Cooperative ownership: reconsidering a Social Gospel legacy.

My article will be divided into three parts. First, I will briefly set the context by discussing the economic situation of the United States after the Civil War. Second, I will discuss Washington Gladden's and Walter Rauschenbusch's views of the cooperative movement. Finally, I will describe two legacies left by them. To do so, I will briefly focus on the modern cooperative movement and Karl Marx's critique of the cooperative movement.

Economic Conditions After the Civil War

So that my words shall linger long in your mind and in your soul, I have decided to start with a sermon.

Listen as I quote from a sermon preached in the year 2000, yes the year 2000, by a certain Reverend Barton. Looking backward a century, he proclaimed:

   Moreover, it must not be forgotten that the nineteenth century was in name
   Christian, and the fact that the entire commercial and industrial frame of
   society was the embodiment of the anti-Christian spirit must have had some
   weight, though I admit it was strangely little, with the nominal followers
   of Jesus Christ.... It was the sincere belief of even the best of men at
   that epoch that the only stable elements in human nature, on which a social
   system could be safely founded, were its worst propensities. They had been
   taught ... that greed and self-seeking were all that held mankind together,
   and that all human associations would fall to pieces if anything were done
   to blunt the edge of these motives.... In a word, they believed ... the
   exact reverse of what seems to US self-evident ... that the antisocial
   qualities of men, and not their social qualities, were what furnished the
   cohesive force of society. (1)

And so goes the sermon of Reverend Barton who is the creation of Edward Bellamy in his hugely successful utopian novel, Looking Backward, published in 1888. Selling millions of copies, translated into twenty languages, and inspiring 165 "Bellamy Clubs" all over the United States, it tells the story of Julian West who went to sleep in 1887 and woke up in the year 2000 to a world cured of every social and economic ill known to the nineteenth century.

In the first fifty years after the Civil War, this country was regularly rocked by economic depressions and worker agitation. In the 1870s, the bedrock of America's industrial might, the iron and steel industries, was severely shaken. National railroad strikes in 1877, at their height, idled half of the freight on the nation's 75,000 miles of track. Over 100,000 workers went on strike and a thousand workers were sent to jail.

The 1880s marked an extraordinary expansion of capitalism, the collapse of the Knights of Labor, the agitation for the eight-hour day, and the rise of the American Federation of Labor. Almost half of the strikes between 1881 and 1886 were wildcat strikes--without official union approval or aid. (2) Between 1881 and 1894, more than four million workers were involved in over 14,000 strikes and other labor-management struggles. (3) Many workplaces were no more than battle sites between workers and capitalists. Pittsburgh--1877, Hay-market--1886, Couer d'Alene--1892, Homestead--1892, Pullman--1894, the great steel strikes of 1919--all this elevated the importance, for social Christians, of industrial peace achieved through cooperation. When Washington Gladden asked would it be peace or would it be war, the question was not merely rhetorical.

Two Views of the Cooperative Movement

Washington Gladden

Despite the economic chaos in Washington in Gladden's lifetime, he did not believe that a union strategy was the final answer for workers. He had deep suspicions about the wage system because there was no guarantee that workers would share in the wealth of production. He argued that cooperation is better than the wage system. Unions could effect positive change by turning back the abuses that prevailed under the wage system. But true social reform and solidarity would forever remain unattainable without looking beyond them. A system of cooperation would guarantee basic respect and dignity for the workers. Cooperation meant moving beyond the "heartless and extortionate" employers and "greedy and headstrong" employees. (4) Management and owners must not plunder the wealth of the workers. Workers must not presume that their labor is the sole cause of the wealth of the enterprise. (5) Both are to work together as "brothers" and partners in business. To continue with strikes, lockouts, blacklisting, and boycotting is like fighting against "the stars in their courses, against the Ruler of the universe." Such actions are wicked, absurd, unnatural and monstrous. (6)

Gladden did not believe that the principle of "cooperation" would spread quickly to the industrial work sites of this country. But he was optimistic that it would happen sometime, through a trial-and-error process. He believed that the best workers would, in time, succeed and own their own tools and machinery. They would enjoy the profits and the wages that come from hard work and intelligent investment.

True cooperation in the economy and the Christian principle of love can be connected with a central image of Christianity--the body of Christ. "For, let no one fail to see that co-operation is nothing more than the arrangement of the essential factors of industry according to the Christian rule, `We being many are one body in Christ, and every one members one of another.' It is capital and labor adjusting themselves to the form of Christianity." (7) The connection of the theme of cooperation with the image of the body is an important and recurring feature of Gladden's work.

The law of love must become a reality for the church and for all human relations throughout society. (8) The key to Gladden's view of industrial relationships is based on his belief in "the absolute unity of human interests." If we are truly "members one of another," it would be just as irrational for employers and employees to struggle with one another or fall into contention and controversy than if the right hand and left hand were to "fly at each other, and beat and bruise each other." (9)

The absolute unity of human interests precluded the possibility on moral grounds that a social class "rises up" if another social class should fall. In the end, such "rising up" is an illusion. While it may seem that one class is "rising up" at the expense of another class, if "one member of the social organism suffers all the other members must suffer with it." (10) This is the "corner-stone of Christian ethics, of Christian social science." (11) This claim was reinforced by stating that the law of the unity of human interests is "not true because Christ taught it; he taught it because it is true." Gladden's view of society is based on a careful equilibrium of altruism and egoism, a balancing of society and individual. This has important implications for his view of cooperation. The working class has the "moral and theological leverage" to argue that its depressed social and economic position can be blamed on employers and capitalists. Yet, revolutionary urges for overthrowing the ruling classes must be suppressed. Working class gains can not come about if capitalists lose out in power, prestige, or wealth. No matter who suffers, all will suffer. This is why Gladden was careful to suggest methods of working class uplift that at heart do not fundamentally alter the social order. Cooperation is the answer to a two-pronged challenge: How to promote change in society while preserving social order and avoiding suffering?

The transition from the wages system to a full cooperative system would have to go through an intermediate stage since, as Gladden claimed, "you cannot have co-operation till you can find men who can co-operate." (12) One way to achieve this goal was to introduce a system of "industrial partnerships" whereby workers would be given a share in the business. In addition to wages, workers would get a percentage of the profits of the company at the close of every year. Manufacturers would find this arrangement advantageous because it would produce more reliable workers, improved work, and the end to workplace strife. Wages that fluctuate with profits will guarantee peace. Labor is not a commodity. To think otherwise is to ignore the intelligence, honesty, and skill that go into any good work.

Certain forms of cooperative industry were already in operation. He conceded that industrial cooperation is "only a faint and partial application of the larger Christian principle." (13) Nonetheless, such experiments were steps in the right direction. Examples included Germany and its experience in cooperative banking, French successes in cooperative production, and England's tradition of cooperative distribution. He reserved his greatest praise for the English Rochdale Equitable Pioneers. "How great that success is few Americans know." (14)

Though Gladden thought highly of "pure cooperation," he argued that industrial partnerships or profit sharing would be safer and more profitable for workers in the long run. Industrial partnerships offer workers the training, energy, and experience that mature capitalists can provide. Workers must make the most of such experiences, save their earnings, and "train themselves and their children to studious, sober, industrious ways of living." If they do so, workers will hasten for themselves " `the development of the cooperative man,' and the coming of that kingdom of peaceful industry of which he will be the ruler." (15)

Gladden considered the work of cooperation to be an opportunity for Christian leadership. He urged workers to value the useful, though costly, coordinating function of management. Those who provide it deserve greater rewards. This is an eternal law and socialistic schemes that ignore it will only come to grief. In addition, workers must not imagine that industrial partnerships will cancel what naturally comes from ignorance, indolence, and improvidence. "A large share of the misfortunes of the working classes arise from these sources." (16) The workers' job, first of all, is the cultivation of candor, moderation, and sweet reasonableness.

Modern production is not individualistic. It is an act of the whole society. "We are members one of another, and we must think and act for the interest of all. That is the Christian way of thinking and acting, and when we all learn that way, we shall have reached the end of our centuries of strife, and have come to the beginning of the thousand years of peace." (17)

Walter Rauschenbusch

In the midst of Walter Rauschenbusch's eleven-year ministry in New York City, he embarked on his third trip to Europe. This voyage was singularly important for his thinking about cooperation and socialism. His first destination was England and this part of the journey provided an opportunity for him to observe firsthand the descriptions he had read of British socialism. (18) One example included Birmingham's "municipal socialism" which served as a model of the possibilities of cooperation at the city level. Such cooperation was "socialistic" in that it promoted public control over services formerly provided by private concerns. In Birmingham, this included control over water and gas systems, the renovation of housing, and the building of parks and libraries. (19) He never forgot his experience in Birmingham. In Philadelphia, in May of 1892, he addressed the Baptist Congress and argued that "if it is a question whether a street-car company should use electric or cable power, the Church has nothing to do with that; that is a question for civil engineers. But if it is a question whether the streetcar companies are to own Philadelphia, or Philadelphia to own the street cars, that is a question of righteousness." (20) Over a decade later in Rochester, New York, he was involved in bringing the power of the city government to bear on Rochester Gas and Electric to provide lower rates. He was also a "persistent thorn in the flesh" of the Rochester Railway Company for its repeated failure to improve service and safety. (21)

"Gas and water" socialism highlights his gradualist approach to social transformation and is central to understanding his conception of socialism and cooperation. Rauschenbusch was not a revolutionary. As a Fabian socialist, he was content with provisional gains toward a revolutionary end. Revolutionary means could be catastrophic. (22) In his essay, "The Ideals of the Social Reformers" (1896-97), he claimed: "For working purposes I am myself a socialist. We want more socialism than we have at present, anyway. (23) This was his way of registering a number of discordant notes with the existing socialist parties and their programs. He believed that there was a "real menace to individual liberty in the schemes of socialism." (24) He approved of socialist plans to ensure that "natural monopolies" (water, gas, electric light and power, surface roads) be publicly controlled (as in Birmingham). Beyond this "practical necessity," Rauschenbusch was deeply suspicious that socialists were planning to organize society like a "colossal machine."

Rauschenbusch's embrace of practical socialism was key to his support of cooperative strategies of economic reform. Dogmatic socialism foreclosed the possibility for such a strategy. The problem with the dogmatic socialists was that they believed reform measures were a palliative, a waste of time, and had nothing to do with bringing in a "true" socialist order. Dogmatic socialists, like Christian millenarians, believed that existing conditions were bad and that the worse things got, the better, since this will inevitably lead to the sudden appearance of a new order.

The gradualist vision of practical socialism was amplified in his book Christianizing the Social Order. In this sequel to Christianity and the Social Crisis, Rauschenbusch articulated a philosophy of social evolution that entailed three different and successive stages of economic order in modern life. The first stage was precapitalist, which, according to Rauschenbusch, was still followed by some farmers, mechanics, and small-business owners. The second stage was the present one--the capitalist order, still in "the flush of its strength." The third was that of the "collectivist" which is still immature. "But on all hands a new order is growing up, young, vigorous, and clamorous, eager to inherit the house and run it in its own way." (25) This third stage most clearly embodies "the characteristics of the Christian economic order." (26) Rauschenbusch did not undertake an extended study of the embryonic social organizations that belong to this third stage. He outlined four different examples that include modern cooperative associations, labor organizations, Henry George's single-tax movement, and "Socialism."

Rauschenbusch had great praise for the cooperative associations of his day. He was greatly impressed by the work of cooperators in Europe and felt that they had become an "economic and social fact of first-class importance" which had changed the economic and social character of nations like Belgium, Denmark, and Ireland. In the United States, he seemed to be aware of the farmers' grange. He described "purchasing associations to buy ... seeds, fertilizers, and agricultural implements for farmers; ... cooperative mills, bakeries, slaughterhouses, creameries, cheese factories, and grain elevators." (27) That the immediate aim is to be rid of the middleman's profit and his "parasitic trickery" is reminiscent of early rationales for the grange.

Rauschenbusch made his case for the cooperatives on moral and economic grounds. Members of cooperatives include the earning classes, industrial workers, small farmers and the lower business class and drawstrength from their peculiar moral qualities. As such, cooperatives have a stronger sense of humanity, and the participants look out for each other's interests. "Thus the cooperative associations represent a new principle in economic life, clearly of higher ethical quality than the principle dominant in capitalism. They combine a wholesomely selfish desire to get ahead with genuine fraternal sympathy and solidarity, and the combination works and holds its own against the most efficient business concerns in those fields where the cooperatives have learned to master the situation." (28) Rauschenbusch viewed the work of the humble cooperators as the beginning of a higher business morality and "part of the newly forming tissue of a Christian social order" and one of "the powers of the coming age." (29)

In sum, cooperation promotes good will and solidarity. It makes Christian love natural and spontaneous. "Thus cooperation is both moral and efficient. If it were not economically efficient, it would not be moral; if it were not moral, it would not be permanently efficient." (30)

The Modern Cooperative Movement

Cooperation As a Social Gospel Legacy

While many are familiar with the fact that the labor question was one of the most important concerns of social Christianity, the role of the cooperative movement in the United States and Europe as a solution to labor and capital strife has been often underestimated. Gladden and Rauschenbusch's knowledge of cooperative activity was extensive. In their day, the cooperative movement in the United States and Europe played a substantial role in helping them envision a critique of capitalism that avoided the "extremes" of "laissez-faire capitalism" and "revolutionary socialism." As such, cooperation was viewed as a moderate and appropriately gradualist response to unprecedented economic problems.

Gladden and Rauschenbusch taught us to stop and simply look around at ongoing experiments in alternatives to capitalism. This is a legacy that we ignore to our peril. They set an example for those fooled into believing that history is over, who are cowed by right-wing critics that liberalism is the source of all evil, and who cannot imagine any alternative to capitalism, especially since the fall of the Berlin Wall. Their voice is an especially useful counterpoint to the triumphalism that is characteristic of our day. (31)

Gladden and Rauschenbusch were not innovative economic theorists. Nor were they bold practitioners and organizers of schemes of cooperative production, distribution, or banking. They were beacons, lighting the road less traveled. In their day, cooperative experimentation became for them the concrete expression of treasured theological concepts of Christian love, and to use their language "the brotherhood of man" and the "fatherhood of God."

Cooperation offers us a set of practices that can liberate us from the sterile abstractions and barren debates that ensue when trying to manage the complexes of "capitalism," "socialism," or "communism." In the modern cooperative movement, we can observe and practice actually existing programs of economic organization. It can be an alternative to capitalism as we know it.

My summary of the cooperative movement is an attempt to stop and look around at other possibilities--following the example set by Gladden and Rauschenbusch a century ago. It is necessarily selective but, I hope, is indicative of current alternatives. Looking abroad, there are, at least four notable examples of cooperation. In the Basque region of Spain, the Mondragon model, founded in 1956, now has 21,000 members operating 171 linked enterprises which include 85 industrial co-ops, 6 agricultural co-ops, 14 housing co-ops and over 40 cooperative schools. The region of Emiglia-Romagna in Italy has three networks of 2,700 co-ops employing over 150,000 workers. In Canada's Maritime provinces, the Co-op Atlantic federation (started in 1927) has 166 purchasing, retailing, producer, housing, and fishing cooperatives employing 5,850 workers and over 170,000 members in the network. In Japan, the Seikatsu network was started in Tokyo in 1965. Originally a buying club, it now has 225,000 member households, and it has established over 160 worker-owned producer households. (32)

In the United States, according to a 1991 study conducted by the ICA Group in Boston, there are 154 pure worker co-ops that are controlled 100 percent by the worker-owners, with decisions regarding significant matters made on a one-person, one-vote basis. Such cooperatives may be found in bookstores, building/renovation firms, retail food stores, bakeries, restaurants, and plywood manufacturing. Other estimates actually claim up to 1,000 worker co-ops. (33)

Not included in these numbers are the 11,000 employee stock ownership plans in the United States including ten million employees. (34) ESOPS are a type of employee benefit plan in which a company gives shares of its own stock to employees and then gets a federal tax break in return. (35) I would argue that one should not put too much stock into ESOPS because they do not guarantee worker control of the workplace and are rarely democratic. Only 4 to 5 percent of the ESOPS have worker representation on the board, and 33 percent of all ESOPS do not involve workers in any of the decision making. The presence of ESOPS is a cautionary note to those interested in promoting the cooperative movement today. This brings up another legacy of the Social Gospel advocacy of cooperation.

The issue is this: not all cooperatives are truly alternatives and many are merely gussied up versions of capitalism trying to pass as true variants to the status quo. Gladden and Rauschenbusch helpfully pointed observers of their day away from a sole preoccupation with capitalism. Yet, their advocacy and theorizing about cooperation was highly conditioned by fears of its next of kin, socialism. Given the fact that schemes of cooperation are not inherently socialistic or capitalistic in character, the social gospelers' exaggerated fear of socialism meant that their advocacy of cooperation had capitalist leanings. This was particularly true for Gladden, less so for Rauschenbusch. Cooperation, for them, was a concrete manifestation of the theological virtue of love. As a way to avoid conflict, it neatly fit in with a middle-class ethos that prized tranquility, modest reforms, and provisional steps. Given the industrial war being waged around them, their advocacy of cooperation, while based on real examples, had an air of unreality for those workers facing the guns of state militias and private security firms. To follow uncritically their example, current day advocates of cooperation can fall into the same trap.

Radical critiques of advocates of the cooperative movement emerged with the rise of the First International in England and the United States. In Karl Marx's 1864 Inaugural Address of the Working Men's International Association, he simultaneously praised and warned listeners in St. Martin's Hall in London about the virtues and vices of the cooperative movement. Calling it a "great social experiment," the cooperative movement showed that production could be carried out on a large scale without a managerial class. Yet, if cooperative labor fails to develop this effort to national dimensions, it will never be a credible alternative to monopolistic power. Thus, it becomes possible for "plausible noblemen, philanthropic middle-class spouters, and even keen political economists" to be "nauseously complimentary" of cooperatives. (36) The real problem is that cooperatives run the risk that they will "naturally reproduce, and must reproduce, everywhere in their actual organization all the shortcomings of the prevailing system." (37)

The cooperative movement is neither dead nor an antiquarian enterprise. Cooperatives are alive and well and striving to succeed within the competitive, and often inhospitable, environment of capitalism. Gladden and Rauschenbusch have asked us to consider alternatives. When we do so, we can follow in their footsteps and, in addition, actively create new patterns of economic organization.

Endnotes

(1.) Edward Bellamy, Looking Backward: 2000-1887 (1888, reprint, New York: Signet Classic, 1960), 188.

(2.) David Montgomery, Workers' Control in America: Studies in the History of Work, Technology, and Labor Struggles (Cambridge: Cambridge University Press, 1979), 18-20.

(3.) Between 1860 and 1914, New York grew from 850,000 to 4 million, Chicago from 110,000 to 2 million, and Philadelphia from 650,000 to 1.5 million (Howard Zinn, A People's History of the United States (New York: Harper Perennial, 1990), 248).

(4.) Ibid., 39.

(5.) Washington Gladden, like so many other Social Gospel teachers, was quite opposed to socialist and communist doctrine and practice. Not only were proponents and adherents of such groups viewed as atheists, but their "radical" notions that unhesitatingly gave priority to the workers were viewed with considerable suspicion. Gladden, in Tools and the Man, speaks out against the International Working People's Party and the Socialist Labor Party. For Gladden, the notion that labor is the sole cause of wealth is an example of the problems when simply deducing the teaching of Marx (which Gladden traces back to Adam Smith, David Ricardo, and Frederic Bastiat) and applying it uncritically.

(6.) Ibid., 181. The appeal to the "same" natural law has a curious way of producing different outcomes. Gutman's observation shows the range of the possible applications of natural law in support of laissez-faire economics: "Legal and political theory, academic economics, amoral `social science,' and institutional Protestantism emphasized that in industrial America interference with the entrepreneur's freedom violated `divine' or `scientific' laws, and historians have given much attention to the many ways Gilded Age social thought bolstered the virtues of `Acquisitive Man.'" Herbert G. Gutman, "Protestantism and the American Labor Movement," in Work, Culture & Society in Industrializing America: Essays in American Working-Class and Social History (New York: Vintage Books, 1977), 80-81.

(7.) Ibid.

(8.) Tools and the Man: Property and Industry under the Christian Law (1893) was originally a series of lectures delivered in 1887 at Yale under the Lyman Beecher Foundation. Gladden was the first lecturer to discuss labor problems for the series sponsored by that foundation. He also delivered these lectures at Cornell University, Mansfield College at Oxford and Meadville Seminary. (Jacob Dorn, Washington Gladden: Prophet of the Social Gospel [Columbus: Ohio State University Press, 1967], 213.)

(9.) Gladden, Tools and the Man, 178.

(10.) Ibid., 179.

(11.) Ibid.

(12.) Ibid.

(13.) Ibid., 189.

(14.) Ibid., 197.

(15.) Ibid., 203.

(16.) Ibid., 240.

(17.) Ibid., 241.

(18.) Minus: "For the last several years he had perused English socialist literature and was excited by the call of Sidney Webb and other Fabian Socialist leaders for a gradual evolution of English society that extended the blessings of liberty into the economic realm; through education and legislation--not the violence of the radicals--workers' misery would be ended and their opportunity for full participation in English life ensured" (Paul M. Minus, Walter Rauschenbusch: American Reformer [New York: Harper Perennial, 1990], 71-72).

(19.) Ibid., 72.

(20.) Vernon Parker Bodein in The Social Gospel of Walter Rauschenbusch and Its Relation to Religious Education (New Haven: Yale University Press, 1944), 38.

(21.) Minus, 124. Bodein provides an important reminder that Rauschenbusch was concerned about municipal cooperation in a concrete way two years before his trip to England. Rather than joining the chorus of discontent concerning the tumultuous New York City streetcar strike in 1889, Rauschenbusch affirmed with the Philadelphia-based publication, The National Baptist, that not only should the strike be supported but that the government ought to take over the streetcar company itself in the face of its unsatisfactory service (Bodein, 16).

(22.) "Quintus Fabius Maximus Verrucosus, d. 203 B.C., the opponent of Hannibal, was called Cunctator [Lat.,=delayer] because of his tactics, from which the term Fabian, referring to a waiting policy, is derived.... Fabius kept his army always near Hannibal's but never attacked, harassing Hannibal continually, but never joining battle. The Romans tired of Fabius's policy, and he was supplanted (216); the rout [of the Romans] at Cannae was the result." Barbara A. Chernow, George A. Vallasi (ed.), The Columbia Encyclopedia, 5th ed., 1993, 917.

(23.) Rauschenbusch, "The Ideals of the Social Reformers," ed. Robert T. Handy, The Social Gospel in America, 1870-1920 (New York: Oxford University Press, 1966), 282.

(24.) Ibid.

(25.) Walter Rauschenbusch, Christianizing the Social Order, 384.

(26.) Ibid., 385.

(27.) Ibid.

(28.) Ibid., 387.

(29.) Ibid., 388.

(30.) Ibid., 170.

(31.) At the beginning of the annual meeting of the "Summit of the Eight" in 1997 (formerly G-7, the seven major industrial nations which now include Russia), President Clinton declared that "`we host our partners at a time when America's economy is the healthiest in a generation and the strongest in the world'.... The Deputy Treasury Secretary, Lawrence H. Summers, described the United States the other day as `the world's only economic superpower ... and the world's most flexible and dynamic economy.' He suggested that other nations `have things to learn from us.'.... U.S., Lauding Its Economy, Finds No Summit Followers," New York Times, 20 June 1997, 1.

(32.) Elizabeth A. Bowman and Bob Stone, "Worker Ownership on the Mondrag6n Model: Prospects for Global Workplace Democracy," unpublished, An Occasional Paper of Grassroots Economic Organizing Newsletter, 6, 12-13.

(33.) Chitra Somayaji, "Worker Co-ops," Dollars & Sense, September/October 1998, 49.

(34.) Corey Rosen, "ESOPS and Co-ops," Dollars & Sense, September/October, 1998, 48.

(35.) Len Krimerman, "Co-ops and ESOPS," Dollars & Sense, September/October, 1998, 29.

(36.) Karl Marx, "Inaugural Address of the Working Men's International Association," 1864, ed. Robert C. Tucker, The Marx-Engels Reader, 2nd ed. (New York: W. W. Norton & Company, Inc., 1978), 518.

(37.) Karl Marx, Capital: A Critique of Political Economy vol. 3, The Process of Capitalistic Production as a Whole (New York: International Publishers, 1967), 440.

Ken Estey is a recent Ph.D. graduate of Union Theological Seminary in New York.