Can Worker Cooperatives Build a Bridge to Socialism?

22 April, 2009

Gramsci, Economic Theory of Worker Cooperatives and the Transition to a Socialist Economy By Bruno Jossa

Economics, University of Naples

1. Introduction

gramsci.jpgIn this paper we intend to discuss the problems arising in connection with the transition from capitalism to a system of producer cooperatives, i.e. to a system of self-managed democratic firms. This subject will be addressed against the backdrop of the ideas of Gramsci, a major theorist of workers’ councils and probably the one Marxist thinker whose work has outlived the collapse of state socialism in the Soviet Union (see Buttigieg, 1995, p.105 and Baratta, 1999, p. 3).[1]

The problem is interesting because in the literature on possible forms of market socialism, the intermediate period between capitalism and socialism has received little attention right to this day. This is all the more surprising if we bear in mind that analyses of the transitional period used to occupy centre-stage in most of the debates on classical issues such as state socialism and the viability of the socialism-in-one-country option. Preliminarily, we wish to point out that, in our opinion, the transition must come about by democratic means and that we will lay particular stress on the query why Gramsci did not accept the idea that the market is a necessary option in the long-term transition to communism. Traditionally, the term ‘transition’ is used to describe a “shift from one production mode to another”.

In our analysis we set out from two basic assumptions: on the one hand the awareness that all Gramsci’s Prison Notebooks, right to the last, concordantly present the socialist revolution as impending (in other words, that “the unifying thread behind Gramsci’s whole theoretical framework” was the inevitability of revolution – see Salvadori, 1975, p. 4) and that workers’ councils are the tool for its achievement;[2] on the other, our belief (discussed in detail further on) that provided it is organized in strict accordance with the findings of present-day economic thought the progress from capitalism to a system of producer cooperatives will entail a change in production modes as a matter of course.

The conclusions we arrive at in our study are as follows:

a) Gramsci’s approach to workers’ councils and modern producer cooperative theory have in common the idea that workers’ councils are a means of attaining the transition to socialism;

b) The transition is bound to be a peaceful, though lengthy process – an assumption that Gramsci, unlike other well-known Marxists, shared with modern producer cooperative theory;

c) The notion of hegemony as theorized by Gramsci has a major bearing on producer cooperative theory as well;

d) Gramsci’s approach to the transition departs from Marx and Engels’s because, differently from the latter, Gramsci was persuaded that the market would have to be abolished on the very morrow of the takeover of the proletariat.

 2. A Workable Transition

To start with, let us spend a few words on the reasons why the new production mode generated by a system of producer cooperatives can be said to be in keeping with the principles of socialism. This system does not assume a planned command economy, nor does it require, of necessity, the nationalization of production means. All the same, provided it is entirely composed of LMF-type producer cooperatives (firms which, in Vanek’s definition, segregate wage incomes from capital incomes), it can be equated with socialism because it literally reverses the usual capital-labor relationship (see Vanek, 1971a and 1971b). Hence the question: what can spark off the transition from capitalism to a system of producer cooperatives?

Modern theorists of producer cooperatives from Ward (1958) and Vanek (1970) onward have inadequately tackled this issue. As a rule, they have simply examined possible working modes of cooperative firms in capitalistic systems without asking themselves if a quantitative growth of cooperative firms with corresponding gains in efficiency may further the turn from capitalism to the new system. (Exceptions include Schweickart, 2002 and Dow, 2003).

Nonetheless, tracing the successive steps of a workable transition to a system of democratic firms is a subject of major interest.3 To start with, there can be little doubt that democratic firms will never outnumber capitalistic firms by a spontaneous process, for history has taught that no such process has ever been recorded to-date (see inter alia., Putterman, 1982 and 1984; Pagano 1991 and 1992; Gunn, 2000, pp. 451-55; Jossa and Cuomo, 2000, chap. XV). Many authors who have inquired into the reasons why democratic firms have difficulty asserting themselves in their own right have, however, provided conclusive evidence that the main obstacle to their spontaneous growth is by no means lesser efficiency.

As theoretical studies have shed light on numerous advantages of cooperative firms over their capitalistic ‘twins’, it is possible to argue that democratic firms are ‘merit goods’ which are capable of generating ‘external economies’ and would hence well deserve incentives from the public hand. Provided this is true, a parliament sharing the view of democratic firms as merit goods could be assumed to enforce a wide spectrum of benefits in favor of cooperatives and thereby encourage their proliferation with intent to spark off a transitional process.

A second possible scenario is a transition fuelled by a normal competition process. As is well known, firms are newly established and closed down day after day, and in capitalistic systems they face winding up whenever they prove unable to work at a profit. However, in contrast with the widely shared assumption that firms that do not report profits waste wealth, from our perspective this is only true of firms that fail to produce value added and it is a fact that firms can generate considerable value added even though they simply break even without reporting profits. On this assumption, when a firm faces insolvency in the ordinary course of business in a capitalistic market it could actually be in the best interests of the community to keep it going and have it run by its workers (see Engels, 1886, p. 389).

This is what might have happened in the so-called ‘red biennium’ in Italy, when Sen. Agnelli declared that he was prepared to transfer responsibility for the management of FIAT to the workers’ council. As times were not ripe for such a solution, this project came to nothing because of the opposition of trade unions. Salvemini (1928, p. 22) blamed this decision on “stout opposition from risk-averse leaders of the General Labor Confederation and the Socialist Party to a communist and anarchist design aimed to sharpen the crisis and give it a revolutionary spin”.

Gramsci also shared this view: “Union members – he argued – are attuned with a society founded on competition; they are no communists. No unions will ever endorse a radical overthrow of society: although they can provide the proletariat with able bureaucrats or industrial experts, they will never become the mainstay of proletarian power” (Gramsci, 1919-1920, p. 36).[5]

In fact, one reason why history records no systematic transfer of insolvent firms to workers is that left-wing parties have never pro-actively worked towards this goal. It remains to be established if this is mainly due to lack of confidence in this solution or to the fear of a back-lash from industrialists. For our part, the assumption which is at the basis of this paper is that the findings of modern producer cooperative theory are providing clear evidence that a system of democratic firms can function properly provided it is organized in accordance with principles of economic efficiency.

Thus, there are reasons to assume that unions, left-wing parties and the greater part of the electorate and intelligentsia will gradually espouse both the equation of a self-managed firm system with “true socialism” and Lenin’s belated insight that cooperation “nearly always coincides fully with socialism”.[6] And the moment when the cooperation/socialism equation becomes a hegemonic notion (along with the idea of the feasibility of the process), a systematic takeover of firms in financial crisis by workers is likely to start a transition to socialism.

But there is also a ‘third road’ towards ‘true socialism’. No major political shift – Hayek argued – is obtainable through mass propaganda; the problem is just to persuade intellectuals (Hayek, 1983, p. 192; see, also, Keynes, 1936, last page). If this is correct and intellectuals are won over to the idea of a system of democratic firms as a major advancement over capitalism, this far-reaching political shift could be set off by a majority vote in parliament abolishing wage labor in ways and to the extent deemed appropriate in the circumstances prevailing from time to time.

In line with Hayek’s and Keynes’s suggestion, once intellectuals have fully interiorized this notion, the general public would gradually assimilate the beliefs of their leaders and, sooner or later, a parliament would probably be in a position to pass the legislative provisions required for implementing socialism by democratic means. From our perspective, the most effective measure would be an act of parliament simultaneously converting equities of joint stock companies into bonds of equal value and limited companies into firms run by their own workers.[7]

Following the enactment of such a revolutionary parliamentary measure, the managers of one-time limited companies might remain in office unless the workers’ councils of the cooperatives established by operation of law should otherwise resolve.

3. Imperialism And The Theory Of Monopolistic Capital

At this point, it is time to analyze Gramsci’s vision of a transitional society and, even before so, ask ourselves what kind of transition process can be perceived behind his overall theoretical approach.

Gramsci was greatly influenced by Lenin’s ideas on imperialism[8] and state-monopoly capital as the terminal stage of capitalism which at once heralds and is inextricably intertwined with the transitional process. This theory – Altvater argued (1982, p. 649), “being in the main of a political import, is useful not only for analytical purposes, but also in making forecasts and forging strategies”. As argued by theorists of state-monopoly capitalism, this terminal stage of a capitalistic system paves the way for a socialist revolution because at this stage capitalism reflects the basics of the new system that is about to arise from the older order.

In Lenin’s description, the main characteristics of imperialism are the development of monopolies and the resulting stalemate in the capitalistic competition process, but this point is fairly well known and need not be discussed in detail here. An equally familiar aspect of imperialism is the predominance of finance capital over industrial capital. (Hilferding, 1909, Lenin, 1917a, and Gramsci, 1919-1920) concordantly held that both these trends were observed in the years from 1870 and 1914 approx.,[9] and Lenin included them among the leading indicators of this process in an often-quoted definition of imperialism which purports that at the terminal stage of capitalism:

1. production and capital accumulation reach levels of concentration at which monopolies arise as a matter of course securing the lion’s share in economic life;

2. the amalgamation between industrial capital and banking capital gives rise to finance capital which is entirely controlled by an oligarchic group of financiers;

3. capital movements gain in importance until they exceed movements of goods;

4. world-wide monopolistic associations of capitalists arise and start apportioning the world among themselves;

5. the apportionment of the earth among major capitalistic powers reaches its apex (Lenin, 1917a).]

Lenin’s definition also draws attention to a third aspect of imperialism – warmongering – with which Hobson (see, inter alia, 1902, pp. 6 e 85), Luxemburg and Gramsci himself concurred, but which is not re-proposed in the work of more recent state-monopoly capital theorists.

An additional significant point with a distinct bearing on our analysis is Hobson’s and Lenin’s assumption that the imperialistic stage of capitalism is ridden by ever more devastating economic crises; and Lenin and post-World War II state-monopoly capitalism theorists derived basic political consequences from this assumption.

For one thing, as Hobson’s and Lenin’s monopoly capital theory is much more inclusive than Hilferding’s, it can be described as a real and proper theory of the successive stages of capitalism (see Altvater, 1982, p. 658-65). Its central idea is that the competition-driven stage of capitalism is followed by a monopolistic stage, but it also sheds light on a second, equally significant aspect of this new phase, namely state intervention into the economy, which is traced to ever closer interrelations between monopolies and the State. Lastly, it suggests that state intervention comes in two forms: not only subsidies to large-size monopolistic concerns, but also economic planning.

In contrast with Hobson and Lenin, more recent theorists of state-monopoly capitalism do not rate the preponderance of finance capital over industrial capital as a distinct aspect of capitalism since it was not a salient characteristic of the period to which this theory is referred. What we do wish to point out above all is that Lenin’s state-monopoly capitalism theory provided a forecast of the transition process that took place in the Soviet Union: the rise of a centrally-planned state socialism system. Describing the evolution of capitalism in objective terms – it is remarked – he showed how monopolies and state intervention gradually prepare the ground for a form of socialism founded on the establishment of large-size monopolistic – though centrally planned – industrial concerns.

As Lenin put it, at least in more advanced countries, modern capitalism had created the necessary preconditions for a takeover of the economic apparatus by the working class: schooling had been made mandatory (as it would be in a socialist system), the working class had been trained in the discipline required for industrial work and administrative and management functions had been thoroughly streamlined (Lorenz, 1975, p. 762).[10]

Both Lenin and state-monopoly capital theorists concurrently assumed that the necessary assumption for a transition to socialism was securing political power. Lenin held that the political apparatus of capitalism was to be clearly distinguished from its economic apparatus and while the former was to be entirely re-forged, the latter need not and will not be broken up (Lenin, 1917b); hence his conclusion that all the institutions and organizations of the older system could be retained on condition that they were stripped from capitalists.

This is the political import of state-monopoly capital theory to which Altvater drew attention and took objection. In the minds of state-monopoly capital theorists the terminal stage of capitalism was to be viewed as a process preparing the ground for socialism in every respect, as its preliminary phase, because socialism is ultimately nothing but the stage when state-monopoly capital is put at the service of people at large and, as such, has ceased to be a monopoly of capitalists. There is no middle way between these two extremes (Lenin, 1917 a).[11]

At this point, it is time to examine Gramsci’s theory of transition in some detail.

4. Imperialism and Workers’ Councils In Gramsci

How did Gramsci prefigure the transition to socialism? Developed at the time when Gramsci was contributing articles to Ordine Nuovo, his theoretical approach to transition was basically Lenin’s with a number of far-reaching departures.

“In the imperialistic phase of the historical evolution of the middle class – Gramsci wrote (1919-1920, p. 135) – industrial power migrates from the factory to a trust, a monopoly, a bank or the state bureaucracy. Shedding off its responsibilities, industrial power becomes more and more autocratic, ruthless and arbitrary, while workers, relieved from the oppression of the ‘boss’ or servile subjection to a hierarchy, manage to attain considerable amounts of autonomy and initiative thanks to the new social climate fostered by this new historical phase.”

In the imperialistic phase of capitalism – he also wrote – “industrialists sabotage production” or, as a minimum, prove incapable of managing the production apparatus (Gramsci, 1919-1920, pp. 49-50). Factories lose their autonomy and many of their functions migrate from individual firms to a system of firms owned by a single holding. “Firms are pooled under the control of a bank or system of banks. Factory owners are seen hanging about in banks and fashionable salons or lobbying in ministries or parliament, and capital owners lose their power by transferring their ‘rights’ into the hands of the government in exchange for iron-hearted actions designed to protect them” (Gramsci, 1919-1920, pp. 82-83).

At this imperialistic stage, therefore, the State takes over all the traditional entrepreneurial functions and starts planning production (op. cit., p. 83) just as the working class gains power, thanks to the crisis of the State. “The revolutionary process – Gramsci argues – takes place in factories, the production environment where relations are founded on oppression and exploitation, where workers are not free, where democracy is unknown” (op. cit. p. 124); and its tool are workers’ councils. Unlike Lenin, though, Gramsci looked upon the proletarian revolution, not as the high-handed act of a single party or group of organizations, but as a long-term historical process set off by the evolution of the forces engaged in production and the resulting change in circumstances.

In Gramsci’s opinion, class struggle in Italy in the 1920s had reached levels that could with equal probability spark off a socialist revolution or precipitate a forceful fight-back from the ruling classes. The changes in circumstances under way had mainly been produced by the war, during which the Italian banking system, seizing control of the industrial apparatus, had strengthened the working class to the detriment of industrial capital, created the assumptions for the birth of a large political party endorsing the interests of the peasant class (the Popular Party) and thereby hastened a crisis of the bourgeois state.

For workers’ councils to emerge, each worker “must have gained an awareness of his place within the economy. First of all, he must have felt part of an elementary unit or team and realized that technical upgrades to machinery and equipment reshape relationships with engineers: less and less dependent on the engineer, his one-time master, the worker must have gained in autonomy and acquired the ability to self-govern himself” (op. cit., p. 81).[12] Conceived of as the cell of the new workers’ state and the core of a new representation system founded on workers’ councils, the factory must once again become the basis of industrial power (Gramsci, op. cit., p. 126). The proletarian state is thus equated with a system of workers’ councils.

The excerpts printed above provide clear evidence that when Gramsci was writing for Ordine Nuovo he drew on Lenin mainly for his idea of wartime monopoly capitalism, rather than for other aspects of his theoretical approach (see De Felice, 1971, p. 245). Concerning Italy, the subjects he used to foreground were the crisis under way in the country, the estrangement of industrialists from factories and the tendency of industrial power to abdicate its responsibilities and become ever more autocratic, ruthless and arbitrary. From these facts he deduced that the working class had gained in strength and that new institutions had been created to represent workers as the cells of a new state.

Despite their common derivation from Lenin, state monopoly capitalism theory and Gramsci’s approach in Ordine Nuovo differ considerably. The former foregrounds the idea that the emergence of trusts, the growing part played by the State in the economy and its role as planner pave the way for the advent of State socialism, a new order in which a new class takes the place of the current power class and further develops its characteristics. In contrast, Gramsci’s theorizations provide special focus on the war, the economic difficulties that European nations, especially those defeated in the war, were facing, and the rise of workers’ councils as a result of the ensuing crisis.

More than on state intervention into the economy or the state’s role as planner at the late capitalistic stage, Gramsci lays stress on the diminishing role of industrialists in the organization and management of production, a crisis which he holds to herald the takeover of firms by the working class.

“Industrial control is stripped off the hands of industrialists. As time goes by, the ‘role’ of the capitalist is perceived as ever more detrimental to production and social life” (Gramsci, 1919-1920, p. 237).[13]

This is the central idea in Gramsci’s approach to the renewal of society.[14]

An additional point worth emphasizing is that Gramsci’s writings for Ordine Nuovo mark a break with the Italian socialist tradition, for “they reverse the negative approach to revolution and define political action as the search for those mass institutions which are capable of objectifying and, hence, outgrowing subversion” (De Felice, 1971, p. 284; see, also, pp. 275 ff.).

In Ordine Nuovo, Gramsci does not confine himself to leveling destructive criticisms at the existing order; he also holds out the prospect of a State of workers’ councils conceived of as a new mode of social organization. Yet there is one point on which the otherwise widely diverging views of Gramsci commentators seem to concur: comparing the Prison Notebooks, with the articles for Ordine Nuovo, they argue that the former, unlike the latter, do not propound any consistent strategy for the transition to socialism in mature capitalistic countries (see De Felice, 1971, pp. 241 ff. and Jocteau, 1977, p. 22);[15] but while those denying continuity of development from Gramsci’s articles for Ordine Nuovo to the Prison Notebooks rate this a severe fault of Gramsci’s theoretical approach (see, Jocteau, 1977, p. 23), others gloss over this fault and stress instead Gramsci’s continued concern with workers’ councils.

As for us, we accept the idea that Gramsci’s Prison Notebooks still keep his original ideas on workers’ councils and that his writings for Ordine Nuovo shed light on his view of transition in matured years. And as these ideas seem to reconcile Lenin’s approach to transition with the theory of workers’ councils, it would appear that they can be effectively used to build on, and even further elaborate, the theory of transition expounded in this paper against the backdrop of Ward and Vanek’s modern producer cooperative theory.

However, in our opinion the criticism that Gramsci’s transition theory is incomplete is convincing. As we will argue in greater detail further on, being inimical to market economics, Gramsci neither clarified the business modes that workers’ councils were to adopt in running their firms before the takeover by the working class (for he did think that workers’ councils were to be created in a market economy well before the revolution), nor the reasons why, departing from Marx’s and Engels’s theorizations, he assumed that the market was to be promptly abolished in the post-revolution period (see further on).

5. Workers’ Councils During The Transition

The problems to be addressed at this point are a) whether Gramsci envisaged the option of a peaceful transition to socialism, and b) whether or not he ever accepted the idea that the transition was a long-term process requiring the maintenance of a market economy in accordance with the approach of modern cooperation theorists.

A convenient starting point is a passage in which Engels defined the historical conditions in which a peaceable transition to socialism would be feasible: “One can conceive that the old society may develop peacefully into the new one in countries where the representatives of the people concentrate all power in their hands, where, if one has the support of the majority of the people, one can do as one sees fit in a constitutional way: in democratic republics such as France and the U.S.A., in monarchies such as Britain” (Engels, 1891, p. 226). The same line of reasoning returns in the passage below, where Engels emphasizes the importance of a democratic transition to socialism (see Engels, 1895, pp. 515-16):

“The Communist Manifesto had already proclaimed the winning of universal suffrage, of democracy, as one of the first and most important tasks of the militant proletariat, and Lassalle had again taken up this point. Now that Bismarck found himself compelled to introduce this franchise as the only means of interesting the mass of the people to his plans, our workers immediately took it in earnest and sent August Bebel to the first, constituent Reichstag. And from that day on they have used the franchise in a way which has paid them a thousandfold”.[16]

These excerpts from Engels are an excellent introduction to the issue of Gramsci’s idea of the attainment of power, for no one better than Gramsci elucidated historically relevant differences between the way the Bolsheviks seized power and the way the transition to a new social order can and must come about in the West, where democracy is a long-established institution. In Gramsci’s words, “a revolutionary minority seizing power through the use of violence would certainly be overthrown by the rebound from the mercenary forces of capitalism” (Gramsci, 1919-1920, p. 307).

In other words, in Gramsci’s mind a revolution in advanced Western countries called for different methods because the long-established democratic traditions of the bourgeois class were likely to result in a much more forceful fight-back than that experienced in Russia. Gramsci also held that the only effective strategy in the West was ‘trench war’ (or ‘war of position’) and that no lasting revolution could be enacted there by recourse to the ‘maneuver warfare’ tactics adopted in the East, i.e. in Russia.

“In the East – he wrote – the State was everything, while civil society was still at its gooey primordial stage; in the West [there is] a correct relationship between civil society and the State and whenever the State structure threatens to stagger [we] immediately [perceive] the sturdy backbone of civil society” (Gramsci, 1975, p. 866; see, also, p. 1566).

From Gramsci’s perspective, the crucial prerequisites for the success of a modern revolutionary movement in the West were workers’ councils and a party determined to work towards revolution. These were the essential tools for the attainment of hegemony, without which no revolution was feasible in the West (see Paggi, 1970, pp. 259 ff and Gruppi, 1977).

The notion of hegemony, which is usually considered to be Gramsci’s major contribution to Marxism (see Gerratana, 1977 and, inter alia, Macciocchi, 1974, p. 199), is closely intertwined with the issue of workers’ councils because it is councils that are expected to further a spontaneous self-education process (see Badaloni, 1977, p.9). Gramsci often contrasts the spontaneous nature of councils with the voluntarism of union or party membership, but he also makes it clear that economic crises or spur of-the-moment revolts, while doubtless creating a favorable climate for certain ways of thinking and tackling issues, will never produce any lasting effects unless they are duly kept in check.[17]

In Gramsci’s view, as long as classes exist one or more of them will dominate over the others either by coercion or through consensus. “A social group may exercise supremacy in two ways, ‘domination’ or ‘intellectual and moral guidance’. A social group dominates over the opponent groups that it intends to ‘annihilate’ or subjugate by any means, including armed struggle, but it provides guidance to allied or cognate groups” (Gramsci, 1975, p. 2010).

Hegemony is closely associated with the notion of the ‘historical bloc’; it entails not only the ability to foster “a piecemeal reconciliation of the conflicting stances of revolutionary agents” (Badaloni, 1977, p.12) and an alliance of classes needed to conquer power,18 but something more complex founded on the role of intellectuals as consensus-builders and the party as the ‘Modern Prince’. Within a historical bloc “material forces are the content and ideologies are form”; but this “content/form distinction is merely an explanatory one, for no material forces would be historically conceivable in the absence of form and without the support of material forces ideologies would be nothing but personal whims” (Gramsci, 1975, p. 69).

The foregoing suggests the major conclusion that Gramsci doubtless shared the peaceful approach to the transition to socialism propounded by today’s producer cooperative theorists; though not the idea that workers’ councils would have to operate in a market economy for a long period of time. Gramsci’s failure to envisage a long-term post-revolutionary period with firms carrying on business autonomously within a market economy (the stance of modern theorists of producer cooperatives) can be explained if we bear in mind the importance he attached to a hegemonic position of the working class.

Holding that “the socialist State requires the permanent pro-active participation of comrades in the life of its institutions” (Gramsci, 1919-1920, p. 381) and that the party’s political platform would more easily become hegemonic in a worker democracy, he wrote: “such a democratic worker system would impart form and discipline to the masses and excellently train them in political and administrative skills; it would assign each man his right place and give the masses an awareness of their status as an army in full fighting trim which needs cohesion to avoid being crushed and reduced to slavery” (Gramsci, 1919-1920, p. 12); and he firmly held on to the belief that hegemony, once attained, would automatically generate the discipline needed to keep factories going even in the absence of the material incentives that the market puts in place. This point needs further clarification.

6. Timing the Transition

Marx and Engels conceived of the transition to socialism as a lengthy process. In Principles of Communism Engels’s answer to the question if private property could be abolished instantly is as follows:

“No, such a thing would be just as impossible as at one stroke to increase the existing productive forces to the degree necessary for instituting community of property. Hence, the proletarian revolution, which in all probability is impending, will transform existing society only gradually, and be able to abolish private property only when the necessary quantity of the means of production has been created” (Engels, 1847a, p. 350; see, also, Engels, 1847b, p. 101-02).

Even in the Manifesto we find statements and arguments in support of the view that Marx and Engels had in mind a long-term transitional process. One of these passages runs as follows: “The proletariat will use its political supremacy to wrest, by degrees, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the State” (Marx and Engels, 1848, p. 504). The way this process would come about in practice is clearly revealed in Marx and Engels’s program for the initial stage of the post-revolutionary period which, among others, provides for the following measures (p.505):

-the abolition of property in land;

-a heavy progressive income tax;

-the confiscation of the property owned by rebels and emigrants

-the concentration of credit and transport in the hands of the State;

-stepwise nationalization of firms.(19)

These measures reflect the need that the new social order be organized as a market economy at least for some time. Turning to Gramsci, it is correct to say that he also looked on transition as a gradual process. Although he doubtless thought of revolution as a decisive win (Gramsci, 1975, p. 802) resulting in the subversion of all the organizational structures of the older order and the overthrow of the enemy once and for all (Gramsci, 1975, p. 800), he held that this was to be the end result of a long-term hegemony-building process: “thinking of history as an unstoppable process entailing piecemeal changes of the State aimed to free mankind from its shackles, he simply could not share the myth of a proletarian revolution as an instant bound from necessity to freedom that was making headway in the minds of most European intellectuals in those days” (Paggi, 1970, p. 236).

The proletarian revolution – we read in Ordine Nuovo (Gramsci, 1919-1920, p. 532) – “is a long-term historical process associated with and depending on the growth of specific productive forces (which we subsume under the definition of ‘proletariat’) in a specific historical environment.”20 Gramsci did not think of hegemony as a onetime permanent achievement (see Badaloni, 1977, pp. 13-14 and Gerratana, 1987, pp. 125-26). In his view, “what counts is, not passive or indirect consensus, but the direct pro-active and participatory consensus of single individuals at the cost of the impression of apparent disruptions or tumult that this could generate” (Gramsci, 1975, p. 1771). As argued by Gerratana (1987, p. 126), “Short spells of confrontation are inevitable before truth can emerge and be concordantly recognized as such by all the actors involved”, and Gramsci made it clear that struggle only could generate collective awareness by creating unity out of multiplicity.

But what are the successive individual steps of this transitional process? By general agreement, in Gramsci’s approach revolution proper is deferred in time because it requires a lengthy preparation process, but the post-revolutionary transition from necessity to the reign of freedom is compressed into a short timeframe. As Riechers puts it (1970, p. 129), “Gramsci thought of the post-revolutionary period as a rigid, not dialectical succession of absolute historical phases (the reign of freedom as the negation of the reign of necessity)”.

Gramsci’s timing of events lies open to at least one forceful objection. If the transition is a long-term process because hegemony must be attained at the prerevolutionary stage, and provided it is true that hegemony is mainly attained through the establishment of workers’ councils at the pre-revolutionary stage, it is reasonable to assume that the government of a capitalistic State would inhibit the establishment of workers’ councils especially if the process were found to be a very lengthy one. A gradual proliferation of workers’ councils is in itself a creeping revolution of some sort and a non-socialist government would certainly oppose it by any means.

“Potentially – Gramsci argued – the socialist State is prefigured by the typical social institutions of the exploited working class. If we join together and coordinate these institutions, subordinate them to a hierarchy of competencies and powers and strongly centralize them without curtailing their necessary autonomy or wiping out distinctions, we would establish a real and proper worker democracy as from now, have it vie with the State in efficiency and initiative, and prepare it to take over from the bourgeois State all the functions needed to hold and manage the nation’s resources” (Gramsci, 1919-1920, p. 10).

Statements such as this one, where Gramsci assumes workers’ councils to be created and to vie in initiative and efficiency with the bourgeois State well before the takeover by the working class, seem to be in stark contradiction with the argument that “the level the struggle of the working class has reached in Italy may either herald the seizure of political power by the revolutionary proletariat …. or a tremendous fight-back from property owners or the State bureaucracy” (Gramsci, 1919-1920, p. 111).[21] While this seems to suggest that the long-term transition process must necessarily fall after the attainment of political power, this is not what Gramsci thought at the time when he was writing his articles for Ordine Nuovo. At that time he maintained that after the revolution the workers of self-managed firms “would rapidly discard utopian middle-class ideologies founded on myth and permanently develop the typical mindset of a communist nourished by a measure of unswerving enthusiasm” (see Gramsci, 1919-1920, p. 30) and that this would expedite the transition to centralized planning, as mentioned above.[22]

7. Conclusion

In the words of C. Bettelheim, to equate socialism with ‘planning’ and capitalism with the ‘market’ means renouncing to probe beneath the surface of things, opting for merely formal modes of analysis and thereby neglecting the relations that really count, i.e. those between different classes. In fact, the plan-market opposition is an all but fundamental one since it reflects neither a class opposition (i.e. a political opposition) nor an economic opposition (i.e. one between economically relevant social relations), but only variable effects of these oppositions (Bettelheim, 1971, p. 6).

As we have tried to show, Gramsci’s discourse is not centered on the plan-market opposition. However, although Gramsci clearly saw (like Bettelheim) that the all-important factor was “the nature of the class in power” (Bettelheim, 1971)[23] and laid great emphasis on the attainment of power by the working class via their councils, he failed to shed sufficient light on the relationship between planning and market in an economic system with self-managed firms.

In the last years of his life, Lenin himself realized that socialism could well be equated with a system of worker-managed firms. The growth of cooperation, he wrote, has thoroughly changed our ideas on socialism. It has made us see, he added, that post-revolution focus must necessarily be on peaceful ‘cultural’ organization processes and that cooperation “nearly always fully coincides with socialism”. And the conclusion he drew from this equation was that the moment when the working class acquires power and the resulting state organs appropriate the bulk of production means, “the only task that remains for us is to organize the population in cooperatives.”

Lenin’s reflections on the all-importance of cooperation and the shift in focus onto cultural work determined by the establishment of workers’ councils are clear evidence that Lenin had espoused the approach that Gramsci would later theorize in Ordine Nuovo. And once these ideas are accepted, the issue that becomes prominent is if, and by what means, cooperative firms will have to come to terms with the market. All the same, Gramsci’s theoretical approach on this point is objectionable at least in part – as we have tried to show in this paper with intent to emphasize that the modern theory of producer cooperatives may be of interest even to Marxists.

Modern producer cooperative theory is of interest to Marxists because it reflects Gramsci’s idea that workers’ councils can bring about a transition to socialism. At the other end of the spectrum, Gramsci’s approach can be of interest to modern producer cooperative theorists because of his hegemony theory and part of his line of reasoning on the role of workers’ councils in the transitional period. Concluding, it is worth summing up the points of contact and discrepancies between the two different views of transition just examined. In our comparative analysis of modern producer cooperative theory and Gramsci’s approach with specific regard to their respective views of transition we have been laying particular stress on the following points:

a) did Gramsci accept the idea of a peaceful, though lengthy transition to socialism?

b) did Gramsci envisage a long-term market economy even after the takeover of the proletariat? The first of these questions has to be answered in the affirmative; the second in the negative. And the objectionable point in Gramsci’s approach is exactly his departure from Marx and Engels, i.e. his assumption that the market will have to be abolished on the very morrow of the conquest of power by the proletariat.


1 On Gramsci’s place in Marxist world literature, see Badaloni, 1977, pp.1-2, Forgacs, 1989, Cammett, 1991 and Hobsbawn, 1995. However, his theory of workers’ councils, “though appreciated in general terms, has increasingly been glossed over” (Garin, 1964, p. 136) and, of all Marxist classics, Gramsci appears to be the most ’embalmed’ (Guiducci, 1977, p. 195. For a completely different view, see Buey, 1995, pp. 33-34). As Garin puts it (1964, p. 131), his theories on workers’ councils were “suffocated, branded as misleading and set aside just because they were not turned into practice”. A case in point is that of Giuseppe Vacca: while admitting that his research was based on “a Gramscian reading of Marx as its main reference point”, he felt it necessary to add that he was speaking of Gramsci’s work of the ‘seventies, i.e. the years when he produced his critical edition of the Prison Notebooks (see Vacca, 1985, p. VIII).

2 Many commentators (see Gramsci, 1923-26, p. 21, 1975, pp. 330 and 1137-38; Garin, 1958, pp. 47-8; Ragionieri, 1969; Paggi, 1970, introduction; Spriano, 1971; Bonomi, 1973, pp. 7-9 and 157-58; Salvadori, 1973, pp. 43-44 and 388-94; 1975, pp. 4-6 and 1978b, pp. 42-43; Macciocchi, 1974, pp. 84-85; Badaloni, 1975, p. 108; Gerratana, 1977 and 1997, p. 108; Gruppi, 1977, pp.29 and 42; Vacca, 1985, p. 62 and Santucci, 2001, pp. 157-58) hold that continued endorsement of workers’ councils is an element of continuity in Gramsci’s thought. “The fundamental event in the Russian revolution – Gramsci wrote – is the creation of a new type of State: a State of Councils. This is what historical research is called upon to address. The rest is contingent” (Gramsci, 1919-1920, p. 374).

3 This is a typical 3rd-International type Marxist subject due to the criticisms levied against Marxism at the 2nd International. In Gruppi’s words (1972, p. 42), “under the impact of positivism, Marxism had turned into an oversimplified, purely materialistic and mechanically deterministic approach. Its maximalist ideological basis was roughly this: exalting socialism as the final goal for purely propagandist purposes without providing any methodological indications as to the means of achieving it, on the assumption that the crisis and collapse of capitalism are fatally inherent in its nature.” ‘Social Darwinism’ has long been in disrepute for want of any solid scientific basis.

4 Hence there is no arguing that to advocate a turn from capitalism to a democratic firm system today, despite ample evidence of the impossibility of a ‘spontaneous’ transition, is tantamount to fighting a sort of rearguard battle utterly wanting in cogency or rationality. Possible explanations of why society fails to proceed from capitalism to a system of self-managed firms by a ‘spontaneous’ process are also found in Gramsci’s theoretical approach to workers’ councils, specifically his ideas on the functions that trade unions, intellectuals and the Party are called upon to perform and his notion of hegemony.

5 For comparatively recent analyses of union opposition to self-management, see, inter alia, Elster and Moene, 1989, pp. 33-5; Moene and Wallerstein, 1993, pp. 148-9; Kester and Pinaud, 1996 and George, 1997, pp. 59-60

6 In the last year of his life, Lenin argued “the only task that remains for us is to organize the population in cooperative societies” (see Lenin, 1923).

7 Marx rated the proletariat as a revolutionary class because it was free from oppressive capitalistic social needs (see Marcuse, 1967, p. 22); today we can assume all wage and salary earners to be free from such repressive needs.

8 Togliatti (1958, p. 239) firmly believed that “the emergence and growth of Leninism in the world scene was the most influential factor in Gramsci’s evolution”. Vacca (1974) also pointed to Lenin as the main source of Gramsci’s thought and Bobbio once wrote (1976, p. 55): “no one has ever denied that Gramsci was a Leninist”. Gerratana has lately remarked (1997, p. 105) that one element of continuity behind Gramsci’s articles for Ordine nuovo and the Prison Notebooks is doubtless the influence of Lenin. See, also, Ragionieri, 1969, pp. 112-13.

9 On the preponderance of finance capital over industrial capitalism in an imperialistic period, see, inter alia, Gramsci, 1919-1920, pp. 26 and 130.

10 Like Marx, also Sweezy thinks that socialism cannot develop within a capitalistic order (see Sweezy, 1972).

11 According to Lorenz (1975, p. 762), “in Lenin’s view the main end of the proletarian revolution was the achievement of control and rendering of account, not the expropriation of capitalistic property; in place of the latter it was possible to enforce suitable tax laws”. Lenin (1917b) thought that during a proletarian revolution the main problem is defining comprehensive and appropriate procedures capable of securing worker control over production and distribution.

12 In Gramsci’s mind, a social group aspiring to power must develop leadership abilities well before it takes over the rule (Gramsci, 1975, p.2010).

13 In his juvenile Critique of Hegel’s Philosophy of Law, which appeared in the autumn of 1843, Marx maintained that for revolution in any country to result in the emancipation of a specific class of civil society, all the shortcomings of society must be blamable on another class viewed as the sole cause of scandal and the embodiment of universal barriers.

14 In the words of Bettelheim, whose approach has more affinities with Gramsci than with State socialism theorists, the road towards socialism is the process whereby workers acquire ever greater control over production and, more generally, their conditions of life. And planning is one of the tools for securing such control. However, as Bettelheim rated ‘plan’ and ‘market’ as merely descriptive, empirical notions, rather than scientific terms proper, he emphasized that the crucial point is not the market-or plan-based nature of the economy (and hence the State), but the nature of the class that wields power (Bettelheim, 1971, p. 9). For Lenin’s wording of this same idea, see Lenin, 1921.

15 In fact, in the Prison Notebooks Gramsci drew attention to “the idea of transition as a process” (De Giovanni, 1977, p. 56), but failed to provide a detailed analysis of how this process was to come about.

16 Seeing that after the events of 1870 the French and German working classes were successfully fighting for their rights and experiencing rapid growth, Marx and Engels re-elaborated their theory of class struggle to bring it into line with non-revolutionary periods as well. The first step in this direction was the comparatively early Inaugural Address, 1864, but the most significant was Engels’s Introduction to the reprint of Marx’s The class struggle in France, from which this excerpt has been taken.

17 As stated by Gramsci himself (1923-1926, pp. 137 ff.) and argued, inter alia, by Gruppi, 1972, p. 75 and Macciocchi, 1974, p. 20, the notion of hegemony was first introduced in connection with workers’ councils. For a different opinion, see Spriano, 1967 and Riechers, 1970, p. 202.

18 “Hegemony-building entails stretching lower-class viewpoints to the farthest possible levels of universalism, so that revolutionary workers may counter capitalist unity with utmost unity of consciences” (Badaloni, 1977, p. 12).

19 On the timing of transition in Marx and Engels, see Lawler, 1998 and Jossa, 2005.

20 The one-time type of homo oeconomicus must be done away – Gramsci argued (1975, p. 1254) – though he should be buried with all the great ceremony he deserves.

21 “It is hardly possible to think of institutionalized worker control within bourgeois society unless we speak of a mode of control directly developed for this type of society” (Chitarin, 1973, p. 22).

22 This is why we hold Gramsci’s theories on workers’ councils to be closely associated with Engels’s and Lenin’s idea of the death of the State (see Gerratana, 1972). 23 For Bettelheim’s view of the transition to socialism, see Montanari, 1974, pp. 105-13 and Chattopadhyay, 1972.


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