8 - Rethinking Degeneration in Co-op Theory

Summary

The NUM co-op development experience took place in a specific historical context and was not without flaws or contradictions – many of which the previous chapters have laid bare. At one level, this limits the extent to which lessons from this experience can be generalised. Yet a number of the approaches taken were reproduced, particularly in the state-led co-op development strategies that followed in the postapartheid period.

In particular, co-ops were promoted as a strategy for job creation in poor and economically marginal areas of the country, with the job creation imperative driving ‘number of jobs created’ as the lead indicator of success (and the main criterion for funding). This in turn led to a pattern in which co-ops were established with an oversupply of labour relative to their productive base or to the absorptive capacity of their target markets, with decisions on what to produce often based on familiarity with a given product as a consumer rather than on prior experience of production or on any meaningful assessment of business viability. Membership was often based on externally driven selection processes rather than on self-selection or on the skills or experience required in the enterprise. The combined effect of these conditions set such co-ops up for failure, exacerbating all other challenges to viability, with ‘the melancholy uniformity’ of co-op collapse witnessed by Beatrice and Sydney Webb in the early 1900s evident – despite the significant effort and commitment often invested by members.

The reasons why worker co-ops might fail – particularly in the kinds of circumstances described – are not a great mystery. Surviving in competitive markets is challenging for any enterprise: all the more so when the process also involves reconfiguring internal relations of ownership and control – without much support or guidance.

Far less clear, however, is why worker co-ops that manage to surmount these considerable obstacles and to succeed should be at any risk of degenerating: with such degeneration posing a different kind of threat to the idea of co-ops as an alternative form of economic organisation.