Are Cooperatives Socialist Ownership?

The idea of an economy based on cooperative ownership—or its derivatives, such as nominally state ownership but actually managed by self-governing workers' councils—is extremely widespread among the anti-capitalist left. It is often presented as the proper, most authentic, and supposedly free from 'bureaucratic distortions' model of socialism. In this narrative, it is precisely the cooperatives, plant councils, commune federations, and other decentralized forms of management that are supposed to embody 'true socialism,' as opposed to the historical experiences of socialist states.

The problem with this vision, however, is that the system described in this way is not socialism at all. Moreover, cooperative ownership—regardless of how democratic, grassroots, or 'worker-oriented' it is—does not meet the basic criteria of socialist ownership. We are dealing here not with a different variant of socialism, but with a qualitatively different type of production relations that remains fundamentally outside its definition.

Socialism vs. Capitalism

To demonstrate this, we must first clearly define what socialism actually is. And here we encounter a phenomenon that is simultaneously half funny and half terrifying: a surprisingly large number of people who identify as socialists 'fail' already at this elementary issue—as if they were unable to answer a question about their own name. At the level of declarations, there is apparent agreement: socialism is the social ownership of the means of production. This is a definition commonly used and, although incomplete, it is the common denominator of almost all socialist currents.

The problem arises, however, at the level of meaning, not words. The same terms can be understood in radically different ways. As a result, the definitions and slogans used sound the same, but not their content. Just as a crystal is exclusively a naturally formed crystal lattice, and not its artificially made model, so 'social ownership of the means of production' does not mean any form of collective management. Therefore, models often invoked by supporters of 'anti-bureaucratic socialism'—such as revolutionary Catalonia, Rojava, or Yugoslavia—do not meet the definition of socialism, even though they use the same terminology.

Capitalism and socialism are not two versions of the same system, but opposing modes of production. In capitalism, the means of production constitute the material base with which the workers, using their labor power, produce value exceeding the value of the consumed constant capital and variable capital—surplus value. This value is appropriated by the owner of the means of production and, in the process of competition, takes the form of profit. The direction and structure of production are subordinated to the maximization of this surplus from the perspective of individual capitals, and the mechanism coordinating their mutual relations is the market with its laws.

The market in capitalism is not just one of many elements of the system or a neutral tool of exchange. It is the fundamental form of existence of the capitalist mode of production—the way in which private production relations shape the development of the productive forces. It is the market that organizes the commodity form of production and exchange, within which the most basic fact of the modern economy is realized: the social character of labor, production, distribution, and consumption. At the same time, it is the source of the fundamental flaw of capitalism—the anarchy of production.

Production has a social character in the material sense: millions of people participate in one global process of creating goods. Goods are produced not for specific individuals but for a collective, anonymous consumer. The production process resembles a combinatorial hell of millions of plants, industries, and supply chains that condition, penetrate, and intertwine with each other. In this process, the fruits of the labor, knowledge, and technology of millions of people are actually integrated into one whole. At the same time, however, production decisions are made privately, detached from this whole, by separate owners of capital, guided by local profit calculations.

From this contradiction arises what Marxist economics calls the anarchy of production, which constitutes the fundamental point of conflict between the relations of production and the development of the productive forces in capitalism. It is precisely this anarchy—not exploitation or alienation, though these are also important—that, in the light of historical materialism, is the deepest problem of capitalism, as it is responsible for hindering the development of the productive forces. The productive forces constitute the main basis of human existence, so their level is the primary factor of development. The anarchy of production means the lack of conscious, society-wide control over the direction, structure, and proportions of production.

Every economic entity produces 'blindly,' guided by its own interest and local profit calculations, not knowing whether its product will find a market, whether it will not be duplicated by competitors, whether it meets real social needs, or whether it will not encounter disruptions in the complex chains of interconnections between plants. Only the market—after the fact—brutally verifies these decisions through the mechanisms of prices, waste of resources, bankruptcies, and cyclical crises of overproduction, in which blind production leads to the accumulation of supply exceeding effective demand.

It is through the market that private, uncoordinated decisions of individual producers are secondarily 'stitched' into one social process. However, this is a very primitive, fragmented, negative, and reactive coordination: it does not involve the planned determination of goals and means based on the social good, but rather a selection ex post, carried out through losses, waste of resources, particular interests, overproduction of some goods, and chronic shortages of others.

The key point is that this anarchy is not a random feature of capitalism or a result of 'market imperfections.' It is a logical and irremovable consequence of the private ownership of the means of production. As long as the means of production belong to separate entities, there is no possibility of conscious, comprehensive control over the production process.

In a market system, millions of separate economic entities clash with each other, each realizing the same logic of profit maximization, but doing so solely from the perspective of their own narrow and local interest. Production decisions are therefore made in a way that is rational for a single capital but irrational from the point of view of the social interest as a whole. What constitutes optimal use of capital for a production unit often appears to society as a waste of resources, labor, and technical potential.

As a result, a significant part of the socially produced labor power, raw materials, and production capacities is directed towards the production of unnecessary, less needed, or even harmful goods, while at the same time entire areas of socially necessary production remain chronically underinvested or not realized at all. The market does not eliminate this contradiction but systematically reproduces it because its selection mechanisms are not based on the criterion of social utility but on the ability to realize profit.

Capitalism—regardless of the level of technological development, degree of regulation, or declared intentions of its participants—remains a system structurally incapable of rational organization of production on a social scale. The market is not an addition that can be arbitrarily limited or 'humanized,' but a necessary mechanism that binds private ownership into an apparent whole. Its existence is simultaneously evidence of the lack of real social control over the production process.

This moment is crucial for further reasoning because it allows us to understand why all models of 'market socialism,' self-governing, or cooperative socialism do not break the capitalist logic of production. As long as the market remains the main mechanism of coordination, the anarchy of production and the primacy of particular profit over social interest continue—regardless of whether the owner of the enterprise is a capitalist, a workers' cooperative, or a local council.

Socialism, on the other hand, is based on a completely different goal of production. This goal is the maximization of benefits for society as a whole, not the interests of individual economic entities. Production here is uniform and integrated on a social scale, and its direction is centrally determined based on a comprehensive, rational assessment of the needs and possibilities of society. The material basis of this process is the social ownership of the means of production, which replaces private ownership. The second, inseparable element of the definition of socialism is central planning, without which social ownership remains an empty form, not a real production relation.

What Are Cooperatives?

Since the essence of socialism is the elimination of the fragmented nature of production decisions and the subordination of production to the interest of society as a whole, not the maximization of profit in particular interests, its material basis must be the ownership of the means of production belonging to the entire society. Not to a set of separate entities, not to the sum of workplaces, not to federations of cooperatives or networks of autonomous enterprises, but to society understood as one integrated economic whole. Only this form of ownership enables a real, qualitative change in the mode of production, and thus the elimination of the anarchy of production and the subordination of the economic process to the maximization of private profit at the expense of the common good.

Cooperative ownership does not meet this condition. Although it formally abolishes the capitalist-worker relation within a single plant, at the system level it retains exactly the same structure that defines capitalism: the fragmentation of ownership of the means of production among separate economic entities. Each cooperative remains an autonomous entity, disposing of its means of production exclusively and making decisions based on its own economic calculations, its own interests, and its own competitive position. In place of the private owner, a collective owner of the plant appears, but the plant—as a separate decision-making unit in the social production process—remains untouched.

As a consequence, all key mechanisms and pathologies of capitalism are preserved. The main regulator of production remains profit, understood as the surplus realized in the market—a transformed form of surplus value—whose maximization becomes the goal of individual, fragmented economic entities. The direction of production activity is not determined by a comprehensive assessment of social needs but by competitiveness against other plants and the ability to survive in market selection. The anarchy of production is not abolished in this model. Production remains uncoordinated between plants and chaotic, lacking a centrally established plan that consciously determines, based on a holistic view of the economy, the functioning of individual plants.

Instead of many private capitalists, we have many autonomous collectives that—regardless of the intentions of their members—are forced to submit to the same market incentives. In this way, cooperatives function as collective capitalists: they manage the means of production in a manner subordinated to competition and profit calculations, not the conscious realization of social interest.

From the perspective of the functioning of the socio-economic formation and the development of the productive forces, especially at the stage of a developed and complex economy based on the social character of production, the key significance lies not in what the ownership and management relations look like within a single plant, but in what role this plant plays in the overall process of social production. In this sense, the production unit—enterprise, factory, plant—plays exactly the same function under both private and cooperative ownership. It is a separate decision-making center, responding to market signals and its own economic balance, not an element of a consciously designed, planned production system subordinated to the development of society as a whole.

Therefore, cooperative ownership does not constitute a transition to socialism but remains a modified variant of capitalism—often more egalitarian in the distribution of income within the plant, but no less capitalist in its essence. It does not abolish either the market as the main mechanism of coordination or the anarchy of production as its necessary consequence. From the point of view of the development of the productive forces, the difference between a private enterprise and a cooperative is secondary; the fundamental contradiction—fragmentation of ownership and lack of real, society-wide control over production—remains untouched.

However, an important reservation must be made here. The above criticism does not mean equating cooperative ownership with private capitalist ownership. Cooperatives do not abolish exploitation in a systemic sense because, as entities operating under market conditions, they can—and often must—exploit their hired workers. However, they undoubtedly narrow the scope of exploitation and abolish its character as an all-pervasive and structurally dominant relation within the plant. In this sense, the cooperative system creates real better working conditions, limits the appropriation of surplus value and the most brutal forms of exploitation, and weakens the hierarchical nature of production relations.

However, this is where the advantage of cooperatives over the classic form of capitalism ends. As shown earlier, the fundamental mechanisms of the capitalist mode of production—the market as the main regulator, the anarchy of production, competition, and the subordination of economic activity to profit calculations—remain fully preserved. This means that cooperatives do not abolish the logic of the system but function within it, modifying only the form of income distribution and intra-plant relations.

For this reason, the establishment of cooperatives should be considered a progressive phenomenon within capitalism. They create real breaches in its most destructive forms, establishing limited oases where some of the system's pathologies are mitigated. They also have their justification as a transitional form in the period after the seizure of power by the proletariat when material, organizational, and technical conditions do not yet allow for the full realization of a centrally planned economy on the scale of the entire society.

However, this is where their historical role ends. Cooperatives have no rational application at the stage of realizing socialism, where the means of production become the property of the entire society, and the production process is subordinated to a unified, society-wide plan. In this sense, the cooperative is not a socialist form but a transitional phenomenon: progressive towards capitalism, useful in the transition phase, but fundamentally contradictory to the planned socialist production system.

The empirically instructive example is Yugoslavia. This country operated under exceptionally favorable developmental conditions: it could conduct profitable trade with both Eastern Bloc countries and the West and benefited from direct financial and credit support from capitalist states. Nevertheless, Yugoslavia never achieved comparable rates of national income growth and labor productivity or the level of scientific and technological development that the USSR achieved, developing in an extremely unfavorable geopolitical, economic, and military environment.

This is not a conclusion based on Soviet propaganda but on the most reliable contemporary recalculations of economic data for the USSR, which reject both the distortions of official Soviet statistics and the simplified methods of some Western economists based on the mechanical extrapolation of capitalist growth measures to the realities of a planned economy. Even when comparing initial levels, it is clear that Yugoslavia did not achieve the civilizational leap and improvement in living conditions that the USSR accomplished between 1930 and 1950, despite a much more difficult starting point.

The often-cited argument about the relatively higher level of consumption in Yugoslavia in the 1970s and 1980s does not withstand methodological criticism. It overlooks the fact that from the 1960s, the Soviet Union itself embarked on a path of significant decentralization and caricature of the central plan, meaning it cannot serve as a reference point in comparing 'market socialism' with a command-planned economy. Comparing decentralized Yugoslavia with a less but still decentralized USSR distorts conclusions and blurs systemic differences.

Moreover, Yugoslavia itself exhibited all the phenomena characteristic of the capitalist mode of production: anarchy of production, the primacy of plant profit over public interest, persistent exploitation of wage labor, strong and growing regional and social inequalities, and structural unemployment. These were not incidents or 'execution errors' but logical consequences of a system based on enterprise autonomy and market mechanisms.

Those interested in a more detailed analysis should refer to the Chinese study from the 1960s, Is Yugoslavia a Socialist State?, which reconstructs the realities of the Yugoslav economy based on data taken directly from Yugoslav newspapers, statistical yearbooks, and official publications. This analysis clearly shows that the Yugoslav model was neither a transitional form of socialism nor a 'more democratic alternative,' but a specific variant of capitalism.

Speaking of autonomous enterprises, it is also worth mentioning the USSR and the people's democracies, which from the second half of the 1950s and 1960s themselves implemented deviations similar to the Yugoslav ones. This process involved limiting the role of the central plan, strengthening enterprise autonomy, introducing economic accounting based on profitability, and increasingly using quasi-market incentives. In theory, this was supposed to increase the efficiency and flexibility of production, but in practice, it led to the reproduction of the same contradictions that are immanent to a market economy. Enterprises began to be guided by their own economic interests, minimizing costs at the expense of quality and long-term development, and the plan increasingly ceased to function as a real coordination tool, becoming merely a formal framework.

The result of this evolution was the gradual return of the anarchy of production and the primacy of particular profit. The consequence was a drastic reduction in the growth rates of economic indicators and widespread economic troubles, cited by bourgeois propaganda as alleged evidence of the inefficiency of central planning.

What Form Does Socialist Ownership Take?

The only known and realistically available form of socialist ownership is state ownership, provided that the state is in the hands of the proletariat and other working classes. This does not stem from dogma or an a priori affirmation of the state as such, but from the material conditions of societal development. The only existing form of social organization capable of sustaining socialism in the long term, defending it against the resistance of reactionary classes, and encompassing the entire population, the entire territory, and the entire economic process is the state. And the only state that can constitute true ownership of the entire society is the state of the working class.

Only through the proletarian state can the means of production come under the control of the working class as a whole, not as a collection of dispersed groups, plants, or local collectives. Only this form of ownership abolishes the fragmentation of production decisions, enables the subordination of production to the general social interest, and creates the material basis for central planning. In this sense, state ownership in a proletarian state is not 'one of the forms' of socialist ownership but its only real form at the historical stage of transition from capitalism to communism.

With the development of the productive forces, and thus with the development of the entire society—material, cultural, and organizational—the state gradually loses its raison d'être as a separate apparatus of coercion. Ownership of the means of production then ceases to be state-owned and transitions to the form of direct management by society as a whole. However, this does not mean in any case the transfer of the means of production into the hands of individual plant teams or federations of autonomous economic units. Rather, it means reaching a level of development at which there is no longer resistance from any reactionary class, and humanity as a species has learned to function based on the common interest as the default state. Then, the state apparatus becomes unnecessary, and central regulation of production is realized without its mediation—as a natural, conscious way of organizing social life. However, this is already at the level of a higher stage of development, i.e., communism, and the described model constitutes communist ownership, not socialist ownership in the strict sense.

This does not mean, however, that state ownership is without threats. First and foremost, it must be clearly stated that state ownership of the means of production in capitalist countries has nothing to do with socialist ownership. It is merely a special form of capitalist ownership, subordinated to the interests of the ruling class, although often playing a progressive role and bringing benefits to the working classes.

Even state ownership, which originally had a socialist character, can—without appropriate mechanisms of political and economic control—undergo gradual degeneration into a bureaucratic form of state-capitalist ownership. In such a case, it ceases to be the real ownership of the working class and ceases to fulfill a social function. Instead, it becomes the actual ownership of a narrow layer of the state apparatus—directors, officials, managers—who begin to dispose of the means of production autonomously, detached from the interests of the working masses and from centrally defined developmental goals.

This degeneration does not consist of formal privatization but of the formation of a particular kind of ownership: bureaucratic control over the means of production, which in practice replaces social control. The managing apparatus, while retaining the state title of ownership, begins to function as a collective entity of interest, realizing its own goals—stabilization of position, expansion of competencies, maximization of personal gains from the resources under its disposal. In this way, state ownership loses its socialist character, even though it formally remains 'public.'

As a result, a structure functionally similar to syndicalist degeneration emerges, but in state guise. Individual plants and sectors gain far-reaching decision-making autonomy, are guided by their own economic calculations and particular interests, and central coordination is weakened or displaced by quasi-market mechanisms. The consequence is the return of the anarchy of production, the erosion of the plan, and the subordination of economic activity to the criteria of plant efficiency and profitability, not the interest of social development as a whole.

We observed such a process in the USSR starting from the Khrushchev period and then in the people's democracies after 1956, where formally maintained state ownership was increasingly filled with state-capitalist content. However, it should be emphasized that this degeneration was not the original state nor a necessary consequence. It was preceded by a real, multi-year period of the existence of socialist ownership, a system by no means free from contradictions, flaws, and errors, but one in which the bureaucracy did not have autonomy in economic management, was subject to strict political control and real social responsibility, and the means of production remained subordinated to a unified central development plan.

The existence of these threats does not constitute an argument against the state form of socialism. On the contrary—the lack of an alternative form of social organization at the transitional stage makes it inevitable. Before achieving communism, there is no other organism capable of conscious, comprehensive management of social production. The proper response to the risk of bureaucratic degeneration is therefore not the abandonment of state ownership but the creation and consistent application of effective anti-bureaucratic safeguards.

Their goal must be to prevent the transformation of managerial, expert, and administrative functions into the basis of a new, privileged class position. These functions should have an exclusively technical character in the social division of labor and not be associated with any special rights to the means of production, privileges, or decision-making autonomy against the general social interest. Simultaneously, the individuals performing these functions must be subject to rigorous control. However, what exactly these safeguards should look like is a question requiring a separate, in-depth analysis.

At this point, it is worth addressing another, 'leftist' counterargument, which—despite its popularity—is in essence deeply absurd. It is the claim that the socialist state 'plays the role of a collective capitalist' because it appropriates the surplus value produced in the production process. This argument is based on a complete confusion of economic categories and abstracts from the most elementary conditions of the functioning of any society.

If the entirety of the produced social product were to be immediately and entirely consumed, social development would become impossible. Without accumulation, there is no expansion of the production base, no investment in new plants, infrastructure, and means of labor, no financing of scientific research, technological innovations, or the expansion of the scope and volume of production. A society devoid of the ability to accumulate not only stops developing but very quickly begins to regress until it finally disintegrates. On a historical scale, this would mean not the emancipation of labor but civilizational regression and social collapse.

The problem of surplus value in capitalism does not lie in the mere existence of surplus or the fact of its accumulation but in the manner of its appropriation and the purpose of its use. In capitalism, surplus value is based on the unjust appropriation of part of the value produced by other people and goes to the disposal of the private owner of capital, who uses it according to their interest and discretion. Accumulation here is private, elitist, chaotic, and subordinated to the maximization of profit, not the development of society as a whole.

In socialism, the situation is qualitatively different. The surplus of the social product is not appropriated by any privileged individual or narrow group but remains at the disposal of society as a whole. It is society—through the plan and conscious decisions—that decides on its division between consumption and accumulation, guided not by private profit but by the maximization of long-term development, labor productivity, and social welfare. The proletarian state does not act here as a capitalist but as a tool for the realization of the collective will and interest of the working class.

The surplus of the social product does not disappear in private appropriation but returns to the working class in a direct and systemic manner. The part intended for accumulation takes the form of public and common goods: the expansion of infrastructure, transport, energy, healthcare, education, housing, culture, as well as the development of science and technology. These are not abstract 'costs' but real forms of increasing social labor productivity and living standards, from which the worker benefits directly as a member of society.

Accumulation in socialism is therefore not opposed to the worker's interest but constitutes its extended form. What does not return to them in the form of immediate individual consumption returns in the form of better living and working conditions and social reproduction, as well as in the form of an increase in general social wealth, which is their collective property. The proletarian state does not act here as a capitalist but as a tool for the organization and redistribution of surplus in the interest of the working masses.

Individual wage distribution in socialism also has a completely different character than in capitalism. It is not based on the ownership of capital or market position but on the actual contribution of labor. Everyone receives a share of the social product corresponding to the quantity, quality, and social utility of the labor they have contributed. This principle—'from each according to their ability, to each according to their work'—not only abolishes the unjust appropriation of the fruits of others' labor but also creates an incentive to maximize productivity and the rational organization of production.

Equating social accumulation with capitalist exploitation is therefore not only a theoretical error but leads to conclusions completely contrary to the material conditions of societal development. Without surplus and its planned use, there is neither socialism nor modern civilization at all.

Marxism and Cooperativism

This view of cooperativism and its derivative forms is not my invention but reflects the views of Karl Marx and Friedrich Engels.

Poverty of Philosophy, one of Marx's first great works, is devoted to a crushing polemic by the thinker from Trier with the mutualist concepts of the anarchist Pierre-Joseph Proudhon.

This is by no means a product of the immature views of the young Marx. In Volume III of Capital, there is a significant passage:

Worker cooperatives belonging to the workers themselves are the first breach within the old form, although everywhere, where they actually organize, they necessarily reproduce all the deficiencies of the existing system. However, the antagonism between capital and labor disappears within these factories, although at first this happens only in the form that the workers, as an association, are their own capitalists, i.e., they apply the means of production to exploit their own labor.

These factories show how, at a certain stage of development of the material productive forces and the corresponding social forms of production, a new mode of production develops and forms naturally from the old one. Without the factory system, which arose on the basis of the capitalist mode of production, the cooperative factory could not have developed, just as it could not have developed without the credit system, which also arose on the basis of the capitalist mode of production.

The credit system, which is the main basis for the gradual transformation of private capitalist enterprises into capitalist joint-stock companies, also provides the means for the gradual development of cooperative enterprises on a scale covering the country to a greater or lesser extent. Capitalist joint-stock companies, as well as cooperative factories, should be considered transitional forms from the capitalist mode of production to the associated mode of production, with the difference that in the first case, the antagonism is abolished in a negative way, and in the second—in a positive way.

(Karl Marx, Friedrich Engels; Works, volume 25, part 1; Książka i Wiedza, Warsaw 1983/1984, pp. 683-684)

As can be seen, Marx considers cooperativism as a progressive form compared to private ownership, but still a capitalist one, good as an intermediate step but unable to serve as a model of socialism.

A similar view is expressed by Engels in a letter to August Bebel dated January 20-23, 1886. As we read:

Neither Marx nor I have ever doubted that during the transition to a fully communist economy, the widespread use of cooperative management as an intermediate stage would be necessary. But things should be organized in such a way that society, i.e., initially the state, retains ownership of the means of production and thus prevents a situation where the particular interests of cooperatives take precedence over the interests of the entire society.

(Letter to August Bebel, January 23, 1886)

The intermediate and non-socialist character of cooperativism is clearly marked in Anti-Dühring:

He [Owen—ed. note] introduced as temporary means to facilitate the transition to a fully communist organization of society, cooperative associations (consumer and producer), which at least practically proved that both the merchant and the manufacturer are entirely superfluous figures; he also created labor exchanges, institutions where the exchange of produced goods took place using labor money, whose unit was the working hour. These institutions were bound to fail by the force of circumstances, but they were a complete anticipation of the much later Proudhonist exchange bank, differing from it only in that they did not represent a universal remedy for all social ills but only the first step towards a much more radical transformation of society.

(Anti-Dühring, Part III)

Going further, in the same work, Engels criticizes the communal ownership advocated by Dühring, which is a derivative of cooperatives at the commune level:

There will therefore be rich and poor economic communes, and equalization will take place through the mass influx of the population to the rich communes and the outflow from the poor ones. Mr. Dühring wants to remove the competition of the products of individual communes through national organization of trade but calmly leaves the competition of producers. Things are freed from competition—people remain under its rule.

(Anti-Dühring, Part III)

In this context—as described in Anti-Dühring—we should understand the praise of cooperativism expressed by Marx in the Inaugural Address of the International Workingmen's Association, cited as evidence of Marx's alleged support for cooperativism:

However, a still greater victory of the political economy of labor over the political economy of property and capital was soon to follow. We refer to the cooperative movement, and especially the cooperative factories, founded by the entirely independent efforts of a few bold 'working hands.' It is difficult to overestimate the value of these significant social experiments. Not in word, but in deed, they have shown that large-scale production, corresponding to the requirements of modern science, can take place without the existence of a class of employers who employ a class of workers; they have shown that, for production, tools do not have to be monopolized as means of domination and exploitation of the worker, and that wage labor, like slave labor and serf labor, is only a transitional and lower social form that must give way to associated labor, performed willingly, with a fresh mind and in a cheerful mood. On English soil, the seeds of the cooperative system were sown by Robert Owen; the experiments of the workers on the continent were in fact practical conclusions from theories that were not discovered in 1848 but were then loudly proclaimed.

(Inaugural Address of the IWA)

There is no mention here of cooperatives as the final, socialist form of society, but only of the benefits they bring—as clearly shown in the examples cited above—as a valuable intermediate form within capitalism.

Sometimes, reference is also made to excerpts from The Civil War in France as an exposition of the economic postulates of Marxism. However, there Marx criticizes the establishment of cooperatives as a form of development only within capitalism and, in their place, proposes a society-wide system in which cooperatives lose their formal sense and become a unit of the centralized command economy. We do not see here a call to establish cooperatives but rather an indication that they would have the sense of a real form opposed to capitalism only as units of a centralized command economy:

The Commune wanted to abolish that class ownership by which the labor of many turns into the wealth of a few. It aimed at the expropriation of the expropriators. It wanted to make personal property a real truth by turning the means of production, land, and capital, which are today primarily means of enslaving and exploiting labor, into mere tools of free and associated labor; - But this is communism, 'impossible' communism! Well, and what, there are people among the ruling classes who have enough sense to see the impossibility of the further existence of the current system—there are many such people—and they impose themselves as intrusive and loud apostles of cooperative production. But if associated production is not to be an empty sound and jugglery, if it is to displace the capitalist system, if the whole of the associations is to regulate national production according to a common plan, taking it under their own direction and putting an end to the constant anarchy and periodically recurring convulsions that are the inevitable lot of capitalist production—what else will it be, gentlemen, if not communism, 'possible' communism?

(The Civil War in France)

Very often, the following excerpt from Anti-Dühring is cited against state ownership:

The modern state, regardless of its form, is essentially a capitalist machine, the state of capitalists, the ideal collective capitalist. The more productive forces it takes into its ownership, the more it becomes a real collective capitalist, the more citizens it exploits. Workers remain wage workers, proletarians. Capitalist relations are not abolished; on the contrary, they are sharpened to their ultimate limits.

However, it is not difficult to notice that Engels is talking here about nationalization carried out by the bourgeois state within the capitalist system, not a critique of nationalization within socialism. We see this even more clearly by taking the preceding sentences:

This discord between the powerfully growing productive forces and their functioning as capital, this increasingly strong compulsion to recognize their social nature, increasingly forces the capitalist class itself to treat these forces as social productive forces, insofar as this is at all possible within capitalist relations. Both the period of industrial boom with its boundlessly inflated credit and the crash itself, which ruins large capitalist enterprises—impose this form of socialization of larger masses of means of production, which we observe in various types of joint-stock companies. Some of these means of production and communication, for example, railways, are by their very nature so colossal that they exclude any other form of capitalist exploitation. At a certain stage of development, even this form is no longer sufficient; the official representative of capitalist society—the state—must take the direction of production into its own hands.

This necessity of taking ownership by the state applies primarily to large communication facilities, such as post, telegraph, railways.

If the crises have revealed the inability of the bourgeoisie to continue managing the modern productive forces, then the transformation of large productive and communication enterprises into joint-stock companies and state ownership proves the superfluity of the bourgeoisie in the realization of this process. All social functions of the capitalist are now performed by paid officials. The capitalist no longer performs any social function except collecting income, clipping coupons, and playing on the stock exchange, where various capitalists take away each other's capital. If the capitalist mode of production previously dismissed workers, now it dismisses capitalists and sends them, just like workers, to the ranks of the superfluous people, though not yet to the reserve army of industry.

But the transformation into joint-stock companies, just like the transformation into state ownership, does not remove the capitalist character of the productive forces. As far as joint-stock companies are concerned, this is quite clear. As for the modern state, it is only an organization that capitalist society gives itself to protect the general external conditions of the capitalist mode of production from attacks by both workers and individual capitalists. The modern state, regardless of its form, is essentially a capitalist machine, the state of capitalists, the ideal collective capitalist. The more productive forces it takes into its ownership, the more it becomes a real collective capitalist, the more citizens it exploits. Workers remain wage workers, proletarians. Capitalist relations are not abolished; on the contrary, they are sharpened to their ultimate limits.

(Anti-Dühring, Part III)

Returning to the curious idea of abolishing social accumulation, let's see what Marx had to say on this matter, describing what a socialist society would look like:

To know what is to be understood in this context by the words 'fair distribution,' the first paragraph must be compared with this paragraph. The latter assumes a society in which 'the means of labor are common property, and the totality of labor is regulated collectively,' while from the first paragraph we see that 'the undiminished proceeds of labor belong equally to all members of society.'

'To all members of society'? Also to the non-working? Where is the 'undiminished proceeds of labor' here? Only to the working members of society? Where is the 'equal right' of all members of society?

For 'all members of society' and 'equal right' are, of course, just phrases. The essence of the matter is that in this communist society, every worker must receive their 'undiminished' Lassallean 'proceeds of labor.'

If we take the term 'proceeds of labor' first in the sense of the product of labor, then the collective proceeds of labor constitute the total social product.

From this, we must now deduct: First: what is needed to reproduce the consumed means of production. Second: an additional part for the expansion of production. Third: a reserve or insurance fund to protect against accidents, natural disasters, etc.

The above deductions from the 'undiminished proceeds of labor' are an economic necessity, and their sizes are determined according to existing forces and means, partly based on probability calculations, but they cannot in any way be calculated based on justice.

What remains is the second part of the total product, intended to serve as means of consumption.

Before the individual distribution of this remaining part, the following is again deducted from it: First: general administrative costs not directly related to production. This part is immediately subject to a very serious reduction compared to its size in today's society and decreases accordingly as the new society develops. Second: what is intended to satisfy collective needs, such as schools, healthcare institutions, etc. This part immediately increases significantly compared to its size in today's society and increases accordingly as the new society develops. Third: funds for those unable to work, etc., in short, what today falls under the so-called official social welfare.

Only now do we reach the 'distribution,' which the program under Lassallean influence has in mind in such a limited way, namely, that part of the means of consumption which is subject to distribution among the individual producers who make up the collective.

The 'undiminished proceeds of labor' have imperceptibly turned into 'diminished,' although what the producer loses as a private individual, they regain directly or indirectly as a member of society.

Just as the phrase about the 'undiminished proceeds of labor' disappears, so does the phrase about the 'proceeds of labor' in general.

Within the associated society, based on the common ownership of the means of production, producers do not exchange their products; likewise, the labor expended in the production of products does not appear here as the value of these products, as a material characteristic inherent to them, because now, in contrast to capitalist society, individual labor exists as a component of collective labor not in a roundabout way but directly. The term 'proceeds of labor,' already today unusable due to its ambiguity, thus loses all meaning.

We are dealing here with a communist society, but not one that has developed on its own foundation, but on the contrary, one that has just emerged from capitalist society; which therefore in every respect—economic, moral, intellectual—still bears the birthmarks of the old society from whose womb it emerged. [Marx describes here the socialist phase of development preceding communism; in Marx's time, the known division into socialism and communism was conceptually unclear—ed. note.] Accordingly, the individual producer receives—after deductions—exactly as much as they have given to society. What they have given to society constitutes their individual labor contribution. For example, the social working day consists of the sum of individual working hours; the individual working time of each producer is the part of the social they have contributed.

(Critique of the Gotha Program)

Vladimir Lenin, of course, held no different view from Marx and Engels. Among his many statements on the idea of transferring factories under the direct management of workers, the following words best express his opinion:

Any direct or indirect sanctioning of the rights of workers of a given factory or profession to their specific production or their right to weaken or hinder the implementation of state authorities' orders constitutes a flagrant violation of the basic principles of Soviet power and a complete rejection of socialism.

(On Democratism and the Socialist Character of Soviet Power)

Finally, it is worth mentioning that a great enemy of recognizing cooperative ownership as socialist was also Ernesto 'Che' Guevara. His view of socialism—as a society organized like one big factory—was expressed in numerous works, such as Critical Notes on Political Economy or On the Budgetary System of Financing.

Summary

The conducted analysis leads to clear conclusions. Socialism is neither a 'more just version of the market,' nor a collection of alternative forms of enterprise ownership, nor a federation of autonomous economic entities. It is a qualitatively different mode of production, whose essence is the abolition of the fragmented nature of production decisions and the subordination of the entire economic process to the interest of society as a whole. The material condition for such a change is the ownership of the means of production in the hands of the entire society and the planned, central coordination of production.

In this light, cooperative, self-governing, or 'market-socialist' ownership does not constitute a socialist form. It can play a progressive role within capitalism, mitigating some of its destructive manifestations, and also function transitionally in periods of material immaturity after the seizure of power by the proletariat. However, it does not break the capitalist logic of production because it retains the market as the main mechanism of coordination, and with it, the anarchy of production, competition, and the primacy of particular interests over the general social interest.

The only known and realistically available form of socialist ownership is state ownership in a proletarian state. Only at a higher stage of development, with the disappearance of classes and political coercion, can this ownership transform into direct, non-state social management—i.e., communist ownership.

The dispute over cooperatives, the market, or decentralization is not a dispute over the 'style' of socialism but over its existence. Either production is subordinated to conscious, society-wide control and planning, or it remains—regardless of the forms of enterprise ownership—in the orbit of capitalism.