft's communitarianism less than perfect, and Hubbard rather more equal than his fellows.30 Nevertheless, this colony, deliberately based on the artists' community founded by William Morris then operating in England, pointed the way to a new chapter in American communal history.31 Byrdcliffe, founded through the largesse of the English millionaireRalph Radcliffe Whitehead in 1903, was never very productive artistically, but it attracted a host of artists and bohemians whose enduring presence turned the obscure New York village of Woodstock into an important center of the arts.32 1903 also saw the founding of Rose Valley outside Philadelphia, where a diverse band of artists, architects and writers labored together for several years.33 Other similar communities followed, and a decade or two later variations on the theme began to appear, especially with 78

the opening of the semicommunal Black Mountain College, an extraordinary center of the literary and visual arts, in North Carolina in 1933.M Here we have communities with some of the strongest links to the communes of the 1960s, the latter also having been populated to a large extent with would-be artists and writers. The art colonies prefigured the hippies in being centers of free expression; they also tended to accept relatively liberated sexuality (heterosex outside of marriage was not uncommon; neither was homosexuality). Hippies who had attended art schools often had had art-colony veterans as teachers; the founders of Drop City, the prototypical hippie commune that had a strong artistic flair, were guided in significant part by their admiration for the bohemian art colonial tradition. In sum, intentional communities were as alive and well as ever when the hippies began creating communes. The notion that the communal tradition essentially died out before the Civil War is clearly erroneous; there may well have been more North Americans living communally in 1940 than there were in 1840.

Continuities and discontinuities

The point of all this is that the hippies, although some of them thought they were inventing communal living, in fact were merely writing a new chapter in a venerable tome. On the other hand, there was something new about the communes of the hippies. While it is hazardous to generalize too extensively about hip communal styles (the communes were a diverse lot, with a wide variety of purposes and attitudes), a few features tended to define the genre. For example, many communes, unlike most of their predecessors, subscribed to the concept of open membership. Openness was basic to the hip ethos; hippies tended to have a naive optimism about human nature, a belief that if one could simply be rescued from the nightmare of American culture and placed in a supportive setting, one would respond in kind and contribute to group harmony and achievement So anyone willing to reject mainstream cultureto drop out, as the argot had itwas welcome. A second hip innovation, in the communes as elsewhere in hip culture, was the use of drugs. Perhaps the hippies were not thefirstcommunal druggies; the Shakers, after all, had been major producers of opium. But by hippie times most mood-altering substances except alcohol were illegal, and illegality put a new patina on the use of those substances. The hippies were deeply convinced that certain drugs were valuable in a great many ways: They made you feel good, they provided glorious mystical visions, they increased your ability to live harmoniously with others and with nature. The fact that marijuana could often be grown in some obscure corner of a rural farmstead was a nice side benefit. Thus hippie communes were natural centers of drug production, use and advocacy, and as a result were frequently raided by the police. A third innovation was a flamboyant outrageousness that thumbed its nose at the rest of society. Mainstream culture was dead; the hippies embodied a breathtakingly new civilization, or so they thought. In their clothes, architecture,


graphie designs, music and many other externals of life the self-described freaks saw themselves as utterly different from what had gone before, and advertised that difference as vigorously as possible. Somewhat new, but less completely so, was the hippie belief in abolishing all restrictions on sexual behavior. The standard hip theory was one of total sexual freedom: multiple partners, multilateral relationships or no commitment at all, homosexualitythere were no boundaries. Of course some earlier communes had experimented with unusual sexual mores; the Oneida Community, for example, had a group marriage involving hundreds of members that lasted for more than 30 years,fromroughly 1850 to 1880. The hippie contribution thus was to take an idea earlier promulgated by a few isolated radical communards and make a variant of it the standard for large numbers of communes throughout the country. In other ways the hippies were much like many of their communal predecessors. Many of the hippie communes had a back-to-the-land flavor, a rural romanticism about raising cropsfromthe good earth that had been very much a part of many earlier American communal ventures. Most of the hippies who had not been raised on farms found agriculture less rewarding and less productive than they had expected, just as many of their predecessors had. They also reflected the experience of their forebears in that they tended to attract members who were illsuited to communal living. The communal ideal is one of strong, self-motivated altruists pooling their money and energy for the common good. The reality is that a reliable commune is seemingly a cradle-to-grave welfare system, and as such is attractive to persons lacking motivation and ability to contribute. The Shakers perennially had "Winter Shakers" who would show up in the fall and live the communal life during the cold months, only to leave in the spring when the workload increased and life became easier elsewhere. The hippies also had problems withfreeloadersand misfits.

Toward the sixties

No single chain of occurrences connected earlier American communitarianism to the hippies. Nevertheless, the communal form evolved, not necessarily consciously, over several decades toward the hip model. Any beginning point is bound to be arbitrary, but looking back about a quarter-century before hip days a sociological generationis useful. One can discern seeds of hip themes in one of the most important community-minded movements of the century, the Catholic Worker. Dorothy Day, its founder, was an early twentieth century Greenwich Village bohemian who was converted to Catholicism without losing her radicalism. Communal living was an important part of the movementfromits inception in the 1930s. In cities the Workers established Houses of Hospitality, places where the poorest of the poor could get coffee, bread and a place to sleep. Eventually several communal farms were developed, providing refugesfromthe problems of the city and food for the urban houses. While the Catholic Workers were (and are) hardly hippies, their movement did provide new directions for 80

communalism. They were devoted to serving the destitute, something that was not a central precept of most of the more famous nineteenth-century communities. They lived lives of service around the clock and threw their doors open to all, sharing their physical space as well as their food and clothing with those they served. While they did not invent voluntary poverty, they lived it more truly than most communitarians have before or since. The center of their movement was religious, most Catholic Workers being as devoted to their religious path as hippies would be to their own diverse brands of mystical spirituality. And the Catholic Workers were full of political radicalism: they fed the poor, but they also worked to change the wealthy nation's political and social system that left many people hungry. It should not be surprising that some early pioneers of 1960s communalism were Catholic Worker veterans; their presence was especially strong in the early days of Tolstoy Farm, founded in 1963. The founding of Community Service, Inc., by Arthur Morgan in 1940 also helped point new directions in communitarianism. Morgan, onetime President of Antioch College in Ohio and later chairman of the Tennessee Valley Authority, used CSI to help keep the communal flame burning at a time when Red-baiting and McCarthyism made life difficult for collective enterprises. In 1954 CSI established the Homer Morris Fund, a source of financing for communal businesses. When the hippies came along, the Morris Fund, although its resources were never large, helped their communesat least some of the more stable onesjust as it had those of the previous generation. (Under a new name, Community Educational Service Council, Inc., the Fund continues to assist intentional communities today.) Some of the member communities of CSI had features that anticipated the hip model and made them, in effect, links between the earlier communitarians and the hippies. One good example is the Glen Gardner Cooperative Community, also known as St. Francis Acres, founded in 1947 in New Jersey.35 Its anarchist/ pacifist members operated a radical publishing house (just as many hip communes would produce "underground" publications), farmed and operated a preschool. Glen Gardner's members declared themselves opposed to land ownership, and announced that the community's land belonged to God. The concept was not original; Peter Armstrong had deeded the 600 acres of his Celestia community to God in the 1860s.36 But it was to crop up again in the hip communes when Lou Gottlieb, after protracted battles with the local authorities over occupancy and sanitation, signed over the 30 acres of his Morning Star commune in California to God.37 The most tangible link between Glen Gardner and the radicals of the 1960s was its leader, David Dellinger, who later became widely known for his pacifist activism and literary polemics, especially against the war in Vietnam. Dellinger eventually was one of the Chicago Seven who were tried for conspiracy for organizing demonstrations at the 1968 Democratic National Convention in Chicago. He was only one of several sixties radicals who had earlier been involved in communal living; another was Staughton Lynd, who was a member 81

of the Macedonia Cooperative Community in Georgia for several years in the 1950s.38 Some communities established on the eve of the hip era eventually drew fair numbers of followers from the hippies. A good example here is the Himalayan Academy, founded in 1962 in Virginia City, Nevada. Virginia City was an early countercultural outpost; Subramuniya, an Eastern master of Western origin, bought an old brewery building and set out to form a spiritual community that would combine the best of Hindu and Christian spirituality.39 By the early 1970s the movement had grown so much that it began forming satellite centers. Meanwhile, other communities of various Eastern religionists sprang up, often in small communities so far from the mainstream of society that they were hardly noticed. How many students of communal history, for example, know of the Ahimsa Community of Parsons, Kansas (founded in 1965),40orof the Yashodhara Ashram of Kootenay Bay, British Columbia (1959)?41 Yet another movement with feet in both earlier and 1960s communitarianism was the School of Living. In 1934 social critic Ralph Borsodi founded the School as an organization that would help people learn the skills needed to move back to the land; two years later a School community was established at Suffern, New York, with, eventually, sixteen resident families. It closed during World War II, but the School of Living was taken over by Mildred Loomis who, with her husband John, re-established it in Ohio, whence it expanded.42 By 1966 the School was holding its classes and seminars at its new Heathcote Center, Maryland, and there a residential community was established. Unlike some older communitarians, Loomis was sympathetic to the hippies, whom she saw as perhaps the best hope for the ongoing communitarian movement and for the revival of rural self-sufficiency, her life goal.43 In the late 1960s Heathcote seems to have become very much like other hip communes; Elia Katz, in a generally pejorative account of a visit there about 1971, reported that the physical community consisted of a "cluster of shacks and trailers" as well as tents, and that quite a few members used marijuana (although not the major psychedelics), led fairly freewheeling sexual lives, and were concerned with healthy eating, subsistence farming and rejecting the values of mainstream America.44

The hip era dawns

Just when and where did thefirstcommune emerge that could properly be called "hip"? The form seems to have evolved in scattered locations between about 1962 and 1966 as a series of communes, each more hip than the last, began to crop up independently. The first, or one of the first, was Gorda Mountain, reportedly founded in 1962 nearBigSur, California. Its nature and role is difficult to assess, however, because information about it is so sparse. Libraries in the area have no information on it, and Big Sur history buffs, while they remember the community, tend to know few details. Richard Fairfield, who devoted two paragraphs to Gorda Mountain in his Communes USA, called it "the first openland commune," saying it began when Amelia Newell, who operated an art 82

gallery on the coast highway, decided to make her rural acreage open to anyone who would setde there. She apparently had few takers at first, but after the hip communal movement reached full steam there seem to have been more. Fairfield reports that 200 were there in the summer of 1967, and that clashes between the hippies and the authorities were intense, leading to a forced shutdown of the community in 1968.45 Gorda's chief contribution to hip communalism was its open-door policy; it may have had other hip featuresfree sex, drug usein its early years, but documentation is lacking. Another proto-hip commune was Kerista, established by John Presmont, who took the name Brother Jud, in the early 1960s. The Keristans were uninhibited practicing existentialists, especially noted for their practice of wideopen free love, but also pioneers in smoking marijuana and proclaiming an unabashed pursuit of hedonism. Although they later found it necessary to put some limits on their exuberance, in their early years they stretched the limits of a not-yet-very-permissive society a long way. There were bouts with venereal diseases, and as early as 1964 Jud and eleven others were arrested for possession of marijuana. But the Keristans were among the earliest exponents of anything goes, the first of the Do It! people.46 With its more or less open use of drugs and freewheeling sex, Kerista even more than Gordaportended what was coming with the hip communes. Meanwhile, a different approach to community was unfolding in the far West. Tolstoy Farm, more like the rural hippie communes to come than any of its predecessors had been, was established in 1963 outside Davenport, Washington. Tolstoy in some ways resembled a less organized version of Glen Gardner, with a radical political orientation and aversion to private land ownership. But it also reflected what would become known as hippie ideals. Its members espoused peace and love and noncoercive behavior. Rejecting all regulations, they tolerated drugs, sex of all kinds, nudity, and just about any imaginable thought and behavior. Huw "Piper" Williams, the founder, in the early 1960s took part in peace marches, including some organized by the New England Committee for Nonviolent Action, which had a rural, somewhat communal farm in Connecticut from which its activities emanated. He decided to return home to Washington and start a similar farm there. Setting up shop on land owned by his mother and his grandparents, he invitedfriendsfromthe peace movement, including some from the Catholic Worker, to join him and "attempt to live in a way that would not require violent acts, being in the military, courts, jail, or police."47 Early on they adopted as the sole rule of the community the principle that no one could be forced to leave, so that "We would have to work out our differences in the right way." With no rules restricting sexual activity or drug use and with wide-open membership, Tolstoy Farm lurched closer to hip than anything that had gone before. Many were attracted to TolstoyRobert Houriet says there were fifty the first summerand the community focused mainly on living at a near-subsistence level.48 With a cash flow of less than $ 100 per month, Williams recalls, "We were

pretty poor, trying to grow our own food, build our own shelter, use old tools and equipment. It occupied us and challenged us." After some shifts and land acquisition during thefirsttwo years, Tolstoy Farm ended up consisting of two separate parcels of land, one of 80 acres in a large canyon and another of 120 acres two miles to the south. An existing farmhouse, known as Hart House, became the communal center. A diverse crowd took up residence there, especially as hippie interest in communes boomed in 1966 and 1967. More than a few of the newcomers, whose numbers included runaways and mental patients, created problems for the longer-term residents. In the spring of 1968 Hart House burned to the ground as a result of afireset by a teenage girl Williams describes as "kind of off balance." Many of the earlier settlers had already built simple homes elsewhere on the two pieces of land and were reportedly not entirely sad to see the chaotic Hart House scene come to an end. After thefirethe community consisted of private households, although cooperative features endured. Population estimates vary, but it appears that at its late-sixties peak the community had perhaps as many as 80 residents, including a healthy contingent of children in the cooperative alternative school, and several cooperative work projects. In 1970 a journalist wrote of a community of "serious, straightforward people who, with calculated bluntness, say they are dropouts, social misfits, unable or unwilling to cope with the world 'outside.'"49 Life was never easy at Tolstoy Farm; many contemporary newspaper accounts of life there commented on the farm ' s run-down physical plant. "Dotted with shacks and makeshift abodes, it is reminiscent of a Hooverville of the 1930s," one reporter wrote.50 But the residents had a sense that those who had learned to live without technological support systems would be the better off for it when, as many believed, the time would come when world crisis might remove such systems. Eventually things took a downhill turn. "Things got wild and different," Williams says. He left and later gathered another community, the Earth Cyclers, on land owned by his parents 25 milesfromTolstoy; at this writing it consists of nine persons living simply and carrying out organic farming and forestry projects. In 1990 Tolstoy reported a population of 27 adults and 22 children, the members living independently as families but still retaining some sense of community.51 The old school building is now. a communal library; the residents have potluck meals every Sunday andkeep a cooperative milk cow. In the fall of 1990 residents were building a communal sweat lodge and, many of them having become interested in goddess religion, celebrating neopagan holidays together. In many ways little has changed in a quarter century. While Tolstoy Farm was trying to map its communal route another influential variation on the communal theme began to take shape in California. Ken Kesey, one of the main pivots between beat and hip culture, and a circle of bohemian friends who became known as the Merry Pranksters soon became prominent promoters of taking LSD. Their 1964 bus trip became legend in countercultural history after its depiction in Tom Wolfe's best-seller The Electric

Kool-Aid Acid Test?1 After the trip the Pranksters lived in a loose, rather disorganized communal setup south of San Francisco and later, after 1967, on the Kesey farm in Oregon. Eventually Kesey tired of it all and in 1969 he shut it down. But for several years Kesey and the Pranksters had one of the liveliest communal scenes anywhere. There was, in short, a good deal of communal activity going on by 1965. It drewfromearlier communitarianism, utopianism and radical politics in many and basic ways; but it also pushed at the boundaries, looking for new options, trying tofindnew and better ways to live than mainstream America presented.

Meanwhile, back in America....

The ongoing communitarian tradition did not by itself cause the 1960s communal revival. Other forces were stirring, portending cultural upheavals to come. One thing that would have a great deal of influence on the hippies and their communes was the changing nature of the beat movement, the predecessor of hippiedom, where by the middle to late 1950s new themes were resonating. One important harbinger of things to come was the emergence of the new psychedelic drugs, especially LSD. Drugs were nothing new to the beats; bohemians had been smoking marijuana for much of the twentieth century, and some of them, at least by the late 1950s, had dabbled in a fair number of other substances.53 But LSD was something else. Its visions were fantastic, urgent, profound. By the cusp between beat and hip it was making rapid strides in popularity. Ken Kesey and the Merry Pranksters had much to do with that, of course; so did the Harvard Psychedelic Research Project of 1960-61, which got Timothy Leary and Richard Alpertfiredfor acts related to their experiments with LSD. The hippies soon made LSD the single most important symbol of what their movement was all about Of course marijuana was not neglected; its low cost and less intense effects made it the subcultural drug of choice by mid-decade. Meanwhile, things were not quiet on the cultural front. Allen Ginsberg's "Howl," published in 1956, was a new blast of poetic wind, a stunning challenge to the formal, academic style that dominated American poetry and that even the earlier beat poets had been unable to dislodge. At the same time, new and daring entertainment began to emerge. Lenny Bruce, to pick a prominent performer, devastated nightclub audiences with a new type of standup comedy, a savage assault on American icons with shocking swear words, heretofore never heard outside of private conversation. New magazines were also pushing at the cultural boundaries. In 1958 Paul Krassner founded The Realist, a. litde newsprint journal that engaged in uninhibited social criticism and displayedfreewheelinggraphics. In the early 1960s Krassner was marketing, through his magazine, such artifacts as the "Mother Poster," which consisted of the words "Fuck Communism" done up in a starsand-stripes motif. Another new periodical, this one begun in 1962, was FuckYou: A Magazine of the Arts, put out in a mimeographed and stapled format by Ed Sanders, the proprietor of a radical bookstore in the East Village. (Sanders would 85

later gain prominence as leader of one of the farthest-out hip musical groups, the Fugs, and as a historian of the Charles Manson family.54) Much of the magazine's content consisted of experimental poetry and the works of leading beat literati, but Sanders also ran polemics (advocating the legalization of psychedelic drugs, he asked, "Why should a bunch of psychologists hog all the highs?") and sexually explicit graphics. There was, in short, an evolution from beat to hip that took place over a decade or so, from the mid-fifties until the mid-sixties. Beyond that, the changing nature of mainstream society and of popular culture also sowed seeds of hip. The new post-World War n prosperity put cash into the hands of the nonproductive young, and that certainly changed their way of thinking about the relationship of work and wealth. Higher education mushroomed; now a great portion of a generation could be isolated from its elders, ghettoized, and given a chance to try new experiments in living.55 New contraceptives and treatments of sexually transmitted diseases made for relatively hassle-free casual sex. A new music with Chuck Berry and Elvis Presley was, compared to its immediate predecessors, primitive and sexual. The political world was changing as well, on campus and off. The civil rights movement brought to the fore a new politics of moral passion. John Kennedy and some of his programs, notably the Peace Corps, furthered the idealism of the young. The founding of Students foraDemocratic Society in 1962 and the sudden emergence of the Free Speech Movement at the University of California at Berkeley in 1964 inaugurated a new radicalism on campuses. Lyndon Johnson's escalation of the war in Vietnam in early 1965 engendered increasingly tumultuous protests. The ongoing presence of Utopian and visionary literature in America also promoted the communal vision. In 1948 B. F. Skinner published Walden Two, which became a perennial best seller and eventually directly inspired several intentional communities, including Twin Oaks in Virginia and East Wind in Missouri.56 Robert Heinlein's Stranger in a Strange Land became a hip literary favorite, and in due course communes devoted to its ideas emerged, including Sunrise Hill in western Massachusetts.57 The communal vision certainly received a boostfromthe dozens of Utopian fantasy novels appearing annually. Alloftheseratherdiversecurrents combined intoapowerful stream. Therise of the hippie alternative, like that of the New Left, was the embodiment of a culture of rejection. Establishment culture seemed cold, empty, closed-minded, unable to change and to tolerate new insights. The countercultural vision as it emerged in the mid-sixties, naive as it may have been, was a seductive one: Don't work, get stoned and be mystical and happy, have sex at will, listen to lots of music, think great thoughts, live in warm communities with other mellow people.

Bringing it all together: Drop City

In May of 1965 these strands of communal exploration and cultural paradigm shift came together in the settlement that turned the corner, that can plausibly be

called the first full-blown hippie commune: Drop City, located near Trinidad, Colorado. Drop City brought together most of the themes of its predecessor communitiesanarchy, pacifism, sexual freedom, drugs, open membership, artand wrapped them in an exuberance and an architecture that trumpeted the coming of a new communal era. Drop City's founders were influenced by a number of communal and collective traditions. One was of Mennonite stock and thus familiar with the close-knit, world-rejecting search for community conducted by the Anabaptists. Two were from leftist families in New York, raised with the collective ideals of Marxism all about them. All three were artists and familiar with the concept of bohemian artists ' collectives. The fourth person to settle at Drop City, and the one who lived there the longest of anyone, was raised by parents who had lived in the Jewish colonies of southern New Jersey. The immediate impetus for Drop City, however, was art. Clark Richert met Gene and Jo Ann Bernofsky in 1961 in Lawrence, Kansas, where Richert and Jo Ann were studying painting and Gene was pursuing his own artistry, especially film. A year or two later Richert and Gene began creating what they called Drop Art, which began when they painted rocks and dropped them from a loft window onto the sidewalk along the town's main drag, watching the reactions of passersby. From there the genre became more elaborate. By 1965 Richert and the Bernofskys found themselves trying to escape the system altogether by pursuing a communal alternative. They wanted tofindland, build houses, and live rent free while doing art. Richert and Gene Bernofsky found six acres of scrubby goat pasture outside Trinidad and bought it for $450 on May 3,1965. There was never a question about the name; Drop City would be the communal settlement of the Drop artists. (Accounts in years to come would say that the commune's name stemmed from the fact that its members were dropouts, orfromtheir affection for dropping acid; they were simply wrong.58) The three Droppers moved in immediately. Shortly before the land purchase Richert had attended a lecture by Buckminster Fuller in Boulder and come away with visions of geodesic domes. With only the vaguest ideas of what they were doing they began to build. Without moneyDrop City was always brokethey had to scrounge building materials; they planted old telephone poles for foundation piles and collected mill ends, pieces of 2x4 too short to sell, from a lumber mill scrap pile. Amazingly, two domes were soon erected, and a big third one was begun. Before the third dome's outer covering was started in the spring of 1966, Steve Baer, an established dome-builder from Albuquerque, had begun to visit the Droppers. Baer startled junkyard owners by walking in and offering them a nickel or a dime apiece for car tops; then he and the Droppers would take big double-bladed axes and chop the topsfromthe cars. Attached to the facets of the domes, they produced a hamlet of crazy quilts. The Droppers had the kind of visionary optimism that would soon characterize the entire hippie movement. Jo Ann Bernofsky says, "We knew that we

Above and facing page: Photos of Drop City courtesy of Gene and Jo Ann Bernofsky. wanted to do something outrageous and we knew we wanted to do it with other people, because it was more exciting to be with a group than to be just one or two or three people. . . . It was full of vitality, and it was extremely exciting and wonderful. You had the sense that anything was possible." They also had the beat-hippie disdain for money, material comfort, and work. As Gene Bernofsky puts it, It's important to be employed; work is important, but we felt that to be gainfully employed was a sucking of the soul and that a part of one of the purposes of the new civilization was to

be employed, but not to be gainfully employed, so that each individual would be their own master and we idealistically believed that if we were true to that principle, that if we did nongainful work that the cosmic forces would take note of this and would supply us with the necessities of survival. Living on a few donations, and, briefly, food stamps, the Droppers pursued their art vigorously. Slides taken during the first year show dozens of paintings, sculptures, pieces of decorated furniture, and assemblages, as well as the monumental artworks, the domes themselves. One innovative piece was The Being Bag, a hand-made black-and-white comic book cooperatively written and illustrated; it would be a strong contender for the title of first underground comic book. Gene Bernofsky also shot a great deal of film at Drop City. Literature was produced at the commune as well; the most prominent writer was Peter Douthit, 89

who arrived a year after the founding. Under his Dropper name Peter Rabbit he published a book entitled Drop City, a mix of factual history, fiction and prose poetry, which, despite its limitations as a historical document, remains the most substantial work to date on the community.59 There was much that was good about Drop City. Richert remembers it as the best part of his life. The Bernofskys talk of it with considerable pride. But eventually the edges began to fray, and Drop City began a long slide toward oblivion, finally closing in 1973. Before that, however, it helped inspire a whole new generation of communitarians, thanks to visits by thousands of hippies who dropped in, illustrated feature stories in both underground and mainstream publications, and the occasional presence of countercultural celebrities, Timothy Leary and perhaps Bob Dylan among them. Drop City had raised theflagof the city in the wilderness and became a defiant center of rejection of the culture of Babylon.

The End of the Beginning

It is at this point that most accounts of 1960s communes start In the spring of 1966 musician Lou Gottlieb opened his Morning Star Ranch in Sonoma County, California, to all comers, and quickly got into a long-running conflict with local authorities over matters of overcrowding and sanitation on the 30-acre spread. Here again was an important link to the American communal past: Gottlieb's co-founder of Morning Star,Ram6n Sender, had lived in theBruderhof

Children born at the Farm, Tennessee. Photo by Albert Bates 1990 The Second Foundation. Reprinted by Permission. 90

and knew something of American communal history. By the following year hippie communes were springing up all over the country. Most were short-lived, but some endure even yetthe Farm, for example, in Tennessee, New Buffalo in New Mexico, and the pioneer Tolstoy Farm. A new and different chapter in the history of American communitarianism was under way.

The author gratefully acknowledges support from the General Research Fund at the University of Kansas. 1. Maren Lockwood Carden, "Communes and Protest Movements in the U.S., 1960-1974: An Analysis of Intellectual Roots," International Review of Modern Sociology 6 (Spring, 1976), 16. 2. Helen Constas and Kenneth Westhues, "Communes: The Routinization of Hippiedom." Kenneth Westhues, d., in Society's Shadow: Studies in the Sociology of Countercultures. (Toronto, 1972), 191-94. 3. For a discussion of the origin of the term see Jay Stevens, Storming Heaven: LSD and the American Dream (New York, 1987), 298-99. 4. J. L. Simmons and Barry Winograd, It's Happening: A Portrait of the Youth Scene Today (Santa Barbara, California, 1966); John Gruen, The New Bohemia: The Combine Generation (New York, 1966). 5. Reader's Guide to Periodical Literature, vol. 26 (March 1966-February 1967) and 27 (March 1967-Febmary 1968). 6. A recent oral history provides an excellent perspective on the Pranksters * bus trip: Paul Perry, On the Bus: The Complete Guide to the Legendary Trip of Ken Kesey and the Merry Pranksters and the Birth of the Counterculture (New York, 1990). 7. On this point see Michael Barkun, "Communal Societies as Cyclical Phenomena,'* Communal Societies 4 (1984), 35-48. 8. See, for example, Donald E. Pitzer, "Developmental Communalism: An Alternative Approach to Communal Studies," in Dennis Hardy and Lorna Davidson, eds., Utopian Thought and Communal Experience (Enfield, England, 1989), 68-76. The theme will be explored in greater depth in Pitzer's forthcoming edited volume, America's Communal Utopias (University of Wisconsin Press). 9. For examples of such views see, for example, Mark Holloway, Heavens on Earth: Utopian Communities in America 1680-1880 (New York, 1966); Kenneth Rexroth, Communalism: From Its Origins to the Twentieth Century (New York, 1974); and Everett Webber, Escape to Utopia: The Communal Movement in America (New York, 1959). 10. See, for example, Webber, Escape to Utopia, 419; Arthur Bestor, Jr., Backwoods Utopias: The Sectarian Origins and the Owenite Phase of Communitarian Socialism in America, 1663-1829 (Philadelphia, 1970), 250-52. 11. On this theme see Jesse Pitts, "The Counter Culture: Tranquilizer or Revolutionary Ideology?" Dissent 18 (April, 1971), 216-229. 12. This information comes from interviews with the founders of the two communities. 13. Robert Fogarty, All Things New: American Communes and Utopian Movements 1860-1914 (Chicago, 1990). 14. For a detailed exposition of the Braderhof, see Benjamin Zablocki, The Joyful Community (Baltimore, 1971). 15. Dallas Lee, The Cotton Patch Evidence: The Story of Clarence Jordan and the Koinonia Farm Experiment (New York, 1971), 93-104,167-70. 16. See, for example, William Hedgpeth and Dennis Stock, The Alternative: Communal Life in New America (New York, 1970), 168-69,175-81. 17. The most complete history of Reba Place is David Jackson and Neta Jackson, Glimpses of Glory: Thirty Years of Community: The Story of Reba Place Fellowship (Elgin, Illinois, 1987). 18. Dom Aelred Graham, Zen Catholicism (New York, 1963).


19. See Laurence Veysey, "Vedanta Monasteries/* in The Communal Experience: Anarchis and Mystical Communities in Twentieth-Century America (Chicago, 1973), 207-78. 20. On the origins of Buddhist monasticism in America see David Stany, "Dwight Goddard the Yankee Buddhist," Zen Notes 27 (July, 1980), unpaginated. 21. Satsvarupa dasa Goswami, Planting the Seed: New York City, 1965-1966 (Los Angeles, 1980), \35ff. Volume two of the movement's authorized history. 22. For an excellent study of Father Divine, see Robert Weisbrot, Father Divine and the Struggle for Racial Equality (Urbana, Illinois, 1983). 23. No major study of the Emissary Communities or the parent organization, the Emissaries of Divine Light, has yet been published. For a brief overview written by a member, see Nick Giglio, "Sunrise Ranch and the International Emissary Community," Communities no. 71-72 (double issue, Summer/Fall, 1986), 46-48. 24. One study documenting the claim that religious communities generally are longer-lived than secular ones is Karen H. Stephan and G. Edward Stephan, "Religion and the Survival of Utopian Communities," Journal for the Scientific Study ofReligion 12 (March, 1973), 89-100. 25. One good history of Llano is Paul K. Conkin, Two Paths to Utopia: The Hutterites and the Llano Colony (Lincoln, Nebraska, 1964), 103-185. 26. For Ferrer Colony see Laurence Veysey, "The Ferrer Colony and Modem School of Stelton, New Jersey," in his The Communal Experience, 11 All. 27. Henry George's classic text is Progress and Poverty (New York, 1879, plus many other editions). The most complete account of Fairhopeis Paul E. Alyea and Blanch Alyea, Fairhope 18941954 (Tuscaloosa, 1956). 28. For details on communal life at the Des Moines University of Lawsonomy, see Lyell D. Henry, Jr., Zig-Zag-and-Swirl: AlfredW. Lawson's Questfor Greatness (Iowa City, 1991), 203-246 29. H. T. Dohrman, California Cult: The Story of "Mankind United:1 (Boston, 1958). 30. For a critique of the supposed communitarianism of the Roycrofters, see Frederick Lewis Allen, "Elbert Hubbard," Scribner's Magazine 104 (September, 1938), 12-14,49-51. Hubbard also had his defenders; for a balanced appraisal, see, for example, Eileen Boris, Art and Labor: Ruskin, Morris, and the Craftsman Ideal in America (Philadelphia, 1986), 146-50. 31. The most complete and balanced history of the Roycrofters is Freeman Champney, Art and Glory: The Story ofElbert Hubbard (New York, 1968). 32. Byrdcliffe is well chronicled in the works of Alf Evers, notably Woodstock: History of an American Town (Woodstock, New York, 1987), 398-449. 33. Rose Valley has apparently attracted only brief attention from scholars. For one of the fuller, but still quite short, accounts, see Boris, Art and Labor, 162-65. 34. For a full account see Martin Duberman, Black Mountain: An Exploration in Community (Garden City, New York, 1973). 35. Literature on Glen Gardner is sparse. One basic account is "Glen Gardner," in Intentional Communities: 1959 Yearbook of the Fellowship ofIntentional Communities (Yellow Springs, Ohio 1959): 22-24. A copy is on file at the archives of Community Service, Inc., in Yellow Springs. 36. Donald Wayne Bender, From Wilderness to Wilderness: Celestia (Dushore, Pennsylvania, 1980), 22-25. 37. The most comprehensive source on Morning Star is a compilation of newspaper clippings, photographs, and other materials published as The Morning Star Scrapbook (Occidental, California, 1976). 38. The most complete work on Macedonia, with information on Lynd's work there, is W. Edward Orser, Searching for a Viable Alternative: The Macedonia Cooperative Community, 19371958. New York, 1981. 39. Erling Skorpen, "Nevada Communities: The Himalayan Academy." Modern Utopian 3 (Summer, 1969), 4, 8,25-26. 40. "Directory of Intentional Communities," Modern Utopian 3 (Fall, 1969), 18. 41. Carleton Collective Communities Catalog (Northfield, Minnesota, 1970), unpaginated. 42. Fora good introduction to the thought of MSldred Loomis and pieces of history of the School of Living and allied groups, see Mildred Loomis, Alternative Americas (New York, 1982). 43. For a general account of the School of Living ' s history and of Heathcote Center see Richard Fairfield, Communes USA, 24-38. 44. Elia Katz, Armed Love: Inside America's Communes (New York, 1972), 37-46. 45. Richard Fairfield, Communes USA: A Personal Tour (Baltimore, 1972), 241. 46. For an early look at Kerista, see Robert Anton Wilson, "The Religion of Kerista and Its 69 Positions," Fact 2 (July-August, 1965), 23-29. See also Gruen, The New Bohemia, 49-60. 47. Interview with Huw "Piper^* Williams, September 11, 1990. Subsequent quotes from Williams are also taken from this interview. 48. Robert Houriet, Getting Back Together (New York, 1972), 219. 49. Sara Davidson, "Open Land: Getting Back to the Communal Garden." Harper's 240 (June 1970), 91-100 (the portion on Tolstoy Farm is on pp. 97-100; the balance is on Wheeler's Ranch).


50. Don Hannula, "Tolstoy Farm: 10 Years Later." Seattle Times, April 1,1973, El. 51. The 1990-91 Directory of Intentional Communities: A Guide to Cooperative Hying (Evansville, Indiana, and Stelle, Illinois), 158. A description of Tolstoy Farm can be found on p. 225 of the Directory. 52. Tom Wolfe, The Electric Kool-Aid Acid Test (New York, 1968). 53. Warren Hinckle, citing the authority of beat/hip historian Chester Anderson, wrote that peyote reached Greenwich Village in New York in 1957, mescaline by the summer of 1958, and LSD by the winter of 1961 -62. See Warren Hinckle, "The Coming of the Hippies," in Ramparts Editors, eds., Conversations with the New Reality: Readings in the Cultural Revolution (San Francisco, 1971), 15. 54. Ed Sanders, 77te Family :The Story ofCharles Mansons Dune Buggy AttackBattalion (New York, 1971). 55. On these themes see D. Lawrence Wieder and Don H. Zimmerman, "Generational Experience and the Development of Freak Culture," Journal of Social Issues 30 (1974), 137-61. 56. B. F. Skinner, Walden Two (New York, 1948, plus many subsequent ditions). For Twin Oaks see Ingrid Komar, Living the Dream: A Documentary Study of Twin Oaks Community (Norwood, Pennsylvania, 1983). No substantial study of East Wind has been published. 57. RobeneiiemyStranger in a Strange LandQjev/ York, 1961). ForSunrise Hill see Gordon Yaswen, "Sunrise Hill Community: Post-Mortem," mimeographed, 1970. 58. For such misguided explanations of the name see, for example, "Drop City Revisited," Shelter (Bolinas, California, 1973), 118; Hugh Gardner, The Children of Prosperity (New York, 1978), 35. 59. Peter Rabbit, Drop City (New York, 1971).


Lip and the self-managed counterrevolution, 1973 Negation

A critical article about workers' struggles at the Lip watch factory in France, where workers began self-managing the firm..

LIP AND THE SELF-MANAGED COUNTER-REVOLUTION from Negation, No. 3 1973 Table of Contents Publication Notes Ngation Introduction I. The Workers' Movement and its Decline II. The LIP Case 1. LIP, A Factory During the Epoch of Real Domination of Capital 2. The Workers' Movement at LIP 3. The Union Question III. Crisis and Self-Management 1. The Workers' Community and the Human Community 2. The Self-Managed Counter-Revolution Translators' Afterword

PUBLICATION NOTES This is a translation of "Lip et la contre-rvolution auto-gestionnaire" first published in the French journal Ngation in 1973, and also apparently as a separate pamphlet. The translation was made by Peter Rachleff and Alan Wallach and was published as a pamphlet by Black & Red in Detroit in 1975. Ngation was a successor to a council communist group called Archinoir, formed in Grenoble in 1968, which produced three issues of a journal of the same name in 1969/70. Archinoir had collaborated with the group Informations et Correspondances Ouvrires. Ngation left the ICO in September 1972. It produced three issues of its journal before disappearing.

NGATION INTRODUCTION An impressive number of pamphlets and texts have appeared dealing with the Lip conflict. This theoretical activity has generally followed some practical or agitational activity by the authors regarding this conflict unique since 1968. The writers of this pamphlet have not taken part in this activity. As soon as the struggle of the Lip workers assumed its form, attractive for others, it appeared clear to us that this struggle -- in its content -- was not ours; thus the critique that we were then making remained concerned with its immediate aspects and we did not feel compelled to publish it. With the evolution of the conflict, certain among us considered a brief publication which would concentrate on the intrinsic limits of this workers' struggle and would contrast it with forms of resistance presently dominant among workers (absenteeism, sabotage, etc.). Because the collaboration that these comrades began with others in order to do this turned out to be impossible, we met again in order to transform their original text in a manner which brought us to a progressive reflection. In effect, it became more and more evident to us that "Lip" represented not only a struggle in which we recognized none of our aspirations for a human society, but rather that this struggle was simultaneously a particular expression of the contemporary capitalist movement and a sort of anticipation of the formation of our enemy : the capitalist counter-revolution. It is therefore not surprising that this text is dense, for it was necessary to introduce the critique of the Lip conflict with a long analysis of the workers' movement and the capitalist movement, although necessarily abridged. Nor is it surprising that it went beyond a simple critique in embarking on an analysis of the self-managed counterrevolution. This latter point will later on be stated precisely and developed through various texts and perhaps by a publication bearing specifically on the revolutionary and counterrevolutionary movements which are now taking place.

TRANSLATORS' AFTERWORD [1975] We undertook the translation of this text because we found it to be one of the most stimulating analyses of any subject we had encountered in too long a time. Although we did not agree fully with all aspects of the analysis, we felt that we had gained immensely from our grappling with it. It is in the hope that you will also benefit from a confrontation with this pamphlet that we have translated it. We encourage you to discuss your reactions to it among yourselves, and to communicate them both to us (c/o Black & Red) and to the original authors (Nicolas Will, 151 rue de Belleville, 75019 Paris, France). We would like to express our special thanks to Ron Rothbart and Fredy Perlman. We hope this text will further an on-going dialogue among all of us who seek to better understand the world in which we live so that we might better share in the project of totally transforming it. For further information, and alternative points of view on the Lip struggle, we can suggest the following (by no means exhaustive) bibliography : "Lip : une brche dans le mouvement ouvrier traditionnel," Mise au point, No. 2. "Lip revu et corrig," La lanterne noire. "Lip : The Organization of Defeat," Internationalism, No. 5. "Lip : c'est bien fini," Lutte de classe, March 1974. Peter Rachleff Alan Wallach

Chapter I THE WORKERS' MOVEMENT AND ITS DECLINE 1. The Expropriation of the Expropriators The workers' movement appeared with the first developments of capital. It was the movement of proletarians in struggle against the formal domination of capital over labor, the first historical mode of domination of capital. What characterizes the functioning of this mode is the extraction of absolute surplusvalue. The labor process consists principally of human labor. Moreover, the content of this labor remains artisanal and skilled. In this first period, capital is content with bringing about the separation between the means of production and the producer, the necessary condition for the appearance of the exchange of labor-power for wages, and with broadening the labor process to the level of manufacture. The proletarian is thus simultaneously a "proletarian" (one who is constrained to exchange his labor-power for wages because he is without social reserves) and a "worker" (one who "works" or whose use-value is qualitatively important to the productive process). Out of this comes the initial content of the workers' movement : on the one hand, struggles for the reduction of labor time, because the extraction of absolute surplusvalue implies the lengthening of the working-day, and the creation of organs to defend the price of labor-power (craft and then industrial unions). On the other hand, the preservation of the pre-capitalist content of the labor process determines within the proletarian a producer's consciousness, which is reinforced by the fact that, confronting him, the capitalist appears as a lazy parasite. Working "as an artisan," but for the accumulation of capital and under the direction of a capitalist, the struggle of the proletarian-producer also seeks the re-appropriation of the means of production, "the expropriation of the expropriators." But, if the producers' attack on the ownership of the means of production was at the heart of the workers' movement of the 19th century, and if the question of socialism had thus seemed to sum itself up in that of property ownership, it was also because this ownership, under the guise of personal ownership, seemed both arbitrary and injurious to the workers. Given the continuation of the pre-capitalist labor process, the capitalist's accession to property ownership changes nothing about production itself, but only its scale. It appears that the capitalist does nothing for production, but is content to live off it, while the workers do everything. He thus appears all the more as simply the bearer of a title of ownership. The function which he has nevertheless acquired, the organization of the sale of products and the purchase of raw materials and labor-power, remains relatively simple, so that its being taken over by the association of the workers seems to pose no problem -- technically or economically.

In this period of general prosperity of capital and relative independence of capitals from each other, the function of the management of capital -- control over its insertion into the circulation process (both up and downstream from production itself), and the equally necessary control over its reproduction -- appears less as a separate function worthy of compensation than as a privilege connected to the ownership of capital and the product. Even at the time of the Amiens Charter (1906) which states that "the union, today an organization of resistance, tomorrow will be the organization of production and distribution, the basis of social reorganization," the question of the management of capital had not been posed as such. Personal ownership of the means of production is arbitrary and also injurious to the producers. In effect, the weak unification of the capitalist process on the level of society allows the owner a large margin of social irresponsibility. The firm that he possesses is still small and is situated in a limited market. If he judges it necessary or useful for him, he may close it without provoking much of a fuss. The other capitalists (creditors aside) will view his disappearance favorably or indifferently, depending on the relative division of the markets. The workers, equally isolated for the same reason, cannot endanger other sectors by their response. Moreover, the continued existence of other modes of production within society -- and this is an important characteristic of the merely formal domination of Capital -- allows at least part of the discharged workers to survive in some other manner, often by returning to craft production or agriculture. The others swell the reserve army which grows in the cities. These three characteristics (the consciousness of being a producer among the workers, due to the maintenance of the former labor process; the apparent arbitrariness of property ownership with the question of management not posing itself; finally, the social irresponsibility connected to personal property ownership) explain why the practical form assumed by the 19th century workers' movement was that of production co-operatives. Beyond defensive unions, and after the abandonment of the utopia of a return to small-scale individual property, one idea remains. It is the idea -- later to be taken up by unions (anarcho-syndicalism) -- that the workers can simultaneously be associated and the owners of their common means of production. Like the non-producing owner, they will thereby fulfill the role of manager, or according to the consciousness of the epoch, they will sell and divide among themselves the "whole product" of their labor (the slogan from Proudhon to the Gotha Social Democratic Program). Moreover, unlike the capitalist owner, the collective producer-owner (facing a variable capital which is only itself) is also thereby socially responsible for the continuation and smooth functioning of the firm. ". . . [t]he antithesis between capital and labour is overcome within [the co-operative factories], if at first only by way of making the associated labourers into their own capitalist, i.e., by enabling them to use the means of production for the employment of their own labour." [1] 2. Dead Labor Capitalist expansion and concentration at the end of the 19th century, the war of 1914-1918 and the revolutionary period which followed, marked an important turning point in the history of the workers' movement. This period is, in effect, the beginning

of the painful passage to the real domination of capital over labor, which was completed only after two world wars and the great depression of the 30's. In this second historical phase of Capital, the production process becomes specifically capitalist. It is based on the extraction of relative surplus-value, by the constant increase of productivity due to the perfection of techniques, the development of the productive forces and their increasing socialization. The extraction of surplus-value depends above all on these processes, which lower the price of commodities in order to increase the surplus-value that they contain by decreasing the necessary labor-time. The share of human labor in the production process now diminishes in comparison to dead labor; the "worker" disappears and only the "proletarian" remains. The use-value of the commodity labor-power loses its particular determinations and comes to depend entirely on the more or less large quantity of surplus-labor that it can be made to produce. This is the epoch of the "scientific organization of labor" and of the appearance of the "Ouvrier specialize' " ("specialized worker"). The term "specialized worker" is simply a euphemism to signify that the "work" of this worker has been stripped of all quality. His labor requires no training, no apprenticeship. Labor-power then becomes absolutely interchangeable, logically enough, since the only thing that counts is the ability to expend labor-time. All the skill is now in the machine, and the "specialized worker" is a good or a bad worker depending on whether or not he reports to his post on time. The increasingly abstract relationship of the worker to the labor process makes the whole "producer-consciousness" disappear. This is clearly manifested in the current outbreak of absenteeism, sabotage and high turnover. Certainly, these forms of struggle are not new, nor have they replaced so-called "traditional" struggles over wages. But, like many other phenomena, they visibly acquire their full meaning in our epoch by reflecting both the secondary role of the human being in the actual labor process as well as his crucial position for capital. In effect, the increase of the organic composition of capital indicates not only the de-qualification of labor and the interchangeability of workers, but also the pressure that this brings to bear on profits. This imposes a speed-up which reduces man to the level of a supplementary but decisive, machine for the capitalist mode of production. From the worker's point of view, these forms of struggle are thus human reactions, elementary in the face of a mode of production which can survive only by continually denying those by whom it lives. The key difference from the epoch in which Pouget advocated sabotage as a means of pressuring the boss without losing wages by striking is that these reactions can no longer be neutralized by a simple wage increase. It has even become necessary to invent "job enrichment" to try to conjure away the irreversible fact that, today, the proletariat is no longer the class of labor. If only for this reason, the struggle of the proletariat can no longer be the struggle of the workers' movement either in its aims or in its means. It is no longer a matter of the associated proletarians becoming their own capitalist but of destroying the capitalist form itself, the firm, along with wage-labor and the market.

3. Variable Capital and the Unions a) The CGT and Devalorization The period when Capital achieves real domination over labor and over the totality of social relations is also the period when the profoundly contradictory nature of capital becomes clear. The increase in the organic composition of capital, which makes possible an immediate increase in a firm's profits, rapidly leads to a decrease in the rate of profit on a social scale : the growth of the mass of profit brought about by the growth of invested capital is connected to the relative increase of constant capital, since it is by means of its superior productivity that a capital manages to absorb its competitors. In brief, today the process of valorization [2] can only be carried out through the process of devalorization; the capitalist who has nothing but exchange-value at heart ceaselessly endeavors to decrease it. This contradiction contains another : the law of value, the relations of production, are increasingly opposed to the development of the productive forces, setting in motion ever more total crises, such as the one we are entering today. As a consequence of the increasing devalorization, the traditional system of private ownership of the means of production is called into question, as is seen most clearly in nationalizations. Fundamentally, nationalization consists of entrusting a capital to the State. Since the State is satisfied with less profit, the share of other capitals in the division of total surplus-value is increased, and thus everything goes on "as if" the nationalized capital were worth less, since it earns less surplus-value. But nationalizations are only an extreme case of the socialization of capital which is involved in devalorization. In general, a firm's capital loses its independence when, in order to compensate for the lowering of the rate of profit by increasing its mass, it becomes necessary to increase the size of an individual capital to the point that immobile property, financial capital, and the firm's capital pass into different hands. The creation of corporations by means of selling stocks is the first act of this process. To the capital accumulated by the firm itself is added a capital of external origin, which lays claim only to interest and thus does not insert itself into the equalization of the rate of profit. This capital rapidly becomes fictitious once revenues are "capitalized" on the basis of a rate of interest. The next act in the process of socialization of capital is even more directly connected to devalorization. When profits have become too small and the appeal to the stockholders' capitals no longer suffices for the enlarged reproduction of capital, it becomes necessary to seek long-term credit. On a general level, capital itself pretends to overcome its contradictions through its "transformation" into fiction. [3] Devalorization therefore means that financial capital takes control of the entire economy. Financial capital, itself highly concentrated, plays the role of "the general capitalist" in the same manner as the State when it takes direct charge of the most devalorized sectors, yet even more totally since credit becomes the nerve-center of

production in all sectors. The banking system is furthermore very closely linked to the State, which, conforming to its nature, furnishes it support and "control." In the context of the workers' movement, the cooperatives (firms weak in constant capital from the outset and whose expansion is limited to their self-financing) then crumble exactly like all the firms with similar organic compositions. Large numbers of workers' co-operatives are created in periods when, due to a structural or conjunctural disorganization of exchange, it is possible to create in semi-artisanal sectors (for example, printing), firms with a very limited constant capital and a decently paid qualified labor force. These periods have been : 18301848 and especially 1848-1850: [4] then the years 1919, 1936, 1945, insofar as France is concerned. Some mid-nineteenth century workers' co-operatives survived over a long period although not without compromising their principles (for example, by employing wage laborers who were not members). However, they do not have comparably durable heirs today when the life span of 75% of such firms does not go beyond two years. [5] It was also clear to Marx that a system of financing by credit was indispensable to the development of cooperatives : "Without the factory-system arising out of the capitalist mode of production there could have been no co-operative factories. Nor could these have developed without the credit system arising out of the same mode of production. The credit system is not only the principal basis for the gradual transformation of capitalist private enterprises into capitalist stock companies, but equally offers the means for the gradual extension of co-operative enterprises on a more or less national scale." [6] Furthermore, this was not only Marx's perspective, but that of the 19th century workers' movement as a whole. (Unlike Marx, this movement saw in this the establishment of socialism.) In fact, the financing of co-operatives by credit turned out to be impossible. The credit arising from the pooling of their not immediately re-invested profits turned out to be quite insufficient, while their insertion into the general credit system was impossible due to a lack of capitalist credibility. This practical impossiblity due to the evolution of capitalism in general, in conjunction with the breakdown of "producer-consciousness" among the workers in most of the important sectors, created a crisis in the workers' movement. A shift was nevertheless made, but it was made by the unions which became federations representing variable capital within the context of the national system and no longer impelled by a "revolutionary" spirit nor the aim of creating associations of producersproprietors. Anarcho-syndicalism died -- or very nearly -- with the cooperative movement. The unions, organs of real resistance to Capital during the mode of absolute extraction of surplus-value (lengthening of the working day), become integrated as purely capitalist operations with the generalized passage to relative surplus value. The First World War, which covered a capitalist crisis, marks a split between the workers' movement and the union movement, out of which grew, for a time, the reality and the idea of "workers' autonomy." The workers' councils, which appeared in

Germany at the end of the war, not only were manifestations of this autonomization produced by the necessity to re-create a resistance to Capital's attack on workers' living conditions, but they also are manifestations of a tendency for the proletariat to constitute itself as a distinct class, in a period when the reproduction of capital was blocked. The specific role of the unions, in their phase that could be called socialdemocratic, is explained by the fact that the contradiction valorization/devalorization, which became omnipresent, was embodied in labor-power, whose price the union negotiates while at the same time controlling it. Thus, in addition to their role as managers of labor-power [7] they become promoters of reforms which confirm the devalorization and aspire to the role of national managers of all of Capital in times of crisis. The contradiction does not appear as such, seeming inexistent or resolved, in phases when the expanded reproduction of capital takes place without difficulties. However, the union then virtually and "theoretically" takes charge of this contradiction and elaborates reform programs which fit in with the viewpoint of the devalorization of Capital : a program of nationalizations of sectors with low profit rates and, especially, the credit sector. But these reform programs only acquire their full implications and appear plausible when Capital, entering a crisis, is forced to recognize its contradictions which are then visibly concentrated in the existence of living labor. It then tends to become immediately practical for the union to take charge of this contradiction. The CGT was formed out of these "old" unions in industries born during the development and concentration of capitalism at the end of the 19th century, which made syndicalism in general and anarcho-syndicalism itself limited modes of organization. Nevertheless, created at the very outset of the transitional phase in France, between the two modes of the submission of labor to capital, the CGT managed to preserve, at its foundation, some notably anarcho-syndicalist traits (cf. the Charter of Amiens) which it quickly abandoned once its integration was brought about by rallying to the cause during the First World War. In the years which followed the war, the CGT smoothly implanted itself in the expanding public sector (whose expansion is immediately contradictory : simultaneously a devalorizer because it is not productive of profits and, as an infrastructure, absolutely indispensable for a society tending to be capitalized); the CGT also implanted itself in the private sectors which were connected to the former major industries (railroads, mines) whose nationalization it has demanded since the beginning of the 1920's. The crisis of the 30's and the popular front of 1936 that was its consequence publicized and diffused these demands which found their satisfaction in the waves of nationalizations following the Second World War : Capital launched its real domination over French society.

In the period immediately after the war, the CGT found itself entrusted with various State responsibilities due to the promotion of several union bureaucrats to governmental positions. As a confederation, it dug in by taking charge of the capitalist contradiction resolved for a time during the war, and then the nationalizations. Because of its new situation, the CGT, in reality, was to exhibit the greatest dependence on the State, which was penetrating more and more deeply into all the machinery of the economy. Its feudal relationship to the PCF, [8] begun during the depths of the crisis and definitively accomplished by the end of the war, is the consequence and not the cause, as some argue, of this management of the contradiction which culminated in the realization of its program. The CGT becomes increasingly unable to manipulate reforms for capital at the heart of social movements. The relegation of the PCF to an oppositional role once its task is accomplished, increasingly leads this union to transfer workers' demands directly to the electoral realm with the perspective of a reappearance of the CP in the management of the State. The 30th Congress of the CGT, in June 1955, openly expressed this situation : "The majority (overwhelming : 5,334 against 17 in the minority), following M. Benoit Frachon, decides to set aside the economic program adopted in 1953, which had implied structural reforms and especially new nationalizations (a program which is also found in the "common program" of the political left), in order to replace it with an action program consisting exclusively of demands." [9] The CGT most often limits itself -- ritually -- to denouncing the so-called "dangers" of the re-privatization of certain sectors such as Regie Renault ! In crisis periods the CGT must even -liquidate" the "hardest fought" workers' struggles, as this is a condition of the credibility of the Left and of the CP in particular (without considering for the moment the question of knowing if this credibility can concretize itself today in the management of the State; in other words, if the counterrevolution from now on needs this type of Left. In any case, it will be seen later that the popular front as it appeared in the last crisis is no longer the most appropriate form of the counter-revolution in France.) From this point on, it is the CGT's confederal position that determines its specific positions in conflicts and this occasionally leads to divergences between the Confederation and this or that section of a firm participating in struggles which "go too far." b) The CFDT and Self-Management Once the program of the social-democratic unions had been realized in the course of the crisis of the 30's, the last world war and the reconstruction, Capital's contradictory process goes on at a higher level and the few reforms of this type which were still possible no longer suffice to resolve the developing crisis. From this point on, the real importance of the problem of management, as well as the myths connected to it result from the growing devalorization of Capital.

The management of a firm becomes a very "technical" problem : the general fall in the rate of profit and the extreme interdependence of markets prohibit the success of amateurism (or of the arbitrariness of ownership). The control of labor-power in particular takes on a crucial importance, and, at the same time, the management of one firm assumes a social scope, depending on the extent to which (unlike what happened in the 19th century) the unification of the capitalist process and the increasing interdependence become so tight that a rupture at any one point of society rapidly leads to consequences nearly everywhere. For example, the bankruptcy of Rolls Royce in England immediately provoked reactions in Seattle, where an airplane requiring Rolls Royce engines was manufactured. Similarly, should an enterprise lay off its personnel, the revenues of a city or region are threatened. In short, the general conditions of Capital today are such that each fraction of Capital requires that all the others behave responsibly in relation to the totality of Capital. (This economic responsibility, from the boss's side as well as the union's, is the very civics [civisme] of real domination : there is no longer any other manner of participating in society, of being a citizen, than to "take charge" of the problems of Capital in its totality). However, the firm's management escapes the capitalist-entrepreneur, at the same time that the ownership of capital escapes him, once stock corporations and the generalized use of banking credit have been established. Parallel to this dispossession, the management of the firm passes to a board of directors theoretically representing the stockholders, and is exercised by hired "managers" or "technocrats" dependent upon banking groups who are no longer even fictitious owners but merely the firm's creditors, but who nevertheless possess the real power over the product and the reproduction of capital. In effect, as the late Serge Mallet, theoretician of selfmanagement, wrote : "the taking over of the management of firms by a stratum of technicians independent of the stock-holders is rendered possible only by the incapacity of the boards of directors to confront, by means of the sale of stocks alone, the costs of operation and the new investments required by expansion." [10] In this movement of Capital, "the capitalist" must disappear, giving way to the anonymous powers of credit on the one hand, and the hired managers on the other. "On the one hand, the mere owner of capital, the money capitalist, has to face the functioning capitalist, while money-capital itself assumes a social character with the advance of credit, being concentrated in banks and loaned out by them instead of its original owners, and since, on the other hand, the mere manager who has no title whatever to the capital, whether through borrowing it or otherwise, performs all the real functions pertaining to the functioning capitalist as such, only the functionary remains and the capitalist disappears as superfluous from the production process." [11] If he nevertheless seeks to maintain himself, he is increasingly relegated to sectors on their way to a slow death. The juridical form of property becomes an obstacle which Capital twists around by reforms, but is unable to suppress it because private property remains its necessary presupposition, in the same way as the development of fictitious capital collides with the law of value and seeks to "surpass" it without being able to suppress it, because this would be to negate itself. Furthermore, not only the management of the enterprise but also that of financial capital itself tends to appear as a simple technical function of a social sort. "We are

proceeding toward a sort of divorce between ownership and capital; capital is increasingly separated from ownership, while it is diluted, concealed, or even presented as the ownership of collective organisms in statizations, socializations, and nationalizations which pretend that they are no longer forms of capitalist management. [12] By the game of fictitiousness, financial capital also pretends that it is no longer a form of private property, but rather an independent social regulator of the relations of production which it claims to surpass. However, this whole structure rests on real capital, on the law of value, and the extraction of surplus-value. "The dynamic of the capitalist process remains intact and under its most ruthless form : but this economic relation is anything but new." [13] This is the relationship that engenders the proletariat. "The fact that the investing capitalist can perform his function of making the labourers work for him, or of employing means of production as capital, only as the personification of the means of production vis-a-vis the labourers, is forgotten in the contradiction between the function of capital in the reproduction process and the mere ownership of capital outside of the reproduction process." [14] But the union movement -- conforming to its nature as the representative of variable capital -- by laying claim to national management, lays claim to the management of each firm and increasingly diverges from the entire developing proletarian base. In so doing it seeks to rejoin the workers' movement, whereas the self-management movement differs fundamentally from, the co-operative movement; the common point, however, is that, in the same way that the questioning of the ownership of capital from the workers' point of view had formerly masked the proletarian question of the destruction of capital (which includes that of the enterprise form regardless of its owner), likewise today raising the question of the management of capital masks that of its destruction (which includes that of the enterprise form no matter who its manager is). The history of the CFDT sheds light on this renewal of the union movement. At the beginning of the 50's, French capitalism underwent a transformation which was only the continuation and full realization of a tendency manifested before the war : the basic industries -- oil, chemicals, and petro-chemicals (among others, but especially these) -- became by degrees the foundation of the new cycle of accumulation. It can be stated that the CFDT was born (in 1964) principally out of the implantation of the ex-CFTC in these new "key sectors" of industry. To prove our point, it is sufficient to demonstrate the growing importance of the chemical union whose general secretary, Edmond Maire, became general secretary of the Confederation; we must also take note of the recent promotion of J. Moreau, Maire's successor as general secretary of the chemical union to a post in the political sector within the executive committee. Along with electronics, the basic industries are the sectors where, in conformity with their nature, the automation of the production process is pushed the farthest; a small portion of living labor is incorporated there, of which the technicians and researchers constitute an essential element.

Moreover, these are the sectors which experience most profoundly the divorce between juridical property and capital because of the impossibility of their selffinancing. Thus, the technicians, engineers and researchers find themselves directly confronting management at the workplace : who is the best manager, those who control the production process every day or the man who is arbitrarily promoted to the management of the business because he belongs, directly or not, to the banking group which is in reality the owner ? Here we find, transposed to the final limits of capitalist production (quasiautomation), the same professional indignation confronting the "capitalists' qualifications" which had marked its dawn; but its content is entirely different. In order to understand the ever-spreading demand for (self)management as the fundamental demand first of the "advanced" fringe of the CFTC and then of the CFDT, the best idea is to let Serge Mallet, a pioneer in the matter, speak, as his remarks are sufficient in themselves "The specificity of working conditions in the firm (insofar as this concerns the sectors in question), the link established between the demands and the economic condition of the firm, the fact that the latter may in itself be a powerful homogeneous unit of production even when its various establishments are geographically isolated, increasingly force the union to organize itself on the basis of the firm itself, in other words, not the factory or the laboratory, but the firm, the complete economic unit. A new organizational structure arises in the union movement which will progressively replace the trade structure and the territorial structure and will merge with the industrial structure by debureaucratizing it." [15] To debureaucratize, in Mallet's conception, means to adapt unionism to the new reality of the firm which renders the traditional structure (represented at its best by the CGT) useless because it is inoperative. Moreover, at this level of his analysis, he is in agreement with the following journalistic expression of progressive management : "Just as it must be certain of outlets when it manufactures for its market and of the products it will sell there (this is the role of advertising), the firm must also be certain of the labor supply in negotiating with the representatives of the wage-workers. . . One of the reasons the unions have found themselves out of step in recent conflicts is precisely that they have been organized on the level of the industry : it is here that they negotiate. . . We are witnessing an 'atomization' of social conflicts : each will fight for itself, with its arms and objectives, and it will be necessary to negotiate much more on the level of the firm; but the leaders of the latter have become accustomed to arbitration by specialists and their professional organizations. As this will no longer be possible, they themselves will have to go to the negotiations and, consequently, they will have to prepare themselves." [16] Mallet continues : "We are thus witnessing, alongside the political and traditional front maintained by the parties and the social front maintained by the unions, the opening of a third front in the perpetual struggle of Capital and Labor : this is a matter of an economic front. by which the workers' movement contests the capitalist system, not out of ideological choices or social demands, but out of the practical experiences of the inability of this system to ensure the harmonious and uninterrupted

development of the productive forces. By the same process, the traditional distribution of roles between the union movement and the political movement of the working class is called into question, and the unions as economic organizations are led to politicize themselves in the true sense of the term, in other words not to echo in a dull manner the electoral slogans of this or that political party, but to intervene in an active way in the political life of the country with the means and forms of action which are specific to them. . . The development of modern society completely integrates the political and economic processes. It is impossible for a serious syndical organization not to intervene directly as a syndical power in political problems, insofar as it wants to play its role as a syndical power effectively. . . Protection of already acquired advantages today demands not the regulation of the existing economic system, but the organization of the economic totality in which the wage-workers will have to live. And economic demands of a total character are obviously related to political problems in a modern state." [17] He concludes : "The apathy [absenteisme] of the citizen, deplored today by all good democratic consciences, is compensated for by the development of a spirit of responsibility within socio-economic organizations. This is probably the most interesting and serious consequence of the evolution of firm-based unionism. In effect, we are led to revise fundamentally all of our political habits and our conceptions of democratic practices." [18] Mallet is only expressing in sociological terms the absorption of politics and democracy by Capital, which destroys them as particular spheres of activity. This movement takes place through the full conquest of the State by Capital and reflects the level of its contradictions : Capitalism developed on the basis of the law of value within petty commodity production, and it represents value in movement. As long as its domination is only formal, it reactivates democracy by bringing to the forefront the producer "liberated" by the bourgeois revolution. [19] Once it is fully tied up to value, Capital enters into contradiction with the basis of its existence. It tends continually to surpass it without being able to accomplish this. Neither can it really suppress democracy, so it swallows it up. Because of the development of this contradiction, Capital henceforth tends to confer citizenship through the productive act and the act of labor in general (one who cannot sell his labor-power is not a "man" according to capitalist logic). At the heart of this movement, as Mallet suggests, the firm acquires all of its omnipresence by emancipating itself simultaneously from juridical forms of property and its own financing. This "autonomization" in turn gives the firm its capacity to exercise its own planning, its self-organization in terms of the fundamental and unique dynamic of the system : valorization of Capital. The intervention of the State becomes proportionately more important as it increasingly functions through financial operations, either direct or indirect.

The famous "democratic planning" elaborated by the CFTC since 1959 expresses this new stage of contemporary capitalist development. It is democratic insofar as it takes into account this "autonomous" planning of the firm; this "autonomy" from then on forbids any unilateral centralized planning. At the level of the State, this planning would consist especially of the organization of credit by means of its complete nationalization : "if the State connected the few large private business banks to the four credit banks that it possesses, it would thereby entirely control French industry without resorting to the slightest change in the theoretical ownership of the industrial means of production. It remains to be seen who controls the State, whom it serves !" [20] This sort of "control" over industry could result only from the submission of the State to the sole capitalist dynamic -- the firm -- moving in a context of extreme devalorization. This would produce the following absurdity : the firm, emancipated" and organizing all activity around itself and for itself, cannot respond to the law of value ! As these sectors of high devalorization (basic industries) are the key sectors for accumulation, they differ from their pre-war homologues which were, or consisted of, the sectors of the infrastructure. Only the existence of transformation industries with a sufficient profit rate has allowed these key sectors to be maintained through the system of the equalization of profit rates and the conceding of excess profits. At such a level of contradiction between the forces of production and the relations of production, the outbreak of a general crisis due to the over-all impossibility of the expanded reproduction of capital must lead to labor power itself taking charge of the contradiction, in other words it takes charge of itself. This self-management is the result of the proletariat's atomization inscribed in the "autonomy" of the firm, as we have defined it above; this is a manifestation of the necessity for a type of control over the proletarians which can no longer be exercised by its first boss, but only by themselves. But this atomization does not stop at the doors of the firm; the social invasion of the firm is accompanied by the atomization of the proletariat in the entire society : the crisis, in which value becomes decrepit, and with it political democracy, will bring about the promotion of the producer to the status of the only recognizable citizen. Self-management will necessarily be generalized. (In the latter part of this text, we will confront several concrete modalities of the self-managed counter-revolution in the countries where it is a possibility.) For the time being this does not reduce the existence of the unions to nothingness; on the contrary, as Mallet has shown, some of them have come to take on considerable importance at the heart of the counter-revolution. However, this very importance implies that, outside of them, distinct organizations of workers (including some propelled and controlled by them) are forming. Already during the Italian mini-crisis [21] of 1968-69, rank and file committees and other factory councils appeared which took on and performed functions which the union structure could no longer carry out. This mode of existence of Capital is certainly not new, having existed as a tendency since Capital achieved its real domination over the labor-process in a given sector, but

it is fully realized in the sectors where this domination is complete. Once these sectors have shaped the industrial totality (if only on the level of the organization of the market), the preparation of general reforms becomes even more necessary for Capital, so that these sectors can co-exist (as in France and Italy) with sectors which are on the path to real submission and to which they tend to confer their mode of management during the passage to full submission. But, reciprocally, only these "archaic" sectors, to the degree that the portion of labor which is incorporated in them is still relatively large and implies a movement of labor power, can carry out these reforms. If the labor force's taking charge of itself in varying degrees is now an immediate necessity, it is because the maturation of certain sectors is today synonymous with crisis; the labor force can intervene only through the evermore contradictory movement of value. If the strength of the CFDT in the sectors of devalorization ultimately represents a small part of its total strength : a) its foundation, as a union, has for its origin this contradictory dynamic of the capitalist social movement on which its own theoretical and practical dynamic rests. b) this dynamic utilizes such tools as localized and genuinely sectoral conflicts of small productive units in generally "disfavored" regions, where the CFDT has experienced a rapid growth. These conflicts are usually marked by direct opposition to the right of ownership (sit-down strikes, sequestration of officials, etc.). They are not the CFDT's laboratories for experiments in self-management but, rather they constitute the local starting points of the process of taking charge of the crisis which is itself still localized. The divergences between the CFDT and the CGT on the subject of the common program of the Left reflect their respective positions : The CFDT emphasizes social struggles in order to carry out the reforms of the crisis, whereas the CGT submits to electoral politics. These divergences are fully borne out in the present conflicts [March 1974], in particular at Houillres in Lorraine, where they are transformed into spectacular oppositions. The deepening of the crisis could cause the confederal agreements, which were gradually established between these two unions during the past few years to be called into question. This is the time for the CFDT to affirm and demonstrate its union leadership in the midst of the counter-revolution in formation; moreover, despite its noisy declarations, the CGT has already adopted some significant characteristics of the CFDT plans. [22] Footnotes [1] Karl Marx, Capital, Volume III (Moscow : Progress Publishers, 1966), p. 440. [2] The profitable expansion of capital. [3] Entreprise, No. 967, p. 56, gives an example of this transformation into fiction of a capital, that of British Petroleum : At a time (1972) when, for all the large oil companies investment needs increased while profits fell, B.P., in order to finance installations in the North Sea, resorted to a loan from a syndicate of banks which

would be repaid after a delay of 5 to 10 years from funds coming from the sales of oil from this new source. B.P.'s new productive capital can thus function on an expanded level, whereas its money capital will only have attained the corresponding size in five years at the earliest. [4] cf. G. Lefrancais, Mmoires d'un rvolutionnaire, Paris : Ed. La Tte de Feuilles. [5] cf. Problmes Economiques, No. 1.357, January 30, 1974. [6] Capital, III, p. 440. [7] In developed states their role as managers of labor-power, which marks their integration as a machinery within capitalist society, is particularly clear in the establishment -- in collaboration with the managers of the total capital -- of periodic contracts for wage increases by branches of production. [8] French Communist Party. [9] G. LeFranc, Le syndicalisme en France, P.U.F. [10] Serge Mallet, La nouvelle classe ouvrire, Paris : Seuil, 1963. [11] Capital, III, p. 388. [12] Bordiga, Proprit et Capital, Ch. 4. [13] Bordiga, Proprit et Capital, Ch. 4. [14] Marx, Capital, III, pp. 380-381. [15] Serge Mallet, La nouvelle classe ouvrire, pp. 86-87. [16] Report by Jean Boissonat, editor in chief of L'Expansion, to the European Commission, published in Problmes Economiques, No. 1272, May 17, 1972. [17] Serge Mallet, La nouvelle classe ouvrire, pp. 102-103. [18] Serge Mallet, La nouvelle classe ouvrire, p. 245. [19] Democracy appeared along with the law of value at the time of the dissolution of primitive communities. Athenian democracy was the lot only of free men, only recognized citizens; the slaves, progressively becoming the principal producers, were excluded by the definition of the social being. [20] Serge Mallet, La nouvelle classe ouvrire, p. 167. [21] "Mini" in comparison to the generalized crisis which is coming.

[22] cf. especially the "democratic management" of the firm, democratic planning, in the new CGT perspective presented in the official organ of the CGT : Le Peuple, No. 927, October 16-31, 1973.

Chapter II THE LIP CASE ". . . This socialism would not be a matter of allowing the worker to leave the factory with a pair of shoes slung over his shoulder; and this is so, not because they would have been stolen from the boss, but because this would represent a ridiculously slow and clumsy distribution of shoes for all." - Amadeo Bordiga, Proprit et Capital

When laid-off workers paid themselves wages by selling commodities produced under their own management, their gesture was spectacular and became famous. The Lip workers' struggle struck a blow against the right to private ownership of the means of production and tended towards the reappropriation of the product by the producers. Thus it seemed to re-unite with a movement which had sought to transfer the management of the social productive apparatus to the hands of the working class. However this perspective was that of a workers' movement produced by an epoch of class struggle when capital only formally dominated the labor process and society. If the struggle of the Lip workers could initially appear as a manifestation of the workers' movement, it was because it had been determined, in the context of the Lip firm, by social relations between Capital and the proletarians which were largely identical to those which had produced the workers' movement. But the much larger context of national and international capitalist society has also shaped the reality of this struggle : personal ownership of the means of production has today become a barrier to capitalist production, which no longer needs owners but only managers. In addition, the reality of the struggle of the Lip workers does not fit in with the tendency toward reappropriation, but much more with the tendency toward the management of Capital by the workers themselves : Lip has become a bazaar for selfmanagement. Moreover, this happened without any conscious intentions on the part of the Lip workers, who were merely demanding a boss capable of guaranteeing their survival. 1. Lip, A Factory During the Epoch of Real Domination of Capital The Lip conflict occurred in a sector (watch-making) where Capital has not yet achieved real domination. More exactly, the real domination of Capital over the totality of society has not yet established the specifically capitalist labor process there. Formal submission historically precedes real submission. But in certain branches of production "this latter form which is the most developed can constitute in turn the foundation for the introduction of the first." [23] In watch production the capitalist form of production corresponding to the real submission of labor to Capital first takes control of the production of components : this production is carried out by machine-tools operated by the O.S. ("specialized

workers"). The high level of productivity in the production of components has allowed the introduction of the capitalist form in watch making through the formal domination of Capital over the labor process : assembling watches, within a single factory. (Before the period of manufacture, the assembling of watches was carried on within the framework of an artisanal mode of production, by the watch-making artisans of Jura and Franche-Comte, "the traditional watch-making region.") As the capitalist mode of production took control of the assembling of watches, its domination was initially formal : the technical processes at this stage differed little from what they had been during the artisanal mode of production. The assembling of watches could be continued even after the workers had been expelled from the factory : this shows the importance of human labor at this stage of production. This manufacture rested on the skilled labor of the workers, and it is certainly because Lip is the last watch-making factory that its closing poses a serious employment problem : the Lip workers "could never find another job corresponding to their skills. [24] Furthermore, factory production is based on a barely-developed division of labor : it involves the production of the materials necessary for the complete fabrication of a watch (this is the famous department of mechanical production). In essence, the Lip capital, operating on too limited a level, incorporated a quantity of labor into its product which exceeded the social average. The large American and Japanese manufacturers produce on a scale of mass production : the size of their capitals allows them to compensate for the fall in the rate of profit (engendered by the height of their organic composition) by the mass of profit and by excess profits because their greater productivity makes the equalization of profit rates work in their favor. From then on, with the real domination of Capital over society on a national and international scale, a crisis of maturation had to affect the Lip capital, whose form of domination of labor was archaic, manifesting itself within the framework of manufacturing production : Lip would have to disappear as an independent capital and as a manufacturer. There was another archaic trait : the Lip capital was the property of one concrete person, Fred Lip. As the owner of his capital, he sought to oppose or at least slow down the maturation crisis which would necessitate his dispossession. He tried to rationalize his production by introducing a degree of Taylorism into the assembling of watches and to diversify his activities by creating a machine-tool sector and a military equipment sector. These attempts at making his production profitable again were only palliatives. It is not (as it has been said) because he was whimsical and blundering that he made managerial errors : it is because the only consistent management would have been to accept the integration of his capital into a vaster organization and to abandon his manufacturing production; he was wrong only in wanting to drag on the independence of his capital, and to accomplish this he needed to find palliatives which have been labelled "errors in management" (which certainly shows the ambivalent character of the Lip conflict, a laggard struggle in the midst of an advanced situation). These famous managerial errors were due only to the defensive action of a property owner faced with the threat of his dispossession. Capital's ascent to real domination is accompanied by the dissolution of personal ownership of capital. It is largely because French capitalist society is in the process of carrying out this mutation that the Lip case has had such an echo at all levels of the

society. In the course of the conflict, some representatives of Capital and the unions made a critique of personal property, behind which and in defense of which managerial errors may have been committed, errors whose social consequences these representatives stressed : "The present law is the all-powerful protector of the private ownership of the means of production. Between the bosses who do not find their profits high enough, and the workers who risk finding themselves thrown into the street, the law acts to favor the former." [25] "The wage-earners must not suffer the financial risks of the failure of a management." [26] "Managerial errors are often paid for later on by those who did not commit them... It is intolerable to lead a firm to its failure, to pull out in time, and for calm days to flow on while hundreds of wage workers are threatened with unemployment." [27] To cure this inadequacy, the government passed a law guaranteeing the rights of wage earners in case of bankruptcy, and the local authorities were kept busy at the time of the conflict with the situation of Besanon merchants facing the disappearance of 1300 jobs and numerous sub-contracts. It is known that Fred Lip did not avoid the progressive loss of control over his capital : Ebauches S.A. took 33% of the stock in 1967, 43% in 1970, the majority in 1973. This gradual penetration by Ebauches S.A. should have been accompanied by the transformation of watch-making production from a single factory producing all of its materials and components to an assembly plant supplied with components from other branches of Ebauches S.A., thus establishing a greater inter-firm division of labor. From this point of view it would have been necessary to fire the excess labor power : from 866 people, the watch-making personnel should have decreased to 620. [28] Giraud's plan retained the same number in the watch-making sector; but he foresaw the creation of a box production sector, permitting the reduction of the number of layoffs to a level more acceptable to the striking workers. He was wrong in this matter, as was proven by the rejection of the Dijon agreement. But Giraud was also repudiated by the bosses, and if the workers had accepted his plan he may have been unable to obtain the necessary financing. The bosses reproached him for making too many concessions to the work force : "M. Giraud is in the process of creating a monster for us," declared one high-ranking official, quite personally interested in the settlement of the Lip affair. [29] "Only a total reorganization can return Lip to an equal footing in terms of production costs, and thus in its commercial chances. But it is already certain that this large-scale house-cleaning will not take place," affirmed a watch-maker from Besangon. [30] On the eve of the Dijon agreement, Franois Ceyrac's wariness was clear : "It is necessary that the head of the firm maintain his freedom in the realm of employment." [31]

Giraud's plan suffered from another shortcoming in the eyes of the bosses : it sought to do without Ebauches S.A. But the latter is the largest European manufacturer of separate watch parts, so that its participation at Palente is far and away the most profitable situation; moreover, it was Lip's principal creditor. To review how Lip's debts were incurred : 30 million [32] to Ebauches S.A.; 15 million to suppliers (watch-bands, cases); 10 million in bank loans. [33] To do without Ebauches S.A. therefore meant repaying the debts, and the Giraud plan thus needed financing of at least 40 to 50 million francs. With such a financial handicap linked to a productive sector in which the labor force was too numerous, the project was doomed to fail. The Interfinexa plan of November 1973 suffered from the same financial drawback. Its financing was 40 million because it, too, wanted to do without Ebauches S.A. and to make an appeal to the French watch-making industry. [34] The Socit Gnrale refused to finance this plan, and one would have to be a Mr. Rocard [35] to think or say that this refusal was motivated by political reasons. The lnterfinexa-Bidegain-Neuchwander plan, which had been adopted by the bosses, and which the workers were finally forced to accept, for want of any other possibility, itself calls for loans of 10 million in private capital and 15 million in State aid [36] to which must be added a balance of 2 million from the wildcat sales ! This plan marks the reintegration of Ebauches S.A. as a protagonist in the business, and improves the economics of the financing and the perspective of profitability : the new capital is going to operate at double the scale of the previous one; Neuchwander stipulates that the objective is to manufacture a million watches a year, whereas production has only been 500,000. [37] This is the solution to the crisis of maturation through the accession of Lip's watch production to real domination. It is also the solution, from the vantage point of Capital's interests, to the contradiction at the heart of the Lip workers' demands : they wanted a good management of capital which would protect them from lay-offs, but a good management could be nothing other than the accession of the Lip capital to real domination, and this had signified the firing of the excess labor force. The Neuchwander-Bidegain plan effectively "reconciles" the two poles of the contradiction by subordinating the more or less complete reintegration of the workers to the successful functioning of the new firm. The other demand, non-dismantlement, has also been solved in terms of Capital's interests. The Ornans machine-tool sector has been independent since November 1973 and, at Palente, watch-making and military equipment have been taken over by a holding company, a juridical structure placing capital and profits in common, which does not allow any technical connection to exist in the domain of production. This section cannot be ended without pointing out that "the Socit Europenne of Watch-Making and Mechanical Development" includes primarily representatives of French capital such as B.S.M., Rhne-Poulenc, Sommer on its board of directors, all of which operate in the chemical and petro-chemical sectors : we have seen in the previous chapter the position and significance which these sectors acquire in the framework of real domination of Capital.

2. The Workers' Movement at Lip The classical socialist goal is the abolition of wage labor. Only the abolition of wage labor can bring about the abolition of capitalism. But not having been able to abolish wage labor in the sense that the workers see the absurdity and backwardness of selling their labor power, the socialist movement has, since it began, aimed at the abolition of the market economy. - Amadeo Bordiga, Proprit et Capital Whatever developed later, the Lip conflict's origins were unquestionably proletarian in the sense that the firm's inability to carry on capitalist reproduction meant the workers would be fired. As has been often observed, the firm's difficulties in no way threatened the survival of its owner F. Lip. By contrast, the workers' means of existence were directly threatened and, what is more (as we have said) the workers were unable to find elsewhere similar types of work in which they would be employed in the same way. To survive they were forced to react. But how ? We shall see that the unfolding conflict was determined by the workers' fundamental isolation which can be looked at from two points of view, capitalist and proletarian. First of all, from the proletarian point of view, the company's inability to carry on the cycle of capitalist reproduction involved "the Lip proletariat" but not the rest of society, and it is evident that that isolation is the real reason for the Lip workers' defeat relative to their goals, and for their non-radicalization. It is also for this reason that while attempting to defend their income they were led to compromise with capitalism. But they had no choice and it would be wrong to suppose they could have chosen more radical methods. They acted in conformity with their real isolation from other workers in struggle against the loss of their livelihood. To do it, they were forced (among other things) to put together small social reserves (seizure of stocks of finished watches and parts, solidarity funds). The illegal means they used might lead us to believe that some sort of radicalization might have become possible as the conflict developed, at least if the unions didn't succeed in betraying the developing radicalization. But that would be to give the unions a power they didn't possess; since the content of the illegal acts was the formation of stockpiles -- which could only be turned into money -- it precluded a subsequent radicalization involving, at least potentially, the destruction of capital and wage labor. And thus the workers fell back into their isolation as workers. Only a movement taking root in the sectors which are specifically capitalist would have allowed them to go beyond the intrinsic limits of their struggle, and would have thus negated its purely proletarian character while carrying it one step further. This sort of solidarity evidently would have been the opposite of the political solidarity of the advocates of self-management of every stripe who wanted nothing more than to reinforce the Lip workers' fixation upon their own isolated firm. In the absence of any real solidarity movement the workerist character of the struggle prevailed over its proletarian origin as the conflict developed. In their isolation the Lip workers were unable to go beyond the immediate conditions they had faced from the outset, and it was from this narrow basis that they rushed into struggle. Attached to their isolated factory, they strengthened their consciousness of themselves as producers, and attempted to realize in practical terms that consciousness. They

resumed the production of watches. The "Lips" -- and that is the origin of their disgusting popular nickname -- became a collective capitalist. What is remarkable and, at the same time, most characterizes Lip at its highest point as a workerist movement is that the workers in struggle attempted to negate in practical terms the consequences of the closing of their factory (in other words the suppression of wage labor) by paying themselves their wages as they had been accustomed to think of it before June 12, the date it was announced by the company that wages would be suspended : "We have been paid our usual wages which the old bankrupt management owed us." [38] But it wasn't only a question of financing the strike by producing and selling watches as the workers at Cerisay sold the blouses they had made with their own resources, or the Bouly workers (who made stockings and collars in a factory at Fourmies) who decided to exploit their hobbies to raise a solidarity fund : "some knitted, crocheted, sewed, while others did woodworking and blacksmithing; the products thus obtained were put up for sale" [39] -- but it was above all a question of assuring their wages. Not only was the sum of money -- as the Lip workers understood it -- identical to their former wages, but, in addition, "each worker or employee received his pay envelope regularly filled with an accounting of deductions for insurance, social security, pension fund. . ." [40] The guaranteed wage was thus carried out to the letter in the form of "wildcat pay" and this was entirely in accord with the will of the workers themselves. [41] In effect, there were three ways in which to see the amount of money each worker would get : 1) an equal amount for everyone; 2) the usual salary less a percentage; 3) the usual salary with a solidarity fund to which everyone could give what he wished. The last of these solutions was the one chosen. [42] Certainly, as B. says in the interview cited above, the union delegate supported this solution but it would be wrong to believe that the adoption of this measure would have resulted from a vote by the workers' general assembly. Proof of this was given by those interviewed : "Since we had some dough why should we accept the lowest level. . ." -- "if the boss gave us 200,000 why have only 150,000 ?" To be sure, a higher level could have been envisaged for some, but they would have been accused of irresponsibility in frittering away the firm's capital and this would have been opposed to the general sense of the struggle. "No firings" meant maintaining salaries and nothing else. "The usual pay for all the workers, that was really something, and I think it would be good if it was done that way; and the second (the usual pay less a percentage) also, and. . . I'm just as happy now getting whatever they can give me." [43] Moreover, the price at which watches would be sold is also significant; this from the Lip catalogue published by the factory : "the sale price of the watches includes the price of parts, value-added, tax, depreciation and replacement of machinery, the workers' salary and even the owners' profit." [44] But what could be the objective reason for such a choice since the workers didn't have any intention of accumulating capital; but also, if they would have been able to sell all the watches, for example, at

the same price, what model for pricing would they use ? There were no other reasons for their decisions about salary and price than their desire to have everything go on as before : the preservation of their wages required the preservation of the firm's capital. "No to firings, no to dismantling" meant "safeguarding the enterprise," [45] in other words the enterprise's capital. In the cycle of capitalist reproduction the various values that make up the total capital are related to each other by the necessity for the total capital to go through the cycle of reproduction. From then on the Lip workers couldn't assure their usual salary by selling watches at any price-not that it would have been impossible for them to finance the strugglebecause that would have destroyed the relationship between the price of the watches and their normal wages; and to have destroyed that relationship between price and wage would have destroyed the cycle of capitalist reproduction and thus led to the firm's liquidation; just the opposite of what the workers wanted. Just as the price of the watches couldn't be determined outside of the cycle of capitalist reproduction, so too the workers' wages couldn't be paid without some sort of effective control over the way in which the workers spent their time. At the Ornans factory the workers continued to clock in every day when work began. At Palente, control was not so close but it still existed at the general assemblies. "You know," a worker said at Mutualit (December 12), "it would be unjust if some received pay but only appeared at the plant on pay day." There, in a nutshell, is the consciousness of the producer, the honest worker expressing himself. In the end the workers continued to wear their work shirts long after the factories were closed and to exhibit those work shirts at support meetings held all over France. It is perhaps this small detail that best reveals the producer consciousness which characterized the Lip conflict as a struggle of the workers' movement, and the backwardness of this movement in relation to the dominant forms of current proletarian resistance such as absenteeism and sabotage. However, a capitalist enterprise cannot be revived by production alone. Capital continues to exist only when it runs through its cycle of reproduction in a harmonious manner. Saving the wage, that is to say, the firm's capital, by starting up production makes no sense unless the rest of the cycle of reproduction is functioning. Thus the necessity of marketing the watches. [46] A "wildcat" or "parallel" market quickly sprang up that was simultaneously a watch market, a formal solidarity fair and a bit of a racket. To sell their watches the "Lips" were led to employ modern marketing techniques, [47] which circumvented the retailer (thus the protests by watchmakers and jewelers) and which allowed them to increase their margin of profit. The "Lips" sold their watches at political rallies, at their friends' houses just as Tupperwear is sold at social gatherings or door-to-door. Additionally this watch market was one of the unproductive expenses as with any other capitalist undertaking. In particular it was necessary to pay for the workers' trips which were as often made to sell watches as to popularize the struggle (popularization = public opinion = publicity). If it is indeed true that travel expenses were not covered by sales but by contributions given in solidarity, [48] then self-managed Lip had still another economic trump card (besides its marketing methods) since the travel expenses couldn't be charged to the firm's capital.

But unfortunately for the "Lips" the Left's goodwill market quickly reached its inherent saturation point. The narrowness of the goodwill market in fact conformed to the Lip enterprise's unprofitable character. This parallel market was at the same time an ideological marketplace. In exchange for the watches sold the Lip workers received all sorts of encouragement and advice to continue the struggle. [49] The support meetings and political rallies gave various political tendencies a chance to try out their self-management or workers' control propaganda. This ideological marketplace was the sine qua non of the struggle. The workers could only take the advice as ready cash and watch while little by little the spirit of the struggle was focused into the image of an enterprise now running on a new basis : self-management. As one interviewed worker said : There are some people who went to Marseilles, some guys who were in Lyon, everywhere they were made to feel like they were big men. They returned with their heads full of a million projects and ideas that come from everywhere. They thought that their ideas should be carried out and thus fell out with the men here who were under pressure from the unions -- the CGT or CFDT -- and who were completely demoralized. [50] To attribute the Besanon workers' lack of enthusiasm to union pressure would be to mask its real character. The hard reality the workers ran into upon returning to Besanon with money from watch sales was that their money could not be converted into additional capital. The second phase of the cycle (the conversion of commodities into money) could be carried out, more or less, but it was only half effective since the third phase of the cycle (the conversion of money into productive capital) comprised the conversion of money only into variable capital and not constant capital. This then was the living reality of the "Lips" at Besanon -- a reality which the unions only reflected. These limits didn't result from the failure to generalize self-management but, on the contrary, originated with the "logical absurdity" of the struggle : workers' self-management of a bankrupt enterprise. With the enterprise in such a state the "Lips" could do nothing more than fall into the same rut as their former boss. [51] There was nothing more for the travelling salesmen to do than to leave once more for other saturated markets : "there were fellows like P., for example; one day he returned with us from Paris, the next day he left again for Lyons. Then he returns from Lyons, he stays here a day, gets edgy, disgusted. He leaves again for Marseilles, returns the next morning. And having to plan all this crap besides." [52] The above leads us to the second aspect of the Lip workers' isolation. From the capitalist point of view, the political or ideological goodwill accorded Lip by the government or the owner does not exclude abandoning the firm economically. For several years Lip had demonstrated its inability to maintain itself within the capitalist community. And for capitalism there is no solidarity that counts except the law of profit. To be profitable once again, it was necessary for Lip to go through a thoroughgoing restructuring. Proof of this is to be found in the sum (about two million francs) which because of their respect for the continuity of the cycle of reproduction the "Lips" were led into giving up to the new owners in addition to the remaining stocks. This is what they had accumulated in seven months of work. If we recognize that this sum covers only one

month's wages (for 900 workers), if we compare this amount with the 15 million owed the suppliers, then we see to what extent the organic composition of the Lip capital had diminished and how unprofitable it was. To be sure the "Lips" as a collective capitalist stuck it out longer than did their old boss. This resulted from the differences between themselves and the old boss, and from the exceptional character of the situation they had created. They had no reason to take charge of the entire cycle of "their" capital. The "Lips" could take advantage of the fact that only a fraction of the capital went through a rapid cycle (circulating capital, which is to say wages, raw materials, parts). They denied the basic problem, however : the rotation of the total capital. They were never obliged to renew the constant capital nor did they make good any of the debts contracted by the old management. Moreover they renewed the stock of parts only to the extent they were able to do so. All this added to the advantage they had over the old management -which we mentioned above. Far from proving the superiority of the "Lips"' management they demonstrated, instead, the impossibility of successfully managing the Lip capital on the old basis. 3. The Union Question Much has been said about the unions' role in the Lip business : the disagreements between the CGT and the CFDT, the relationship between the CFDT and the nonunion action committees which were formed. While the CFDT immediately took charge of the struggle, promoting in large measure the action committees and cautioning against illegal acts, the CGT groaned about its usual demand for "the right to employment," claimed it was being, as usual, realistic, and in the end was driven off the scene by converging forces. The unions' activities seemed to be devoted to wedding the workers' movement to the union movement, and could have restored a bit of luster to old "revolutionary unionism." In fact, beneath the surface of their respective statements, the dissension between the CGT and CFDT at Lip did not result from a real choice between modes of action that each would have made, but from a constraint resulting from the outstanding differences that had generally existed between them and which were faithfully reflected in the particularities of the Lip situation. At Lip we simply witnessed the clearest expression of the differences between the CGT and CFDT which were forced into public view by May '68 and which were more or less the same afterwards on the occasion of certain strikes (notably Joint Franais). The CFDT's managerial pretentions were clearly concretized at Lip by its preparation and publication of plans, in contrast to the CGT's deliberate silence on the subject. At the risk of being entirely discredited among the workers, the CGT was forced into tail-ending while discretely criticizing, more or less constantly in this case, the "adventurism" of the CFDT. The momentary return of union unity during the Dijon negotiations, where the unions accepted firings as a matter of principle, coincided with a renewed divorce, also completely provisional, between the workers' movement and the unions, since the facts once again raised the fundamental question, for the workers (who seized upon it as proletarians), of the firing of the excess work force. For the CFDT, it was but a secondary question.

Sensing the rank and file's upcoming rejection-and since the CFDT couldn't exist without the support of the rank and file -- the CFDT was forced into a quick aboutface and once again adopted at the October 12 meeting the position of the Action Committee against all firings and did not put to a vote the contents of the Dijon compromise (firings with a guarantee of re-employment), which it had defended only the day before. This sort of quick turnaround was, to be sure, made possible by the CFDT's position "close to the rank and file." The creation of an Action Committee at Lip might have been surprising at first, in part because in recent years in France no strike, even the most lengthy and bitterly fought, had involved the birth of a separate workers' organization save for a few ephemeral strike committees; but above all because the CFDT apparently was completely involved in the struggle. We have seen that because of its nature the CFDT was led to support the creation of such committees as soon as the workforce took charge of itself. Lip is a concrete example of this phenomenon in an isolated context. [53] By taking over itself, the Lip variable capital, in view of capitalism's total reconquest, required an organization which at one and the same time would emanate from the CFDT and yet possess a certain amount of autonomy from it, since the content of this sort of activity lay temporarily beyond the bounds of negotiating the price of labor power -- which is the fundamental task of the unions. At certain moments this relative autonomy can be transformed into virtual opposition; this results from its very nature as was the case during the brief period of time between the Dijon agreement and the meeting of the consultative general assembly. But the movement toward autonomy was no real expression of the Action Committee's having gone beyond the union; with respect to the content of the action -- saving the enterprise -- there could be no rupture. The union always had in its hand the key to the problem. To demonstrate this, it suffices to notice the final, unanimous acceptance of the Neuchwander-Bidegain plan (see above) which concretized the final, total defeat of the proletarian origin of the conflict by its capitalist content; this defeat was inherent in the beginnings of the conflict, as we have seen; and since it was irreversible, the only outstanding questions were when and how it would occur. Thus the problem of firings, essential in the rejection of the Dijon agreement, seemed to disappear suddenly in the acceptance of the Dole agreements. The only qualification attached by Bidegain and the unions in elaborating a new plan at this level in no way explains the apparent sudden reversal. Their qualification was, on the contrary, the natural result of the social relation of forces that were established at the beginning of the reconstitution of the capitalist cycle. The creation of the Lip Action Committee and the practice upon which it was founded unquestionably reflects the end of the workers' movement as a progressive historical force. In effect, in struggle the dismissed workers could only free themselves from the unions' grasp in two ways : in a reactionary way (tendency to return to small-scale production and distribution via markets), or on a revolutionary communist basis (destruction of value, wage labor, the enterprise itself and the market). These were, in sum, the scenarios put forward by the councilist Ultra-Left, which could only lead to disaster. [54] "We make, we sell, we get paid -- it's possible" the Lip Action Committee sang along with the confused Ultra-Left and Maoist tail-enders who helped with a good deal of the publicity. But no, it wasn't possible The development and socialization of the productive forces by capitalism forbid any return to any such

low level mode of production and mercantile exchange, unless, in limited or general crises (with other developments), it is used as a means of hiding the impossibility of continuing the cycle of capitalist reproduction. In that case, the end of the workers' movement immediately has as its content the legacy of this development : the reconversion of its theory and practice into the potential counter-revolution. This should astonish only those who haven't taken into consideration the historical movement or the direct link between revolution and counter-revolution. Footnotes [23] Marx, Un chapitre indit du Capital, Paris : Ed. 10/18, 197 1, p. 201. [24] Lip, Information Bulletin, published by the Publicity Committee of the Lip Workers, p. 9. [25] cf. "Syndicalisme-Hebdo" (CFDT), cited by Le Monde, August 9, 1973. [26] Ceyrac, cited by Le Monde, September 21, 1973. [27] L'Expansion, September 1973, p. 100. [28] cf. Document 3, Ebauches S.A. plan of June 8, 1973, in Lip 73, Paris : Seuil. [29] Le Monde, September 22, 1973. [30] Le Monde, September 22, 1973. [31]Le Monde, October 7, 1973. [32] All figures in francs, 5 f = $1. [1975 footnote] [33] Le Monde, August 14, 1973. [34] Le Monde, August 14, 1973. [35] Head of the Socialist Party. [36] Le Monde, February 2, 1974. [37] Cited in Le Figaro, February 7, 1974. [38] Lip Information Bulletin, published by the Publicity Committee of the Lip Workers [39] AFP deposition, October 8, 1973. [40] Le Monde, August 4, 1973.

[41] See Jean Lopez, Lip interview, 18 rue Favart, 75002 Paris, November 1973, pp. 27-31. [42] Jean Lopez, Lip interview, 18 rue Favart, 75002 Paris, November 1973, p. 30. [43] Jean Lopez, Lip interview, 18 rue Favart, 75002 Paris, November 1973, p. 31. [44] Lip Information Bulletin, published by the Publicity Committee of the Lip Workers, p. 11. [45] Lip Information Bulletin, published by the Publicity Committee of the Lip Workers, p. 9. [46] The money for the "workers' pay" came only from the sale of watches produced after production was begun by the workers. Here then is an example of the Proudhonist idea of the right of the producer to his product. In a general way it can be observed that as the situation developed the workers' initial reaction in defense of their wages led to a mixture of archaic working class tactics and modern management techniques : thus the resumption of production in order to attain the superficial objective (the profound objective being the defense of wages) of demonstrating the importance of the workers' productive activity by contrast with the boss's superfluity that is truly a characteristic of the worker. The sale of the watches produced (which also was motivated by the desire to defend the wage) also demonstrated the workers' ability to manage things. It is, as well, by virtue of these self-management tendencies supported by the CFDT that watches and wages were invested with a price and a capitalist form (to the consternation of some Situationists). [47] Between June 20 and November 16 the workers sold 82,000 watches, realizing a total of more than 10 million francs (figures furnished by Ch. Piaget, cited by Le Figaro, November 16, 1973. At the August 24th press conference of the CFDT -- "Lip is viable" -- it was emphasized that the "sales committee" was ready to furnish precise information on the "nightingale" and "war horse" models and various esthetic improvements to be made on them. Moreover, the CFDT stated that "experience of direct sales to individuals and to factory committees merits serious analysis." [48] cf. Charles Piaget, Le Figaro, November 16, 1973. [49] The publicity put out by the Left, the New Left, the unions and others to prepare workers for the visiting Lip workers involved a simple slogan which had already proved its worth : "the Lip workers are fighting for all the workers" (therefore you have to support them and above all finance them), equivalent to "I drive for you" that the truckers put up to convince you to be patient with their heavy burden. So it goes in a society in which all activities cooperate in the reproduction of capital, where everyone has his job to do, not for pleasure, you can be sure, but because any single interruption would harm the general interest : the implacable logic of the situation to which every "man" of good will must agree. [50] Lip interview, 18 rue Favart, 75002 Paris, November 1973

[51] Indeed it seems that the conversion of money into means of production (materials) might have been foreseen : see Le Monde of August 2, 1973 : "according to those in charge of the production department ... it will be possible to buy raw materials : we are studying various propositions which have been made to us." This sort of managerial logic also was behind the "Lip" attempt to start the entire cycle of reproduction : see Le Monde of July 13, 1973 : "the workers' collective added : we've established a plan for the year with a renewal of watch production and renewed activity in other sectors." The Palente factory evacuation of August 14 [1973] certainly put an end to their project. But the workers' inability to take over the cycle of capitalist reproduction did not result primarily from political opposition from the bourgeoisie but rather resulted from the unprofitable nature of the enterprise. Besides it is known that on July 12, 1973, Charbonnel, one of the government ministers, suggested that Lip become a cooperative. Among the arguments the CFDT advanced in opposition to this idea were some which linked the inevitability of the bosses' political hostility with their opposition to an enterprise directed by workers (see Le Monde, August 21, 1973). That the cooperative wouldn't work was due, in the first place, to its inability to show a profit. In fact, the CFDT only too well understood the situation, and their delegate, Roland Vittot, in his answer to Charbonnel, stressed that the unions were rejecting the ministers' suggestion since he foresaw "a decrease in employment" not because of errors of management made by the old directors, but because Lip, inevitably, would have to become an assembly line in order to survive. [52] Lip interview, 18 rue Favart, 75002 Paris, November 1973 [53] We should note, if only in passing, the role played by "Cahiers de Mai", which took over, for the most part, the bulletin Lip Unit (Lip United). For several years now this group appears every time the workers show a little autonomy vis--vis the unions. "Cahiers de Mai's" organizational flexibility permits it to be an ideal complement, indeed a palliative, for the union's practice, to which they are immediately linked by their exclusive attachment to one factory (as compared to the "classical" political groupuscules). In 1972 at Pennaroya, for example, in the absence of the union, they organized from beginning to end the strike of immigrant workers. Once the conflict ended they then helped organize a union local in the factory. The apparent ambiguity of the "Cahiers de Mai" in its critique of the unions (taking them to task for "divisive" hierarchies), at the same time recalls the group's function of stimulating unity among an atomized rank-and-file and also recalls its origin in May of 1968. May '68 has too often been lauded for its anti-bureaucratic and antiauthoritarian dimensions. Now and then the limits of this one-dimensional view have been pointed out. It remains to show that on this level the movement also anticipated certain counter-revolutionary characteristics of our epoch which correspond to the crisis of French capitalism's maturity which, to some extent, May of 1968 revealed. [54] Even at the very moment when it was evident that they were enjoying unprecedented publicity using techniques borrowed from the dominant modernism (see, in particular, the republication in paperback of the complete works of Chaulieu, alias Cardan, alias Castoriadis, etc.).

Chapter III CRISIS AND SELF-MANAGEMENT This is the road to be taken : first, to motivate the workers more than they are now. That is to say not to allow nine hours of work to go by without a meeting so that each worker understands what is happening in the enterprise as a whole, where it is going, why we work, what it means for society. Then it will be necessary for society to respond to the workers' aspirations.... There might be some guys who take on responsibilities, there might be responsibilities that are rotated; when one takes on responsibilities something happens; one then learns to accept many other things; if one understands why, then one can very well accept many other things. - Charles Piaget, Lip Interview 1. The Workers' Community and the Human Community Besides self-management, much has been said, with respect to Lip, about human warmth, the rediscovery of the joy of living, etc., not only in the large meetings and solidarity marches (we already have seen what they stand for), but also within the enterprise itself. These ideas appear again and again in the interviews with the "Lips"; we finally can know ourselves; everyone was able to express himself. . . Even many of those who recognized the limits of the struggle let themselves be carried away by the carnival atmosphere at the beginning; they believed something of that atmosphere would be maintained and that the form of the "Lips'" struggle had a "dynamic" all its own, independent of its limited content. In fact the archaic character of the productive process of the Lip Watch Co. not only did not stop the workers from wanting to safeguard their enterprise by any means possible but also allowed them to form a homogeneous group confronting the personified enemy : their boss. When the boss went bankrupt and disappeared because of the uncompetitive character of his capital, the workers found themselves with their tools and their production process negated and inert. The requirement that they start up the production process themselves could only be sustained by the sort of enthusiasm that affirmed a new-found sense of community. Any sort of breakdown within a community sooner or later leads to the formation of a new community which, at the outset, provokes enthusiasm within the newly formed community. For the workers of the Lip Watch Co., however, the break with their previous community was profound not only because as proletarians they were deprived of the means of subsistence (which was the origin of their new found sense of community) but especially because they could once more make use of the objects and motions which they had been deprived of; the reformation of the Lip community as a collective capitalist on the basis of the disappearance of the "exterior" constraint

of bosses, directors, etc., must have induced quite suddenly a tremendous feeling of enthusiasm. First of all, we can directly compare this sort of fraternization with the fraternization which marked the formation of workers' cooperatives in the nineteenth century and, more recently, the numerous communities of work which arose in France at the end of the last war. In fact, even at this simple level, there are fundamental differences, but before taking them up it is necessary to understand the points of similarity and their origin. The communities of work that emerged from the war developed in areas where the destruction of productive forces had been great, and in those sectors of production where there was little constant capital at the outset. In a general way, the rebirth of such communities in a form approximating workers' cooperatives, was made possible by the rejuvenation of operating capital during the war combined with the generally archaic character of French capitalism as a whole. Proclaiming equal wages and equality in management, the few individuals involved in these new productive units evidently believed quite sincerely that they were founding socialist enterprises in the manner of the nineteenth century workers' movement ! A good example of this is furnished by the community of work Boimondau (makers of Dauphine watch-cases) at Valence in the Drme. This community was founded by Christian socialists, anarcho-syndicalist and other socialist militants who were known in the Resistance in Vercours (the Drome and Ardche region witnessed a tremendous destruction of men and materials thanks to this important Resistance cell). It involved a watch factory around which was build a city housing this mini-capitalist collective and its family. The ensemble of factoryhabitations was given the evocative name Watch City. General assemblies were regularly held to take collective decisions on everything from the running of the enterprise to leisure time; for example, an attempt was made to establish "sexual liberty" by decree. Similarly, at the new Lip there was a tendency to create a communal life organized around the enterprise : meetings, sandwiches, little festivals were held, it seems, almost daily. But there the comparison ends because if, at Boimondau, there was a real equality of wages at the outset, at Lip we have seen that the preservation of a wage hierarchy was an imperative necessity in the creation of the collective capitalist : at Boimondau the framework of the general re-accumulation of French capitalism allowed the worker community to take shape in relative "purity." However, the impossibility of capitalist reproduction at Lip could allow the Lip collective to exist only as a "bastard" workers' community. [55] Boimondau was a product of the destruction of the forces of production. Lip was created by their contradictory development. At Lip no new enterprise was born. Rather the old was saved by a sort of modernization. Rocard in vain declares, to justify this sort of management, that several hundred communities of work were created just after the war: [56] some sociologists have in vain exhumed the Boimondau experiment. [57] However today the idea of the

commodity labor power taking control of its own situation has an entirely different meaning. For the same reasons another fundamental difference appeared : in addition to outside organizations and groups of militants the Lip workers were joined by numerous outsiders from the Palente section of Besangon and from other parts of France. This concentration at Palente had two complementary origins : French society being capitalist, Lip's survival, as we have seen, was a vital imperative for the city and surrounding region. Additionally, this material community could only develop in contradiction with its own bases; it could no longer organize, in its usual form, the totality of human beings which it pretended to include in itself (e.g., hippy communes, etc.). Those not part of "marginal communities" were subject to the contradictory movement involved in the decomposition of social relations : hence the growth of "delinquency." The instability of capitalism's material community, [58] profound origin of its intolerable character, makes every type of breakdown attractive, even if it is carried out on the reactionary basis of wage labor and the appropriation of the product for sale on the market by the producer himself, as was the case at Lip. The violent battles following the occupation of the factory by the CRS [national guard] can be considered as a sort of proletarian outpouring -- not an expression of solidarity in defense of the factory itself (those arrested said they came "to see" or "to enjoy themselves"), but a violent expression of a desire to take part in a breakdown when the occasion presented itself. [59] It was no accident that many of those sentenced had delinquent records. Moreover, such events have occurred more or less regularly for several years whenever the conditions for a riot or the smallest disturbance have existed. That is the origin and the content, apparently inexplicable, of the violence distinguished by its "hooligan" stamp -- thus its profundity and limitation. In effect, contrary to the Lip workers, the mass of proletarians expending their labor power in specifically capitalist processes of production are so interchangeable that the existence and life of this or that enterprise is of no concern to them. Thus as anonymous victims of the rising organic composition of capital, they find themselves unemployed (often for the young this means there is no possibility for them to enter the global productive process), they feel no compulsion to organize against a specific antagonist. [60] The enemy which has victimized them is not any capitalist in particular but capitalist society as a whole which they perceive more or less confusedly. Without a generalized crisis, the rejection of labor power is nothing but one of the necessities of reproduction for global capitalism. These proletarians form an industrial reserve army necessary for capitalism's general expansion since they exert a pressure that keeps wages down; however, the fundamental difference between the nineteenth century army of the unemployed and the present one is that the latter can gather in the most developed capitalist metropoles as relatively stable communities of lifetime unemployed limited in size only by the extent to which the productive forces have developed with respect to the relations of production. Thus over the last twenty years in the U.S.A. there have developed ghettos of black proletarians who can manifest, by their uprisings, as in 1965, their need for a human community; but these revolts

immediately reached their limit and were checked by the impossibility, in that period of general expansion, of attacking the heart of capitalism : the relations of production. However, in the absence of a general crisis, the weakness of those temporarily included as well as those permanently excluded becomes a potentially revolutionary force when the crisis embraces all of society-that is to say when the movement to devalorize ends up by prevailing over the valorization movement and the capitalist mode of production is forced to reveal its ruin. Because the general crisis has at its root the nature of capitalism which consists of accumulation by autonomous enterprises, the proletariat can form itself as a class only by overcoming the enterprise (and no longer as groups within the enterprise) to create a unified mode of production freed from the detour between production and consumption created by exchanged value, and which reveals its absurdity during a crisis. The proletarian mass, undifferentiated by its work, which incorporates in a banal way this "class within bourgeois society which at the same time is not a class of bourgeois society" in the crisis finds itself constrained to break the last link and can no longer reproduce itself as a category of Capital. This class-in-itself tends to organize itself as a historical party which affirms its future in the human community; this class has no "future" save in its own suppression. The formation of the human community is the result of the development of the productive forces by the community of Capital and is the only historically possible supersession of Capital's community. In integrating this development by which it radically transforms work, the human community destroys in a positive manner the ideology of work, which capitalism had made into something negative : labor time finally disappears as the sole measure of social wealth to the benefit of "free time." In fact communism carries with it the end of the division of labor time/leisure time by fusing all activity into activity necessary for the production and reproduction of humanity; the resulting fusion would consequently not be carried out on the basis of the labor of men alienated into citizen-producers as was the case in the worker community. Thus timed production of time-producers which was the Lip Watch Co. is doubly negated in the good company of money. But if the organization of the proletariat as a class-for-itself directing itself toward the construction of the human community tends to be as much a product of the global development of capitalism as it is a product of the inability of capital to reproduce itself, the result isn't automatic or inevitable. "Let us rebuild the ENTERPRISE by means of self-management, and not destroy it. . ." - Serge Mallet, La nouvelle classe ouvrire

"Socialism resides entirely in the revolutionary negation of the capitalist ENTERPRISE, not in granting the enterprise to the factory workers." - Amadeo Bordiga, Proprit et Capital 2. The Self-Managed Counter- Revolution In capitalist society revolution and counter-revolution form a linked pair though radically antagonistic to each other. The two are joined in the contradictory movement which is indispensable to capitalist reproduction and at the same time fetters that reproduction. The crisis which is simultaneously the explosion of the contradiction and the beginning of its resolution thus implies the continual emergence of revolution and counter-revolution. The two are carried forward by the dominant movement of devalorization : the counter-revolution, because this important devalorization is then necessary for a later revalorization; the revolution because such a period of devalorization broadcasts its decrepitude. Consequently, while the revolution must cut short any later revalorization, the counter-revolution must first of all take over devalorization with the hope of rationalizing the contradictions. However, given the depth of the present contradictions, the counter-revolution can only develop one perspective for a capitalist resolution : the massive destruction of productive forces. This development thus implies that the revolutionary movement might be inhibited and sporadic revolts might not attain their objectives and be crushed (consider the repression of revolts in little developed or underdeveloped capitalist nations which have already suffered the first violent blows of the crisis : Greece, India, Ethiopia, Bolivia, etc.). On a more immediate level of proletarian activity and consciousness revolution and counter-revolution reflect the impossibility of reproducing the capitalist community which, on a global scale, has disorganized the life of the disoriented proletarians. The dissolution of the form of consciousness corresponding to material conditions in a state of auto-destruction implies the formation of a new consciousness reflecting new conditions. For the proletariat within a crises-riddled capitalism, the dissolution of a consciousness linked by ideology to a self-valorizing Capital is immediately translated into the raised consciousness of being a class without reserves, possessing only its labor power. Forced to take steps to reproduce its lost means of existence -- or to reproduce a much lower standard of living because of the brutal fall in real wages-the proletariat sees in the situation it confronts the possibility of two types of responses :

1) a spontaneous tendency to personify the historical movement of the productive forces that signals the superannuation of the capitalist mode of production and calls for a communal organization on a human basis; 2) a tendency to locate the origin of all these evils in secondary capitalist phenomena that mask the roots of the contradiction and hinder the historical movement. [61] A superficial anti-capitalism is born which feeds on various ideologies and which the earlier dissolution of consciousness aids in developing. These ideologies share a common desire to resolve the crisis for the proletariat by economizing on proletarian revolution and by putting forward a mish-mash of reactionary and reformist measures. They reflect a tendency towards communitarian reform on the thin basis of lingering capitalism. Thus the fascist and democratic responses (popular front) to the crisis of 1929-30 implied an unprecedented holding on to the principle of wage labor just at the moment when wage labor was in the process of self-destruction. This was made possible by the destruction of the revolutionary movement. If the proletariat is the class of consciousness the breakdown of its alienated community will neither result from nor automatically involve the rise of a new mode of production. Unlike previous revolutionary classes, the proletariat is not supported by the irresistible force of value, which it must destroy. To carry out its work it has nothing but its humanity. Hence the importance of revolutionary theory in the communist movement. "Class of consciousness" doesn't mean that "the revolution first occurs in the head" as various academics and other modernists pretend. They only reflect capitalism's tendency to suppress every form of social activity and social existence for a growing portion of its slaves. The "importance of theory" doesn't mean the proletariat has to be forced to become conscious, as all sorts of militant pedagogues have attempted to do (for example, to say to the Lip workers that they can or must transcend their practice). [62] Very simply, communist theory, inherent in the contradictory movement of Capital, will tend to be produced on a more spontaneous and broader scale than at present, at the level of practical revolutionary measures to be taken. Today as the traditional figure of the capitalist entrepreneur tends to disappear completely, the depth of the crisis is signalled by the fact that in some countries selfmanagement is becoming a plausible counter-revolutionary force. Doubtless it is only one of the components of the counterrevolution and probably will coexist with or oppose other forms, but it is possible to outline the practical function of selfmanagement already evident from the inherent character and content of the crisis. If the depth of the crisis determines the extent to which the work force takes charge of itself, then self-management (which is to say the reorganization of the crisis of capitalist society) can develop only in the industrialized countries where the organic composition of capital is not very high, notably France and Italy. The crisis is by definition a lack of profit. In these countries the proportion of variable capital is still large enough so that during an initial period it might be possible to struggle against the disappearance of profits by radically lowering the value of the work force. To be sure, this also would be done in countries with a very high organic composition of

capital, but with the difference that the role of living labor being relatively small in those countries, they would not require a type of social organization especially adapted to this objective. As we have seen, in these countries -- especially the U.S.A. -- the logic of excess profit is already included in profit itself. Self-management is a way of having the work force control the contradiction between valorization and devalorization because all society would then be organized to lower the value of that living commodity, labor. It is a question of the population taking over activities previously run by Capital and which consequently increase the expense of the upkeep of the work force. We can already partially see the content of this sort of self-management in diverse parallel survival networks formed in recent years (parallel schools, unofficial nursery schools, clinics, food co-ops, etc.). It is significant that with the beginning of the crisis the mass media have begun to publicize, some of these experiments (for example the favorable presentation of "free clinics" on the television program of March 31, 1974). At the level of the enterprise, self-management develops at first in the sectors where the low rate of profit cannot be compensated for by raising productivity via an increase in the technical composition of capital since the crisis is, precisely, a lack of capital necessary for such investments. However, an increase in productivity can be obtained by further subjugating the work force to the production process : by eliminating various forms of proletarian resistance to the real domination of capital (absenteeism, sabotage) it is possible to increase the intensity and speed of the work process. Various attempts at "the enrichment of work" and especially the organization of autonomous work groups (Donelly, General Food, Volvo . . . ) fall into this trend since they result from capitalism's difficulties with valorization since the end of the 1960's; they remain, however, very limited experiments inasmuch as capitalism has yet to reproduce them on a global scale. The deepening of the crisis, by raising the issue of self-management, will generalize and widen such experiments which must be given an adequate framework. [63] From this perspective, new profits will be obtained from the increased productivity and the decrease in unproductive costs, since self-management, as the name implies, consists of conferring part of the tasks of managing capital to the work force itself. Thus within the enterprise self-management's inherent function is not to lower the value of the work force but to be the adequate framework, the form in which the work force is militarized and is adapted to this sort of rationalization of production. In this hypothetical development, that is the victory, if only momentarily, of the counter-revolution, self-management attaches the workers to the enterprise; it maintains the link which is essential for the social fabric, while at the same time, it carries out a movement transcending the enterprise -- a movement that transforms society into a community of poverty. Concentrated self-management will be the counterrevolutionary response to the potential transcendence of, the enterprise by interchangeable workers which self-management attaches to and assembles within the popular, national state. In effect, if self-management has as its chosen terrain the industrialized countries with a low organic composition of capital, this is not only a result of the productive structure of these countries but is equally determined by the level of the world economy. Areas with a much higher organic composition of capital

always have more difficulties in finding the profits necessary for the reproduction of capital, but their higher organic composition allows them to manage in their own favor the transfer of value in the course of exchange with less developed areas (unequal exchange). This increase of value constitutes the excess profits which are more and more necessary to them and which follow from the fact that merchandise sold contains less work than that for which it is exchanged. But for this transfer to work it is necessary for each country with a high organic composition constantly to enlarge their area which explains why the most developed countries are always forced into free exchange (e.g., the U.S.A. and the agricultural Common Market). As the need for excess profits increases in a crisis situation, the countries with a high organic composition of capital will try to force other countries into their exchange zone. But in a situation of world-wide crisis, these other countries will be less disposed than ever before to tolerate this flight of value, and will try to defend themselves from this by organizing their autarchy. Self-management will play a role in the organization of this autarchy and in the general militarization of the population against the overdeveloped countries, which will then be defined as the enemy. (This antagonism can already be seen emerging today between France and the U.S.A.) Self-management could thus well become a war mechanism for those countries in a feeble economic position, a mechanism of the third world war which such a conflict of interests can provoke. Thus the sort of militarization of work and organization by neighborhood that selfmanagement represents at its base, would naturally extend to the militarization, pure and simple, of the producer-citizen. Self-management exists only with respect to the totality and the organization from top to bottom of all the capitalist categories. The rationale for such a "self-managed state" would be anti-imperialism which it would exacerbate. The capitalist extreme left will be called to play a central role in this war mechanism, as the evidence shows in the patriotic mobilization in the Lip conflict and its support for one camp against the other in the last Arab-Israeli War. It is significant that in a party like the French Socialist Party which presents itself as a government party, one fraction -- the CERES -- can be formed on the bases of selfmanagement and violent anti-U.S. imperialism. It is no less significant that the French Communist Party itself believes that "the Way in which the question of selfmanagement is posed today has evolved positively," and "communists are second to none in the field of self-management." [64] Finally we must notice the purest Gaullist faction at loggerheads with "U.S. imperialism" -- the "progressive front" concurs entirely with the leftist organizations on the full gamut of their programs (not to mention the royalists of the N.A.F. who have proclaimed themselves partisans of selfmanagement) Self-management appears to be on its way to becoming the new form of the Sacred Union. However the autarchy of the self-managed countries threatens to strengthen certain contradictions. If it is true that these countries have on the average a low organic composition of capital, still we have seen they also have highly developed enterprises which cannot have any interest in autarchy. They also encounter hostility from other,

less developed branches of enterprise which cannot survive declining profits, being at the heart of the crisis which is synonymous with the liquidation of the smaller economic sectors. Thus a conflict of interest arises over the way in which surplus value is divided up, the less developed enterprises and sectors attempting to set up mechanisms to shift the fall in value onto sectors with a higher organic composition of capital. This unequal exchange reflects the unequal development of different regions which, with the emergence of the crisis, bring about an upsurge of regionalist violence and; its corollary, theses about "neo-colonization of the interior." On a more acute level, these antagonisms could lead to a capitalist civil war which would carry out a part of the destruction of productive forces, the destruction necessary for Capital. Self-management might also develop as a political or rather administrative form of management of internal antagonisms. If we say "administrative" it is because these insoluble conflicts of interest would be one of the reasons for an authoritarian organization of society. If today the counterrevolution in these countries implies an unprecedented participation by the wage-slaves of capital in the maintenance of their slavery, the integrity of all the essential categories of the capitalist mode of production requires a superior force (the metamorphosized but very real State) which links all the separate parts and assures the cohesion of a chaotic society : any other idea of selfmanagement (as part of the bourgeois fiction of liberty and equality) is nothing but a reactionary utopia, a dream that capitalism, even "self- managed," is bound to explode. [65] Just as the social democratic program, elaborated during the festival of capitalist reproduction (before 1914) was only a reactionary utopia which finally was realized in the Popular Front and above all in Nazism, so the crisis' imperatives can only be reduced by ultra-left schemas into recipes for saving capitalism. If the revolutionary proletariat's autonomy will be unquestionably affirmed when it constitutes a class-for-itself, the counter-revolution also implies a certain autonomy of the "proletariat" as a class that maintains capitalism. Furthermore, with respect to all the committees and other organs of the base that arise in the heat of the crisis, it will be absolutely necessary to constantly appraise the content of their activity, likewise the content of the movement of which it is part without being diverted by the forms they might borrow. Footnotes [55] The accumulation of capital at Boimondeau marked the end of the selfmanagement experiment. Little by little, the wage hierarchy was reestablished; one, or rather two owners emerged from the community. The enterprise set up new wage scales on new bases. These low wages were the making of one of the two enterprises which employed convicts upon their release from prison. Most of the employees lived outside Watch City which had nothing communal about it but its name (many workers were fired after May '68 for having gone on strike). The enterprise lived on in agony and after many ups and downs was finally liquidated, sold, in 1970. (information about the enterprise, here given very briefly, was provided by an old Boimondeau

worker who witnessed the end of the communal self-management period and a comrade who worked there shortly after '68.) [56] Le Monde, January 29, 1974. As for the many offspring of this worker community only a handful survived more than a few months or years since most were an immediate, palliative response to the disorganization of post-war capitalism and to the momentary absence of capitalist investors (who also appeared, in a way, at the "Lip community"). [57] G. Friedman in Le Monde, March 22, 1974. [58] The tendency of capitalism to form material communities after 1945, incarnate in the Welfare State in the USA, is not the same thing as the disappearance of internal antagonisms, nor the creation of a real community of men, even if alienated. On the contrary, that capitalism is forced to found such communities in its metropoles is the result of the ineluctable development of its contradictions (evaded beforehand by the adoption of Keynesian theories) and has as its content the extreme fragmentation of society into atomized individuals. Just as giving commodities a value (valorization) includes the destruction of value, so Welfare, by its nature, contains the personified contradiction of capital-the living proletarian. "The bourgeoisie lets the proletariat fall so low that it must feed it rather than being fed by it" (Communist Manifesto, 1848). In fact, beyond the bourgeoisie of 1848, Capital, as a social relation, collides with the proletariat and is incapable of creating a harmonious community. To speak of a "material community" is to acknowledge the impossibility for the "capitalized" proletarians (during the postwar cycle of expanded reproduction) to form themselves into a distinct class; such a situation turns "traditional" revolutionary militancy into a disaster, transforming it into simple racketeering. But the crisis of capitalist reproduction will provoke the destruction of the material community and simultaneously speed the reorganization of the counter-revolution to a degree equalling the degree of social disorganization : self-management wherever feasible; another reason for specifying precisely the type of organization now developing. [59] For Rvolution Internationale (in No. 5, New Series, B.P. 219 75827 Paris Cedex 17) the confrontation with the CRS marked a class unification and the passage from economic to political struggle, because the workers had gone beyond the framework of the factory. However going beyond the framework of the factory in itself is not enough to determine the proletariat (or a fraction of it) as a class for itself, unless it occurs on a virtually revolutionary basis (was it to defend the collective capitalist of Lip that the class would be formed ? !). In fact the enterprise's existence could not continue anywhere; the formation of the proletariat is implied only in going beyond the dynamic of capitalism-the reproduction of capital. But, on the contrary, the Lip workers constantly went beyond the limits of their locality in making trips here and there without ever going beyond their enterprise whose preservation was the very content of their struggle. R.I.'s way of seeing things results from its fundamentally political conception of the communist revolution with its corresponding partyist outlook. [60] See, for example, Le Monde, April 2, 1974 : "The Lulus of Abbaye," and "Employment Difficulties for the Young in the South."

[61] In reality this twofold tendency is likely to become manifest in the form of antagonisms and proletarian fractions personifying first one, then the other, like the one which arose in Germany in 1919-21 and which was only reinforced by the development of contemporary capitalism. (See Ngation No. 2, Intervention Communiste No. 2, and Bulletin Communiste of May, 1973. H. Simon, B.P. 287, 13605 Aix-en-Provence.) [62] The text "Critique du conflit Lip et tentative de dpassement" [A criticism of the Lip conflict and an attempt to transcend it] , (P. Laurent, 32, rue Pelleport, 75620 Paris) is an example of that programatic conception of communist theory : in part it explains to the workers what they are supposed to do and not do. The diversion of Lip Unit (of unknown origin but reproduced by Quatre Millions de Jeunes Travailleurs, B.P. 8806, 75261 Paris Cedex 06) substitutes itself, pure and simple for the Lip workers in order to make them say what they should have done if ... if what, in fact ? This manner of working tends to conceal the programatic conceptions of the above. In general, the diversionary method expresses the impossibility of any sort of (even a. potential) revolutionary affirmation of a movement. It is not by accident that this method was set up as a "subversive practice" by the Situationists in a period when the proletariat was totally under the domination of Capital. [63] The crisis of the 1930's, when there was no question of self-management, saw in German shoe factories the suppression of assembly line work which had just recently appeared. This "de-rationalization" -- a new rationalization adapted to the crisis -- was then a vain attempt to compensate for unemployment. (See Carl Steuerman [pseudonym for Otto Rhle], La crise mondiale, Paris : Gallimard, 1932, p. 50.) [64] l'Humanit, February 15,1974. [65] It is clear that the work force, on this level, cannot at the same time be both agent and object of Capital; also the role of agent would naturally be taken over in the selfmanaged State by a coalition coming from the most "progressive" fringe of economic and political managers (Bidegain, Neuschwander, J. Delors, Edgar Faure, for example), bureaucrats from the Left and New Left, including their trade unionist counterparts, not to mention a fraction of the working class drawn from the base via various committees and councils (Monique Piton and other members of the Lip Action Committee were given an audience by E. Faure -- doubtless taking care of the little man).

Autogestin and the Worker-Recuperated Enterprises in Argentina

The Potential for Reconstituting Work and Recomposing Life

Marcelo Vieta Programme in Social and Political Thought York University, Toronto, Canada This draft: August 10, 2008
Paper to be presented at the 2008 Anarchist Studies Network conference, Re-imagining Revolution, in the panel: Autogestin ya! The promises and challenges of self-management in Argentinas worker-recuperated enterprises Saturday, Sept. 6, 2008

The Argentine worker-recuperated enterprises (empresas recuperdas por sus trabajadores, or ERT) are direct, diverse, and non-traditional union aligned responses by roughly 10,000 urban-based workers to recent socio-economic crises. Over ten years since the first workplace occupations and their recoveries as self-managed workers-cooperatives, this latest wave of workers struggle in Argentina has shown promising alternatives to capital-labour relations and the neoliberal enclosures of life. But why were almost 200 failing, closed, or bankrupted small- and medium-sized businesses spanning the entire urban economic base subsequently occupied and reopened as self-managed workplaces by former employees in Argentina since at least 1997? Why do most ERTs decide to reorganize themselves as workers cooperatives? Why do many of them also decide to open up the shop floor to the diverse communities surrounding them, symbolically and practically tearing down factory walls by sharing their workplaces with community centres and dining halls, free clinics, popular education programmes, alternative radio and media centres, and art studios? Finally, why Argentina? To begin to answer these questions, I first explore some of Argentinas key socio-economic and historical conjunctures motivating workspace occupations and the formation of self-managed workers cooperatives. Second, I begin to theorize the concept of autogestin (self-management) as it tends to be practiced by Argentinas ERTs. Third, I sketch out some of the ERTs most common micro-economic and organizational successes and challenges, exploring how the struggle to reconstitute a once capitalist workplace as a self-managed workers coop interplays with an ERTs reconstituted labour processes. I conclude by appraising the future possibilities of ERTs for social transformation in Argentina by mapping out four social innovations being spearheaded by the phenomenon.

But now I know, looking back on our struggle three years on. Now I can see where the change in me started, because it begins during your struggles. First, you fight for not being left out on the street with nothing. And then, suddenly, you see that youve formed a cooperative and you start getting involved in the struggle of other ERTs. You dont realize at the time but within your own self theres a change thats taking place. You realize it afterwards, when time has transpired. Then, suddenly, you find yourselfinfluencing changesomething that you would never imagine yourself doing. ~ Cndido Gnzalez, on La Tribu 88.7 FMs La quadrilla, Buenos Aires, August 2, 2005

Argentine labour researcher Hectr Palomino (2003) writes that the political and economic impacts of Argentinas empresas recuperadas por sus trabajadores (workerrecuperated enterprises, or ERTs) are more related to its symbolic dimension than to the strength of its size. To date, the ERT phenomenon involves roughly 180-200 mostly small- and medium-sized enterprises estimated to include between 8,000 and 10,000 workers (Ruggeri, Martinez & Trinchero 2005), which represents between 0.55% and 0.62% of Argentinas approximately 14.3 million officially active participants in the urban-based economy (Ministerio de Trabajo 2005). 1 As Palomino points out, however, while it is true that this reflects only a fraction of the economic output of the country, the ERTs have nevertheless inspired new expectations for social change in Argentina since they especially show an innovative and viable alternative to chronic unemployment and underemployment (72) and the institutionalized system of labour relations (88). I would add they also more fundamentally show innovative alternatives for reorganizing productive life itself in the aftermath of Argentinas recent crisis of neoliberal finance capital. The team of activist anthropologists at the University of Buenos Aires working with a number of Argentinas ERTs calls the innovative alternatives experimented by the ERTs their social innovations (Ruggeri et al. 2005; Ruggeri 2006). Broadly, in this paper I specifically explore some of these social innovations in light of the tensions and challenges of self-managing formerly capitalist small- and medium-sized firms in Argentinainnovations that tend towards the communitarian, cooperativist, and directly democratic values and practices that ground the concept of autogestin (selfmanagement) throughout many of the countrys ERTs. 2 More specifically, in the following pages I begin to answer several complex and interrelated questions: Why did these new expressions of workers self-management take

The Argentine Ministry of Labours statistics are based on May 2003 figures, which included fully employed and underemployed persons living in urban centres. It excludes those persons not actively looking for work or living in rural areas. 2 According to the team of activist anthropologists researching and working with Argentinas ERTs led by the University of Buenos Airess Andrs Ruggeri, 94% of ERTs organize under the legal rubric of a workers cooperative (Ruggeri et al. 2005: 67). Moreover, 71% engage in some form of egalitarian remuneration scheme (Fajn 2003: 161). My own in situ research thus far in several ERTs in the city and province of Buenos Aires confirms these findings, together with my additional observations regarding particular practices of directly democratic and horizontal workspaces that I make in part IV of this paper.

off in Argentina in the past decade? Why is it that they have survived as long as they have within and despite a stubbornly ever-present neoliberalist national economy? Indeed, if, as Croatian self-management economist Branko Horvat has asserted, producer cooperatives, in a capitalist environment, [have historically] turned out to be a failure on the path towards socialist development (1982: 128), how is it that Argentinas ERTs have survived for so long when compared to other self-management movements in other conjunctures? 3 Furthermore, how is it that they have forged several innovative and non-capitalist production processes and schemassuch as horizontalized labour processes, factories and shop floors opening up to the community, and incipient experiments with economies of solidaritygiven the micro-economic and -political difficulties they continue to face? How do these challenges shape the less hierarchical labour processes and divisions of labour that emerge within each ERT? And, finally, how are the ERTs prefigurative of other potentialities for restructuring productive life outside of the enclosures of capital-labour relations? With the aim of beginning to answer these questions and, in the process, report on some of my ongoing research findings to date, in this paper I specifically: 1. point out some of the conjunctural factors that have contributed to the rise of worker-recuperated enterprises in Argentina since at least 1997-98 and that came to a head in the financial crisis years of 2001-03, 2. describe and begin to theorize the concept of autogestin as it tends to be practiced by Argentinas ERTs, 3. map out several of the challenges that arise out of ERTs practices of autogestin and their workers direct action tactics adopted to defend their jobs and recover their workspaces, and 4. explore four social innovations that subsequently emerge immanently and within ongoing crisis moments in the lives of ERT protagonists as responses to the challenges of autogestin in a continuingly intransigent environment of market capitalism.

While in this paper space and thematic structure will not permit me to get into the differences between the ERT phenomenon as a self-managed, worker-led, bottom-up movement and other bottom-up workers movements in other conjunctures (such as Paris 1871, Turin 1919, Spain 1936, Hungary 1956, France 1968, and earlier historical situations of workspace occupations in Latin America), I pick up these themes explicitly in a forthcoming book chapter I co-wrote with Andrs Ruggeri (Vieta & Ruggeri 2009). I briefly lay out the five characteristics that underscore the uniqueness of the ERT movement within the broader and historical workers movements against capital in footnote 18.

I. The Conjunctural and Phenomenological Factors that Impel Argentinas ERTs

From my political economic and in situ qualitative and participant observation research thus far, six conjunctural factors seem to have contributed to Argentinas modest but promising surge in worker-recuperated workers coops over the past decade 4: 1. Conjunctures of need: Workspace occupations and their subsequent selfmanagement under the legal rubric of a workers coop have not been, of course, about a national revolutionary cause or the total civilizational change, (as Marcuse would say) of Argentinas socio-economic system by its working class. They are, rather, risky practices of localized workspace occupations and situational worker resistances that immanently lead to the subsequent worker selfmanagement of once-at-risk capitalist firms. ERT protagonists take on the challenges of self-management in order to feed families, keep jobs, and safeguard workers self-dignity in the face of a collapsing neoliberal system. In other words, the formation of most ERTs were first impelled by pragmatic factors: ERT protagonists deep need to protect their jobs, hold on to their diginity, and provide for their families necessities in light of a temporarily disintegrating economic model, the growing wave of bankruptcies and business closures that had peaked at the rate of over 2600 firms per month by late-2001 (Magnani 2003: 37), 5 and the callous anti-labour climate of the late 1990s and early 2000s (Ruggeri 2006). 6
According to Gramsci (2000), the conjuncture is defined as the set of circumstances which determine the market in a given phase, provided that these are conceived of as being in the moment, i.e. as constituting a process of ever-changing combinations, a process which is the economic cycle.... (201). For Gramsci, the bases economic and organicsituation was intimately connected to the superstructures conjunctural moments (201). Immanent to a given moment, the conjunctural emerges out of the inevitability of capitalist economic crisis and may potentially open up the terrain [for] the forces of opposition to organize (201). The conjuncture, in other words, is a set of immediate and ephemeral characteristics of the economic situation, Gramsci explains (2003: 177). Furthermore, [the] study of the conjuncture is thus more closely linked to [bottom-up] immediate politics, to tactics and agitation, while the situation relates to [top-down] strategy and propaganda.... (177). In a similar vein, Italian radical social theorist Maurizio Lazzarato (2005) asserts that the political event organically emerges out of crisis moments, coalescing individuals and collectivities via creative and life-affirming actions spurred on by the realization of what is intolerable with the historical conjuncture they live in. From within benchmark political-historical moments of crisis and conflict new possibilities for living get articulated through the event (1), such as Argentinas mass protests of Dec. 19-20, 2001. More ethico-politically charged and immanently bottom-up than Gramscis analysis of the conjunctural, for Lazzarato, the political event may not only place capitals contradictions into sharp relief, it may also reveal openings for recomposing life for those of us oppressed by constituted power. Crisis moments that reverberate into and inspire events such as The Battle for Seattle in 1999, Quebec City 2001, and the Argentinazo of Dec. 19/20 should not be understood as merely momentary and fleeting reactions to the inevitable glitches and cracks present in constituted power. Rather, the event is the intensified and collective eruption of alternative actions, images, and statements within an ongoing social struggle against established forms of power. It is the creative climax in the long narrative of the class-based conflicts instigated by the preponderance of the commodity form and the political-economic structures that uphold the circuits and logics of exchange and accumulation and that entrench the social divisions of labour with their inherent inequalities. Hence, the event that emerges out of these conjunctural crisis moments begins to rouse the questioning of dominant values and of constituted power and articulates other possibilities for life. 5 Beginning around 1995, thousands of smaller- and medium-sized businesses in Argentina began to lose market share and amassed unwieldy debt loads due, in part, to the drying up of export markets during Argentinas economic liberalizations of the 1990s and, in particular, to the after-effects of President Carlos

2. Conjunctures of precariousness in everyday life: The majority of these risky workplace occupations and struggles to make recovered enterprises economically viablerisky because of the continued threat of repression from returning owners and the statewere situated within a backdrop of the temporary implosion of the neoliberal model of the 1990s, propagated as it was by the multinationalization and privatization of the Argentine economy under the regime of President Carlos Menem. This neoliberalization ultimately led to a national export deficit, high rates of under and unemployment, high rates of bankruptcies of small- and medium-sized firms, high levels of homelessness, increased poverty, and little job security amongst Argentinas once-strong working classes. 7 3. Conjunctures of deep class divisions: Everywhere in Argentina conspicuous consumption continues to intermingle with still high levels of poverty, albeit at lower rates compared the middle classs high consumption rates and the high rates of indigence and poverty of the late 1990s and early 2000s. In other words, deeply structurated economic and social divisions still etch everyday life in Argentina, with continued social tensions between the haves and have-nots. 8 4. Conjunctures of horizontalism and resistive subjectivities: Between 1995 and 2005, and especially between the years 2001-03, Argentina witnessed a deep radicalization of marginalized groups. The contagion of bottom-up popular resistance and horizontalism 9 among Argentinas marginal sectors throughout this
Menems (1989-1999) dollarization of the peso and the sell-off of over 150 once-nationalized firms. By the mid-1990s it was clear that these neo-liberal policies were affecting the competitive advantage of Argentine products in foreign markets (Damill 2005). Moreover, the large wave of privatization schemes, company downsizings, and the foreign capitalization of large portions of Argentinas industrial base further compromised the competitiveness of thousands of small- and medium-sized firms, eventually causing a growing number of them to declare bankruptcy at unprecedented rates starting around 1995 (Boron & Thwaites Ray 2004). By 2001, the national month-over-month business bankruptcy rate had reached its highest point in Argentinas modern history: During the Menem/de la Rua presidencies (1989-2001), bankruptcies soared from an average of 772 per month in 1991 to over 2,600 per month by 2001 (Magnani 2003: 37). 6 Argentinas historically strong collective agreements that were formalized in the 1940s, 1950s, 1960s, and 1970s, as well as national economic policies guided by import substitution initiatives, were slowly dismantled throughout the 1980s and 1990s with the introduction of a neoliberalized economy and its inherent discourse of less meddlesome government, anti-union labour legislation, more entrepreneurialism, and lean business models. In the years after the financial crisis of 2001, strikes, demands for better work conditions, and struggles for union representationrepresentation that hundreds of thousands of Argentine workers lost during the anti-labour and privatization years of the 1990shave returned (CTA 2006). ERT workers were, in many ways, a vanguard within this new antagonistic labour landscape. Indeed, the new imaginary of worker agency ERTs helped carve out has assisted in reviving the active and grassroots political participation of workers in Argentina. 7 For a detailed account of the political economy of this period in Argentine history in light of workers struggles, see Vieta (2006). 8 For a phenomenological account of these deep class divisions inspired by a piece I wrote while on an afternoon of flaneuring on the streets of downtown Buenos Aires, see Vieta (2005). 9 Horizontalism is a concept that has historical roots in the practices of autonomist and anarchist collectives. Popularized in particular by the daily organizational practices of grassroots activist and neighbourhood groups that formed in Argentina during and since the 2001-2002 economic crisis, horizontalism espouses an egalitarian (re)distribution of economic and political power. More specifically, it is both a theory and a practice, mapping out, immanently rather than in a predetermined way, how the

period intermingled with a long history of working class militancy and workers collective imaginary of Argentinas Peronist-led golden years of a nationalized and self-sustaining economy. Consequently, by the early years of the new millennium there was much socio-political cross-pollination between grassroots social justice groups, witnessed in myriad informal networks of solidarity and affinity that continue to crisscross Argentinas social sectors. Much of the routines of daily life in Argentina were, up until 2005 and the relative recomposition of Argentinas economy under Nestor Kirchners administration, peppered by constant protests, the occupation of land by the dispossessed, workplace takeovers, and road stoppages by myriad marginalized groups demanding political voice or social change. 10 5. Conjunctures of community: The ERT movement tends to be situated deep within the community each enterprise finds itself in. There is a spatio-temporal reality to the impetus for autogestin in Argentina. For example, networks of solidarity between the recovered enterprise and the greater community and with other local ERTs have in some cases emerged into neighbourhood links of mutual aid. This is further driven by the fact that most workers live in the neighbourhoods where the enterprises are located. Moreover, neighbours were often also active in and supportive of the various stages of recuperation of workplaces by their workers. Consequently, neighbourhood cultural centres and other community services tend to organically emerge within many recovered enterprises themselves as a way of giving back to the neighbourhoods that supported them and as a way of further valorizing and, thus, protect the ERT from repression and closure via the bonds of solidarity formed within these interlaced communities of mutual assistance. 11 6. Conjunctures of cooperativism: The practices and legal framework of cooperativism have a long tradition in Argentina extending as far back as the early waves of European immigration in the late 19th and early 20th centuries and the traditions of anarchism and socialism that they brought to their new country and that guided labour movements in the early part of the 20th century (Munck, Falcon & Galitelli 1987). Subsequently practiced in myriad economic sectors and entrenched in national business legislation, co-operativism serves as an important legal organizational model for the countrys ERTs in light of the paucity of other legal frameworks for these former owner-managed recovered enterprises.

ongoing participation of all individuals in the decision-making of a particular collective and between collectives can be facilitated. Moreover, horizontality points to the conscious attempt by individuals of a collective to lessen the coercive force of obligation by rallying around a more inclusive force of mutual commitments and consensus (Sitrin 2006). 10 It is important to note here that since roughly 2005 (but even visible by mid-2002), many of the groups that composed these popular movementsmost poignantly exemplified by the current state of the piquetero movement of the unemployedhave been coopted back into the patriarchal and clientelist capital-state system under the regimes of Eduardo Duhalde and the Kirchners. 11 See my discussion of ERTs fourth social innovation in part IV of this paper.

Five Direct Micro-Political and Micro-Economic Influences on Workplace Takeovers Emerging out of these six broad conjunctural factors, ERT protagonists consistently mention five direct micro-economic and micro-political experiences that influence their desire for and practices of autogestin (Ruggeri et al. 2005: 66): 1. the practices of illegally emptying the factory of its assets and inventory by owners once bankruptcy is declared (called vaciamiento) (28% of cases studied); 2. employees perceived imminence of bankruptcy or closure of the plant (27% of cases); 3. employees not getting paid salaries, wages, and benefits for weeks or months (21% of cases); 4. actual layoffs and firings (28% of cases); or 5. lockout and other mistreatment (21% of cases). Two Further Phenomenological Influences on Workplace Takeovers In light of these precarious micro-economic and -political experiences, workers across the urban economic sectors began to take the drastic action of either occupying workspaces or beginning self-managed production starting around 1997-98. 12 In addition to these five experiences, ERT protagonists tend to give two related and overarching phenomenological reasons for attempting the risky occupations of workplaces and their stubborn resistance against state power and owner repression (Fajn 2003; Ruggeri et al. 2005). First, workers initial actions involving the seizure of deteriorating, bankrupted, or failed companies from former owners, their potential occupation of them for weeks or months, and their desire to put them into operation once again under autogestin, arise out of fear and anger. That is, most ERTs originate as direct and immanent responses to their worker-protagonists deep worries about becoming structurally unemployed, a life situation that Argentine workers term death in life (Vieta 2006). Second, most ERTs reorganize themselves within the legal rubric of a workers cooperative only after workers gain control of the plantand usually after many weeks if
The two earliest cases of the current ERT phenomenon are the Yaguan meat-packing plant in the Buenos Aires suburb of La Matanza and the IMPA metallurgic plant in the city of Buenos Aires. Their occupation and reopening as ERTs coincided with the most impact-filled years of the neoliberal collapse 1996-2002. In addition, the period that saw the surge in ERTs (2001-03) was also a period of much labour turmoil in Argentina, witnessed in the escalation of strikes, lockouts, public protests, and road blockages during these years (Vieta & Ruggeri 2009). It is no surprise, therefore, that during these three years Argentina saw the most conflictive factory occupations. It is also not coincidental that these years of heightened labour strife and factory occupations also happened to be the years with the highest rates of unemployment and bankruptcies in modern Argentine history. By 2003-04 and the beginning of the relative recomposition of the Argentine economy workspace recuperations continued to occur but in less conflictive settings as the strategies and tactics of workspace takeovers began to formalize and legal outlets such as temporary legal expropriation and cooperativism became more accessible to embattled workers (Ruggeri et al. 2005: 55; Vieta & Ruggeri 2009).

not months of strugglenot because the recovered firms workers come to the struggle with a vision of becoming cooperativists, nor because they possess presupposed political ambitions or clearly-defined working class identities. Rather, workers turn to cooperativism as a legal and pragmatically defensive strategy that emerged in the early years of the movement and that become known to them during or after their own struggle to occupy or seize their workplaces. This cooperativist strategy is passed on to new ERTs through informal networks of solidarity where the experiences acquired by older and supportive ERTs are shared through the facilitation of various ERT lobby groups, social organizations, and even sympathetic university student groups. A Three-Staged Struggle on the Road to Autogestin, or Occupy, Resist, Produce Theorizing these micro-political, micro-economic, and phenomenological motivators, Palomino (2003) identifies three stages on the long road to workers self-management in Argentina: 1. The recognition and genesis of conflict with former bosses and/or the state, 2. the transformation of workers perceptions of their capacity to change their situation and shift the terrain of conflict from their workspaces onto the streets and the houses of power, and 3. the struggle to regulate and normalize their work once again. 13 The National Movement of Recovered Enterprises (or MNER), the first and most influential of the ERT lobby groups between 2001-05, evocatively captures this threestaged struggle towards autogestin in the following slogan borrowed from Brazils landless peasant movements: occupy, resist, produce. In sum, the micro-political and micro-economic strategies and tactics of occupation, resistance, and self-managed production under the legal framework of a workers coop have become important defensive maneuvers for the ERT movement. These maneuvers serve to: 1) counteract and struggle against the very real threat of repression on the part of the state and returning owners and bosses, 2) address the indifference of traditional unions to the plight of the ERTs, 14and 3) directly challenge the roadblocks to autogestin put up by Argentinas recalcitrant capitalist establishment. It is from out of these initial phenomenological experiences and micro-political and micro-economic realities that the subsequent restructuring of workplaces as self-managed firms most immediately emerge. And as I will explore in parts III and IV of this paper,
Lack of space prevents me from describing and analyzing the specific political and legal strategies taken on by ERTs in order to secure their places of work as self-managed workers coops. For an analysis of these stages and strategies, see Vieta (2006) and Vieta & Ruggeri (2009). 14 With the exception of a few supportive unions such as the Quilmes branch of UOM (Union of Metallurgic Workers), established Argentine labour unions have been, on the whole, either only tentatively supportive, indifferent, or outright hostile to ERTs, usually choosing instead to side with ERTs that have been returned to former or new proprietors. One reason for the inertia of traditional unions regarding ERTs is linked to the fact that, used to limiting themselves to the usual reform-minded and wage-based demands of traditional unions, there is widespread bafflement amongst union leaders and organizers with regards to how to deal with workers that do not work for bosses and report to managers.

these experiences also shape the labour processes, divisions of labour, and solidarity economies being forged by ERT protagonists. 15

II. Cooperative Production Under Autogestin

Conceptualizing Autogestin According to Paul Farmer (1979) the word autogestin has a Greek and Latin etymology. The word auto comes from the Greek auts (self, same) (59). Gestin comes from the Latin gestio (managing), which in turn comes from gerere (to bear, carry, manage) (59). More evocatively, one can conceptualize it as self-gestationto self-create, selfcontrol, self-provision, and, ultimately, self-produce; in other words, to practice autogestin means to be self-reliant. Tellingly, the English words gestate and gestation have evolved from the word gestion. Taken together, autogestin alludes to an organic, biological, and processual movement of creation and conception, having social political relevance in its implicit notion of immanence, becoming, and potentiality. Together, the words auto and gestin yield the perhaps inadequate English term selfmanagement. In critical theory, the concept of autogestin is rooted in a sense of workers bottom-up agency, human autopoiesis, and anthropogenesis even within the tendency for capital to want to capture all of life. In this sense, one is reminded of Max Horkheimers continued hopes for human agency, where the good society [is] one in which [humans are] free to act as a subject rather than be acted upon as a contingent predicate (Jay 1973: 57). One is also reminded of the classical anarchist desire to balance individual freedom and voluntary participation in economic life with the ethico-political commitments of communal life reflected in the well-known anarchist and socialist maxim from each according to his ability, to each according to his need. In this sense, autogestin is ultimately rooted in the desire for individual freedom via self-control, self-reliance, and collective and cooperative production in provisioning for the realm of necessitywhat Andr Gorz called the heteronomous spheres of lifevia the maximization of the autonomous spheres underprivileged by the productivist-capitalist paradigm (Little 1996: 41). For worker liberation from the exploitation and alienation inherent to capitalist labour relations, divisions of labour, and modes of production, autogestin was first articulated in Europe in the 19th century. First, by the utopian socialists in, for example, Robert Owens concept of and experiments with federations of cooperative communities (Horvat 1982: 112) and Charles Fouriers theories of self-governing productive social communities he termed phalanstrres (114). Second, by classical anarchists in, for example, Pierre Joseph Proudhons writings on mutuellisme and its equitable systems of exchange, popular banks, small private posessions, and larger collective properties of workers associations (118), or in Peter Kropotkins notions of the predominance of mutual aid rather than detailed divisions of labour within the evolutionary process and traditional human societies (Kropotkin 1989). And, finally,
For a further analysis of these defensive maneuvers and the subsequent organizational and alternative economic structures that emerge within and between ERTs, see Vieta (2006), Vieta & Ruggeri (2009), and Atzeni & Ghigliani (2007).

indirectly by Marxs mostly favourable views of worker-producer cooperatives (Jossa 2005), labour in common or directly associated labour (Marx 1967: 77), living labour (167-169), and the potential he envisioned for working class agency more generally. As economic potential, from a workerist and reformist standpoint, autogestin has, since the late 1960s and 1970s, come to denote a modernizing form of industrial democracyin which administrative councils of workers, technicians, and managers engage in cooperative decision making, over-seeing all the aspects of industrial life (New Republic, June 18, 1977: 20, quoted in Farmer, 1979: 59). Historical and theoretical examples from this standpoint that come to mind are council communism, anarchosyndicalism, development theory, workers control in Yugoslavia, European works councils, traditional producer and workers coops, proposals for self-management in the production of socially useful products, 16 and other experiences with self-managed work teams and enterprises in industrial settings. Limiting the definition of autogestin only to workerist, reformist, or development agendas, however, elides the capacity for the concept to overflow the self-management of life outside of the factory and beyond the point of production. Inspired by the writings of Marcuse, Castoriadis, Gorz, and the Situationists, amongst others, eventually the students and militant union protagonists of the May 1968 events in France, the May-June 1969 events in Crdoba, Argentina, and similar late-1960s movements throughout the world adopted the concept of autogestin as a key demand and desire. By the late 1960s, the desire for autogestin for these militant students and workers was not only a struggle for more democratic workplaces, less alienated and exploitative labour processes at the point of production, and a return of the means of production to the producers. It was also characterized by a demand for the selfmanagement of life itself. The changes in capitalist modes of production that were emerging with post-Fordism at the time meant that, increasingly in developed countries, workers were experiencing domination not only via control at the point of production but outside of the workplace, as well. Indeed, the individual within post-Fordism was being integrated more and more within the capitalist modes of reproduction itself (Boltanski & Chiapello 2007). This more total integration of the individual within the circuits of capital pointed to the increased futility of the free development of human beings outside of the established spheres of production, consumption, and leisure (Marcuse 1964; Littek & Charles 1996; Little 1996). Now, even the intervals between the buying and the selling, to quote Marx (1967: 155), were the domains of capitalist technological reason. As such, the desire for autogestin was felt by an increasing number of workers, students, and activists to be one where life itself had to be reclaimed from the ideologies and practices of workerism, productivism, and consumerism. Arising as a direct reaction against the spiral of greed, exploitation, and consumerism of the 1990s and the eventual implosion of the Argentine economy, currently in Argentina autogestin means, most directly and in everyday practice, to self-manage work cooperatively as an alternative to capitalist and owner-managed work organization. For a not insignificant group of Argentines engaging in autogestin, the practice has also made
For example, the experiments with self-managed workteams at GE in the early 1970s and the UKs Lucas Industries in the mid 1970s (Cooley 1980; Noble 1984).


them increasingly aware that, on the one hand, any stark separation between work life and the rest of life is a fantasysociality overflows the divisions between private life and public work. On the other hand, there is also an increasing awareness that the post-Fordist and neoliberal desire to merge capitalist production with the reproduction of life is a move by contemporary forms of capital to capture even the moments and spaces of unproductive consumption for the project of accumulation (Marx 1967: 573). It is, they realize, an ideological move by contemporary capitalits attempt at pacifying worker resistance while, at the same time, continuing to maximize surplus value and profits. In sum, for many protagonists of the ERTs and other self-managed workers collectives, autogestin means to self-constitute social and productive lives while minimizing the intrusive mediation of free markets, traditional bureaucracies, hierarchical organization, or the state. In Latin America, myriad social justice groups are increasingly using the concept to articulate how the (re)invention and (re)construction of labour and social relations can take place. To autogestionar is the verb that drives how more and more groups are democratically and ethically reconstituting productive life. In Argentina, especially since the socio-economic crisis years of 2001 and 2002, countless grassroots groups have been experimenting with and concretely practicing forms of autogestin that, as Richard Day (2005) points out regarding the newest alterglobalilization social movements, both contests the neoliberal enclosures of life while, at the same time, moving beyond them by prefiguring other modes to productive life. In the process, they are inventing new horizons beyond socio-economic crises by forging new and particular social and solidarity economies. In Argentinas recent history, such groups have included not only the ERTs but also the movements of the unemployed (the piqueteros), the surging networks of solidarity spearheaded by self-managed microenterprises, affordable housing activists, Las Madres de la Plaza de Mayo and other human rights groups, popular education initiatives, and environmental and rural groups. The Possibilities for Autogestin in Argentina Under the auspices of autogestin, the ERT movement in many cases and in numerous ways problematizes the very practices of wage-labour and the capitalist privileging of private propertyi.e., the privileging of property rights over not only the right to work, but also the right to self-manage ones capacities to labour and the products of ones labourespecially in the neoliberal capitalist paradigm that Argentina still finds itself in (see section IV). What some of the protagonists of the ERT movement in Argentina are fundamentally challenging is, in Marxian terms, the proprietors practices of extracting and exploiting the surplus value of workers expended labour-power over and above the right of the worker to live un-alienated livesthat is, to own the products of his or her labour, to control the means of production, and for workers to ultimately self-direct their own productive lives. One of the major breakthroughs of workers self-management in Argentina is that it begins to open up the social divisions of labour enclosed within capitalist logics of production to other values and practices that lie outside of the profit motive, the pursuit of accumulation, and the incessant drive towards surplus-value. It is a reclaimed drive towards self-production. In this respect, the ERTs share many of the values and practices 11

of the world-wide co-operative movement, social and solidarity economies, participatory economics theories of work sharing, Kropotkins mutual aid, and the everyday bottomup practices of the alter-globalization social justice movement. 17 The social, political and economic conjunctures that ERT protagonists struggled through, the daily challenges they face to protect their livelihoods and self-manage their work, plus the collective memory of working class struggles in Argentinas recent and more distant past, all contribute to shaping the innovations, new organizational structures, and the co-operative practices ERT protagonists engage in (Atzeni & Ghigliani 2007; Vieta & Ruggeri 2009). The tensions between their social innovations and the challenges of practicing autogestin in Argentinas obstinate neoliberal model get played out in each ERT on a daily basis. These tensions influence the unique organizational makeup of each ERT and the self-management strategies across the movement. In the next two sections I decribe these tensions and the ERTs responses to them in their practices of autogestin.

III. The Challenges to Autogestin in Argentinas ERTs

Despite the promises of autogestin for Argentinas workers, and the incipient economies of solidarity forming between ERTs and other microenterprises and social groups, there is no doubt that a continued over-reliance on the capitalist economic system and markets forces some ERT cooperatives to be tempted to return to competitive business practices and even practices of cooperative capitalism. These realities risk pushing the ERT into situations of self-bureaucratization and self-exploitation (Fajn & Rebn 2005: 7). Before discussing the social innovations of the ERTs that directly and indirectly respond to the challenges they face as a result of producing for a capitalist marketplace, I should first briefly mention a few of the specific micro-economic realities that tend to push some ERTs towards capitalistic practices once again (i.e., more capitalist modes of production and management styles). The reasons for these tensions are multifold, reminding us of Marx and Engels measured support of workers coops as an important but incomplete forms of organization for the formation of a new and more egalitarian society where workers own and run the means of production. Some of these difficulties that may even lead to the closure of the ERT once again, include: 1. loss of customers due to their lack of confidence in the ability of workers to selfmanage the firm and deliver goods; 2. capitalization issues (i.e., lack of regular funds for re-reinvesting into the firm); 3. out-of-date or inadequate machinery and the lack of capital or cash sources for technological renewal; 4. the perception by private investors and traditional financial institutions that ERTs are very risky enterprises and, thus, not viable investments;
See footnote 18 for a brief description of what distinguishes the ERT movement from other bottom-up workers movements in other conjunctures.


5. lack of sources for short-term and long-term loans; 6. lack of support from national and local governments, most unions, and traditional cooperative sectors; 7. the fact that national and local governments are caught between recognizing ERTs as legitimate methods of saving jobs and their commitments to traditional capitalist business models and private property; 8. chronic underproduction when compared to original production levels under owner management; 9. lack of adequate and reliable sources of raw materials; 10. difficulties in accessing new markets due to distribution issues; 11. a stubborn endurance of worker individualism amongst some ERTs; 12. a lack of understanding of the major tenets of cooperativism by some workers; 13. the need for continued educational opportunities for workers in the movement and the paucity of such opportunities; 14. the risk of taking on new workers and losing the cooperative values that founded the ERT; and 15. the risk of self-exploitation due to the continued presence of the commodity form (i.e., producing for persistent and highly competitive capitalist markets). The challenges many ERTs face when they need to take on new workers serves as an illustrative case in point regarding ERTs ongoing challenges with self-managing their cooperatives. In addition to the market and financial challenges that confound their situation, one of the first barriers ERTs must face when attempting to bring on new worker-members is Argentinas legislation for cooperatives, which stipulates that a coops full-time hires must be eventually incorporated as members. By legislation, this requires probationary periods not to exceed six months. Once a potentially new member has become a socio (associate) of the cooperative, any subsequent decision to exclude him or her from the coop involves a long and complicated process. As such, the decision to incorporate new workers takes on a level of gravity and consideration not experienced by private companies in Argentina, which have benefited since the Menem years from lax labour laws. In other words, ERTs that decide to incorporate new worker-members must be very sure that these workers will be able to execute and maintain a level and quality of work that will justify their remuneration. Indeed, a bad decision by the workers assembly in their incorporation of new members could, for example, cause its already tight bottom line to suffer, possibly taking the ERT into a crisis situation once again. Moreover, the question of how much decision-making capacity the ERT co-operative should vest on new workers, as well as how much they should be remunerated, remain 13

crucial points of debate within many ERTs workers assemblies. This is in no small part related to the uncertainty that incumbent workers have concerning a newer workers level of commitment to the ideals of cooperativism and horizontal work processes that, for many of the ERTs founding workers, were formed during the long months of occupation and struggle. Hence, new hires add to the co-operatives uncertainty concerning the future returns on their hiring investment. Furthermore, the period of worker-member expansion adds an additional long-term worry for the ERT: If the number of new associates supersedes the number of founding members of the coop, could the cooperative be voted out of existence one day and become, once again, a capitalist firm if the latter form is perceived by newer members to be a much more efficient model for securing their jobs and tackling capitalist markets? Due to these risks some ERT coops have decide to incorporate new workers as temporary contract workers without making them members of the co-operative. At times these contracts are renewed far beyond the six-month probationary period that they would have had to respect had they taken on these contract workers as outright members of the cooperative, replicating the nefarious common practice of work flexibilization and hiring contract labour amongst private firms in Argentina. Ironically, these situations tend to reproduce the very capitalist practices that led to the labour instability that ERT protagonists were contesting in the first place. In some ERTs, however, there is a marked preoccupation with balancing the equitable treatment of all its worker-membersnew and establishedwith the ERTs cooperativist organizational and production processes and the long-term viability of the coop. In these cases the balance seems to be maintained by hiring strategies that look to their immediate communities and solidarity networks: hiring family members, ex-workers of the cooperative (including retired workers), or workers recommended to them by the ERTs incumbent members, other ERTs, or friends (Vieta & Ruggeri 2009).

IV. Four Social Innovations as Responses to the Challenges of Autogestin in Argentinas ERTs
In this last section, I will discuss the four major social innovations being spearheaded by ERTs as a direct response to the challenges I just mentioned. 18 These four social innovations are:
These four social innovations are linked to five broader socio-political and socio-economic features that, taken together, distinguish the ERT movement from other contemporary or historical bottom-up workers movements. One of the most outstanding aspect of these features is their consistency in almost all cases of ERTs in the country, especially given the fact that the movement is in actuality a loosely collective expression of very localized struggles that tends to begin and end initially at the factory door. In other words, the history of each ERT is thoroughly ensconced within the particular micro-political and microeconomic particularities of each workspace. Nevertheless, the five distinguishing characteristics that tend to distinguish most ERTs in Argentina are: 1) Almost all ERTs were taken over or reopened by embattled former employees in either risky occupations or confrontations with former owners or with Argentinas juridical-political establishment out of fear and desperation at having to face the closure of their workplace and thus enter the ranks of the structurally unemployed. 2) Most ERTs endeavour not to replicate the management hierarchy and exploitative practices of the former company, hence the fit with traditional cooperativist principles. 3) As such, many ERTs adopt extremely flat self-management structures and almost all to some degree engage in one worker, one vote direct-democracy (i.e., workers councils,


1. the commitment to democratize and cooperativize the labour processes and the division of labour amongst the ERTs worker-members; 2. creative responses to intensifying market competition and financial and production challenges; 3. redefining notions of social production by reclaiming substantial degrees of workers surpluses and, ultimately, contesting notions of surplus-value and surplus-labour, even as they produce in part for capitalist markets; and 4. rediscovering notions of social wealth by opening up workplaces to the community, thus strengthening the social value of the new worker self-managed workspaces. 1. First Social Innovation: Cooperativizing the Divisions of Labour, Horizontal Work Structures, and Equal Distribution of Revenues Ninety four percent of ERTs reorganize production under the legal rubric of workers cooperatives (Fajn 2003; Ruggeri et al. 2005). Part of this almost universal adoption of cooperativism amongst ERTs has to do with the fact that it is the only readily available legal framework from which to reconstitute a workspace controlled by a collective of workers in Argentina. Furthermore, legal recognition is important for ERTs for their potential stability and longevity: First, it is an already tested and sound model for organizing workers desires for autogestin; regular workers assemblies and direct democratic decision-making processes are integral principles guiding the day-to-day and month-by-month running of most workers cooperatives. Second, it is a viable and legally recognized business model that goes a long way to showing the state and potential customers that the workers collective is serious about its commitment to running its own affairs. Third, due to Argentine cooperative law, becoming a workers cooperative rather than another form of entity protects the worker-members from the seizure of their personal property should the coop fail while also ensuring that the ERT does not have to pay taxes on revenues (Fajn 2003: 105-106). Fourth, as legal cooperatives, ERTs may qualify for subsidies and loans from national cooperative associations and the state. And finally, it is an acceptable framework for ERT protagonists to contrast the exploitative business practices of former owners and begin to explore viable ways of experimenting with how to self-manage their labour processes and collective working lives. Tellingly, more than 71% of ERTs also practice egalitarian or almost egalitarian remuneration schemes (Fajn 2003), a practice, incidentally, that is not necessarily common amongst traditional workers coops in Argentina or in other conjunctures (Vieta
workers assemblies) adopted not necessarily from the values of cooperativism per se but, rather, from the anti-capitalist contagion of horizontalism in Argentinas anti-neoliberal social movements. 4) Unlike most other cooperative experiences, many ERT workers coops are distinguished by a predominance of near across-the-board egalitarian pay schemes despite variations in worker seniority or skill-sets. 5) Finally, these four factors emerge out of and because of ERTs long road in the struggle to reclaim their workspaces as viable self-managed cooperatives. Of course, while it cannot be claimed that other workers cooperatives in other conjunctures have not encompassed one or more of these distinguishing marks, I do make the argument in a forthcoming book chapter I co-wrote with Andrs Ruggeri that the pervasiveness of these tendencies in most of Argentinas ERTs are, taken together, unique experiences in the history of workers struggles against capital in Argentina and perhaps also beyond its borders (see: Vieta & Ruggeri 2009).


& Ruggeri 2009). Interestingly, egalitarian pay schemes and the degree to which directly democratic decision-making structures are implemented and practiced are related to the age of the ERT, the political turmoil the collective of workers had to traverse during the firms most turbulent economic years, and its size. Older ERTs that had to traverse more intensive struggles of occupation, resistance, and the commencement of self-managed production are 60-70% more likely to practice egalitarian pay schemes and directly democratic decision-making when compared to newer ERTs. Also, 64% of smaller ERTs (usually 20 workers or less) practice egalitarian pay schemes and tend to respect more directly democratic decision-making processes compared to 47% of firms having between 20-50 workers that do so, and 54% of firms with more than 50 workers that to so (Ruggeri et al. 2005). From the perspective of these tendencies, perhaps Argentinas ERT movement is showing how it is that an imminent form of workers collective consciousness gets sketched out in lived experience. Between ERT protagonists, a collective consciousness and more egalitarian values seem to be forged by the solidarity and camaraderie that emerge out of the cooperative efforts of workers within tumultuous times (Rebn 2005). Rather than being predetermined by hierarchical unions, vanguardist parties, or the influence of organic intellectuals, the collective experiences of ERT protagonists show us that a collective working class consciousnessif I can be allowed the luxury for the moment to presume one can existis not fixed or a predetermined state to be achieved, but rather multilayered, in an already-always state of becoming, provisional. That is, the (re)formation of what might loosely be called a working class consciousness amongst the collectivity of workers that make up the ERT movement is not, hearkening back to Maurice Merleau-Pontys words in the Phenomenology of Perception (1962), predetermined by an idea of what the working class should be. Rather, something resembling a collective class consciousness that might be undergirding the forms of productive practices being experimented with by the ERT movement and its protagonists desires for autogestin emerges intersubjectively from the entanglement of ERT protagonists emergent and multidimensional subjectivities that co-exist in the same situation and feel alike, not in virtue of some comparison, as if each one of [them] lived primarily within [themselves], but on the basis of [their] tasks and gestures (444). In other words, as individuals whose lives are synchronized together and that share a common lot within a particular socio-economic conjuncture (444). 2. Second Social Innovation: Creative Responses to Production and Financial Challenges Most ERTs are currently operating at between 20-60% of production capacity when compared to their production runs when they were capitalist firms (Ruggeri et al. 2005: 52). This is primarily due to six factors (74): 1. lack of adequate machinery, 2. lack of sufficient labour capital, 3. lack of specialized workers, 4. an aging workforce, 16

5. difficulties in accessing markets, or 6. lack of investment capital. Moreover, the three post-2001 Peronist regimes have, to date, refused to subscribe to an official national policy for Argentinas ERTs. Instead, as confirmed to me by a senior bureaucrat in the national Ministry of Labour, the state, ever committed to its capitalist inheritance and dependence on the business establishment, treats each ERT on a case-bycase basis, gingerly maneuvering through the contradictory needs, agendas, and desires of workers, the unemployed, social welfare plans, and capitalist commitments. Moreover, because ERT cooperatives are viewed by financial institutions as risky investments and fledgling entrepreneurial initiatives, most ERTs find it hard to secure loans from banks (now all mostly foreign-owned after the market liberalizations of the 1990s) or private investors, or to receive subsidies from government programs geared towards small- and medium-sized business start ups. As such, ERTs are constantly challenged in their pursuit of funds for upgrading or buying new machinery, to assist with wages and benefits, or otherwise help in market expansion. Given this lack of governmental or institutional support, it is perhaps even more remarkable, and a testament to their social innovations as well as the potentiality of self-determination for Argentinas working class, that ERTs have survived as long as they have. Innovative labour process responses to these production challenges by ERTs include: 1. job sharing amongst and ERTs workers;s 2. a desire to re-skill or learn new trades by many ERT protagonists (e.g., from shop floor work to administrative work); 3. the problematization of worker individualism by the workers collective; 4. practices of recycling materials for economic and ecological purposes; 5. day-to-day or just-in-time production runs (i.e., the reappropriation of Japanese-style and post-Fordist production models); 6. asking customers to pay for the cost of raw materials when purchase orders are made (called working al fan); 7. horizontal organizational structures framed within workers councils and assemblies that tend towards infinitely more transparent administrative and selfmanagerial methods than when ERT firms operated under owners, 8. ad-hoc work committees that are integrated into actual production and decisionmaking processes and within the shop floor itself;


9. looser and more horizontal communicational structures fostering continuously flexible and open dialogue between workers on shop floors (again, taking the form of ad hoc practices); 10. worker-members eating and playing together regularly and taking many breaks throughout the day; 11. building networks of solidarity amongst similar ERTs (i.e., practicing the sixth principle of cooperativism: cooperation between cooperatives), a. the sharing of machinery, production processes, and even customers (i.e., sharing of the means of production and distribution), b. the sharing of inventory and production inputs, c. the establishment of networks of experts within the ERT movement facilitated by supportive university programs and technicians in order to aid in administrative tasks and technological repair and upgrading; 12. affiliations with foreign aid initiatives, local and international universities and research projects, and internship initiatives with social justice groups; and 13. a nascent initiative by some ERT protagonists to brand products produced by the movement fair work, emulating the fair trade model. 3. Third Social Innovation: Creative Responses to Capital-Labour Relations Fundamentally, many ERTs engage in production practices that aspire to minimize capitalist forms of surplus value, capital-labour relations, and wealth accumulation, even as they face the challenges imposed by an intensifying capitalist marketplace. For example, although not always possible, many ERTs try to first distribute the major part of their revenues equally between workers salaries, the material needs of workers that periodically arise, and pensions for retired members of the co-operative before allocating remaining revenues to the production needs of the firm. That is, the preference for most ERT co-operatives is to redirect any remaining revenues into the needs of production and the maintenance of the firm after individual workers remuneration and other needs are met. This is possible because, as in other workers cooperatives around the world, in ERTs labour hires capital and not vice-versa. In other words, it is the workers assembly that tend to decide how remuneration is to be distributed, not a boss, commodity prices, or the market price of wages. 4. Fourth Social Innovation: Opening Up Workspaces to the Community, Reclaiming More than Surplus Jobs, of course, are not the only things recovered by ERTs, we can now see. New forms of social production and the sharing of social wealth are being experimented with, as well. For example, researchers and journalists are placing much weight on how ERTs tend to engrain themselves in the communities and neighbourhoods that surround them. What is not commented on by these writers is that this is partially to do with the fact that, due to the organic evolution of industrial capital spread across Argentinas half-dozen or so major cities in addition to the wave of migrations from the countryside and from other countries to its urban centres over the span of the 20th century, many industrial workplaces in Argentina are located within actual neighbourhoods and are close to where 18

workers live. As such, the opening up of the factory doors to the community is perhaps much easier in Argentina than in other conjunctures Also, as I have already mentioned, neighbours contribute much support to local ERTs in the stages of occupation and when starting production by, for example, providing clothing, bedding, and money; distributing products for the workers; militating in solidarity with ERT workers; etc. Pragmatically, opening up the recovered workspace to the community by allowing myriad social, health, educational, and cultural programs to be located within the recovered firms walls serves to not only give back to the communities that helped them, it also increases an ERTs social value within the community while, at the same time, protecting the ERT from closure by the state. If the state, for example, were to consider closing the ERT or returning it to private hands once more (as has happened in some cases), elected officials and the courts have to contend with the wrath of not only the ERTs workers, but the potential mobilization of the surrounding communities, as well. Thus, the social capital of ERTs exponentially grows with the opening up of the coop to the community, beyond a capitalist businesss usual connections with the world beyond its walls at the point of production or as customers of raw materials and labour-power. One can say that this self-valorization increases the ERTs social value within the community in ways not accounted for by the capitalists focused pursuit of surplus value and profits. As such, more than a factory or a print shop or medical clinic or a hotel or metal shop is recovered in the process. ERTs also tend to recuperate and reinvent values and practices of social production that move beyond mere economic and instrumental rationalities and exchange value. Thus, since ERTs tend to, on the whole, privilege workers necessities and the necessities of the communities within which they find themselves in over the logics of capitalist accumulation and the profit motive, their practices of egalitarian remuneration and horizontalized labour processes can be seen as experiments in forms of organizing work that move beyond some of the exploitative practices intrinsic to capital-labour relations.

Concluding Thoughts
On the whole, the ERTs experiences with workers self-management provide suggestive and viable alternatives for the transformation of traditional capital-labour relations in Argentina and beyond. In particular, the ERT phenomenon seems to be questioning the neoclassical political economic privileging of property rights over the right to work while also experimenting with the practices of autogestin. In the process, the ERTs are pointing to viable ways workers can seek to take control of their own skills, means of production, labour-power, surpluses, and time. Most inspirational are the many personal testimonies I had the privilege of hearing in myriad conversations I engaged in with selfmanaged workers over the past two years. Their everyday practices of autogestin are, while emergent and always in tension with capitalist values, living testimonies of a commitment to another mode of productive life. Indeed, most ERT protagonists that I spoke with told me they would not go back to the exploitative and alienating work conditions they previously experienced under managers and business owners despite the long struggles needed to achieve autogestin in Argentina. This is the case, they insisted, even if their salaries or wages were to increase with an employer and, most surprising to me, despite the long road to material security that worker self-management entails in 19

Argentinas current historical conjuncture. And while most ERT cooperatives constantly live within a tension between the desire for total self-management and a return to more capitalist ways of doing business, these tensions are tempered by the myriad ways that ERT workers seem to ground themselves in a different set of values than those offered by competition and the capitalist market, fostered within their emerging practices of autogestin. As movingly articulated by Cndido Gnzalez, a long-time worker at the ERT print house Grfico Chilavert and an ERT activist whom I spent much time with over the past three years: If you want to protect your job, you have to protect the job of the other. If you want to ensure you have a meal, you have to make sure the other has a meal (Lavaca 2004: 62). Specifically, the unique form of workers cooperativism under the auspices of autogestin being spearheaded by Argentinas ERTsfledgling as it iscould be paving new paths towards changing the countrys institutionalized system of labour relations (Palomino 2003: 88) because ERTs are beginning to exemplify new forms of organizing work outside of traditional unions and capitalist enclosures. They also offer viable and community-based alternatives to welfare plans, government make-work projects, assistentialism, clientilism, unemployment, and underemployment. Moreover, I understand ERTs to be articulating new ways of critically thinking about the power of employers to determine the working conditions of employees. The ERT movement is also modeling for Argentinas still brittle and foreign debt-beholden economy alternative forms of economic relations. Examples of these alternative economic models include the common practices of inter-ERT solidarity networks, with their sharing of customers, orders, prime materials, technological know-how, administrative duties, legal assistance, and even machinery and labour processes within infinitely more horizontalized and egalitarian workspaces. Most importantly, these alternative economic models are pointing to viable alternative paths leading towards greater social transformation that are rooted deeply in the neighbourhoods and communities that surround them. Out of crisis, then, it can be said that Argentine workers involved in the ERT movement are beginning to forge new and promising roads out of situations of exploitation, alienation, and immiseration. Rather than fall prey to poverty and despair, ERT protagonists decide instead to re-organize their world around more humane, more socially aware, and more democratic forms of work and life. It is the possibilities that these experiments with autogestin have opened up for Argentinas workers that are inspiring similar movements across Latin America and around the world.


Atzeni, Maurizio & Pablo Ghigliani. 2007. Labour Process and Decision-Making in Factories Under Workers Self-Management: Empirical Evidence from Argentina. Work, Employment and Society 21(4): 653-671. Boltanski, Luc & Eve Chiapello. 2007. The New Spirit of Capitalism. London, U.K.: Verso. Boron, Atilio & Mabel Thwaites-Rey. 2004. La expropiacin en la Argentina: Genesis, desarollo, y los impactos estructurales. In Las privatizaciones y la desnacionalizacin de Amrica Latina, eds. James Petras & Henry Veltmeyer, 113-182. Buenos Aires, Argentina: Promoteo Libros. Central de Trabajadores de la Argentina (CTA). 2006. Informe sobre conflictividad laboral y negociacin colectiva en el 2006. Boletn Electrnico Peridico. Buenos Aires, Argentina : Central de Trabajadores de la Argentina. Available online at: (accessed on 15 Mar. 2007). Cooley, Mike. 1980. Architect or Bee: The Human/Technology Relationship. Boston, Mass.: South End Press. Damill, Mario. 2005. La economa y la plitica econmica: Del viejo al nuevo endeudamiento. In Nueva historia argentina: Dictadura y democracia (19762001), ed. Juan Suriano, 155-224. Buenos Aires, Argentina: Editorial Sudamericana. Day, Richard J.F. (2005). Gramsci is Dead: Anarchist Currents in the Newest Social Movements. London, U.K.: Pluto Press. Fajn, Gabriel. 2003. Fbricas y empresas recuperadas: Protesta social, autogestin, y ruptures en la subjectividad. Buenos Aires, Argentina: Centro Cultural de la Cooperacin, Institutio Movilizador de Fondos Cooperativos. Fajn, Gabriel & Julin Rebn. 2005. El taller sin cronmetro? Apuntes acerca de las empresas recuperadas. Herramienta, n. 28 (19 May). Available online at: (accessed on 15 Jan. 2006). Farmer, Paul. 1979. Enjoying Language: An Adventure with Words. The English Journal 68(5): 58-61. Gramsci, Antonio. 2000. The Antonio Gramsci Reader: Selected Writings 1916-1935. New York, N.Y: New York University Press. Gramsci, Antonio. 2003. Selections from the Prison Notebooks. New York, N.Y.: International Publishers. Horvat, Branko. 1982. The Political Economy of Socialism: A Marxist Social Theory. 21

Armonk, N.Y.: M.E. Sharpe, Inc. Jay, Martin. 1973. The Dialectical Imagination: A History of the Frankfurt School and the Institute of Social Research, 1923-1950. Boston, Mass.: Little, Brown & Co. Jossa, Bruno. 2005. Marx, Marxism, and the Cooperative Movement. Cambridge Journal of Economics 29(1): 3-18. Kropotkin, Peter. 1989. Mutual Aid: A Factor of Evolution. Montreal, Canada: Black Rose Books. Lavaca. 2004. Sin patron: Fbricas y empresas recuperadas por sus trabajadores: Una historia, una gua. Buenos Aires, Argentina: Lavaca Editora. Lazzarato, Maurizio. 2004. Struggle, Event, Media. Available online at: (accessed on 7 Jan. 2006). Littek, Wolfgang & Tony Charles. 1996. The New Division of Labor: Emerging Forms of Work Organization in International Perspective. Berlin, Germany: Walter de Gruyter. Little, Adrian. 1996. The Political Thought of Andr Gorz. London, U.K.: Routledge. Magnani, Esteban. 2003. El cambio silencioso: Empresas y fbricas recuperadas por los trabajadores en la Argentina. Buenos Aires, Argentina: Promoteo Libros. Marcase, Herbert. 1964. One-Dimensional Man: Studies in the Ideology of Advanced Industrial Societies. Boston, Mass.: Beacon Press. Marx, Kart. 1967. Capital: A Critique of Political Economy, Volume 1: A Critical Analysis of Capitalist Production. New Cork, N.Y.: International Publishers. Ministerio de Trabajo, Empleo, y Seguridad Social de la Repblica Argentina. 2005, December. Poblacin urbana total y poblacin econmicamente activa. 1991-2003. Available online at: (accessed on 23 Dec. 2005). Merleau-Ponty, Maurice. 1962. Phenomenology of Perception. London, U.K.: Routledge and Kegan Paul. Munck, Ronaldo, Ricardo Falcon & Bernardo Galitelli. 1987. Argentina from Anarchism to Peronism: Workers, Unions and Politics, 1855-1985. London, U.K.: Zed Books. Noble, David. 1984. Forces of Production: A Social History of Industrial Automation. Oxford, U.K.: Oxford University Press. Palomino, Hector. 2003. The Workers Movement in Occupied Enterprises: A Survey. 22

Canadian Journal of Latin American and Caribbean Studies 28(55): 71-96. Rebn, J. 2004. Desobedeciendo al desempleo: La experiencia de las empresas recuperadas. Buenos Aires, Argentina: La Rosa Blindada. Ruggeri, Andrs, Carlos Martinez & Hugo Trinchero. 2005. Las Empresas Recuperadas en la Argentina: Informe del Segundo Relevamiento del Programa. Buenos Aires: Programa de Transferencia Cientfico-Tcnica con Empresas Recuperadas por sus Trabajadores (UBACyT de Urgencia Social F-701). Facultad Abierta, Facultad de Filosofa y Letras, Universidad de Buenos Aires. Ruggeri, Andrs. 2006. The Worker-Recovered Enterprises in Argentina: The Political and Socioeconomic Challenges of Self-Management. Trans. Marcelo Vieta. Paper presented at Another World is Necessary: Center for Global Justice Annual Workshop (2006). Available online at: (accessed on 16 Dec. 2006). Sitrin, Maria (ed.). 2006. Horizontalism: Voices of Popular Power in Argentina. Oakland, C.A.: AK Press. Vieta, Marcelo & Andrs Ruggeri. 2009 (forthcoming). The Worker-Recovered Enterprises as Workers Co-operatives: The Conjunctures, Challenges, and Innovations of Self-Management in Argentina and Latin America. In International Co-Operation and the Global Economy, Darryl Reed and J.J. McMurtry, eds. Cambridge: Cambridge Scholars Press. Vieta, Marcelo. 2005. Witnessing the political on the street in Buenos Aires: Flaneuring from 9 de Julio to Plaza de Mayo. In Thoughts on Argentinas Conjunctures (personal website). Available online at: (accessed on 8 Aug. 2008). Vieta, Marcelo. 2006. The Worker-Recovered Enterprises Movement in Argentina: SelfManagement as a Potential Path to Recovering Work, Recomposing Production, and Recuperating Life. In Thoughts on Argentinas Conjunctures (personal website). Available online at: (accessed on 8 Aug. 2008).


The Historical Content of the Classical

Labor Surplus Model
JeffreyG. Williamson

in the first Writing halfof the nineteenth century, postSmithian economists modelsto deal witheconomic developedtheir dynamic anddemographic events saw goingon around them after the they thought they 1780s.The evidence that thosemodelswas mostly underlay anecdotal-ithas to establish takenhistorians morethana century a something approximating harddata base forthe FirstIndustrial Revolution. But based on street-level witnesses before trade observations, expert Parliamentary Committees, foreign taxreturns, and scrapsofdemographic theclasdata,incomplete information, oftheFirst sicaleconomists saw thedimensions RevoIndustrial thought they them lution thatstruck as mostnotable was stable clearly.The phenomenon realwages.How was itpossiblefor tooccurwhileatthe rapidindustrialization ofliving oftheworking sametime thestandards classeschanged butlittle? Marxtried to explaintheseevents to technological forces. by appealing inindustry andenclosures laboroff Labor-saving technological change pushing thelandinagriculture both served toaugment thereserve thelid army, keeping on common unskilled labor'srealwage. Thus,Marx'smodeloffered a derived driven. labordemand Malthus explanation, technologically Although appears tohavebeenunaware that an industrial revolution was taking placearound him, to a demographic hismodelcouldexplaintheseevents byappealing response. run served tofoster inrealwagesintheshort Anyimprovement early marriage, within Irish as wellas anelastic greater fertility marriages, emigration response. Malthus'selegant(but pessimistic) modelimplieda demographic-economic an elasticlaborsupply laborsupply a long-run subsisexplanation, ensuring ofliving andno standard for common tence unskilled wagefloor, improvement in agriculture. For them,"disguisedunlabor.Others appealedto conditions intheIrish andEnglish ensured an elasticlaborsupemployment" countryside industrial no standard of ply to therapidly growing sector, and, as a result,

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The Classical

Labor Surplus


living improvement for common unskilled labor.In these classicallaborsurplus ofstable models realwages,rapid capital accumulation goeshandinhandwith an absenceof capital-deepening, since any increase in thecapitalstockwill induce inemployment an equal increase function. alongan elasticlaborsupply In contrast, Ricardoseemsto haveappealedto capital-scarcity andslow to get stablereal wages and laborsurplus.In theRicardian industrialization slowcapital-deepening thecausation seemstogo from to laborsurplus, model, notvice versa.Giventheinelastic of land,rents supply increase their sharein from national a savingsshortfall results landlords' income, lack of thrift, and slowsdown.As capital-deepening accumulation comesto a halt,labor'smarstabilizes at subsistence ginalproduct wages.
The classical labor surplus model carried

into the twentieth century

As theBritish economy passedthrough a "turning point"(theterm usedbyFei ofthenineteenth andRanis,1964:ch. 6) inthemiddle andrealwages century, British economists lostinterest begantorisemarkedly, inthese classicalgrowth Insteadtheyadoptedthemoreoptimistic paradigms. neoclassicalparadigm, whichbecamethe dominant interpretation of economicgrowth foralmosta Butas Third World century. attracted economists' development attention inthe W. Lewis (1954) askedus totakeanother 1950s, Arthur lookatthose discarded inparticular. classicalmodels, the"non-Ricardian" Theimplication paradigms was thattheThirdWorldin the 1950s closelyresembled in thelate Britain andearly nineteenth iftheclassicalmodels worked andthus eighteenth century, wellthen, shouldworkwell fortheThird Worldtoo. Lewis's celebrated they "laborsurplus"modelemerged as a result. oftheLewis model.Herewe have thekeyrelationships Figure1 repeats themodern industrial sector,wherethe supplyof labor(represented by the elastic(at leastup to someturning andthederived curve SL) is perfectly point) for labor(represented curves DL) hastheusual demand bythemarginal product firms toincrease that lower downward slopeindicating wageswouldencourage are at any givenlevel of capitalstock.The classical dynamics employment The wage bill (W) plus profits apparent. (P) associatedwithemployment L, of thoseprofits, exhausts total thederived demand output. Uponreinvestment forlaborshifts to theright increases (to D' L), employment (to L'), industrial output rises,but the real wage remains The model implies,of unchanged. is necessary to getthe course,rising inequality. Indeed,therising inequality in savings increase andaccumulation. is therefore Accelerating growth assured in earlystagesof growth before theturning point. Lewis's modelunderwent extensive refinement and elaboration after it first in 1954. In theearly1960s,John appeared Fei and GustavRanis (1964) extended themodeland applieditto Japan formally and SouthAsia. In 1966, A. K. Sen showedus exactlywhatassumptions wererequired to makethe laborsurplus modeloperational, and shortly thereafter AvinashDixit (1973)

This content downloaded from on Sat, 6 Jul 2013 06:41:24 AM All use subject to JSTOR Terms and Conditions

Jeffrey G. Williamson


FIGURE 1 The labor surplus model of the industrial sector


DL L L' Employment

for themainstream ofgrowth Itremained LanceTaylor placeditwithin theory. et al., 1980)to embedthefixed-real-wage (see, for example, Taylor paradigm intolarge-scale Worldeconomies. The modelhas not macromodelsof Third beenwithout ofcourse, itscritics, sinceneoclassical alternatives havecompeted withthe classical model everyinchof the way (Jorgenson, 1961; Kelley, and Cheetham, and Robinson, Williamson, 1972; Adelman 1978; Dervis,de 1984a and 1984b). Melo, and Robinson,1982; Kelleyand Williamson, The point of thisrecitation is simply to remind us that thelaborsurplus modelhas itsroots with andthat the theclassical(non-Ricardian) economists, classicaleconomists account for the economic their to developed paradigms and demographic eventstheythought weretaking themin the place around lateeighteenth and earlynineteenth Werethey century. right? Were real wages stable?

Werereal wages stableduring theBritish industrial revolution? Debate over thisquestionis as old as therevolution itself. The controversy beginswith

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The Classical

Labor Surplus


ofliving was standard theworkers' Engels,whoallegedin 1845that Friedrich and later The Manifesto (Marx Communist worsethanbefore.Threeyears British for apologists Engels,1848:34-35) madethesameclaim.TheVictorian evenAlfred Marshall's(1910: butsomehow roseto thechallenge, capitalism toerodethedominant view to theoptimists' campfailed addition 687) weighty the earlydecades of the industrial thatcommonlabor gained littleduring revolution. of livingheatedup again The debateoverreal wages and thestandard History ofJohn H. Clapham'sAnEconomic in the1920swith theappearance ofrealwage gains. found farmoreevidence Britain (1926), which ofModern eviwas to introduce whereanecdotal quantification Clapham'scontribution thereseemsto be a pessimist, dencehad servedbefore.For everyoptimist The (1930), wholed thecounterattack. andin thiscase itwas J.L. Hammond ofthemore recent a bituntil theappearance ofthis debatediminished intensity whosaw evidence between Max Hartwell (1959, 1961),an optimist exchange of (1957), whodid not.The timing of real wage gains,and Eric Hobsbawm forit was in shouldoccasionno surprise, theHartwell-Hobsbawm exchange of Third theproblem thelate 1950s thatsocial scientists beganto confront historical for Worldindustrialization, to evidence guidance. turning and liberalresearch archivalcollaboration, Thanksto the computer, to real wages during we now knowfarmoreaboutwhathappened funding, or evenHartdid theclassicaleconomists theFirst Industrial Revolution than (based on Lindert that experience well and Hobsbawm.Figure2 summarizes showsclearly that 1985). The figure and Williamson, 1983,and Williamson, unskilled real wages wereindeedstableup to about 1820. It also showsthat commonlaborlaggedbehindwhenthereal wages of moreskilledworkers laborandurban unskilledafter 1820(farm dramatic growth beganto exhibit in livingstanthe "middle group" -enjoying muchslowerimprovements
FIGURE 2 Adult male average full-time earnings at for selected groups of workers, 1775-1851, constant prices
?300 ?200 ?100 _ White-collaremployee Artisans ?40 ?30 ?30 ?75.15 L52.95 X__M Middlegroup?90 29.04 ?258.88

94 - ~~?4061?.2 ?42.30 -?25.17_

?20 -?19.01



laborers 51

971805101519 27 35

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Jeffrey G. Williamson


dards). Income inequality rose across the century following1760 as well (Williamson, 1985: ch. 4), tracing outthefamiliar Kuznets Curve. It appearsthat theclassicaleconomists wereright after all. Real wages werestableup to 1820,andwhenrealwagesriseafterward theunskilled wage lags farbehind. Was the British industrial revolution "revolutionary"? Weretheclassicaleconomists also right in assuming thatBritish industrialiIf theywerewrong on thissecondpoint,then zationwas "revolutionary"'9 whatwe need are explanations of slow growth, notlaborsurplus modelsof rapidgrowth withstablereal wages. Thatis, we wouldneedmoreRicardian and Marxian on earlyindustrialization thinking and less Malthusian thinking up to 1820. The classical economists did not have the evidenceto make thatasbut we do now, muchof it collectedover thepast two decades. sessment, of accumulation estimates CharlesFeinstein (1978) has presented pioneering rates from 1760to 1860,and E. A. Wrigley andRogerSchofield (1981) have ofdemographic at that time.The early offered a brilliant reconstruction events of national estimates incomeby Phyllis Deane and W. A. Cole (1962) have a been augmented revisionist and informed by steady stream, guesseson the rateof totalfactor productivity growth are now available. The new evidenceconfirms thatsomewhere aroundthe 1820s Britain a secularturning in national incomewas much passedthrough point.Growth forexample,C. KnickHarley(1982) estimates lowerbefore thanafter: the growth in percapitaincomeat 0.33 percent peryearfor1770-1815and0.86 is apparent, percent per yearfor 1815-41. The growth ratedoubling too, in theindexes ofindustrial which at 1.5 or 1.6 percent production, growannually before 1815 and at 3.0 or 3.2 percent afterward. Andas we have seenin Figure2, theturning forreal wages. pointis equallydramatic British before the 1820s,then, was modest at best.By thestangrowth to follow, industrial revolutions Britain's dardsofthemany percapitaincome Even of 0.33 percent growth per annumbefore1815 is hardly impressive. countries the uneven1970s the developing during managedan averageper rate rateof 3.2 percent capitaincomegrowth per year,tentimestheBritish citedis for1970-77). before the 1820s(IBRD, 1980: 372; thefigure before the 1820slooksodd whensetbesidetheconvenBritish growth withthe labor surplus revolution. tionaldatingof the industrial Consistent in of livingamong is no evidenceof improvement thestandard model,there theworking withthelaborsurplus classes untilthe 1820s. But inconsistent ofincome andtherate ofindustrialization wereboth model, growth surprisingly slow. Industrial output grewat only 1.5 or 1.6 percent per yearup to the exceededthe nationalincomegrowth rateof 1.3 1820s, a ratethathardly Britainwas a low saver (Table 1, col. 8). A gross percent. Furthermore,

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Jeffrey G. Williamson


domestic savingrateof 9 or 10 percent is certainly low compared withthe contemporary developing country averageof 20.1 percent in 1977 or Meiji Japan (14.8 percent, 1910-16) orlatenineteenth century America (28 percent, 1890 1905).2 In addition, thesavingrateonlyrisesfrom 9 to 13 percent up to 1820,hardly thedramatic increase predicted bythelaborsurplus modeland certainly well below the5 to 12 percentage pointincrease thought by Arthur Lewis (1954: 155) to characterize the "centralproblem in thetheory of deIn fact, velopment." therate ofaccumulation was very modest. Between1760 and 1830-the "heroic" age of theFirstIndustrial rateof Revolution-the capitalstockgrowth was only 1.2 percent per annum.Since theemployed laborforcegrewat only 1 percent thecapital-labor per annum, ratiodrifted at theleisurely upward pace of 0.2 percent per annum.In short, hardly any tookplace during theclassic periodof "labor surplus"in capital-deepening and therateof capital-widening Britain, wasn'tveryimpressive either. The absenceofcapital-deepening has suggested to somethat thenewtechnologies sweepingEngland were capital-saving. This suggestion is certainly antiMarxian.The suggestion is also remarkable whenset besidethevoluminous workon labor-saving in nineteenth-century and in thecontemporary America ThirdWorld.The FirstIndustrial Revolution looks veryodd indeed,and it doesn'tseemto support thelaborsurplus modelverywell. In spiteof stable real wages, the savingrateremained low and therateof accumulation was modest. so slow in thesix decadesbefore Whywas British growth the 1820s? that One answer be Britain tried to do two at might things once-industrialize and fight did nothave theresources expensivewars, and she simply to do both. Duringthe60 yearsfollowing was at warfor36; in the 1760, Britain three decadesfollowing thelate 1780sBritain went from a peacetime economy to a levelof wartime commitment that had no parallel until WorldWarI. The war mobilizeda good shareof the laborforce,suggesting thatthe civilian The war debt grewrapidly, economyfaced labor scarcity. that suggesting was suppressed civiliancapitalaccumulation Tax revenues by crowding-out. ofnational to one-fifth that realprivate surged incomes income, implying after tax wereeroded.Meanwhile, and diminished inwar,blockades, embargoes ternational therelative trade,inflating and rawmaterial pricesof agricultural in the home market while lowering importables the price of manufactured from deflected worldmarkets. exportables rate Couldthemodest ofaccumulation oftheFirst most Industrial during have been theresult Revolution of limited saving,constrained by war?That is theway many observers saw it, and it soundslikeRicardian contemporary New war debtcrowded out private capital-scarcity. laws debt,and theusury wereseento deflect muchas funds in Third savingto government borrowing, Worldfinancial markets are diverted to state-backed projects and government borrowing (McKinnon, Stuart Mill (1909 [1848]:481 and 1973). Indeed,John 483) had a view of crowding-out in whichnew war debt issues displaced

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The Classical

Labor Surplus


private capitalaccumulation, one-for-one: "thegovernment, bydraining away . . . subtracted a greatpartof annualaccumulations just so much[capital] whilethewar lasted." And Mill (1824: 40) thought was large crowding-out thebeliefthat thecounterfactual to warrant rateof capital enough peacetime accumulation wouldhave been "enormous": on inthe Theaccumulation hands ofindividuals wassufficient tocoungoing teract theeffect ofthat wasteful andtoprevent [military] expenditure, capital from being diminished. Thesameaccumulation would havesufficed, butfor toproduce thegovernment an enormous expenditure, increase. A century T.S. Ashton thecrowding-out later, (1955, 1959) affirmed hypothwerebuilding and construction. esis, whosemainvictims The first theMill-Ashton stepin testing is to compute hypothesis the size of thewardebt.Table 1 showsthat it was vast.3 Netadditions to thewar of national debtwere3.6 percent incomeas earlyas the 1760s (Table 1, col. 7), aboutthesameas the3.7 percent theUnited Statesachieved during 1980and capitalscarcity 82, whencrowding-out began to attract attention. The share had risen to 6.5 percent bythe1780s,a neardoubling. It reached a peak in the 1790s. Net additions of 11.5 percent to theBritish wardebtcontinued thefirst at highlevelsthrough twodecadesof thenineteenth century, holding of national at 6.6 percent incomein the 1800s and 7.4 percent in the 1810s. The averageburden of thesenet additions to thewar debtwas 6.8 percent 1761 and 1820, and 8.5 percent between between 1791 and 1820. To getan estimate of thegrossprivate saving rate,newpublicwardebt should be addedtocivilian formation. reproducible Whenitis, Britain's capital theFirstIndustrial private savingratesduring Revolution no longer seem so modest.Indeed,whiledomestic investment in reproducible capitalaveraged 11.4 percent ofnational income onlyaround from 1761to 1820 (Table 1, col. 8), the gross privatesavingrate averaged18.1 percent (Table 1, col. 9). whiletheinvestment shareonlyrisesfrom Furthermore, 9.1 to 13 percent in thesix decadesfollowing the 1760s, thegrossprivate savingraterisesfrom 12.7 to 20.4 percent, an increase morein tunewithArthur Lewis's dictum. was not a "modest" saverduring It appearsthatBritain theFirstIndustrial Revolution after all. WhatmakesBritain is that unusual muchof the potential war. savingwentintofinancing Whatare theimplications of thecrowding-out whenit is posed in its one-for-one form? The mostawkward strongest, partof theexercise involves effect of thewardebt.Since thewardebtwas heldby hightheredistributive incomesavers,and since taxes fell primarily on low-income a nonsavers, redistribution from nonsavers to saversis implied.The redistributive effect wouldhavehad an unfavorable on theliving impact standards of workers, but nonetheless would have servedto augment thegrossprivate savingrate.In other theredistributive effect haveoffset words, thecrowding-out might effect, so we mustincludeit in whatfollows. raising investment,

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Jeffrey G. Williamson


The setofassumptions Table 2 can be stated underlying briefly. Assume that taxeson income andwealth fellon thetophalfoftheincome distribution, whileall other taxeswereregressive, on thebottom falling halfoftheincome distribution. Also assumethattheaveragesavingrateout of incomesin the lowerhalfof thedistribution was zero,and define theaveragesaving rateout ofthetophalf tobe SH. A counterfactual investment share cannowbe evaluated in theabsenceof thewars.The counterfactual risein IIY is calculated as:
d[I/Y]CF =

[AD -



4,) iD]/Y,

where4t is theshareof incomeand wealth taxesin totaltaxrevenue, AD is thedeflated iD is thedeflated on thedebtoutstanding, interest deficit, charge and Y is totalreal income.UsingHarrod'sidentity (therateof capitalaccushare divided mulation, K*, equalstheinvestment bythecapital/income ratio), itis a simple matter to compute thecounterfactual changein theaccumulation on thechangein theinvestment rate,dependent share just calculated:
d[K*]CF = (YIK) * d[IIY]CF

whereYIK is theincome/capital ratio. If the crowding-out assumptions are anywhere near correct, Table 2 war that debt issue of suggests of the First explainsmuch thepeculiarities Industrial Revolution. Between 1761 and 1820 the capitalformation share wouldhave been 4.84 percent in theabsenceof war,and therateof higher accumulation would have been 1.74 percent an per yearhigher. Assuming of0.35, national income output wouldhavegrown some0.6 percent elasticity The counterfactual peryearfaster. calculations are evenmorestriking forthe decadesin whichthewarsweremostimportant, 1791-1820:thecapitalformation share wouldhavebeenhigher therate ofaccumulation by6.38 percent, wouldhavebeenhigher by2.42 percent ofoutput peryear,andtherate growth wouldhave been some0.8 or 0.9 percent faster. peryear Whathave we learned? wereright First,theclassicaleconomists that real wages werestableup to 1820. Second,theywerewrong in treating the
TABLE 2 on civilian on the impact of war debt issue Conjectures sector accumulation and growth, 1761-1820 Counterfactual rise in the rate Capital's productivity of accumulation, YIK dK* (percent) (2) (3) 0.36 0.38 1.74 2.42 Counterfactual rise in the aggregate growth rate, dY* (percent) (4) 0.61 0.85


Counterfactual rise in share of in investment nationalincome IIY (percent) (1)

1761-1820 4.84 1791-1820 6.38 SOURCE: See text.

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The Classical

Labor Surplus


economic as "revolutionary." performance On thecontrary, and acgrowth cumulation wereslow. Third,one plausibleexplanation fortheslow growth performance was thewardebt, which crowded-out conventional accumulation.

Why were real wages up to 1820?


Whilethecounterfactual in Table 2 are useful, conjectures reported theyare notenough. the Theyoffer into impact insight at theaggregate level,butthey tell us nothing aboutreal wages or industrialization, directly although they imply thatlow ratesof capitalformation produced low ratesof capital-deepinlabor'smarginal ening andthus little increase andrealwage.Perhaps product moreimportantly, Table 2 ignores thepotential of other war-induced impact influences-such as mobilization and labor scarcity, or food and resource induced andembargoes. scarcity byblockades The latter sounds In Ricardian. theclosed Ricardian model,inelastic land supplies eventual imply foodscarofftrade, thewarmayhave had thesameeffect. city.By choking Major warscreateunskilled laborscarcity, and theFrench Wars were no exception. In fact,the shareof thetotallaborforcemobilized rose from about2 to 10 percent, a rate that toapproximate twentieth begins wars. century therelative Furthermore, priceof agricultural goods rose sharply acrossthe a deterioration in Britain'sterms period,implying of trade,an erosionin aggregate realincome, anda fallin therealwage. The critical question is how muchof thisrelative was due to war. GlennHueckel(1973) has pricedrift estimated that thehostilities andblockades 1812wheat inflated prices by some 24-40 percent due solelyto higher and insurance freight costs.Forthe 17901815 periodas a whole,he estimates that thewarsraisedtherelative priceof grains by 28 percent. How can we assess theimpact of thesethree influences on British economicperformance up to 1820?One way is to developa general equilibrium modelthat wouldallow us to exploretheimpact on theBritish had economy thelabormobilization, therelative pricetwists, andthecrowding-out nottaken place. One such model has been developed(Williamson,1984a; 1985); it contains six factors of production: farm land,capital,unskilled labor,skills, intermediate domestically produced inputs(e.g., coal), and imported intermediateinputs(e.g., raw cotton).These factor inputsare used to produce in fourdomesticsectors:agriculture, outputs manufacturing, services,and The civilianeconomy is open to tradein all finalconsumption mining. and investment goods, save thenontraded services.The home-produced intermediate tobe a nontradeable, goodis also assumed while theimported intermediate is assumednotto be produced at home. The modelconforms to thereality thatBritain was a net importer of agricultural goods and a net exporter of manufactures. The smallcountry takesthepricesof all tradeables assumption as determined andevents exogenously ofBritain, bycommercial outside policy

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Jeffrey G. Williamson


words, suchas blockades, embargoes, andinternational transport costs.Inother ofimportables to be highly demands forexportables and supplies areassumed equilibrium priceelastic.In short, themodelis a simplecomputable general of suchmodels (CGE) model. As such,it is a member of a growing family used by development economists (Adelmanand Robinson,1978; Dervis,de Melo, and Robinson,1982; Kelley and Williamson, 1984a), publicfinance and tradeeconomists (Shovenand Whalley,1984), and even economichistorians and Lindert, (Williamson 1980; James,1984). ourCGE modelof theBritish variables Of themany exogenous driving attention here:theimpact of wars,emindustrial revolution, onlyfiveattract on of the three and the tradeables blockades (whichwe shall bargoes, prices in whatfollows); theimpact ofmobilization call "war-distorted priceeffects" on civilianlaborsupplies(whichwe shall call "mobilization effects");and on civilian theinfluence ofcrowding-out (which we shall capitalaccumulation The endogenous variables thattheprevious call "war debtcrowding-out"). has stressed are: the real wage of unskilled commonlabor; real discussion as meaof thefoursectors; industrialization, national income;output growth ingrowth rates between andagriculture; manufacturing sured bythedifference and exports. Since thedebateovertheFirstIndustrial Revolution hingeson rather thanon levels,themodelis converted trends and growth performance, ratesof change. intoperannum of history are fiction, of course,butsome All economicinterpretations This one has been estimated thanothers. withdata drawn fictions are better usedtopredict trends theearly1820s.Themodelwasthen British between from 1821and 1861,a far better documented epochthan1760to 1820.It performed we can proceed 1985: ch. 9). Thusencouraged, well (Williamson, extremely to theperiodbefore1820. withmoreconfidence of whichwouldserveto twocounterfactuals, either One could imagine revolution. On theone hand,we could theindustrial factor outthewarsfrom in the absenceof the ask how the British economywould have performed would have wars. On the other,we could ask how Britain'sperformance is used here. in theabsenceof thewars.The secondcounterfactual differed the counterfactual. The last columnsuppliesthetotal Table 3 reports three columns breakthetotalintoitsthree whilethefirst parts-war impact, on the on capitalformation; mobilization effects effects debtcrowding-out relative laborforce;and tradedisruptions unskilled pricesat home. affecting for1790-1815(theworst of thewar is reported The counterfactual separately theimpact on growth rates 81Os. Each panelreports the1760s-1 years)andfor of interest: real income,output variables of thesevenendogenous aggregate index(thedifference thegrowth an industrialization between in foursectors, of industry and of agriculture), and, our mainfocushere,thereal wage of common labor. on capitalaccumulation The effects effects) (thewardebtcrowding-out of sourceof slow growth werethemostimportant (0.67/0.96 = 60 percent ofwarfrom the1760stothe181 thecombined effects Os). Yet thewar-induced

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The Classical

Labor Surplus


TABLE 3 By how much peacetime counterfactual

would Britain's conditions?





duringtwo Annual growth rates (percent)of selectedeconomicindicators revolution periodsof the industrial No war debt crowding-out effects .94 .93 .40 1.14 1.13 1.14 .74 .68 .67 .29 .82 .81 .82 .53 No mobilization effects -0.27 0.13 0.34 0.02 0.09 0.02 -0.32 -0.13 0.06 0.15 0.01 0.05 0.01 -0.14 No war-distorted price effects 0.59 0.46 -2.76 2.93 0.70 2.82 5.69 0.30 0.23 -1.38 1.47 0.35 1.41 2.85 All effects combined 1.27 1.51 -2.05 4.09 1.93 3.98 6.14 .84 .96 -.94 2.30 1.21 2.24 3.24

Indicator The 1790-1815 period Real wage Real income Sectoroutputs Agriculture Manufacturing Services Mining in Industrialization index:growth less growth manufacturing output in agricultural output The 1760s-1810speriod Real wage Real income Sectoroutputs Agriculture Manufacturing Services Mining in Industrialization index:growth less growth manufacturing output in agricultural output

SOURCE: Williamson (1984a, Table 6: 709).

of trade and mobilization declinein theterms priceeffects) (thewar-distorted thattheeffects of war in totalexceededthe werebothsufficiently important Britain's realincome that aggregate accumulation effects themselves. Itappears 1790 to 1815, peryearfrom wouldhave been higher by 1.51 percent growth the 1760s to the 1810s,had peace peryearfrom by 0.96 percent and higher prevailed. are even close to the mark,theyhave important If thesecalculations of theBritish industrial revolution. Table forour interpretations implications in growth all of theacceleration after around1820was that 3 suggests almost to do withtheunderlying forces to peace, havinglittle caused by thereturn inthegrowth that thedoubling ofcapitalist The tablealso implies development. of industrial after 1815 or 1820 can be explained entirely bythereturn output to peace. in Table 3 has to do with thereal Butthemoststriking result appearing elastic supplies accounted The classical economists believed that labor wage. Revolution. Table 3 suggests forstablereal wages during theFirst Industrial the 1820s can before thatmostof thedismalreal wage performance instead Peace would have raisedthe to the wars and theirfinancing. be attributed

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Jeffrey G. Williamson


in realwagesby 0.84 percent growth perannum, or by 65 percent forthesix decadesas a whole.Crowding-out tohavebeenthedominant appears influence of thetotaloverthesix decadesas a whole). Slow (0.68/0.84 = 81 percent accumulation and thusslow ratesof job creation (especiallyin the cities) in realwagesup to the1820s.Waraccount formostof thepoorperformance induced trade distortions, raising therelative priceof foodstuffs and raw marole(0.30/0.84 = 36 percent terials, playeda majorsupporting of thetotal). In short, a classical modelof labor surplus is notrequired to explain A neoclassical stablereal wages during theindustrial revolution. modelthat takesintoaccountthehistorical reality of war will do equallywell, or even better. the neoclassicalanalysissupports Paradoxically, Ricardo'sstresson for and foodconstraints, but different reasons. capital-scarcity Can elastic labor supplies explain lagging wages up to 1860? Whathappened after thewarswhentrade openedup and government debtno outinvestment andaccumulation?4 crowded Did laborsurplus longer conditions roleduring Pax Britannica? After playa morecritical all, qualitative accounts intoBritain thatIrishimmigration becameveryimportant after the suggest French Wars.At thesametime, unskilled andinequality wageslaggedbehind was on therise (Williamson, 1985: chs. 3 and 4). Did theemergence of an Irish ofthedistribution rolein accounting glutat thebottom playan important 1820? forthesetwoeventsafter is seductive-lagging The grosscorrelation wages andrising inequality a clearassessment is cloudedby the withIrishimmigration-but coinciding of controlling foreverything else. Yet, economic historians difficulty writing revolution havealwaysthought theIrishmattered. abouttheBritish industrial In Arthur Redford's forexample,we are toldthat (1926: 159) classic study, of theIrishinflux "the mainsocial significance itstendency to lower lay with the of of the standard living classes." And wages and English wage-earning whileRedford thistendency was obviousduring theIrishFamineof thought social effect of theIrishinflux thelate 1840s, "the disastrous was, however, in the'thirties" intothe already apparent (p. 159). Thisviewhas beencarried I suspect it playeda keyrole in motivating Lewis's modelof elastic present. laborsupplies,and it certainly plays a key role in SidneyPollard's(1978) theindustrial influential of British labormarkets revolution. survey during of contemThe rootsof thisview seemto lie solelywiththeopinions rather thanwithanyexplicit testof theproposition. Fearof porary observers, in the 1825 Select Committee on anIrish was Disturbances glut already apparent in Ireland on Emigration. andthe1827 SelectCommittee Indeed,theclassical as a realthreat to British economists viewedan elasticIrish laborsupply living the 1825 SelectCommittee So said J. R. McCullochbefore standards. (Poor the1827Emigration Inquiry, Parliamentary Papers, 1836:xxxiii).Andduring theHouse called noneother thantheReverend ThomasR. Malthus Inquiry,

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The Classical

Labor Surplus


to serveas witness to British totheIrish threat living standards. Malthus stated that"the wages of labourhave been lowered essentially by thecoming over of the Irish" and thatin the future the Irishimmigration "mighthave the ofintroducing pernicious effect thehabit ofliving almost entirely on potatoes" (quotedin Poor Inquiry, Parliamentary Papers, 1836: xxxiii). If theIrishhad an impacton real wages, surely theymustalso have of thenative-born to thebooming cities.Thereare discouraged themigration of thediscouraged of ratesindicative three native-born would-be categories ratesfrom thepoorSouthto thebooming low emigration low migrant: North, British tourban andrising rates from rates emigration agriculture employment, of native-born to theNew World.On thetwo internal emigration migration sincethe 1830s (see thereferences issuesthere has been abundant comment in Pollard,1978,and Williamson, is posedquitesimply 1984b).The problem in Figure there aretwosectors, and industry. Prior to the 3, where agriculture where AB of thenativewe assumea labormarket Irishinflux, equilibrium is employed inagriculture andtheremainder, born laborforce BD, is employed in industry. thetotal AssumetheIrishimmigrants augment British laborforce will be absorbed by DE. These immigrants only if theeconomywide wage in thisexample to a newequilibrium at w(t+ 1). Notealso that all of declines in industry-their intotheBritish theIrishare employed labor pointof entry market-andthat BC of thenative-born are pushedoutof industrial employsinceovert back to agriculture is ment, presumably migrating unemployment in thissimplemodel. ignored

FIGURE 3 exogenous

Labor absorption Irish immigration

in British industry with

Labor demand in agriculture

Labor demand in industry

Net fall in standard ow(t) f living,cet. par. w(t+ 1)

tZ [




/ /~~~~~~~~~~~employed

_ IIrish < I

w(t+1) employedin

"Discouraged" native-born I pushed back into

employment agricultural jDtindustr

labor Native-born


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Jeffrey G. Williamson


Does an elasticIrishlaborsupply right? Weretheclassicaleconomists real wages up to 1860? explainlagging favors inmodel,an elasticlaborsupply In theclassical laborsurplus toholddown important immigrants weresufficiently IftheIrish dustrialization. industrialBritish to favor they shouldalso have served then wagesin Britain, unemploylines:disguised evolvesalongthefollowing ization.The argument theelastic in Irishagriculture an elasticlaborsupply forBritain; ensured ment oflabor-intensive theexpansion favored heldwagesdown,which laborsupply of incomeaway thedistribution and whichalso shifted (like textiles), sectors and accumulation fromlabor and towardcapital,makingmoreinvestment is historical there believethat historians economic possible.Pollardand other model: fortheclassicallaborsurplus support ofthe British ofagreement observers among animpressive degree There is thus andabundant labour, bylowwages that itwascharacterized industrial revolution itself an instrumental labour part thecheapandelastic supply played andthat ofindustrialization. 1978:102) (Pollard, intheprogress
and thisrolewas as a labourreservoir, predominantly . . . Irelandfunctioned on Irishsoil corre. . . Disguisedunemployment notlost on contemporaries.

intheLewismodel, labour became andIrish sector totheagricultural sponds ofBritish industrialization. 1978:115) (Pollard, an integral part

evidence.Did with has notbeenconfronted So far,thethesis anyquantitative industrialization? foster British Irishimmigration One way to answerthese questionsis to imaginehow the British in theabsenceof theIrish.Whenthiscounwouldhave performed economy used in theprevious terfactual questionis asked of theCGE modelalready shownin Table 4. we gettheanswers section, from theIrishimmigrations The keymessageemerging thetableis that over the fourdecades mattered littleto British wages and industrialization 1.40 rate,from growth declinein thelaborforce 1820-60. The counterfactual and it would have would not have been trivial, to 1.25 percent per annum, laborparticipation of population sincetheIrishhad farhigher exceededthat all of the labor rates(migration youngadults). Furthermore, self-selecting since the Irish forcedeclinewould have takenplace amongthe unskilled, skills. Theunskilled fewurban illiterate andcamewith was primarily immigrant real wage clearlywould have risenin the absenceof the Irish,the model than at 1.04 rather 0.92 percent that itwouldhavegrown perannum. suggesting oftherelatively theviewthat does confirm The counterfactual part experiment distribution of theBritish up to 1860 was slow risein incomesat thebottom seemlargeenough below. Butthemagnitudes due to an Irishglutfrom hardly forlaggingreal a majorrole to the Irishin accounting to justify assigning Revolution. theFirst Industrial wagesduring in Table 4, perhapsthe If the readeris not persuaded by the results theIrish" counmaybe decisive.The "Britainwithout following argument staticexperiment withthe CGE a strictly terfactual comparative performs

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The Classical

Labor Surplus


4 TABLE revolution

The British industrial without Irish immigration Annual growth rates (percent) of selectedeconomicand demographicindicators,1821-61 Actual: withthe Irish 1.40 1.23 0.92 3.17 1.37 Counterfactual: the without Irish 1.25 1.12 1.04 3.14 1.24

Indicator Laborforce Population Unskilled real wage Manufacturing output Agricultural output index: Industrialization manufacturing output less growth in agricultural output Agricultural employment Nonagricultural employment ratefrom Emigration agriculture SOURCE:

1.80 0.93 1.58 -0.84

1.90 0.70 1.46 -1.07

Williamson (1984b, Table 12).

model.In other therateof technological words,we assumethat and progress itsbias wouldnothave been altered in an economy with no Irishand greater laborscarcity; unskilled we assumethattherateof capitalaccumulation and skillformation wouldhave remained as well; and we assumethat unchanged thenative-born laborsupplywouldhave stayed thesame too. These are unreasonable butany plausibleeffort to endogenize assumptions, capitalaccunative-born labor forcegrowth, and technological mulation, changewould thefindings in Table 4. Whyso? Consider strengthen capitalformation. The Lewis modelstresses theconnection between elasticlaborsupply, stablereal wages,rising profit andaccumulation. shares, and,thus, In theabsence saving oftheIrish, wageswouldhaverisen, wouldhavebeenchoked profits off, and therateof accumulation wouldhavedeclined. The lowerrateof accumulation thatrisingwages induce (accordingto the classical labor surplusmodel) implies lowerrates ofcapital-deepening andoffsetting downward pressures on therealwage.Table4 ignores suchaccumulation responses andthus overstates theimpact of theIrishon therealwage. Consider In theabsence technology. of the Irish,wouldn'trisinglabor scarcity inducea moreactivesearchfor thatsaved on labor,thusoffsetting technologies the rise in the real wage? 4 Table ignores suchinduced technological responses and thusoverstates the of theIrishon thereal wage. Consider impact thenative-born laborsupply. thenative-born laborsupply wouldhave been larger Surely in theabsenceof theIrish.After all, theIrishimmigrations native-born encouraged emigrations

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Jeffrey G. Williamson


totheNew Worldanddiscouraged non-Irish foreign intoBritain. immigrations Table 4 ignores suchnon-Irish laborsupply responses the and thusoverstates impact of theIrishon thereal wage. Whataboutindustrialization? Since thelaborforcewouldhave grown at a slower ratewithout theIrish, output, including manufacturing, wouldhave slower grown too. Butwhichsectors wouldhavebeenhardest hit?The answer must be those sectors that weremost unskilled-labor intensive. Sinceagriculture was moreunskilled-labor intensive thanindustry, output wouldhave shifted in theabsenceof theIrish.In other toward industry Table 4 rejects words, the that the Irish fostered hypothesis industrialization. Had there beenno Irishin Britain, agriculture would have suffered farmorethanindustry. Only if we are concerned withindustrial and output in isolationcan we employment concludethatthe Irishfostered industrialization. If insteadwe focuson inrelative shareof totaloutput andemployment, dustry's then itappears that the Irishinhibited British industrialization. The finding thatIrish immigration tendedto favorthe expansionof morethanmanufacturing agriculture may seem odd to readers familiar with thefactthattheIrishwereneveremployed in agriculture withthesame frequencyas in industry seasonalIrishemployment (although in agriculture was The resolution of thisapparent important). is close at hand:in the anomaly absenceof the Irish(whose pointof entry was urbanemployment), British farm laborwouldhavebeenencouraged toemigrate from agriculture at a more rapidrate.This can be seen at thebottom of Table 4, wheretheemigration rate risessharply from- 0.84 to - 1.07 percent in a counterfactual perannum Britain without theIrish.Had there been no Irish,agricultural employment growth wouldhave declined(from 0.93 to 0.70 percent perannum)-in part due to a declinein agricultural and in partdue to therise in output growth laborscarcity farmers encouraging to use less unskilled labor.And withthe declinein agricultural the rate of from employment growth, emigration agriculture wouldhave risen,thusfilling thejobs vacatedby theIrish.It appears from Table 4 thattheIrishhad a farbigger on rural-urban impact migration in Britain thanthey did on overalllaborscarcity. In short,"elastic Irishlabor supplies" in Britain after1820 did not the rise in the real wage. It rose anyway, retard seriously but it would not muchfaster haverisen hadthere beenno Irishglutin theBritish labormarket. Accumulation, inequality, and the labor surplus model For me, themostchallenging aspectof thelaborsurplus modelis itseffort to confront whatLewis arguesis the central of development problem theory, namely: andinvesting 4 or 5 percent of itsnational saving income or less,converts
. . . to understand theprocessby whicha community whichwas previously

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The Classical

Labor Surplus


cent of nationalincomeor more. . . . We cannotexplainany "industrial" . . . until revolution we can explainwhysavingincreased relatively to national

into aneconomy itself where voluntary saving is running atabout 12to 15per

income. (Lewis,1954:155)

Thelaborsurplus modelconfronts this central problem byadopting theclassical view of inequality tradeoff and accumulation: stablerealwagesimply greater inequality, and inequality breeds higher savingrates, a surge in accumulation, revolution. and thustheindustrial The British historical evidencehas notbeen kindto the laborsurplus therealwage was certainly stable model.Although up to 1820,theinvestment from rateonlyrose by about4 percentage 1761/71 to 1811/21 points (Table 1)-far below the7 to 11 percentage in Lewis's assertion. pointsembedded And while inequality was sharply on the rise after1820 as Britain passed the upswingof the KuznetsCurve (Williamson,1985), Feinstein through (1978, Table 28: 91) has shownthattheinvestment sharein grossdomestic failedto riseat all up to the 1850s. product The lack of correlation between and accumulation inequality during the industrial revolution British does notbode well forthelaborsurplus model, or theclassicaltradeoff thinking uponwhichit is based. For theperiodprior I offered an to 1820, have alternative consistent explanation withthesimulofthelow investment theslowrates ofaccumulation, taneous appearance rates, thelack of capital-deepening, and, of course,stablereal wages. The explalies withwarand its impact nation on thecivilianeconomy. It appearsthat a modelwhichcaptures theimpact of war debt neoclassical,fullemployment labormobilization, andfoodscarcity due totrade deflection can crowding-out, all ofthepeculiarities account for oftheBritish industrial revolution adequately is notrequired to up to 1820. To repeat,a classical modelof laborsurplus stablerealwagesduring theFirst A neoclassical Industrial Revolution. explain overtones can do better. modelwithRicardian theFrench The periodafter Warsalso failsto support thelaborsurplus ofcourse, is that therealwagebegins model.The critical a significant evidence, 1820. Stablerealwagesare simply nota characteristic riseafter oftheBritish revolution thosefour decadesofdramatic industrialization industrial during up of itis attributable is on therise,however, and much to the1850s. Inequality unskilled to thefactthat wages lag behind.Whythelag in unskilled wages? Whilemuchhas been madeof "elastic Irishlaborsupplies,"it appearsthat rolein keeping thelid on realwages. Of course, they playedonlya marginal a peakrateof transition thisis also a periodwhenthedemographic generates was and Schofield, population growth (Wrigley 1981); butifthelaborsupply no evidence ofan accumulation is there glutted bysuchMalthusian forces, why sharein grossdomestic As we have seen, theinvestment response? product for 1820. We maynothave verygood explanations showsno riseat all after after 1820 did notinduce therisein inequality thispuzzle,butit is clearthat central of thelaborsupply share.5 Another a rise in theinvestment premise modelseemsto failthetestof history.

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Jeffrey G. Williamson



the classical

labor surplus model

is zero or productivity marginal that"whether Lewis (1954: 142) insisted model." to thelaborsurplus importance is not. .. of fundamental negligible
is thatthe "price of labour . All thatmatters

sincea good shareof apparently, disagreed, level." Much of theprofession issue. on that primarily after 1954 focused that emerged thecritical response Is raisedtwoquestions: tack.It has, instead, Thispaperhas takena different consistent revolution industrial British from the drawn evidence thehistorical model?Can a neoof theclassicallaborsurplus withthemacroimplications revolution? fortheBritish industrial account classicalmodelmoreadequately to thesecondis yes. is no, whiletheanswer question to thefirst The answer content to theclassicallabor little historical that is very It appears there declassicaleconomists result sincetheBritish model,a paradoxical surplus theysaw modelsto explainthe eventstheythought dynamic velopedtheir the FirstIndustrial evidencefrom goingon aroundthem.Is thishistorical all, the FirstIndustrial fatalto the labor surplusmodel? After Revolution revoof industrial Revolution is onlya sampleof one in a largepopulation 1945. Whether since have taken place of which themostnumerous lutions, of thelabor from theThird Worldis anymoresupportive theevidence drawn that takesus too far from Britain is a question drawn modelthanthat surplus is fargreater ofcourse,that pressure population afield in thispaper.It is true, hand,Britain in theThirdWorldthanit ever was in Britain.On the other that the transfer and capitalinflows of technological never had theadvantage muchof the 1960s and 1970s. The during ThirdWorldhad in abundance assessment. is stillopen and awaiting empirical question Notes
thereal computing by debatewithfaculty Real AccrualAccounting, This paper,stimulated andtheendoftheperiod, atthebeginning College,hasbenefited debt atWilliams andstudents The accrual is calculated. before theincrease Dorfman. withRobert from discussions on the of inflation theimpact includes concept draw 1 Thissection andtheone following stockof old debt, whereasthe nationalacliberallyon my paper "Why was British income does not.The national concept counts revoluthe industrial so slow during growth in the literature, is used commonly approach 1984a). tion?" (Williamson, so I applyitheretoo. Use of theaccrualconwouldyieldthesame concluare taken cept,however, 2 The ThirdWorld estimates theWorldBank(IBRD, 1980:421), the sionas whatfollows. from from forJapan KelleyandWilliamson figures 4 This sectiondrawsheavilyon my unfrom published figures (1974: 233), and the American elasticlapaper"Irishimmigration, Williamson (1979: 233). duringthe bor supplies and crowding-out of thewar debtcan be British industrialrevolution,1821-1861" 3 The real impact Most (1984b). assessedby usingone of two concepts. 5 British evidenceis notuniquein rejectof Commerce economists use theDepartment deflating ing thisbasic premiseof the classical labor approach, Accounts Income National a in thenominal debtoutstanding. surplusmodel. America also underwent theincrease acrossthe nineteenth use instead sharprise in inequality that we should Others haveargued

. is a wage at the subsistence

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The Classical

Labor Surplus


In contrast century. withBritish experience times.However,the correlation betweeninbetween1820 and 1850, the Americanin- equality and the investment rateturns out to vestment rate increasedby two and a half be mostly spurious (Williamson, 1979).

Adelman, Irma,andSherman Robinson.1978.Income Distribution PolicyinDeveloping Countries:A Case Study ofKorea. Stanford, Calif.: Stanford University Press. T. S. 1955. An Economic Ashton, History ofEngland:The 18thCentury. London:Methuen. . 1959. Economic Fluctuations in England,1700-1800. Oxford: The Clarendon Press. Clapham, John H. 1926. An Economic History ofModern Britain. Cambridge, England: Cambridge University Press. Deane, Phyllis,and W. A. Cole. 1962. British EconomicGrowth, 1688-1959. Cambridge, England: Cambridge Press. University Dervis,Kemal, Jaimede Melo, and Sherman Robinson.1982. GeneralEquilibrium Models forDevelopment Policy. Cambridge, England: Cambridge University Press. Dixit,Avinash.1973. "Models ofdualeconomies,"inModelsofEconomic Growth, ed. James A. Mirrlees and NicholasH. Stern.New York:Wiley. Engels,Friedrich. 1845. The Condition oftheWorking Class in England.Translated from the German edition withan introduction by E. J. Hobsbawm.St. Albans,Herts.:Panther, 1974. Fei, John C. H., andGustavRanis. 1964. Development oftheLaborSurplus Economy: Theory and Policy. Homewood,Ill.: Richard D. Irwin. Feinstein, Charles. 1978. "Capital formation in GreatBritain,"in The Cambridge Economic History ofEurope: Volume VII: TheIndustrial Economies:Capital,Labour,and Enterprise,ed. Peter Mathias andMichaelPostan.Cambridge, England: Cambridge University Press. Hammond, J. L. 1930. "The industrial revolution anddiscontent," Economic History Review, 1stseries,no. 2: 215-228. Harley,C. Knick. 1982. "Britishindustrialization before1841: Evidenceof slowergrowth theindustrial during Journal revolution," ofEconomic 42 (June): History 267-289. R. M. 1959. "Interpretations Hartwell, oftheindustrial revolution inEngland: A methodological Journal inquiry," ofEconomic no. 19: 229-249. History, . 1961. "The risingstandard of livingin England,1800-1850," EconomicHistory Review,2nd series,no. 13 (April):397-416. Hobsbawm,Eric J. 1957. "The British of living,1790-1850," EconomicHistory standard Review,2nd series,no. 10 (August):46-68. Hueckle,Glenn. 1973. "War and the British economy,1793-1815: A generalequilibrium in Economic analysis,"Explorations 10 (Summer): 365-396. History International Bankfor Reconstruction andDevelopment. 1980.World Tables,2nded. Baltimore: Johns Press. Hopkins University A. 1984. "The use of general James, John in economic equilibrium analysis history," Explorations in Economic 21 (July): History 231-253. Dale W. 1961. "The development Jorgenson, of a dual economy,"Economic no. 71 Journal, 309-334. (June): Kelley,AllenC., Jeffrey G. Williamson, and RussellJ. Cheetham. 1972. DualisticEconomic and History. Development: of ChicagoPress. Theory Chicago:University G. Williamson. 1974. Lessons , andJeffrey AnAnalytical from Japanese Development: of ChicagoPress. History. Chicago:University G. Williamson. 1984a. What , andJeffrey DrivesThird World Growth? A Dynamic City GeneralEquilibrium N.J.: Princeton Approach.Princeton, Press. University

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Jeffrey G. Williamson


revolutions, and G. Williamson.1984b. "Population growth, industrial , and Jeffrey Review 10, no. 3 (September): the urbantransition," Populationand Development 419-441. of labour,"ManLewis, W. Arthur. 1954. "Economicdevelopment withunlimited supplies chester School ofEconomicand Social Studies,no. 22 (May): 139-191. Peter living standards during Lindert, H., andJeffrey G. Williamson. 1983. "Englishworkers' revolution: A new look," EconomicHistory the industrial Review,2nd series,no. 36 (February): 1-25. 6thed. London:Macmillan. Marshall, Alfred.1910. Principles ofEconomics, in 1848. Capital. VolumeI. New York: International PubMarx,Karl. Originally published lishers, 1947. in 1848. The Communist Manifesto. New , and Friedrich Engels. Originally published York:International 1930. Publishers, Washington, D.C.: McKinnon, Ronald. 1973. Moneyand Capital in Economic Development. The Brookings Institution. 1824. "Observations onthe effects ofgovernment Mill,John Stuart. produced bythe expenditure of cash payments," The Westminster ReviewII (July),Art. II: the restriction during 27-48. and ofPoliticalEconomy, 5thed., vol. II. New York:D. Appleton . 1909. Principles Company. of Pollard,Sidney. 1978. "Labour in GreatBritain,"in The Cambridge EconomicHistory Part Europe: VolumeVII: The Industrial Economies:Capital,Labour,and Enterprise, University I, ed. PeterMathiasand Michael Postan.Cambridge, England:Cambridge Press. Poor Inquiry (Ireland),Appendix G, Reporton theStateof theIrishPoor in GreatBritain. 1836. Parliamentary Papers, vol. 34. England: Redford, Arthur. 1926. Labour Migrationin England, 1800-1850. Manchester, Manchester Press. University ofPolitical Sen, A. K. 1966. "Peasantsand dualismwithor without surplus labor," Journal no. 74 (October):425-450. Economy, modelsof taxation Shoven,John B., and John Whalley.1984. "Applied general-equilibrium andinternational trade: An introduction and survey," Journal Literature 22 ofEconomic 1007-1051. (September): L. Bacha,ElianaA. Cardoso,andFrank J.Lysy.1980.ModelsofGrowth Taylor, Lance,Edmar Press. and Distribution forBrazil. New York:Oxford University A growthG. 1979. "Inequality, accumulation andtechnological imbalance: Williamson, Jeffrey conflict in American Economic and Cultural Change27 equity history?," Development 231-253. (January): so slow during . 1984a. "Why was British theindustrial revolution?," Journal growth no. 3 (September): 687-712. ofEconomic History, . 1984b. "Irishimmigration, elasticlaborsupplies and crowding-out during theBritish 1821-1861," Harvard Institute industrial Research, Discussion revolution, forEconomic PaperNo. 1085 (September). 1985. Did British BreedInequality? London:Allenand Unwin. Capitalism A Macro-Economic and PeterH. Lindert.1980. American New History. Inequality: York:AcademicPress. E. A., and Roger S. Schofield.1981. The Population of England,1541Wrigley, History 1871: A Reconstruction. Press. Cambridge, England:Cambridge University

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From Wikipedia, the free encyclopedia . In English social and economic history, enclosure or inclosure[1] is the process which ends traditional rights such as mowing meadows for hay, or grazing livestock on common land formerly held in the open field system. Once enclosed, these uses of the land become restricted to the owner, and it ceases to be land for commons. In England and Wales the term is also used for the process that ended the ancient system of arable farming in open fields. Under enclosure, such land is fenced (enclosed) and deeded or entitled to one or more owners. The process of enclosure began to be a widespread feature of the English agricultural landscape during the 16th century. By the 19th century, unenclosed commons had become largely restricted to rough pasture in mountainous areas and to relatively small parts of the lowlands. The process of enclosure has sometimes been accompanied by force, resistance, and bloodshed, and remains among the most controversial areas of agricultural and economic history in England. Marxist and neo-Marxist historians argue that rich landowners used their control of state processes to appropriate public land for their private benefit. This created a landless working class that provided the labour required in the new industries developing in the north of England. For example: "In agriculture the years between 1760 and 1820 are the years of wholesale enclosure in which, in village after village, common rights are lost".[2] "Enclosure (when all the sophistications are allowed for) was a plain enough case of class robbery".[3][4] W. A. Armstrong argued that this is perhaps an oversimplification, that the better-off members of the European peasantry encouraged and participated actively in enclosure, seeking to end the perpetual poverty of subsistence farming. "We should be careful not to ascribe to [enclosure] developments that were the consequence of a much broader and more complex process of historical change."[5] "[T]he impact of eighteenth and nineteenth century enclosure has been grossly exaggerated...."[6][7]

Early history
Enclosure of manorial waste was authorised by the Statute of Merton (1235) and the Statute of Westminster (1285). Throughout the medieval and modern periods, piecemeal enclosure took place in which adjacent strips were fenced off from the common field. This was sometimes undertaken by small landowners, but more often by large landowners and lords of the manor. Significant enclosures (or emparkments) took place to establish deer parks. Some (but not all) of these enclosures took place with local agreement.[8]

Tudor enclosures
There was a significant rise in enclosure during the Tudor period. These enclosures largely resulted in conversion of land use from arable to pasture usually sheep

farming. These enclosures were often undertaken unilaterally by the landowner. Enclosures during the Tudor period were often accompanied by a loss of common rights and could result in the destruction of whole villages.[9] English champaign that is, extensive, open land had been commonly enclosed as pastureland for sheep from the fourteenth to the sixteenth century as populations declined. Foreign demand for English wool also helped encourage increased production, and the wool industry was often thought to be more profitable for landowners who had large decaying farmlands. Some manorial lands lay in disrepair from a lack of tenants, which made them undesirable to both prospective tenants and landowners who could be fined and ordered to make repairs. Enclosure and sheep herding (which required very few labourers) were a solution to the problem, but of course this created other problems: unemployment, the displacement of impoverished rural labourers, and decreased domestic grain production which made England more susceptible to famine and higher prices for domestic and foreign grain. From as early as the 12th century, some open fields in Britain were being enclosed into individually owned fields. In Great Britain, the process sped up during the 15th and 16th centuries as sheep farming grew more profitable. In the 16th and early 17th centuries, the practice of enclosure was denounced by the Church and the government, particularly depopulating enclosure, and legislation was drawn up against it. But elite opinion began to turn towards support for enclosure, and rate of enclosure increased in the seventeenth century. This led to a series of government acts addressing individual regions, which were given a common framework in the Inclosure Consolidation Act of 1801. Sir Thomas More, in his 1516 work Utopia suggests that the practice of enclosure is responsible for some of the social problems affecting England at the time, specifically theft. But I do not think that this necessity of stealing arises only from hence; there is another cause of it, more peculiar to England.' 'What is that?' said the Cardinal: 'The increase of pasture,' said I, 'by which your sheep, which are naturally mild, and easily kept in order, may be said now to devour men and unpeople, not only villages, but towns; for wherever it is found that the sheep of any soil yield a softer and richer wool than ordinary, there the nobility and gentry, and even those holy men, the abbots not contented with the old rents which their farms yielded, nor thinking it enough that they, living at their ease, do no good to the public, resolve to do it hurt instead of good. They stop the course of agriculture, destroying houses and towns, reserving only the churches, and enclose grounds that they may lodge their sheep in them. The loss of agricultural labour also hurt others like millers whose livelihood relied on agricultural produce. Fynes Moryson reported on these problems in his 1617 work An Itinerary:[10] England abounds with corn [wheat and other grains], which they may transport, when a quarter (in some places containing six, in others eight bushels) is sold for twenty shillings, or under; and this corn not only serves England, but also served the English army in the civil wars of Ireland, at which time they also exported great quantity thereof into foreign parts, and by God's mercy England scarce once in ten years needs a supply of foreign corn, which want commonly proceeds of the covetousness of

private men, exporting or hiding it. Yet I must confess, that daily this plenty of corn decreaseth, by reason that private men, finding greater commodity in feeding of sheep and cattle than in the plow, requiring the hands of many servants, can by no law be restrained from turning cornfields into enclosed pastures, especially since great men are the first to break these laws. By some accounts, three-quarters to nine-tenths of the tenant farmers on some estates were evicted in the late medieval period. Other economic historians argue that forced evictions were probably rare. Landlords would turn to enclosure as an option when lands went unused.[citation needed]

Anti-enclosure legislation
The enclosure of common land for sheep farming and the consequent eviction of villagers from their homes and their livelihoods became an important political issue for the Tudors. Reflecting royal opposition to this practice, the anti-enclosure acts of 1489 and 1516 were aimed at stopping the waste of structures and farmland, which would lead to lower tax revenues, fewer potential military conscripts for the crown, and more potential underclass rebels. The Tudor authorities were extremely nervous about how the villagers who had lost their homes would react. In the sixteenth century, lack of income made one a pauper. If one lost one's home as well, one became a vagrant; and vagrants were regarded (and treated) as criminals. The authorities saw many people becoming what they regarded as vagabonds and thieves as a result of enclosure and depopulation of villages. From the time of Henry VII onwards, Parliament began passing Acts to stop enclosure, to limit its effects, or at least to fine those responsible. The first such law was in 1489. Over the next 150 years, there were 11 more Acts of Parliament and eight commissions of enquiry on the subject.[11] Initially, enclosure was not itself an offence, but where it was accompanied by the destruction of houses, half the profits would go to the Crown until the lost houses were rebuilt. (The 1489 Act gave half the profits to the superior landlord, who might not be the Crown, but an Act of 1536 allowed the Crown to receive this half share if the superior landlord had not taken action.) In 1515, conversion from arable to pasture became an offence. Once again, half the profits from conversion would go to the Crown until the arable land was restored. Neither the 1515 Act nor the previous laws were effective in stopping enclosure, so in 1517 Cardinal Wolsey established a commission of enquiry to determine where offences had taken place and to ensure the Crown received its half of the profits.

Inflation and enclosure

Alongside population growth, inflation was a major reason for enclosure.[12] When Henry VIII became King in 1509, the royal finances were in good shape thanks to the prudence of his father Henry VII. But this soon changed as Henry VIII doubled household expenditure and started costly wars against both France and Scotland. With his wealth rapidly decreasing, Henry VIII imposed a series of taxes devised by his finance minister, Thomas Wolsey. Soon the people began to resent Wolsey's taxes and a new source of finance had to be found: in 1544, Henry reduced the silver content of new coins by about 50%; this was repeated to a lesser extent the following

year. This, combined with injection of bullion from the New World, increased the money supply in England; which led to continuing price inflation. This threatened landowners' wealth, which encouraged the landowners to become more efficient, and enclosure was seen as a way of doing this.[citation needed] The debasement of the coinage was not seen as a cause of inflation (and therefore enclosures) until the Duke of Somerset was Protector of Edward VI. Until then enclosures were seen as the cause of inflation, not the outcome. When Thomas Smith advised Somerset that enclosure was a result of inflation, he was only ignored. It was not until John Dudley, 1st Duke of Northumberland was Protector that his finance minister William Cecil took action on debasement to try to stop enclosure.[citation needed]

Enclosure riots
After 1529 or so, the problem of untended farmland disappeared with the rising population. There was a desire for more arable land along with much antagonism toward the tenant-graziers with their flocks and herds. Increased demand along with a scarcity of tillable land caused rents to rise dramatically in the 1520s to mid-century. The 1520s appear to have been the point at which the rent increases became extreme, with complaints of rack-rent appearing in popular literature, such as the works of Robert Crowley. There were popular efforts to remove old enclosures, and much legislation of the 1530s and 1540s concerns this shift. Angry tenants impatient to reclaim pastures for tillage were illegally destroying enclosures. Beginning with Kett's Rebellion in 1549, agrarian revolts swept all over the nation, and other revolts occurred periodically throughout the century. The popular rural mentality was to restore the security, stability, and functionality of the old commons system. Historians would write that they were asserting ancient traditional and constitutional rights granted to the free and sturdy English yeoman as opposed to the enslaved and effeminate French. This emphasis on rights was to have a pivotal role in the modern era unfolding from the Enlightenment. D. C. Coleman writes that the English commons were disturbed by the loss of common rights under enclosure which might involve the right "to cut underwood, to run pigs" (40). The Midland Revolt For more details on this topic, see Midland Revolt. In 1607, beginning on May Eve in Haselbech, Northamptonshire and spreading to Warwickshire and Leicestershire throughout May, riots took place as a protest against the enclosure of common land. Now known as the Midland Revolt, it drew considerable support and was led by John Reynolds, otherwise known as "Captain Pouch", a tinker said to be from Desborough, Northamptonshire. He told the protesters he had authority from the King and the Lord of Heaven to destroy enclosures and promised to protect protesters by the contents of his pouch, carried by his side, which he said would keep them from all harm. (After he was captured, his pouch was opened all that was in it was a piece of green cheese.) Thousands of people were recorded at Hillmorton, Warwickshire and at Cotesbach, Leicestershire. A curfew was imposed in the city of Leicester, as it was feared citizens would stream out of the city to join the riots. A gibbet was erected in Leicester as a warning, and was pulled down by the citizens.

Newton Rebellion: 8 June 1607 The Newton Rebellion was one of the last times that the peasantry of England and the gentry were in open armed conflict[citation needed]. Things had come to a head in early June. James I issued a Proclamation and ordered his Deputy Lieutenants in Northamptonshire to put down the riots. It is recorded that women and children were part of the protest. Over a thousand had gathered at Newton, near Kettering, pulling down hedges and filling ditches, to protest against the enclosures of Thomas Tresham. The Treshams were unpopular for their voracious enclosing of land both the family at Newton and their more well-known Roman Catholic cousins at nearby Rushton, the family of Francis Tresham, who had been involved two years earlier in the Gunpowder Plot and had apparently died in The Tower. Sir Thomas Tresham of Rushton was known as "the most odious man in the county". The old Roman Catholic gentry family of the Treshams had long argued with the emerging Puritan gentry family, the Montagus of Boughton, about territory. Now Tresham of Newton was enclosing common land The Brand that had been part of Rockingham Forest. Edward Montagu, one of the Deputy Lieutenants, had stood up against enclosure in Parliament some years earlier, but was now placed by the King in the position effectively of defending the Treshams. The local armed bands and militia refused the call-up, so the landowners were forced to use their own servants to suppress the rioters on 8 June 1607. The Royal Proclamation was read twice. The rioters continued in their actions, although at the second reading some ran away. The gentry and their forces charged. A pitched battle ensued. 4050 were killed and the ringleaders were hanged and quartered. A memorial stone to those killed now stands at the former church of St Faith, Newton, Northamptonshire. The Tresham family declined soon after 1607. The Montagu family went on through marriage to become the Dukes of Buccleuch, one of the largest landowners in Britain.[13]

Parliamentary Enclosure and open fields

(See also British Agricultural Revolution) During the 18th and 19th centuries, enclosures were by means of local acts of Parliament, called the Inclosure Acts. These "parliamentary" enclosures consolidated strips in the open fields into more compact units, and enclosed much of the remaining pasture commons or wastes. Parliamentary enclosures usually provided commoners with some other land in compensation for the loss of common rights, although often of poor quality and limited extent. Enclosure consisted of exchange in land, and an extinguishing of common rights. This allowed farmers consolidated and fenced off plots of land, in contrast to multiple small strips spread out and separated. Parliamentary enclosure was also used for the division and privatisation of common wastes (in the original sense of "uninhabited places"), such as fens, marshes, heathland, downland, moors. Voluntary enclosure was also frequent at that time. [14]

At the time of the parliamentary enclosures, each manor had seen de facto consolidation of farms into multiple large landholdings. Multiple larger landholders already held the bulk of the land. [15] They 'held' but did not legally own in today's sense. They also had to respect the open field system rights, when demanded, even when in practice the rights were not widely in use. Similarly each large landholding would consist of scattered patches, not consolidated farms. In many cases enclosures were largely an exchange and consolidation of land, and exchange not otherwise possible under the legal system. It did also involve the extinguishing of common rights. Without extinguishment, one man in an entire village could unilaterally impose the common field system, even if everyone else did not desire to continue the practice. De jure rights were not in accord with de facto practice. With land one held, one could not formally exchange the land, consolidate fields, or entirely exclude others. Parliamentary enclosure was seen as the most cost effective method of creating a legally binding settlement. This is because of the costs (time, money, complexity) of using the common law and equity legal systems. Parliament required consent of the owners of 4/5ths of the land (copy and freeholders.) The primary benefits to large land holders came from increased value of their own land, not from expropriation. [16] Smaller holders could sell their land to larger ones for a higher price post enclosure. [17] There was not much evidence that the common rights were particularly valuable. [18] There was relatively little complaint about Parliamentary Enclosure compared to the 'uproar against common law enclosure in the sixteenth.' Voluntary enclosure was frequent at that time. [14] Enclosed land was twice as valuable, a price which could be sustained only by its higher productivity. [19] Marxist historians have focussed on enclosure as a part of the class conflict that eventually eliminated the English peasantry and saw the emergence of the bourgeoisie. From this viewpoint, the English Civil War provided the basis for a major acceleration of enclosures. The parliamentary leaders supported the rights of landlords vis-a-vis the King, whose Star Chamber court, abolished in 1641, had provided the primary legal brake on the enclosure process. By dealing an ultimately crippling blow to the monarchy (which, even after the Restoration, no longer posed a significant challenge to enclosures) the Civil War paved the way for the eventual rise to power in the 18th century of what has been called a "committee of Landlords",[20] a prelude to the UK's parliamentary system. The economics of enclosures also changed. Whereas earlier land had been enclosed in order to make it available for sheep farming, by 1650 the steep rise in wool prices had come to an end.[21] Thereafter, the focus shifted to implementation of new agricultural techniques, including fertilizer, new crops, and crop rotation, all of which greatly increased the profitability of largescale farms.[22] The enclosure movement probably peaked from 1760 to 1832; by the latter date it had essentially completed the destruction of the medieval peasant community.[23] Before enclosure, much of the arable land in the central region of England was organised into an open field system. Enclosure was not simply the fencing of existing holdings, but led to fundamental changes in agricultural practice. Scattered holdings of strips in the common field were consolidated to create individual farms that could be managed independently of other holdings. Prior to enclosure, rights to use the land were shared between land owners and villagers (commoners). For example, commoners would have the right (common right) to graze their livestock when crops

or hay were not being grown, and on common pasture land. The land in a manor under this system would consist of

Two or three very large common arable fields Several very large common haymeadows Closes, small areas of enclosed private land such as paddocks, orchards or gardens, mostly near houses In some cases, a park around the principal house, the manor house Common waste rough pasture land (effectively everything not in the previous categories)

Note that at this time "field" meant only the unenclosed and open arable land most of what would now be called "fields" would then have been called "closes". The only boundaries would be those separating the various types of land, and around the closes. In each of the two waves of enclosure, two different processes were used. One was the division of the large open fields and meadows into privately controlled plots of land, usually hedged and known at the time as severals. In the course of enclosure, the large fields and meadows were divided and common access restricted. Most openfield manors in England were enclosed in this manner, with the notable exception of Laxton, Nottinghamshire and parts of the Isle of Axholme in North Lincolnshire. The history of enclosure in England is different from region to region.[24] Not all areas of England had open-field farming in the medieval period. Parts of south-east England (notably parts of Essex and Kent) retained a pre-Roman system of farming in small enclosed fields. Similarly in much of west and north-west England, fields were either never open, or were enclosed early. The primary area of open field management was in the lowland areas of England in a broad band from Yorkshire and Lincolnshire diagonally across England to the south, taking in parts of Norfolk and Suffolk, Cambridgeshire, large areas of the Midlands, and most of south central England. These areas were most affected by the first type of enclosure, particularly in the more densely settled areas where grazing was scarce and farmers relied on open field grazing after the harvest and on the fallow to support their animals. The second form of enclosure affected those areas, such as the north, the far southwest, and some other regions such as the East Anglian Fens, and the Weald, where grazing had been plentiful on otherwise marginal lands, such as marshes and moors. Access to these common resources had been an essential part of the economic life in these strongly pastoral regions, and in the Fens, large riots broke out in the seventeenth century, when attempts to drain the peat and silt marshes were combined with proposals to partially enclose them. Both economic and social factors drove the enclosure movement. In particular, the demand for land in the seventeenth century, increasing regional specialisation, engrossment in landholding and a shift in beliefs regarding the importance of "common wealth" (usually implying common livelihoods) as opposed to the "public good" (the wealth of the nation or the GDP) all laid the groundwork for a shift of support among elites to favour enclosure. Enclosures were conducted by agreement among the landholders (not necessarily the tenants) throughout the seventeenth century; enclosure by Parliamentary Act began in the eighteenth century. Enclosed

lands normally could demand higher rents than unenclosed, and thus landlords had an economic stake in enclosure, even if they did not intend to farm the land directly. While many villagers received plots in the newly enclosed manor, for small landholders this compensation was not always enough to offset the costs of enclosure and fencing. Many historians believe that enclosure was an important factor in the reduction of small landholders in England, as compared to the Continent, though others believe that this process had already begun from the seventeenth and eighteenth centuries. Enclosure faced a great deal of popular resistance because of its effects on the household economies of smallholders and landless labourers. Common rights had included not just the right of cattle or sheep grazing, but also the grazing of geese, foraging for pigs, gleaning, berrying, and fuel gathering. During the period of parliamentary enclosure, employment in agriculture did not fall, but failed to keep pace with the growing population.[25] Consequently large numbers of people left rural areas to move into the cities where they became labourers in the Industrial Revolution. By the end of the 19th century the process of enclosure was largely complete, in most areas just leaving a few pasture commons and village greens, and the foreshore below the high-tide mark. Many landowners became rich through the enclosure of the commons, while many ordinary folk had a centuries-old right taken away. Land enclosure has been condemned as a gigantic swindle on the part of large landowners. In 1770 Oliver Goldsmith wrote The Deserted Village, deploring rural depopulation. An anonymous protest poem from the 17th century summed up the anti-enclosure feeling, and has been repeated in many variants since, even being applied to the contemporary privatization of the Internet:[26] The law locks up the man or woman Who steals the But lets the greater felon loose goose from off the common

Who steals the common from off the goose Anon,[27] George Orwell wrote in 1944 Stop to consider how the so-called owners of the land got hold of it. They simply seized it by force, afterwards hiring lawyers to provide them with title-deeds. In the case of the enclosure of the common lands, which was going on from about 1600 to 1850, the land-grabbers did not even have the excuse of being foreign conquerors; they were quite frankly taking the heritage of their own countrymen, upon no sort of pretext except that they had the power to do so. George Orwell, As I Please, Tribune, 18 August 1944[28] In April 1772, a paper signed "near Dorchester," was addressed to the King (the newspapers taking notice of His Majesty's desire to see the price of provisions lowered), to lay before him the evils of forestalling and engrossing. As examples of

engrossing in the neighbourhood of Dorchester, the writer instances the manors of Came, Whitcomb, Muncton, and Bockhampton. The first, he says, about thirty years before, had many inhabitants, many holding leasehold estates under the lord of the manor for three lives. Some of these had estates of 15l., 20l., and 30l. a year, being for the most part careful, industrious people, obliged to be careful to keep a little cash in order to keep the estate in the family if a life should drop. Their corn was brought to market, and they were content with the market price. Their cattle were sold in the same manner. Their children when of proper age were married, and children begotten, without fear of poverty. But the lord had since turned out all the people, and the whole place was in his own hands, while not half the quantity of corn was sown that formerly had been. The writer also gives an account how one Wm. Taunton, though only a tenant of the Dean and Chapter of Exon, was gradually getting the whole parish into his own hands. He says, comparing his own with past times, that formerly a farmer that occupied 100l. a year was thought a tolerable one, and he that occupied four or five hundred pounds a very great one indeed ; but now they had farmers that occupied from one thousand to two thousand per annum, who did not want money to pay their rent, as did the little farmers, who were obliged to sell their corn, &c. The writer gives it as the general opinion that the kingdom had become greatly depopulated, some averring the population to have decreased by a fourth within the preceding hundred years. He further says : " Your Majesty must put a stop to inclosures, or oblige ye lord of ye manor to keep up ye antient custom of it, and not suffer him to buy his tenant's interest ; to have all the houses pulled down, and ye whole parish turn'd into a farm : this is a fashionable practice, and by none more yn Jn Damer, Esq., ye owner of Came, and his brother Lord Milton."[29]

Contemporary movements against enclosure

Abahlali baseMjondolo in South Africa The Bhumi Uchhed Pratirodh Committee in India The Zapatista Army of National Liberation in Mexico Fanmi Lavalas in Haiti The Homeless Workers' Movement in Brazil The Landless Peoples Movement in South Africa The Landless Workers' Movement in Brazil Movement for Justice in el Barrio in the United States of America Narmada Bachao Andolan in India The Western Cape Anti-Eviction Campaign in South Africa

1. ^ "Enclosure" is the modern spelling, while "inclosure" is an older spelling still used in the United Kingdom in legal documents and place names. 2. ^ Thompson 1991, p. 217. 3. ^ Thompson 1991, p. 237. 4. ^ A comparison of the English historical enclosures with the (much later) German 19th century Landflucht. Engels, Friedrich (1882.). Die Mark. Die Entwicklung des Sozialismus von der Utopie zur Wissenschaft. Hottingen

(Zurich). Marx, Karl; Engels, Friedrich. Werke (1973 reprint of 196t 1st ed.). Berlin: Karl Dietz. 5. ^ Chambers & Mingay 1982, p. 104. 6. ^ Armstrong 1981, p. 79. 7. ^ Hey 2008, pp. 177-240. 8. ^ Hammond & Hammond 1912, pp. 45. 9. ^ Beresford 1998, p. 28. 10. ^ Holeton, David R. "Fynes Moryson's Itinerary: A Sixteenth Century English Traveller's Observations on Bohemia, its Reformation, and its Liturgy.". The Bohemian Reformation and Religious Practice. Prague. pp. 379410. Retrieved 4 March 2012. 11. ^ Beresford 1998, pp. 102 et seq. 12. ^ Thirsk 1958, p. 9. 13. ^ Monbiot, George (22 February 1995). "A Land Reform Manifesto". The Guardian. Retrieved 4 Mardh 2012. 14. ^ a b McCloskey 1975, pp. 146. 15. ^ McCloskey 1975, pp. 149-50. 16. ^ McCloskey 1975, pp. 128-133. 17. ^ McCloskey 1975, pp. 147. 18. ^ McCloskey 1975, pp. 142-144. 19. ^ McCloskey 1975, pp. 156. 20. ^ Moore 1966, pp. 17, 1929. 21. ^ Moore 1966, p. 7. 22. ^ Moore 1966, p. 23. 23. ^ Moore 1966, pp. 2529. 24. ^ Thirsk 1958, p. 4. 25. ^ Chambers & Mingay 1982, p. 99. 26. ^ Bastick, Zach (2012). "Our Internet and Freedom of Speech Hobbled by History: Introducing Plural Control Structures Needed to Redress a Decade of Linear Policy". European Commission: European Journal of ePractice. Policy lessons from a decade of eGovernment, eHealth & eInclusion (15): 97111. 27. ^ "The Goose and the Commons". Retrieved 4 March 2012. 28. ^ Orwell, George (18 August 1944). "On the Origins of Property in Land". Retrieved 4 March 2012. 29. ^ Watt, Robert, ed. (1772). A letter to a Member of Parliament on the present High Price of P.s. "Bibliotheca Britannica". Calendar of Home Office Papers, 17701772 (Google Books). p. 479. Retrieved 4 March 2012.


Armstrong, W A (1981). "The Influence of Demographic Factors on the Position of the Agricultural Labourer in England and Wales, c.17501914". in "Agricultural History Review."". The Agricultural History Review 29 (British Agricultural History Society). pp. 7182. Beresford, Maurice (1998). The Lost Villages of England (Revised ed.). Sutton. Chambers, J. D.; Mingay, G. E. (1982). The Agricultural Revolution 1750 1850 (Reprinted ed.). Batsford.

Court, W. H. B. (1954). A Concise Economic History of Britain. Cambridge University Press. Hammond, J. L.; Hammond, Barbara (1912). The Village Labourer 1760 1832. London: Longman. ASIN B000876AAE. Hey, David; John L. Halstead , R. W. Hoyle , Brian M. Short (2008). David Hey, ed. Themes in The Oxford Companion to Family and Local History. Oxford: Oxford University Press. ISBN 0-199-53298-2. Johnson, Arthur H. (1909). The Disappearance of the Small Landowner. Oxford: Clarendon Press. Kropotkin, Peter (1902). "7. Mutual aid amongst ourselves". Mutual Aid: A Factor of Evolution. Retrieved 4 March 2012. Lindley, Keith (1982). Fenland Riots and the English Revolution. McCloskey, Donald. (1975) The Economics of Enclosure. [1] Moore, Barrington (1966). Social Origins of Dictatorship and Democracy: Lord and Peasant in the Making of the Modern World. Boston, Massachusetts: Beacon Press. Neeson, J. M. (1993). Commoners: Common Right, Enclosure and Social Change in England, 17001820. Cambridge University Press. ISBN 0-52156774-2. Polanyi, Karl (1944). The Great Transformation. Shaw-Taylor, Leigh (2001). "Parliamentary Enclosure and the Emergence of an English Agricultural Proletariat". Journal of Economic History. Thirsk, Joan (1958, reprinted numerously since). Tudor Enclosures. The Historical Association. Thompson, E. P. (1991). The Making of the English Working Class. Penguin.

Further reading

Beckett, J. V. (1991). "The Disappearance of the Cottager and the Squatter from the English Countryside: The Hammonds Revisited.". In Holderness, B. A.; Turner, Michael. Land, Labour and Agriculture, 1700 1920. London: Hambledon Press. Dahlman, Carl J (1980). The Open Field System and Beyond: A Property Rights Analysis of an Economic Institution. Cambridge University Press. Everitt, Alan (2000). "Common Land". In Thirsk, Joan. The English Rural Landscape. Oxford University Press. Gonner, E. C. K (1966). Common Land and Inclosure. New York: A. M. Kelley. Humphries, J. (1990). "Enclosures, commons rights, and women.". Journal of Economic History 50: 1742. Unknown parameter |iisue= ignored (help) Thirsk, Joan (29 December 1964). "The Common Fields". Past and Present. pp. 3 25.