In the minds of many workers the co-operative movement is regarded as being in some way linked up with socialism. The theorists of the original co-operative movement saw it as a movement that would eventually outcompete and replace ordinary capitalist businesses, leading to the coming of “the Co-operative Commonwealth” (which was an alternative name for socialism). They would constitute, as it were, little oases in the desert of capitalism. They anticipated that the movement would grown until finally the workers would have achieved their emancipation. Essentially society was to be transformed by means of experimental communities. Each community would own its own means and instruments of production and each member of a community would work to produce what had been agreed was needed and in return would be issued with a note certifying for how many hours he had worked; he could then use this note to obtain from the community's stock of consumer goods any product or products which had taken the same number of hours to produce. (G.D.H. Cole was another who wrote on what he called “Guild Socialism”. Although Cole’s blueprint did provide for close links between consumers and producers which could be interpreted as “production directly for use”, it still envisaged the continuation of finance, prices and incomes. And it was to come into being through the guilds eventually outcompeting capitalist industries in the marketplace)
We know what happened. This was because they had to compete with ordinary capitalist businesses on the same terms as them and so were subject to the same competitive pressures, to keep costs down and to to maximise the difference between sales revenue and costs (called “profits” in ordinary businesses, but “surplus” by the co-op). The co-operative movement was outcompeted and is now trying to survive on the margin as a niche for “ethical” consumers and savers, leaving the great bulk of production, distribution and banking in the hands of ordinary profit-seeking businesses. Co-operativism did not provide a real solution to the workers' situation. It was incapable of providing an answer in the interests of all workers. At no time did it question the capitalist production relationships - it questions only superficial features (monopolies, competition, etc.). The co-operative movement cannot solve the basic economic problems of the workers as a whole, or even of the co- operative societies' own members. Where it was a success it was merely the success of essentially capitalist undertakings.
Co-operatives can only ever involve a minority of workers, and the more they are integrated into the capitalist economy and its profit- seeking, the more their members will have to discipline and pressurise themselves in the way the old bosses did - what is known as "self-managed exploitation". The fact is that there is no way out for workers within the capitalist system. At most co-operatives can only make their situation a little less unbearable.
Owen believed that his co-operative commonwealth could begin to be introduced under capitalism and in the first half of the 1830s some of his followers established "labour bazaars" on a similar principle: workers brought the products of their labour to the bazaar and received in exchange a labour-note which entitled them to take from the bazaar any item or items which had taken the same time to produce, after taking into account the costs of the raw materials. These bazaars were failures but the idea of labour-time vouchers (or "labour-money") appeared in substantially similar forms in France with Proudhon and in Germany with Rodbertus and is one source of currency crank theories.
They were not money at all, but merely a method of sharing out consumer goods. As Marx said of the Owenites' plan for a co-operative commonwealth: Owen's "labour-money", for instance, is no more "money" than a ticket for the theatre. Owen presupposes directly associated labour, a form of production that is entirely inconsistent with the production of commodities. The certificate of labour is merely evidence of the part taken by the individual in the common labour, and of his right to a certain portion of the common produce destined for consumption. Engels says much the same in his comments in Anti-Duhring on Owen's labour-notes.
Writing in 1875 Marx had to concede that, in the early stages, consumption would have to be rationed and he suggested this be done by means of labour-time vouchers, but specifically said that these would no more be money than a theatre ticket was, but eventually all goods and services would be free for everybody to take according to need. Today, nearly a hundred years later, this stage could be reached very rapidly once socialism/communism had been established. In one of his criticisms of the Gotha Programme which was adopted by the German Social Democrats in 1875 when the followers of Lasalle united with the group with which Marx and Engels had been working. In the course of this criticism Marx made his well-known statement about labour-time vouchers in socialism ("not as it has developed on its own foundations, but ... just as it emerges from capitalist society"):
"The individual producer ... receives a certificate from society that he has furnished such and such an amount of labour (after deducting his labour for the common funds), and with this certificate he draws from the social stock of means of consumption as much as costs the same amount of labour. The same amount of labour which he has given to society in one form he receives back in another."
Supporters of state capitalism have used this passage to try to show that Marx thought that money could exist in socialism. This is so much nonsense since elsewhere Marx specifically stated that labour-time vouchers were not money:
"The producers may ... receive paper vouchers entitling them to withdraw from the social supplies of consumer goods a quantity corresponding to their labour-time. These vouchers are not money. They do not circulate."
Marx nowhere states that labour-time vouchers were the only method of distributing wealth in socialism; they were only one possible method. The actual method adopted would depend on the circumstances . Alternatives were suggested, as for instance by Edward Bellamy in his Looking Backwards written in 1887 who wanted everybody in socialism to be issued with a credit card entitling them to obtain an equal amount of consumer goods. In any event, later on in his criticism of the Gotha Programme Marx made it quite clear that if labour-time vouchers were used in Socialism this would be a temporary measure imposed by the comparatively low level of technology. In time, he saw, when the "springs of co-operative wealth flow more abundantly" Socialist society could abandon labour-time vouchers (or whatever) and go over to "from each according to his ability, to each according to his needs", that is, to free access to consumer goods.
In 1875 the then existing level of technology might well have meant that many consumer goods would unavoidably be available only in limited quantities for some years after the establishment of Socialism. But in the hundred years since, technical progress has made it possible for the springs of co-operative wealth to flow more abundantly than Marx could have foreseen so that free distribution-to each according to his needs-can be implemented almost immediately after Socialism has been established. Potential abundance has made the idea of labour-time vouchers quite outdated. For Marx there was no "must" about labour-time vouchers (and so more or less "equivalent exchange"); they were just one possible way of allocating consumer goods before free access could be introduced.
The 60/70s group Solidarity advocated a self-managed market economy blueprint published as Workers Councils and the Economics of A Self-Managed Society, a long article originally written in 1957 by Cornelius Castoriadis . This pamphlet painted a picture of factories and other workplaces being controlled by elected Workers Councils in the context of the continuation of the money-wages-profits system. Thus, in a given factory, the workers would elect a Council which would decide on the level of wages, the price of the product, the amount of profits to be re-invested, etc. This was Solidarity's conception of "socialism"; which would never work - either because if the working class had reached the degree of consciousness needed to establish it then they would establish real socialism instead or, if they hadn't, then it would degenerate into some kind of state capitalism. It was the completely impractical idea of direct workers' control of a capitalist economy. They put all the emphasis on "democratic control" or, as they put it, "self-management", and believed that this could be achieved without ending the money-wages-profits system which is the essence of capitalism. Socialism is not just concerned with emancipating workers as workers (i.e. wealth-producers) but as human beings (i.e. as men and women). Socialism aims not to establish "workers power" but the abolition of all classes including the working class. It is thus misleading to speak of socialism as workers ownership and control of production. In socialist society there would simply be people, free and equal men and women forming a classless community. So it would be more accurate to define socialism/communism in terms of the common ownership and democratic control of the means of production by and in the interest of the whole people. "Workers council" would have been a misnomer since socialism, being a classless society, involves the disappearance of the working class just as much as of the capitalist class. "Democratic councils" would have been a more appropriate term. A society where the means of production belong to everybody and run by democratic councils, that's socialism.
As long as capitalism lasts workers will have to find a source of money one way or another and so will always be in a dependent and precarious position. A number of lessons can be drawn from the recuperated enterprises movement in Argentina in. Firstly, that built into capitalism is a class struggle between those who own the means of wealth production and those who don't and who are therefore forced by economic necessity to sell their ability to work to those who do. This class struggle is not just over the price and conditions of sale of the commodity workers are selling. Ultimately, it's about control over the means of production. If, as happened in Argentina after the economic melt-down of December 2001, capitalists abandon their factories or, as happened in Russia in 1917, Spain in 1936, and Hungary in 1956, the capitalist state is temporarily incapable of protecting capitalist property, then the workers more or less spontaneously take over their workplaces and keep production going. Workers are not going to let themselves starve: if the means of production are there, and there's no state to stop them using them, they'll go ahead and use them, even if they have no revolutionary pretensions. However, as soon as the state has re-gained its strength again, then it is in a position to confront the workers and re-instate its authority and re-impose property ownership laws to the means of production only on its terms. Which leads to the second lesson: the importance of who controls the state. At the moment, in Argentina as elsewhere, this is in the hands of people favourable to the continuation of capitalism, itself a reflection of the fact that most workers too don't see any alternative to capitalism. The state, therefore, upholds legal private property rights. The importance of political power is in fact fully recognised by the recuperated enterprises movement. This is why they are calling for the law on property rights to be changed so as to recognise the property rights of the workers cooperatives which are running recuperated enterprises; which will only happen if they can get the elected law- makers to do so, either by pressuring them from outside or by electing ones favourable to a change in the law.
The end of capitalism can only come as a result of a consciously socialist political movement winning control of political power with a view to abolishing all capitalist property rights and ushering in the common ownership and democratic control of the means of production. The preconditions for ending capitalism are a majority socialist consciousness and workers democratically self-organised in a large-scale socialist party. Neither of which, unfortunately, existed in Argentina. Which is why the recuperated enterprises movement there has proved a dead-end and why the workers cooperatives it gave rise to are now forced to compromise and integrate themselves into capitalism to survive.