Camila Piñeiro Harnecker: Cooperatives and socialism in Cuba

At the end of the text you'll find the footnotes and table of contents, translated from the Spanish – Marce Cameron, editor Cuba's Socialist Renewal

[For more analysis and discussion on the economic reforms in Cuba, and assessments of the sixth congress of the Communist Party of Cuba, click HERE.] 

Preface to Cooperatives and socialism: A Cuban perspective (extract)

This book arises from the urgent need for us to make a modest contribution to the healthy “birth” of the new Cuban cooperativism and its subsequent spread. Given that cooperatives are foreshadowed as one of the organisational forms of labour in the non-state sector in the Draft Economic and Social Policy Guidelines of the Sixth Cuban Communist Party Congress, the Dr. Martin Luther King Memorial Centre approached me to compile this book. The Centre has made an outstanding contribution to popular education aimed at nurturing and strengthening the emancipatory ethical values, critical thinking, political skills and organisational abilities indispensable for the conscious and effective participation of social subjects. The Centre considers it timely and necessary to support efforts to raise awareness about a type of self-managed economic entity whose principles, basic characteristics and potentialities are unknown in Cuba. There is every indication that such self-managed entities could play a significant role in our new economic model.

For this to happen we must grapple with the question at the heart of this compilation: Is the production cooperative an appropriate form of the organisation of labour for a society committed to building socialism? There is no doubt that this question cannot be answered in a simplistic or absolute fashion. Our aim here is to take only a first step towards answering this question from a Cuban perspective in these times of change and rethinking, guided by the anxieties and hopes that many Cubans have about our future.

When it is proposed that the production cooperative be one – though not the only – form of enterprise in Cuba, three concerns above all are frequently encountered: some consider it too “utopian” and therefore inefficient; others, on the basis of the cooperatives that have existed in Cuba, suspect that they will not have sufficient autonomy[1] or that they will be “too much like state enterprises”; while others still, accustomed to the control over enterprise activities exercised by a state that intervenes directly and excessively in enterprise management, reject cooperativism as too autonomous and therefore a “seed of capitalism”. This book tries to take account of all these concerns, though there is no doubt that more space would be required to address them adequately.

The first concern is addressed to some extent with the data provided in the first part of the book regarding the existence and economic activity of cooperatives worldwide today. This shows that the cooperative is not an unachievable fantasy that disregards the objective and subjective requirements of viable economic activity. Thus, the experiences of cooperatives in the Basque Country, Uruguay, Brazil, Argentina and Venezuela that are summarised in the third part of the book demonstrate that cooperatives can be more efficient than capitalist enterprises, even on the basis of the hegemonic capitalist conception of efficiency that ignores externalities, i.e. the impact of any enterprise activity on third parties.

The efficiency of cooperatives is greater still if we take into consideration all of the positive outcomes inherent in their management model, which can be summarised as the full human development[2] of its members and, potentially, of local communities. The democratic abilities and attitudes that cooperative members develop through their participation in its management can be utilised in other social spaces and organisations. Moreover, genuine cooperatives free us from some of the worst of the negative externalities (dismissals, environmental contamination, loss of ethical values) generated by enterprises oriented towards profit maximisation rather than the satisfaction of the needs of their workers.

It’s not possible to take up here the arguments of enterprise administration theorists who hold that cooperatives are inefficient. These criticisms are based, in general, on the fact that democratic decision-making takes time, ignoring the fact that this participation is also the principal source of the advantages of cooperatives over other, non-democratic enterprises. In addition, they condemn cooperatives for not resorting to dismissals, as well as for a supposed tendency to undertake little investment due to the maximisation of member incomes and their aversion to risk. However, such behaviour is not revealed in the practices of the cooperatives analysed in this book, practices which also demonstrate the advantages of democratically managed enterprises in terms of the positive motivation of cooperative members. While the negative incentive of the fear of dismissal is undoubtedly effective in eliciting certain behaviours, not even this is sufficient. The tendency of capitalist enterprises to incorporate methods of democratic management suggests that they understand that participation in decision-making is needed in order to achieve the levels of worker motivation necessary for competitive success in the capitalist market.

We hope that those who, on the basis of the Cuban experience, doubt that it is possible for a cooperative to be truly autonomous and democratic will find this concern adequately addressed in the first part of the compilation. Here, when we explain what a cooperative is, we point to the basic differences between a cooperative and a socialist state enterprise. In a genuine cooperative, the participation of the cooperative members in management does not depend on the enterprise management council deciding to involve them more in decision-making; such participation is a founding principle, concretised in the rights of members established in the internal rules of functioning and exercised through bodies and decision-making procedures that are drawn up and approved by the cooperative members themselves. Although the degree of autonomy of the new Cuban cooperatives will depend, of course, on the content of the anticipated legislation on cooperatives and on the implementation of the regulations it establishes, the Draft Economic and Social Policy Guidelines seem to indicate that they will be granted the powers of self-management that characterise cooperatives everywhere, and without which democratic self-management is impossible. We hope the legislation resolves the deficiencies of the current legal framework for Cuban agricultural cooperatives, which are analysed in the fourth part of this book.

The third concern, that which gives rise to the inclination to reject the cooperative as an option for socialist enterprise organisation because it is considered too autonomous and therefore incompatible with broader social interests, takes up the most space in this book. Beginning with the first essay in the compilation we attempt to demonstrate that genuine cooperatives function according to a logic that is diametrically opposed to that of capitalist enterprises. Instead of profit maximisation for the shareholders, the driving force of cooperatives is the satisfaction of the human development needs of their members, needs which are inevitably bound up with those of local communities and of the nation, and even of humanity as a whole. Throughout the book it is suggested that while it’s true that cooperatives cannot be incorporated into the national economic plan or regional or local development strategies though mechanisms of coercion or imposition, it is possible to harmonise and coordinate the orientation of their activities towards the fulfilment of social needs identified through the planning processes, above all if the latter are democratic and respond to the interests of the surrounding communities or those to which cooperative members belong.

However, to argue for the relevance of cooperatives as part of a socialist project we need to begin by clarifying what we mean when we refer to these socioeconomic entities. In the first part of this book, Jesus Cruz[3] and I try to define the cooperative as simply as possible. Here, it is important to stress that in the international context, cooperatives carry out a great diversity of economic activities, and that a not insignificant part of the global population either belongs to one of these organisations or directly benefits from their activities. This should not be surprising if we consider that the form of the organisation of labour that characterises a cooperative, self-management, has existed since the emergence of humanity. The cooperative has persisted as the most common organisational form chosen by groups of people that seek to resolve common problems through their own efforts.

What differentiates a production cooperative (referred to hereafter as “cooperative” since we emphasise this type[4]) from other forms of enterprise organisation is emphasised, based on an analysis of the cooperative principles[5] that have contributed to the success of these organisations since the emergence of the first modern cooperatives. These early modern cooperatives understood the imperative of achieving an effective enterprise management that would allow them to survive within the more savage and monopolistic capitalism of the late 18th and early 19th centuries. To the degree to which cooperatives have observed these principles in their daily practice, they have benefited from the intrinsic advantages of this form of enterprise. These advantages ultimately derive from a democratic management model that permits the harmonisation of individual interests with those of the collective (i.e. of the common interests of cooperative members) and even, though in a less axiomatic way, with the social interests of the local communities with which they interact the most.

The observance of these principles is also what allows cooperatives to reduce the inevitable corrupting effects of the capitalist surroundings in which the majority of them have developed. The capitalist environment privileges individual over collective solutions; makes it difficult to achieve equality by generating and reproducing differences in abilities and social status among cooperative members; denies them the time needed for democratic decision-making; punishes genuine acts of solidarity; and promotes the super-exploitation of human beings and nature. While this undoubtedly limits the horizon of human emancipation – the overcoming of the barriers that stand in the way of us fulfilling our human potentialities – an emancipatory dynamic has always been latent in genuine cooperatives. The capitalist environment is not an absolute barrier to cooperatives becoming spaces in which these principles are put into practice, and in which the values that such practices instill may develop. The experiences of successful cooperatives presented in this book demonstrate the economic and ethical-political potential of these organisational principals, above all when cooperatives that embody these principles are able to link up with other self-managed entities, and when they promote the approval of laws and regulations that undermine the prejudices that exist regarding cooperatives in the legal framework and in the practices of capitalist enterprises and state institutions.

As Julio Gambina and Gabriela Roffinelli argue, the cooperative should be seen as one of the many forms of the self-managed social organisation[6] that will allow us to transcend the capitalist logic of maximising narrow individual interests. Because it takes no account of human nature and its social and ecological constraints, such economic “rationality” is in fact irrational and suicidal. For as long as it pervades our daily practice, the logic of capitalism will not only distance us ever more from the socialist or communist ideal of complete social justice; it is also taking us to the brink of an irreversible rupture in the dynamic equilibrium of the biosphere.

The rationality that drives a cooperative, as with all forms of genuine self-management, is the necessity for a group of people to satisfy common needs and interests. It is based on the recognition that they share collective interests that correspond to some degree with their own individual interests, and that it is collective action that allows them to pursue these interests most effectively. This, together with the recognition that all its members are human beings with the equal right to participate in decision-making, results in democratic management in which the cooperative members decide not only who the leaders are and how revenues should be allocated, but also how to organise the process of production: what is produced, how and for whom.

The managerial autonomy of the collective that makes up the cooperative – the ability of this group of people to make decisions independently – is the key reason why the historical experiences of socialist construction have rejected their relevance to the building of socialism and have relegated them to agriculture or marginal economic spaces. Some see in autonomy a disconnection from, or a wanting to have nothing to do with, social interests and the strategic objectives embodied in the socialist economic plan, and ask the following questions: Is it possible to “hitch” an autonomous enterprise to a planned economy? Can a cooperative respond not only to the interests of its members but also to wider social interests? When one thinks in terms of absolute autonomy and authoritarian (i.e. undemocratic) planning, if the interests of collectives (groups) are considered a priori to be indifferent to social interests, then the answer is obviously negative. The authors of this book are motivated by the certainty that the answer is affirmative. We argue the case here, though we are unable to respond to all of the questions about how this can be achieved in practice.

Here, we must point out that we make no claim to have solved this practical problem which dates back to the times in which socialist theories were first elaborated. It is perhaps more of a conceptual problem than a practical one, since there are examples of collective and even private enterprises that satisfy social needs more effectively, and that have established decentralised horizontal relations that are more socially responsible, than some socialist state enterprises. Our focus here is on the form of organisation of labour within a productive unit and not in the economic system as a whole. The analysis of how a socialist-oriented society should guide the management of enterprises, or of the form in which the fruits of cooperative labour should be distributed in society, are thus topics that we do not attempt to grapple with in this initial approach to the problem. However, we do put forward some ideas in relation to these themes throughout the book.

\The “fruits” of cooperative labour that interest us most here are the human beings themselves that are “produced” as a consequence of the particular form in which the productive process is organised in the enterprise: the social subjects that work together as members of a cooperative and who are motivated to give the best of themselves to the success of their enterprise and, potentially, to local communities.

What differentiates a cooperative member from an employee of either a capitalist or socialist state enterprise? In light of the experiences of cooperatives analysed in this compilation, the member of a genuine producer cooperative, or other form of self-managed entity, is the true owner of their enterprise and thus feels like it. He or she, together with the collective they belong to, participate in a conscious and active way in strategic and managerial decision-making, as well as in their implementation and in verifying that decisions are carried out. What characterises a cooperative is not legal ownership of the means of production (premises, land, machinery) by the collective or group of people that comprise it, but the fact that decisions regarding the use of means of production are made by the cooperative as a whole, either directly or by representatives that they elect, in such a way and with such powers as decided by the collective. Albeit limited to the cooperative enterprise and its activity, this is a concrete form of self-management, of the exercise of popular sovereignty.

Given this, for Gambina and Roffinelli the relevance of various forms of worker self-management, in particular cooperatives, to the building of socialism depends on the degree to which they serve as an “an apprenticeship in administration outside the control of capital”. Thus the value of the cooperative lies in the nature of its daily practice, in the social relations of production that are established among its members: relations between associated producers rather than between wage-workers and capitalists. Cooperative members are not obliged to renounce, in exchange for wages or salaries, their capacity to think, be creative and make decisions. They exercise these capacities via democratic mechanisms in conditions of equal rights and duties. There are no bosses and subordinates in a cooperative but an organisational structure and a technical division of labour that have been collectively drawn up and approved.

Thus cooperatives can be valuable weapons in the struggle to build socialism. They are not the only such weapons, they are insufficient by themselves and are not devoid of risks and challenges, but they are nevertheless tools – perfectible and adaptable – for socialist construction. They are tools that we should not allow to be abandoned due to either state-centric dogma or the misconception that only what is privately owned and managed, and operates according to capitalist logic, works. As Gambina and Roffinelli argue, “... there is a dialectical relationship between socialism and cooperativism that is either promoted or discouraged in specific socio-historical conditions.” The extent to which cooperatives contribute to the building of socialism depends on the context in which they arise and develop, and on the relationship they establish with this context. 

Footnotes 

[1] By “autonomy” we mean the ability to make decisions independently. As we shall see, no social organisation anywhere in the world is completely autonomous since its options are always conditioned in one way or another by its social context.

[2] The term full or integral “human development” is used to make clear our rejection of the progressivist and economistic mythology that reduces development to achieving an abundance of material goods, without taking into account that development also has intrinsic ethical and spiritual dimensions, in which people can achieve professional fulfilment and the realisation of their potentialities as social beings.

[3] A brief biography of each of the contributors to this compilation is included at the end of the book.

[4] Cooperatives can be classified as either production cooperatives, in which cooperative members unite in order to collectively produce goods or provide services; or consumer cooperatives, in which the members acquire goods or services collectively.

[5] Essentially, as is clarified in the first contribution to this compilation, a cooperative must be: (1) open to members joining and leaving and flexible with regard to its internal organisation; (2) run democratically; (3) based on the labour of its members; (4) managerially autonomous; (5) prioritise the education and training of its members and the general public; (6) establish mechanisms for cooperation with other cooperatives; and (7) committed to the community.

[6] Other forms of enterprise self-management are the various forms of co-management (in which the work collective participates in the management of the enterprise together with the legal owners of the means of production, or owns shares in the company); professional partnerships (professional associations in which members provide services on an individual basis, but pool a part of their incomes to acquire services and goods collectively; they are usually limited liability companies); associations, etc. There are also forms of self-management outside the economic enterprise sphere, such as self-management in regions, communities and local governments.

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Cooperatives and Socialism: A Cuban Perspective

Compiled and edited by Camila Piñeiro Harnecker

Editorial Caminos, La Habana, 2011, 420 pp.

ISBN: 978-959-303-033-5