Co-Operation Within the Corporative System of the Italian State
(From: Survey of Fascism the Year Book of the International Centre of Fascist Studies Volume 1, 1928 Page 154-169)
Not long ago the Florentine police arrested a landowner, on the ground that he had left his estate in a deplorable condition in spite of repeated government orders calling for better cultivation. He eluded punishment by turning over his estate legally to his nephew, who, on his part, has since produced sufficient guarantees to the authorities that the land will be cultivated rationally.
About the same time the Economic Council of the province of Pisa ordered an inquiry into the condition of two very well known estates, because the owners were not keeping to the terms laid down in the collective organisations, and were not farming rationally, i.e. they were neglecting to cultivate some parts of the estates or were cultivating them badly, were not using sufficient fertilisers, were not applying crop rotations, were not using machines, and were leaving the peasants’ houses in an uninhabitable state.
These two cases, taken at random from the daily papers, may be cited as test cases, for they characterize the underlying motive of the fascist regime and bring us into the very midst of any discussion regarding it.
Fascism, which is widely considered both by its enemies and by many uncalled-for friends as the savior and upholder of Capitalism, can thus be shown to be interfering with Capitalism’s most sacred right – with property; and goes even so far as to take it away from its owner because he has not used it in the general interest.
This interference is not imposed in a clamorous, revolutionary way by turbulent masses acting without sanction, but in an orderly manner through legally recognized bodies, as a direct and logical act of a regime that is established on definite principles.
It is true, of course, that private property, capital in short, has obtained a new lease of life from Fascism, but only under a new contract; it may live, but only on the condition that, in exercising its functions, it does not come in conflict with the general interest. It has been invested virtually with public functions.
While this new “social contract,” the Constitution of the Corporative State, is not yet laid down in all its details, it is being carried, day by day, into practice by decisions of competent bodies and by single laws to be co-ordinated later into a system. Cases such as those cited above were for example, contemplated in the Labour Charter, where is stated (clause 9):
“State intervention in economic production can take place only where private initiative is lacking or is insufficient or when the State’s political interests are involved. Such intervention can assume the form of control, encouragement, or direct management.”
The same holds good of Labour, Labour cannot impose its demands by force; it must keep them within the limits of the capacity of industry and commerce. But Labour’s particular rights are ensured. For example, the Magistrature of Labour lately decided (January 28th, 1928) against the reduction of the seamen’s wages which was proposed by the shipping combines on the plea that their industry was losing heavily. A certain leveling of wages and salaries between the various categories of workers was, however, approved by the Court in accordance with a scheme previously agreed upon by the workers themselves. Finally, the Court declared that the higher standard of living obtained by the seamen, during the last decade or so, was fully deserved by them and should not be reduced.
Capital and Labour alike have lost, then, their rigid sectional nature. They can no longer act against the general interest, nor can they remain neutral; for neutrality with regard to the common good is as open to condemnation in the eyes of Fascism as running counter to it.
While, in the past, all the talk about social solidarity amounted to so much cant, it is now becoming translated in Italy into a veritable reality - a reality which is sweeping away old systems and institutions and is preparing new ones every day. Italy is in the midst of organising the Corporative Nation-State, in which every activity will be represented in its organised aspect, with functions considered as public ones. So to-day old functions are being shifted into new positions, and new positions are being found for new functions.
During the world-war, and long before there was any sign of Fascism, certain writers, the “guildsmen,” predicted the probability that the primitive class struggle would eventually transform itself into a higher and more complex struggle - that is, into a process of competition and selection of organised functions, aiming at the common good.
This production was founded on a profound study of modern social conditions, and it is now coming true under the fascist regime, because in it is now coming true under the fascist regime, because in it the State, conceiving production as a national unit, is intervening with a view to disciplining economic interests, not merely at random and as an expedient to meet an exceptional case, but methodically and as an established policy. The fascist State, imbued, beyond material motives, with motives of a higher order - with traditions, principles, and loyalties - is aiming at permeating private economic interests with its own higher motives so that these may cease to operate merely as such. Only thus will it be possible for the problem of production to become a public problem, and for the bodies which are organising production to become, through the institution of the corporations, real public bodies; functional parts of the State itself.
Capital and Labour will lose their class character. From the corporation will emerge, not the capitalist and the proletarian, but the manager and employee of production. The class struggle has ceased and has been replaced by the State verdict. The classes are disappearing in the social functions they respectively fulfill, and will ultimately be merged in the Nation that sums up all functions.
It is evident that in this new environment, where the enforcement of the common good is not merely a police function, but the natural effect of a social system, Cooperation is undergoing some changes and is evolving a new status.
According to the laws enacted on July 1st and December 10th, 1926, all enterprises managed on co-operative lines must aggregate in separate associations, independently of similar capitalist enterprises and of workmen’s associations engaged in similar work; and, for all business that concerns the workmen in their employ, they must affiliate with the respective trade-unions.
Moreover, a central national co-operative body (the Ente Nazionale Cooperativo) has been founded by the state, the function of which is to co-ordinate the co-operative societies and assist their development. To this body the government delegates its right to inspect and control the co-operatives. The State is represented on the board of the E.N.C., which, in the words of Signor Belluzzo, late Minister of National Economy, “is the connecting link between the State and co-operation, performs the part of a public institution, and is called to collaborate with the State in developing co-operation.”
To reduce to the necessary minimum the contact between the co-operatives and the trade-unions, the law prescribes that the co-operatives must join, on the lines of their special business, in Provincial and National Federations, and affiliate through them, and not individually, with the respective National Confederation of Unions, and as said above, only for business concerning labour contracts. For all other business and functions they come under the E.N.C. with which they are obliged to affiliate.
Each National Federation of co-operatives sends a delegate to sit on the Council of its respective National Confederation of trade-unions, while one representative of the E.N.C. sits on the National Council of Corporations.
Signor Bottai, Under-Secretary of State of the Ministry of Corporations, in a speech before Parliament on May 26th, 1927, has justly said that the above arrangements
“...are neither perfect nor definitive. But the distinctive character of the co-operative phenomena has been asserted and safeguarded from and disintegrating force. The corporative system cannot be identified with the co-operative system; however, it does not push it aside; for co-operation, inasmuch as it tends to sum up the forces of capital and labour in one resultant, harmonises itself more easily with the corporative spirit than with capitalistic enterprise. One may say, indeed, that the E.N.C. will become the corporation of the co-operative societies. Moreover, in taking part in the work of the corporative organs, the co-operatives will communicate to them, naturally, its spirit of conciliation, and will thereby greatly benefit their functioning.”
Thus Fascism is recognising the particular function of co-operation and wants to preserve it, especially by emphasising its independence of the unions which have, or may have, interests divergent from them. The way by which co-operation may become embodied in the corporative State is already well prepared. At present legislative measures are under discussion by which the co-operative societies, wherever they are sufficiently strong, shall be directly represented as an independent function, in the various governing bodies, which, as is well known, are now organised on functional lines, as for example the municipal giuntas and the provincial economic Councils. Only very lately the government decided that the co-operative societies should send delegates to the provincial economic Councils. Hence it follows logically that the coming corporative Parliament will have members appointed by the co-operatives. In fact, Mussolini in a circular sent the Prefects, in February 1928, instructed them that the new municipal bodies, in those provinces where co-operation was strong enough, should have members representing the co-operative movement. Moreover Signor Rocco, the Minister of Justice, definitely confirmed in a recent interview )March 28th, 1928) the expectation that co-operation will be represented in the corporative parliament.
Some people have even ventilated the idea of making it obligatory for every citizen to belong to a co-operative society. There is no reason why, in a State where every citizen is obliged to organise in his capacity as a producer, he should not be obliged to organise as consumer also. Such a step would bring about a tremendous change in the whole economic system.
The economic importance of co-operation with regard to the whole mass of consumers is, indeed, recognised already by the fact that co-operation is officially represented on the provincial joint committees, established to control the prices of first necessities and regulate the trade in them.
To understand the significance of the new status of co-operation we must sum up the features of the pre-fascist co-operative movement.
Co-operation was, before the war, in direct relation with the trade-union movement and sometimes its very duplicate. This fact explains why it has flourished mainly in the fields of production and labour. Trade-unionism looked for co-operative enterprise in industry, agriculture, and labour to carry out a considerable part of its own maximum and minimum programme, such as the elimination of middlemen in trade and of absentee landlords in agriculture, the regulation and control of process, the reduction of unemployment, and, finally, the transformation of the social system.
In other countries co-operation was based mainly on distribution; it was the organisation of the consumers. When it entered the field of manufacture, it organised it like any other productive enterprise. There were, for instance, in existence producers’ co-operative societies, engaged in agriculture, for the transformation of their raw products into finished articles and for marketing the same.
Co-operative productive societies, founded by workmen and managed by them, were present in Italy on the other hand in almost every line of industry, craft, and agriculture; they had invaded even the field of traffic and public services. Their ventures were always supported by the trade-unions.
Another characteristic aspect of Italian co-operation, without any counterpart in other countries, was the formation of provincial or local combines of co-operative societies, which, so to speak, pooled workmen’s co-operatives of every kind. In some centres they included workers’ co-operatives of production and labour; agricultural co-operatives of labourers and of peasants; cooperatives of masons, plasterers, sculptors, and marble workers; carters’ co-operatives, production and labour co-operatives of carpenters, jointers, smiths, metal workers; fishermen, forage packers, and bakers, and consumers co-operative societies. Hundreds of small co-operatives, in short, with thousands of members, with offices, shops, workshops, modern plant and machinery, land and cattle - everything, in fact required for carrying on their business, sometimes even almost the whole business of a small community, and for marketing their produce.
They went even beyond their economic activities, and covered a wide range of initiatives in education (e.g. special courses in co-operation or summer schools,), assistance and grants in many forms, especially for agricultural and industrial development and general culture.
Frequently they dominated the whole economic life of their locality and district; and, with their strong social spirit, they have powerfully influenced the moral tone of the population, even to the point of affecting the actions of persons who were quite outside their own sphere.
They were always upholding the general interests and, especially during the war, were faithful allies of the State.
These powerful centres of co-operation did not attack, as was supposed, private enterprise and ownership at their roots, but developed new forms of enterprise and ownership, with new functions, alongside the old ones. They eliminated large numbers of profiteers, but, at the same time, strongly stimulated modern private enterprise and often collaborated with it. A modus vivendi between private and co-operative functions was being evolved wherever the heat of political passions was not falsifying reality. In fact, where they were strong, the whole life of the community was progressive. The co-operatives were creating a new public opinion, intolerant of everything retrograde of stationary.
In so many respects were they exercising functions in the general interest, sometimes strongly allied with the State that only a legal definition of their acquired status was needed in order to consolidate them in the form of an independent superstructure of the guild type, to the benefit of the whole country.
Unfortunately their development in the direction of a guild society was arrested by post-war events. After the war all political parties favoured a trade-union and co-operative movement of their own. Rival trade-unions and co-operatives were set up everywhere. They grew rapidly in number, but lost in strength. The movement towards a guild structure was split into sections, preferring to compete with each other in the political field rather than to work out in common their intrinsic economic functions. Political parties made a stronghold of them in their battle for the control of the State. Those who, by definition, were public bodies, public spirited, above all classes and class struggles, and who eventually, by sheer force of development, would have become a recognised part of the State, found themselves, all of a sudden, in the most exposed positions against the State.
No wonder, the, that, in the inevitable final struggle for the control of the State, many of them have been swept away.
We wrote some years ago: “it is in the nature of co-operation to create the Co-operative Commonwealth by moulding society co-operatively, through the competition of functions and capabilities organised for public ends; to engage in political struggles, directed at the suppression of antagonistic groups, endeavoring to make it assume functions contrary to its nature. Co-operation grows by developing the co-operative principle and function through co-operation in the widest sense; it declines and is ultimately ruined, when it is forced to take part in class warfare.”
With the advent of Fascism an end has been made of class warfare and rivalry between co-operatives of different colour. Co-operation is no more against the State, it is becoming a part of the State. Nothing, then, is blocking its progress any longer. If it shows itself to have the vital energies it appears to possess, it is bound henceforth to grow into a mighty factor in the life of the State.
The laws and dispositions referred to above have not only sanctioned the reorganization of co-operation which the fascists had to undertake, but have and obliged all co-operatives to join under E.N.C. and follow the lines of organization laid down officially.
The writer of this study has recently (January 1928) accompanied the Royal Commission, appointed for the revision of the laws that regulate the commercial and industrial activities of co-operatives, in its tour of investigation in certain districts, where before the co-operatives, organised on a system of mutual rivalry, had flourished most intensely and where the battle against them had been most virulent. He found the movement substantially intact. The number of single co-operative societies had generally decreased: some were wound up, a number of smaller ones, previously affiliated to various political parties or trade-unions, had been pooled. Many new ones had been founded. One of the latest numbers of the Labour Bulletin, published by the Ministry of National Economy, gives numerous data about the co-operative movement during 1927. The statistics show, in fact that last year 711 new co-operatives were founded with 15,930 members and 6,010,994 lire capital, while 836 co-operatives were founded in 1926, with 15,526 members and 4,820,528 lire capital. The tendency was to create fewer but stronger co-operatives, and to this end 421 co-operatives were wound up in 1927, while in 1926 the number of co-operatives which ceased operating was approximately 500.
The writer was most surprised to see that even the Community Centers have become most prosperous, and are actually more conscious of their public function than before.
This is true for the whole country: where the co-operatives had an intrinsic reason for existence and vitality, where they were reasoned creations of conscious groups of workers or consumers, there they are still working and have undoubtedly a great future before them.
In the province of Bologna, for example, there are 22 consumers’ co-operatives, 55 co-operatives for production and labour, 22 agricultural co-operatives and 69 horse owners’ co-operatives. The labour co-operatives accomplished in 1927 work for more than 20 million lire, employing 6,000 labourers, helping thus to reduce unemployment especially during the winter. The consumers’ co-operatives have, moreover, sensibly contributed to the reduction of prices.
The big consumers’ co-operatives of Turin and Milan have been set of their feet through State financing, on the ground that their activity was useful to the vast industrial population of these cities Others, like the consumers’ co-operatives of Trieste, like the famous federation of co-operatives of the province of Ravenna, and the Garibaldi (the well-known shipping co-operative society), are making constant and regular progress. For instance, the last balance sheet of the Garibaldi (December 31st, 1927) showed a net profit of 3,444,999.42 lire, while the balance sheet of December 31st, 1922, showed only 1,319,822.75 lire net profit. The fleet of the Garibaldi consists now of seven big steamers and various smaller crafts.
There is, in fine, a revival of co-operation on all lines. Special attention is given by the E.N.C. to the consumers’ co-operatives, which was always the weakest section of the movement; and wholesale co-operatives are being created for the provisioning of local societies.
Great progress has been made during the last few years in the field of transformation of agricultural raw products and in the marketing of the final product: there are now big federations of social canteens and creameries.
For instance, a fruit and vegetable growers’ co-operative combine was founded in 1926 which sends its products directly to the chief markets in Europe; but while, in Northern and Central Italy, the reorganisation of co-operation follows established traditions, it had to be read ex novo in Southern Italy and in the Islands. Nevertheless, in Foggia (Appulia) a big new movement, which in 1926 carried out work for the State in reclaiming about 2,000 hectares of land, has been put on foot and affords an example of the progress made in the South.
The coal-dockers of Genoa, previously organised in five different sectional co-operatives, often at war with each other and badly managed, amalgamated in February 1927 into a single organisation with 1,367 members. Within the first ten months of its existence the new enlarged society contracted work valued at 17,286,165 lire, of which 16,264,159 lire were paid out to the members in the form of salaries. The difference was invested in mutual aid stock, insurance, and new tools; while overhead charges absorbed only 4.913 per cent of the total income, a fact which demonstrates a very efficient management.
In Sardinia a creamery combine was founded in 1925, giving a great impulse to rational cheese manufacturing and marketing. Within a year it had increased the number of local creameries from 20 to 49, the number associated shepherds from 750 to 2,000, transacting business for about 50 million lire. The shepherds have been thereby freed from the oppression of unscrupulous middlemen who, for centuries, had held them in virtual bondage.
Several national federations are already operating, such as those of the consumers’ co-operatives, of the farming co-operatives (cultivating more than 40,000 hectares), of the house-owning co-operatives, of the co-operatives of production in the industrial field. At present the federation of the co-operatives of labour (of those co-operatives that organise manual labour for such work as does not need costly mechanical equipment) is under organisation. There are now over 1,000 of them in Italy with about 135,000 members, who during 1927 accomplished work of a value to over 370 million lire.
Again, in January 1928, the national confederation of farmers agreed to collaborate with the E.N.C. in the special field of co-operative societies between landowners for the transformation and marketing of their produce and for all co-operative services needed by the landowners. The national confederation organises the technical and financial side, while the E.N.C., with which these co-operatives have to affiliate, attends to their more general needs and aids them in matters concerning required legislation.
A practical example of fascist co-operation may be useful in order to illustrate how this movement is being guided today. Let us take that of the fascist fisherman’s combine of Campania.
It is a well-known fact that Italy, though having proportionately perhaps the longest coast-line of any other country, is importing fish at the coast of more than 500 million lire annually, and that the consumption of fish per-capita is less than in any other country. About 160,000 men are directly occupied in the fishing industry and yet fish is scarce on the markets; moreover, fish is very dear because, between the fishermen and the consumers, there is a long chain of profiteers who exploit the fisherman and consumer alike.
But lack of modern means of fishing is contributing to this state of affairs. Today fishing is done in Italy with very primitive methods.
Competent people, who made fishing their life study, such as Professor Police of the University of Naples, have repeatedly declared that only fishermen’s co-operative organisations are capable of improving the situation; for, by bringing their fish to the market co-operatively, they could sell for less and, at the same time, earn more and save funds to be invested in modern tools and appliances; they could buy equipment and boats co-operatively at wholesale prices; they could provide directly for the transformation of fish which they cannot sell into oil and fertilisers; and, finally, they could do the actual fishing with modern motor boats or steamers.
Signor Bisi, Under Secretary of State for the Ministry of National Economy, is at present, giving all his attention and encouragement to the fishing industry. In a speech to the fishermen of the district of Naples, who were gathered to found the above-mentioned combine, he put the problem in the following terms:
“We had to create a high-sea fishing fleet on a modern industrial scale, and we have created it. At the same time we still have to provide for the 160,000 coast fishermen of all Italy - the artisans of fishing. Individually, one by one, they cannot face the problem, which is nothing less than gigantic. Only by substituting the 160,000 poor, small, impotent, scattered units with a few solid, courageous bodies, united by common interest and love of their profession, can things be set right. Fishermen are born co-operators; every small boat is virtually a co-operative society. Thus co-operation is a natural issue with you.
“The various groups of fisherman, therefore, must take a further step by legalising their virtual small co-operatives, organised around the boat, by pooling them into an organisation capable of facing bigger issues.
“The government will give you its support, but you must energetically and patiently organise and defend your interests. The government is forcing the dubious personages who prey upon the fishing trade, people who are at the same time obscure moneylenders, usurers, and middlemen, to show their hand. Who is who in fishing must be known; functions must be declared and defined. There are private persons in the fishing industry and they may be quite sound, but they must unite legally and enter into the combine which you are about to found. The ‘suspect’ figure of the small financier of fishermen must disappear. The State Bank of Labour and Co-operation will take his place, and will be the sole disinterested financier of the fishing industry.
“All this will provoke the rebellion of vested interest, and you co-operators must keep a military discipline in order to overcome it. If you co-operators will prove that you are using the instrument of your economic independence - co-operation - judiciously and in the interests of the public, the government will consider a further step: it will finance the transformation of your initial ventures into modern enterprises.”
The combine was founded on very original lines. According to its by-laws, not only fishermen’s co-operatives can belong to it, but also State or semi-State or municipal bodies, consumers’ co-operative societies, and all organisations interested in the development of the fishing industry and in the marketing of its products. At its foundation seventeen co-operatives of the fishermen, with 4,776 members, joined it. The Banco di Napoli, a State bank, has contributed a substantial sum to its initial capital; the provincial Administration and various municipalities have taken preference shares in it, bearing 6 per cent. Interest. Some of the municipalities in the Naples district have also put their fish markets under the combine’s control.
Its example will no doubt be followed in all important fishing centres in Italy and, when this is done, the country will soon not need to import fish.
I have tried, in this necessarily brief summary, to give a comprehensive picture of the present conditions of Italian co-operation, emphasising especially its new status.
Its new status is what lends to co-operation new tendencies, new forms - a future, in short. Now the State may, directly or indirectly, through its various bodies, take the initiative in creating co-operatives or may take part in them - and this not as an expedient, but as a necessary action in certain fields where the co-operative form seems the best to obtain the desired result in the general interest, in accordance with the fundamental idea of the fascist State.