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Modern cooperative socialism is the name given to a theoretical, non-Marxian concept of post-capitalism. It originated in the United States in the early 21st Century with the Cooperative Republic Movement under the leadership of Grady Ross Daugherty.

Modern cooperative socialism arose as a theoretical construct first out of the negative experiences of bureaucratic and absolutist state monopoly socialism, and second out of the positive economic experiments in non-bureaucratic, democratic, worker-owned cooperative enterprise. Most notable of these was the successful “Indusco” or “gung ho” Chinese cooperatives, 1938 to 1959; the Faridabad, India “City of Hope” cooperative experiment, 1949 to 1953; and especially the Mondragon, Spain industrial cooperatives, 1955 to the present day.

These successful experiments gave an indication as to the economic principle needed for successful socialism, but they did not fully answer the question as to how a workable, socialist political order might be constituted. Finally, a concept evolved that the socialist state did not need to own all the instruments of production; and that private productive property rights and the price-fluctuating market could be retained and relied on by the socialist leadership for economic and social functionality and democracy.

The new concept envisioned that primary ownership of productive property ought to rest with those who do the work of society, that is, private small entrepreneurs and cooperative worker associates on the Mondragon model. The socialist state could then leave management of enterprise to its direct primary owners, yet hold non-controlling preferred co-ownership for ample quarterly state revenues. Through democratically-owned private productive property and state co-ownership, the advocates of modern cooperative socialism believe that tax-based government would finally be at an end.

Modern cooperative socialism however is a theoretical construct. No country as yet has applied it in real life. Until this is the case, it can only be examined in the abstract.

HISTORY

Modern Cooperative Socialism is best understood in sharp contrast to the traditional Marxian concept.

In the next-to-last page of the second chapter of the 1848 Communist Manifesto, Engels and Marx had set forth the proposition that the socialist state should and would concentrate ownership of all the instruments of production in its hands. This proposition, taken as ironclad principle within the socialist movement, was reaffirmed by its originators a quarter-century later in their preface to the 1872 German edition of the Manifesto.

When the Soviet state was established in the early 20th Century, this principle was relied upon. Full state monopoly ownership automatically decommissioned the institutions of private productive property rights and the price-fluctuating trading market. Production was planned and administered by bureaus, with prices were set by state functionaries.

This system gave rise to harsh, one-party political absolutism and massive bureaucracy. Other countries that established socialist state power followed the Marxian/Soviet model, with the same manifestations. Within several decades however this vast international experiment in state monopoly began to show signs of failure, and ultimately led to the collapse of socialist state power.

The question naturally arose as to an alternative concept for a more functional form of post-capitalism. Enter Modern Cooperative Socialism.