The Fall of the Co-operative Movement in Poland

THE FALL OF THE CO-OPERATIVE MOVEMENT IN POLAND:
CAUSES AND CONSEQUENCES

by Dr. Andrzej Maliszewski


Some Historical Reflexions

Having read "The History of the Polish Co-operative Movement" by Stanislaw
Wojciechowski, I wonder how  in the period of history mythologisation that
has lasted since the introduction of the martial law in 1981 up to today,
the importance of the co-operative idea was not recognised as a
state-forming and civilising  factor. It is sufficient to read Maria
Dabrowska's "Journal", or to learn that the name of consumer union:
"Spolem", comes from the writer Stefan Zeromski, to realize that the
co-operative idea has been supported by persons of the highest cultural and
political authority, both in the 19th century as well as in the interwar
period. However, today's politicians operate mostly with stereotypes, among
them being the theory that the co-operative idea comes from socialism.


They are not aware that in the period between the wars all the political
parties, from the left to the right, were supporting the idea of
Co-operation. Moreover, they were fighting for influence in the co-op
movement, which would often appear as a rival to the political ideologies,
especially those that could lead to a totalitarian state. It is not
astonishing that communists, as well as fascists, at first tried to fight
the co-op idea, and then, according to totalitarian logic - to infiltrate
and to subordinate it. That was the case in Germany under Hitler, as well
as in socialist Poland.


The Significance of the Co-operative Idea

Why did the totalitarian states fight the Co-operative idea? To answer this
question, one has to go back in history. The birth of the co-operative
sector was a reaction to the transformation of social structures in early
capitalism. Capital concentration, its original accumulation, industry
specialisation, changes in agriculture - all these factors led to the fall
of the three social strata: artisans, small merchants and peasants. A new
social stratum appeared in towns - workers and employees working in
industry. None of those social groups had an economic organisation
defending them from the exploitation and competition of the capitalists.
Therefore they started to organise themselves into small groups, designed
for economic  self-defence against the upper class.  It was concluded that
the only chance to remain on the market was economic co-operation in the
form of a business managed democratically by its members. To the principle
of profit at any price, these groups answered with the principle of mutual
help, and to competition with the principle of solidarity.

Around these two principles were assembled social activists and
intellectuals who, despite different political options and views, were
trying to work out a uniform system for co-operatives and to locate it
rationally on the free market so it could achieve social as well as
economic aims. These people believed in people's s p o n t a n e o u s
behaviour and in the superiority of communities over the fragmentalised
society. Their vision of social order was different from that proclaimed by
extreme liberals. They were convinced that individual egoism cannot be
society's driving force. When discussing human nature, they paid attention
to the relationship between people, asserting that social organisation
should be based on this. A particular importance was attached to
communities that had kept up moral and behavioural patterns. Hence the
importance they attached to social organisations in the rural environment,
basing the development of the Co-op system in administrative units such as
the village, parish or commune. It is not surprising that in the Co-op
Movement, originating in the 19th century, there are so many activists
coming from such professional circles as priests, teachers, doctors,
scientists etc.

The democratic system held an essential value for co-op activists. They
applied it to management mechanisms in associations as well as in
co-operatives. Co-ops could not be ruled bearing the unequal wealth status
of its members in mind.  All co-op members had equal rights, regardless of
their contribution of capital.

The democratic principles in co-op management had a double meaning: they
realised the rights and duties of all associated members and, at the same
time, they would bring the democratic principles on to the capitalist
market. The educational aspect, underestimated today, was a strong
motivation for the political parties supporting the co-operatives.
Obviously nowadays co-operative education has to be understood differently
than in the interwar period. Nevertheless, propagation by the co-ops of
pro-market attitudes, professional training of members and effective
management training is necessary, especially in rural communities, which
are not prepared for the coming changes.

A synthesis of the above mentioned values took the form of a specific
co-operative ideology, around which were built different justifications,
such as people's freedom to voluntarily associate into economic non-profit
organisations designed to satisfy members' needs.

There was not a totalitarian state that could accept such an ideology,
especially when co-ops began to proclaim the principle of political
neutrality.

Totalitarian states limited all forms of associations, including  co-ops.
They wanted, however, to use the "social basis", created by the Co-op
Movement. Therefore, in 1947 they started to subordinate those co-op
sectors which could be used for the communist ideological aims and to
abolish sectors which could exist only in a free-market economy. All
municipal and credit co-ops were suppressed and rural co-ops transformed -
accordingly to Stalin's doctrine of the countryside's "co-operativisation".
By 1956, there were no more credit, housing, dairy, supplies and
distribution co-ops, the latter being replaced by the Peasants' Co-op
"Samopomoc Chlopska".

There are political and ideological reasons why the Polish co-op structures
were so easily abolished from 1947-56. Ideological, since the Polish
Socialist Party fought the thesis that the Co-op Movement had been created
in order to adapt the economically weak units to the free market. For them,
co-ops were the tool for transforming the whole of  society, and not a
factor for activating the individual and the group on the free market.
Negating the market, they talked about some abstract "global social
interest", that had become the truth for communists.

On the assumption that co-ops work for society as a whole, all the
advantages that a co-op member had previously obtained,such as the
dividend, priority rates, priority in using the co-op services etc., were
abolished. This ultimately meant that the co-ops lost their voluntary
character, and could no longer be distinguished from the state enterprises.

In the years 1956-57, the Co-operative Idea apparently revived. We say
"apparently", since the co-op activists of that time never directly
declared that the only reason for the co-ops to exist would be in the
interests of their members and not the whole of society. The value of
democratic management was only tolerated as a panacea for the
bureaucratised state economy. The activists contested the theory of the
superiority of state ownership over group ownership not to admit private
ownership, but to equal the importance of the co-op ownership with that of
the State. It appeared that the co-ops wanted to win a position equal to
that of the State, at the cost of the private sector. The general view,
prevalent among socialist activists, was that there was no place for
competition among the three sectors.

>From 1958 the co-op sector became concentrated with the local co-ops being
replaced by giant complexes. Self-management was abolished and there was
increased bureaucratisation with representative bodies and members becoming
alienated. During this period co-ops were merely perceived as para-statal
institutions much like state companies. Since rural co-ops were seen as a
tool of achieving the aims of rural policy and housing co-ops and so on,
all membership privileges were abolished. Membership became obligatory and
the co-ops made no difference between members and clients. It was not
surprising then, that when democratic changes took place in Poland,
society, including the co-op members themselves, regarded the co-operatives
as alien institutions - a creation of the Socialist Regime. This naturally
had negative consequences on all forms of co-operation in Poland.


Post-communist society  versus co-operatives

Although the communist doctrine proclaimed a collectivist vision of
society, the practice of the communist state has led to a society that was
entirely fragmented. Two reasons for this were the ban on forming
associations and the workers' total dependency on the workplace.

In democratic societies, there is a range of horizontal and vertical links
between people satisfying their different needs in particular social
groups. In totalitarian states, these links are purposely abolished, so
they could be fulfilled only in relations between the individual and the
state. Thus freedom of association is limited, and the associations
authorised to exist have to be controlled - internally and externally - by
the state. In such a system the workplace takes a special role.

In addition, the employees had to belong to the co-op and consequently, the
unions were dominated by members easy to manipulate by a bureaucratised
management.

In the co-op sector (especially in users' co-ops), there are three groups
of social and economic interests: members, employees and management.
Obviously, the mangement and employees are in a better position to
influence changes if part of the membership withdraws, leaving a majority
of employee-members over member-users. This situation - the lack of
identification of members with the co-op, no freedom for the
self-organisation of the community from which the members came and a
majority of employee-members in the union, and consequently in the
self-elected bodies, led to a management organised into informal groups and
dominating the unions and supervisory boards.

When the former opposition came to power, they consolidated this situation
by their unconsidered reforming of the whole sector and uncritical
acceptance of the neoliberal ideology, proclaiming the superiority of
"profit" over all other categories of social and economic life.


Neoliberal ideology and co-operatives

By 1989,  co-op managers were thinking about a reform that would allow
increased individual profit for members. It became fashionable to transform
co-ops into employees' associations, independent from the unions, and to
divide the entreprises into smaller units. But two factors were not taken
into consideration: the economy of shortage and the lack of activity of the
society in which the co-ops would be functioning. The members did not
protest as they did not consider the co-ops as their own institutions or
understand the meaning of group ownership, the consequences of competition
on the market, the lack of capital, unemployment etc.


At the time of political changes in 1989 the ground for pro-market reforms
was prepared by a management pursuing its own interests. Under the slogan
of rationalising the co-op economy, there was a hidden desire to
appropriate the wealth of the "reformed" co-ops.

The green light for stealing the co-op wealth was given by the quickly
changing authorities, who considered that only private enterprise should be
supported.

The lawmakers saw the law on liquidation of the central unions, for
instance, as abolishing the co-op nomenclature, not reinforcing it. They
naively believed that society itself would introduce democratic changes
without taking into account the fragmentation of the society, and as
regards co-ops, the process that had taken place in the memberhip
structures.

In 1989 the union and board increased the co-op's membership fees. Members
who did not see any advantage in their membership, did not pay their dues
and were deleted from registers.

At the same time, there was an administrative pressure on the employees to
enroll and pay dues. They had been convinced that the co-op wealth was
their property, since they had worked for it.

In 1990, when the new laws were introduced, it was mainly employees,
manipulated by the unions, that participated in district meetings to choose
delegates for the General Assembly. Members - especially in the countryside
- that were not employees  were also influenced to vote for the board's
proposals (for instance there are cases of co-ops when farmers were told
that their goods would not be purchased). Delegates were chosen and
resolutions adopted, often with only a few members present, even when there
were several hundred of them in the district.

During general assemblies all resolutions adopted were consistent with the
neoliberal philosophy - co-ops have to yield profit, which will raise
employees salaries, and members dividends. Anything which drained profit
(e.g. training center, holiday home etc.,) was disposed of. People
informally connected with members of the board or employees were chosen to
the boards. Co-op properties were sold and some of them (such as shops)
sub-contracted to employees. Users co-ops were transformed into employees
companies, and  co-operatives into share companies (in this way consumer
societies for instance were transformed into workers companies).

Dues were again raised, with unions and boards paying several shares.
Dividends amounted to 150-180% of the participation. The co-ops served the
clients' and not the members' interests. Co-op Banks, for instance, served
mainly speculative commercial capitalists, eliminating farmers members.

"Solidarity" had initiated the process of liquidating co-ops and allowed
the very people they had oposed politically to appropriate the co-ops'
wealth.  The new political class had been unable to work out its own vision
of a democratic society, forgetting to take into account the social
consequences in a situation where there was a lack of capital, natural
social links had been destroyed, etc. This was particularly visible in
local societies in small towns and villages. The studies of the Co-op
Studies Institute show that those societies had ceased to co-operate
economically to suppress the negative consequences of the free market. The
slogan of economic  "self-defence" was understood by farmers and
wage-earners only as lobbying central state authorities, but not as
organising themselves into unions with economic activities. The workers'
trade union "Solidarity" for instance had been defending the interests of
co-op employees without taking into consideration the consequences for
consumers.

Farmers' organisations criticized the pathological situation in local
co-ops, banks, or farmers circles, but they did nothing to found a new
movement that would activate the countryside and compete with the existing
structures. All our studies show that farmers do not want to co-operate
economically, and they prefer the form of farming in an individual,
private, profit-seeking enterprise. They do not understand that, in the
free market economy, it is important to gain access to cheap credit, or to
organise their workplace, rather than the amount of revenue on the dues
paid to the co-op, or that the agricultural co-op should be ruled by a non
profit principle.

Trade unions as well as farmers' political parties should review the
conceptual categories that have been thrust upon them, among which are:

- ownership - group ownership as well as individual
  ownership is also private ownership,

- enterpreneurship - group enterpreneurship is an important
  form of economic activity in democratic countries. It
  complements individual enterpreneurship everywhere private
  capital does not want to enter the market due to low
  profit. It is necessary to create the legal financial
  framework that will allow group aims and interests to be
  met even though these may not always agree with individual
  interests,

- profit - in a modern democratic society, profit cannot be
  the only economic criterion, non profit activities have as
  an important role to play,

- economic co-operation- local communities without
  economical co-operation suffer from anarchisation. The
  co-ops' activities have to be based on the group's social
  and economical interests, and not on the economic power of
  individuals and their influence on the political process,

- competition - societies with limited capital have to
  associate in order to eliminate monopolistic
  intermediaries,

- community - individual freedom cannot conflict with the
  community's interest.

In Poland the revival of co-operatives can only occur when the myth of the
market as an omnipotent force regulating all aspects of the economic and
social life is finally laid to rest. In a modern capitalist society the
welfare of communities is as important as the interest of the individuals
active on the market. Even the sacred right of disposing of private
ownership is limited, when community interest comes into play. It is a
complete misunderstanding that those who appeal to Christian values claim
that the market will solve all problems.


Institutions interested in the development of co-op forms of management

Trade unions and political organisations seek a meaning of existence in the
same values that lie at the basis of co-op activity. In capitalism it is
the defence of the economically weak individuals who, thanks to economic
association, can actively defend their own interests on the market, at the
micro- as well as macro-social levels. In the past, it was not accidental
that all such organisations sought ideologies based on group solidarity,
class solidarity, or Christian solidarity. They all had a common
characteristic - opposition to violence in the social and economic life due
to the free market. Nowadays, there is a need for group solidarity, and
co-ops are the expression of this in a concrete economic activity. In
capitalist countries co-ops as enterprises are submitted to the laws of the
market. But as economic unions, which precede these enterprises, they are
driven by different laws than those prevailing on the market, to satisfy
concrete group needs rather than existing solely for profit.

In Poland today, the following conditions exist which, in the past, were
decisive in the trade unions and farmers organisations:

- excess speculative commercial capital on the market and
  multi-level commercial intermediaries, resulting in
  excessive price rises, which hit the consumer (both wage
  earners and agricultural producers),

- lack of cheap credit that could be transformed into
  capital to support the economic activities of individuals
  or groups,

- the supply/demand barrier,

- increasing unemployment. In small towns and villages the
  unemployed could organise themselves into workers' co-ops,

- the housing crisis. In order to finance housing co-ops,
  savings and credit co-ops could  be organised;

- increasing insurances. Unions and farmers organisations
  should organise their own insurances, for rural producers
  as well as wage-earners.

The reform of the Polish co-op system has to be directed towards the
future. In other words, new co-ops have to be formed, But additionally,
care needs to be taken that the old co-op system does not become an
organisation which makes profit on small producers and wage-earners.


It is particularly important to stop the process of "privatisation" of
co-ops. A co-op fund should be created to support the new movement. The
first step is to reform the co-op banking system. Co-op Banks cannot be
commercial banks. They will be the vital cornerstone of the new co-op
system that is being built in Poland.

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19 out of 24
path:Review of International Co-operation/vol 88 no 1 95/The Alliance and
the War - The Co-operative Press
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The Alliance and the War - The Co-operative Press

by Henry J. May

Six months ago when we were suddenly overwhelmed by the outbreak of war,
the Executive of the Alliance were confronted with the task of determining
the lines on which the work of the ICA should proceed during the
continuance of the European upheaval.

George Jacob Holyoake had once declared that the British Co-operative
Movement would hardly withstand the shock of a great war, and in the first
excitement of that reversion to the barbaric arbitrament of the sword, it
was felt by some that the Alliance of Co-operators in the various countries
must be shattered by such an unspeakable conflict.

They remembered, with a sharp pang at thought of the change which twelve
short months had wrought, the happy and successful gathering with our
comrades from many lands which had taken place in Glasgow at the
International Congress of 1913.

They thought of the resolution on International Peace, of the eloquent
speeches with which it was supported by our colleagues from Holland,
Germany, France, Norway, and Great Britain; of the wonderful demonstration
with which the delegates received the announcement of the President that it
had been carried without dissentient voice or vote. And as they thought of
these things there flashed through their minds an instant of doubt. Could
it be that that great demonstration at Glasgow was only a 'pious expression
of opinion' after all, and not a consummation devoutly to be wished?

Doubtless our Continental colleagues have had similar moments of scepticism
in view of the destruction of our cherished hopes. But with them, as with
the Executive, to realise the doubt was to dismiss it with scorn, and to
acknowledge that the noble declaration of the Glasgow Congress remained a
true reflex of the ideals of our movement and the earnest desire of the
workers of all the countries in the Alliance. They realised also that our
democratic organisations, both national and international, had failed to
avert the greatest and most calamitous war in history, not because of any
defects in their aims or principles, but because they had been overtaken by
the influences and power of the old order of capitalistic imperialism
before the new system of society which it is the main business of
Co-operation to establish, had been sufficiently developed to make the will
of the people prevail.

The thought of that failure was the one consideration necessary to resolve
their doubts as to the future. The Alliance must go on even as the
co-operative movement must go on in all the countries. That it had failed
today was only the proof of the need of more energetic and wholehearted
effort on the morrow of the war.

In the meantime, two duties stared them in the face: the first, to use
every endeavour to keep in touch with all the members of our International
family, belligerents and neutrals alike, as far as the laws of the land and
the circumstances permitted, and to continue our interchange of ideas and
information on our own special work; the second, to prepare our
organisation to render all possible aid to any of the members of the
Alliance that may need it, as a result of the war, to reestablish
themselves or even to maintain their existence during the hostilities of
the nations.

That task the Alliance has endeavoured so far to fulfil, and on another
occasion we shall venture to give a brief resume of its efforts and their
general results.

For the moment we are concerned more particularly with the Co-operative
Press. Naturally, if the policy decided upon by the Executive - with the
full approval of all the members of the Central Committee who could be
reached, was to be effective, it must be carried out with impartiality
towards all the members of the Alliance.

It was not simply that the financial resources of the Alliance are derived
from all the countries, and that therefore all had a legal right to
consideration, but that only so could its work be made effective, its
existence justified, and the universal ideals of the co-operative movement
achieved.

There was, therefore, imposed upon the Bulletin a stricter obligation than
usual to avoid all subjects of controversy outside the limits of
co-operative enterprise. To publish only facts of co-operative interest,
and when the circumstances sometimes trenched upon the operations of the
war, as it was inevitable they should do, our duty appeared clear to state
the facts without attributing motives or stigma of any kind to the one
party or the other.

In the early period of the war, before we had so remarkably settled down to
it as a business and learned to receive the news of the destruction and
maiming of our fellow creatures as an everyday occurrence - before that
time there was some natural excitement in our co-operative press.

After all, every co-operator though entertaining international ideals is
himself, first of all, a patriotic citizen of his own country. With time,
however, that excitement has shown signs of settling down, and gradually we
may hope that the co-operative press will confine itself more and more to
its own business, leaving the discussion of war to the capitalistic press.

For ourselves, we have refrained from publishing anything but news of the
co-operative world, and have sacrificed the pleasure of dilating upon many
interesting, not to say burning, topics which have arisen since the war
began. In some quarters that restraint has been mistaken for weakness and
lack of hope in the future, but it is just because we look forward to a
great advance in all democratic institutions when the war is past that we
have bowed our heads to the passing storm.

The co-operative movement, like many another, is suffering the severest
test in its history. Thus far it is not only standing the strain with
remarkable fortitude, but is establishing itself as a permanent phase of
national life. It will emerge from the war strengthened in its usefulness,
purged of its weakness and with new impulses towards its ideals.

It therefore behoves us to watch closely against any acts or words which
may impair our usefulness as a national or international force for social
reform and peace.

The co-operative journals of all countries have a heavy responsibility
placed upon them in this matter, but they have also a high destiny to
fulfil. They can, by their moderation in questions of present controversy
and hostility, do much to preserve friendly relations between all sections
of our great movement. This is essential to a prompt resumption of our work
when the diplomatists, statesmen and generals have concluded the peace.

The co-operative press is now a considerable force and can use its
'platform' for definite propaganda, not only in economic relations, but in
strengthening the democratic foundation of a permanent peace. The only
peace which is likely to have any continuity must be based upon the
goodwill and acknowledged brotherhood of the peoples. If any evidence of
this were wanting, it could be found in the anxiety which all the
belligerent leaders exhibited as to the attitude of the proletariat towards
the conflict, when the war became imminent.

Many of us are profoundly convinced that if our working class institutions
had been a little more developed, they would have been able to defeat both
militarism and secret diplomacy and have prevented war. The future,
however, is left to us, and we have to build anew with greater strength and
determination to cement the ties which bind us, in spite of differences of
language, race and creed.

We have to strengthen the relationships which existed before the war, which
still exist, and which have received their most striking and pathetic
confirmation on the battlefield itself.

The co-operative press has a noble part to play in this work. Let it preach
principles, not of war, but of peace; not of reprisals or even of legal
rights, but of fraternity and mutual work for the benefit of mankind.

Let us discuss the means by which we can soonest repair the desolation
which has penetrated, in some places, even into the co-operative field. Our
organisations should be prepared, like the Red Cross Brigades, to enter the
field immediately hostilities have ceased to care for the wounded and
distressed with impartial humanity.

The task of the co-operative press is so much the more easy because the
capitalistic press of all the countries relieves it of any necessity to
enter the field of the war correspondents. Our business is always with the
new ideals - 'the new system of society', preached so optimistically by
Robert Owen, which has only yet a partial realisation; it is, nevertheless,
no illusion, but an ideal which the great upheaval will bring within
measurable distance of realisation.
H. J. M.
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