This is the text of a chapter from the book New Views of Society - Robert Owen for the 21st - Century, edited by Richard Bickle and Molly Scott Cato and published in 2008 by Scottish Left Review

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Thoughts on the Connection between Universal Happiness and Practical Mechanics

Shaun Fensom

On 6 March 1795, not long after he joined the Manchester Philosophical and Literary Society, Robert Owen gave an address entitled ‘Thoughts on the Connection between Universal Happiness and Practical Mechanics’ (Literary and Philosophical Society of Manchester, 1856: 253). Unfortunately we can only guess what he said in that address, but it seems likely that he would have aimed to impress on his audience the impact that the new mechanical technology was having on the productive capacity of the textile industry, and the implications that greatly increased productive power could have for the advancement of society.

The extent of this impact was not widely understood. Speaking before a committee assembled by the Duke of York in 1816, Owen was asked by a Mr Colquhoun to estimate the increase in productive power due to the introduction of new machinery, calling on his experience as a mill owner:

[Owen said that] ‘the mechanical and chemical powers at work in 1816, must have equalled the labour of all the men, women, and children employed; or of four to five million pair of hands. Mr Colquhoun and other members expressed astonishment and incredulity; but Owen re-iterated his assertion; and added that at New Lanark, the quantity of work done by two thousand persons, young and old, with the aid of machinery, was as much as was formerly accomplished by the whole labouring population of Scotland.’ (Sargant, 186:  97)

Futurologists have argued that the pace of technological change through history is continuously accelerating and follows an exponential curve (Kurzweil, 2005: 10). But it is not a smooth curve: there have been periods of time when technological changes come in batches. One of those periods was during Owen’s lifetime, when there was a tremendous leap forward in the industrial application of mechanics, particularly in the textile industry. Another such period is now.

Parallels between two waves of technological change

A characteristic of the period between 1760 and 1790 was the availability to engineers and inventors of a new set of tools they could use to solve problems as they came across them. The same is true of the current period. In Owen’s time these tools were the mechanical components and techniques that inventors like Crompton could use to create machines such as the spinning mule (1779), effectively a combination of the spinning jenny and the water frame. The mule created a surplus of thread, because the spinning process was more efficient than the weaving process, and so inventors needed to apply themselves to making more efficient looms such Cartwright’s power loom, patented in 1786. It is worth noting that this wave of invention was already well underway before steam power was widely adopted following the invention of James Watt’s improved engine in 1783. Owen was undoubtedly right to put his emphasis on ‘practical mechanics’ as the key transforming technology.

In the modern era there are many examples of new sets of tools and components that can be assembled into new machine designs. For example, architectural components can now be so accurately manufactured by computer-controlled machine tools that hitherto impossible buildings can be assembled as if they were machines, without the conventional building techniques of shaping and filling to make the parts fit. But the technology that most closely parallels the ‘practical mechanics’ of Owen’s time is undoubtedly information and communications technology. The ‘universal’ programmable computer allows for an almost limitless combination of instructions to create new algorithms. The constraints—machine speed, reliability problems due to increasing software complexity—are progressively removed as the technology advances, just as the accuracy of manufacture and reliability of mechanical components steadily advanced in Owen’s time. Steam power multiplied the power of mechanics, freeing it from constraints such as the need for running water.  In modern times the advent of microprocessors (computers fabricated on a single silicon chip) and the Internet have multiplied the power of computers, freeing them from the data processing centre and allowing their use in all areas and industries as well as the home.

The advent of the internet is commonly compared with the invention of printing press (using movable type), cited as one of the three great motors of recent historical change, along with gunpowder and the compass (Rietbergen, 1998: 200). There are obvious parallels: both technologies transform the production of and access to information and knowledge. Universal education and democracy could not have come about without the printing press, but the internet is also changing the nature of production at a more fundamental level, and so it was with the changes taking place in Owen’s time.
The new productive methods in the industrial revolution had a dramatic impact on the dominant component of value by greatly magnifying the output of one worker. The advent of the computer and the industrial robot are also magnifying productive capacity, leading to the elimination of manual and low-skilled jobs in some industries. But the big surges in material productive capacity, during the first wave of mechanisation, and later with the advent of Ford’s methods of mass production, have already taken place. Perhaps when the first truly intelligent machine asks its makers for instructions on what to do next we will see the final complete collapse of the notion of labour value.

Knowledge, design skills and innovation are becoming the dominant components of value in the industrialised West. It is in this area that the internet is having its greatest impact. Mechanisation brought the textile worker out of the cottage into a mill where the division of labour made it possible for thousands effectively to collaborate in the production of cloth, just as the internet is enabling the division of intellectual labour and mass collaboration in innovation, design and the production of knowledge. Many thousands or even millions can work together to design an operating system, produce an encyclopaedia or sequence a genome (Tapscott, Williams, 2006).

Owen saw the potential for mechanisation to create a new material abundance. Similarly the internet offers the promise to a new abundance of knowledge, destroying the barriers to its universal dissemination. In his address to the 150th anniversary of the American Association for the Advancement of Science, Bill Clinton said: ‘Today, the store of human knowledge doubles every five years. Soon, every child will be able to stretch a hand across a computer keyboard and reach every book ever written, every painting ever painted, every symphony ever composed.’ (AAAS, 1999)

Wealthy individuals

The gold rush was a favourite metaphor for commentators on the first ‘dot com’ boom. The people who made money from the gold rush, they said, were not the prospectors, but the people who sold the picks and shovels.1 So it was predicted that the people who would make the most from the internet boom would be the manufacturers of routers and servers and the owners of the networks that would carry the traffic. Some of the most spectacular failures during the first dot com boom were indeed the equivalent of the prospectors—the ‘new paradigm’ e-commerce businesses aiming for ‘first mover advantage’ (a high-profile example was Cassy, 2000). It is perhaps an irony however that there were also some spectacular failures in the telecoms and ISP industries (e.g. Atlantic Telecom: Wray, 2001). This was primarily because massive investment in new fibre trunk networks had led to a collapse in the cost of bandwidth. It seems that so many people had bought the ‘picks and shovels’ metaphor that there was a pick and shovel glut. Meanwhile, ‘new paradigm’ first mover Amazon, after losing money steadily for years, is now the pre-eminent ‘e-retailer’ across the globe.

Despite the dot com crash, the internet has, in the end, made a lot of people very rich, just as men like Owen became rich in the first wave of mechanisation. Owen did not inherit wealth; neither did he invent anything of any significance. As with the picks-and-shovels internet entrepreneurs, his initial success was in the manufacture and sale of machinery for processing textiles (Podmore, 1907: 43). He had no particular understanding of the technology2, merely a good sense of the potential market for it. Later he made his money from the manufacture and processing of the textiles themselves.
The archetypal internet entrepreneur bears a strong resemblance to Owen and his fellow capitalists in the Manchester crucible. Some internet billionaires are technologists who have come up with a new idea—such as Google founders Larry Page and Sergey Brin, who invented the page-ranking system that was used for the Google search engine (Page, et al., 1998). But many have made a success out of an idea that was already current by applying better techniques and good business sense. Mark Shuttleworth made his fortune by starting Thawte, a company that sold secure certificates, enabling websites to verify their bona fides for the secure transmission of payment and similar data. Shuttleworth did not invent anything new, he spotted an opportunity, and turned out to be one of the more successful people to do so. He is an interesting example because he went on to launch Ubuntu, a software package that includes a variant of the Linux operating system and the Open Office application software. Ubuntu is free to download, runs on standard PC equipment and is very easy to install: many variants of Linux, being highly configurable and powerful, require an expert to install and set up. Shuttleworth’s aim for Ubuntu is to eliminate the big costs associated with Microsoft Windows and Office and so dramatically reduce the entry cost of using a PC, with the developing world particularly in mind (Mitchell, 2006).

Shuttleworth shares a belief in the transforming power of the net and the importance of making computing power affordable in the developing world with people like Nicholas Negroponte, the founder of the ‘One Laptop per Child’ project (Naughton, 2005). These new utopians see the technology as central to the utopian project, rather than solely as an enabler. Owen wanted to use technology to abolish scarcity and create the material conditions for new forms of society. The new utopian is more likely to believe in some utopian aspect of the technology itself.

Jimmy Wales, the founder of Wikipedia, had a vision: ‘Our idea was very radical: that every person on the planet would have access to an open-source, free online work that was the sum of all human knowledge.’ (Marks, 2007). However, he also believes transforming power of the collaboration itself, not just what it produces: ‘Understanding what we could do with a wiki was the big breakthrough.’ (Marks, 2007) The mode of production is a part of this new utopian vision. Owen probably would not have seen factory work—the new mode of production in his time—as a part of his utopian system. Whatever difference there is in the attitude to the role of technology, there does seem to be something in common between the two waves of technological change that has made utopians out of entrepreneurs. It may be simply that they realised the potential of the technology, the possibility of change for the better. Perhaps they were as surprised as everyone else at their sudden wealth, and concluded that the new technology would have a similar impact on the rest of the world. Or perhaps they rather attributed their huge success to their own abilities and so convinced themselves that they had a unique insight and understanding which they needed to communicate to everyone else. Owen does seem to have fallen in this trap.

Problems with technology

Owen saw mechanisation as a way to create the conditions for the ‘superior state of society’ (Pollard et al., 1971: 229), but he also had a keen appreciation of the problems the technology was causing. At a meeting in the City of London Tavern cited at the beginning of this chapter, Owen pointed to the massive increase in productive capacity during the Napoleonic war, and the consequent collapse in demand at its end: ‘And on the day on which peace was signed, this great customer of the producers died, and prices fell as the demand diminished’ (Sargant, 1860: 96). This led to reduced wages, which then further reduced demand, creating a vicious circle. The stimulation of demand due to the war brings to mind the notion of the ‘permanent war economy’ which writers such as Melman and Chomsky have used to explain the long period of economic growth following the Second World War (Counterpunch, 2004).

Another concern for Owen was the shrinking demand for skilled labour in the era of mechanised production. The introduction of mass production techniques in the Fordist era meant an even greater division of labour and simplification of tasks to increase productivity, leading to similar fears. This was exemplified by the plight of the Charlie Chaplin character in Modern Times, who is so used to the monotonous and repetitive task of tightening nuts in the factory that he cannot stop when his shift ends. Yet during the same era the entirely new process of producing electronic devices such as radios and later televisions required immensely complex wiring to be performed—a skill easily on a par with spinning or weaving, and arguably more complex. Furthermore, with time the least skilled operations in the factories have been eliminated altogether, so that the tasks performed by Charlie Chaplin are themselves performed by machines or robots.

In the modern era there are similar fears. The advent of call centres, for example, is seen to have de-skilled the customer care process—which in a sense it has. But new demands for increasingly tailored and individualised goods and services are creating a requirement for a different sort of customer care that cannot possibly be accommodated by the scripts used in call centres. Meanwhile the most mundane call centre tasks are increasingly replaced by machine interfaces used by the customers themselves, either over the phone or by the internet. Over the long term the highly de-skilled processes are merely temporary: once the tasks become simple enough they are taken over by a machine anyway, and the relentless drive for new ways to add value requires new technical and human skills in areas the machines cannot (yet) compete.

Unintended Consequences

Marx and Engels pointed out that by ‘socialising’ production, capitalism creates crises that threaten its existence: ‘But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons—the modern working class—the proletarians’ (Marx, Engels, 1848: 226). Whether or not the working class is the agent of destruction of capitalism, whenever workers have come together in factories they have formed trade unions, in the present as in the past (Mason, 2007). Trade unions are an inevitable and unintended consequence of the use of technology by capital to reduce costs and increase productivity.

File sharing is an inevitable consequence of the ‘socialisation of consumption”. By bringing consumers together in one ‘place’—the internet, with the capacity to make limitless copies of goods and exchange them—a result of the digitisation of music, films and (increasingly) books as computer files, they will inevitably share them. Participants can benefit individually from the existence of the network because they gain access to (copyrighted) material for free. But it is only by people making music or films they have paid for available for others to copy that the process can work. That is not a selfish act—it is almost an act of solidarity.

The impact of file sharing, first on the recording industry, then on the film industry, and now increasingly on the TV and publishing industries, has been profoundly disruptive. As such it shares characteristics with the growth of trade unions: what was assumed to belong to a particular group of people by right—be it the power to set wages and conditions and hire and fire, or be it the power to trade intellectual property—is fundamentally subverted by groups of people acting together, in some cases outside the law, but where the law is largely powerless to prevent it. In both cases the power of the groups depends on a sophisticated shared notion that everyone must give a little for the process to work.

How the Internet Wave is Different

While we can continue to draw parallels between the wave of technological change that took place in Owen’s time and what is happening now, there are some unique features of the new wave, which could mean that its impact will be greater. Marx and others pointed to the way in which capitalism’s use of the industrial process tended to increase the gap between the wealthy and the less wealthy. Whether this is a long-term effect of industrialisation is debatable, but it certainly had this effect in the short term. The internet too has created its class of the super wealthy, but more importantly, it has an immediate and profound levelling effect. This is its key disruptive quality.

We can argue about specifics, caveats, exceptions, but by and large the following statements are true:

  • On the internet, I can access a vast and growing library of knowledge, far greater than contained in any one physical library, even though I may be a schoolchild sitting miles from any city or university. Indeed, I have better access, because I can search within databases, and increasingly within the text of books.
  • On the internet, my website is just as accessible as your website. Even though I may be a small entrepreneur in a developing country with a microfinance loan, and you may be a huge transnational corporation.

The ranking methods used by search engines like Google make some websites more visible than others. But this hierarchy is constantly subverted as users find and create new ways to find content—for example the new ‘web 2.0’ services like digg and The most lowly websites can become world famous.

A concomitant effect of the egalitarian nature of the net is the way that it enables and encourages collaboration. The free transfer of information makes it possible to construct powerful mechanisms for people and things to find each other. The net is like a giant version of the ancient Greek agora: an open space where everyone can gather and exchange almost anything: goods, news, gossip, ideas, money. With previous communications technologies it was possible to collaborate with other people at a distance, but you had to find them first. There was a hidden transaction cost which the internet is lowering.

The economist Ronald Coase pointed out that in a market economy firms are islands where market rules do not apply. Inside a firm it is too costly to use a market mechanism to find the best person or group to carry out each task and then negotiate contracts, so the firm replaces the market mechanism with a command mechanism (Coase, 1937). Don Tapscott has coined the term ‘Coase’s law’: ‘A firm will tend to expand until the costs of organizing an extra transaction within the firm become equal to the costs of carrying out the same transaction on the open market.’ (Tapscott, Williams: 56). The internet makes the process of finding suitable suppliers much easier. Being open to all, the range of potential suppliers can be vast. The internet can also simplify the process of negotiating transactions. The auctioning site E-bay is a superb example of this: it has enabled many thousands of people to make a living trading items and services with a vast potential market and provides a quick and effective mechanism for agreeing a price and conducting the transaction.

According to Coase’s law this should mean that the scope of the market can be extended, so that small suppliers can perform tasks previously carried out internally, opening the way for a new form of artisanship. The internet is now the favoured method for finding employment; the increased liquidity in terms of supply and demand that it brings means that workers can move more quickly between jobs, and have less need to hang on to employment for longer than they want to. Robert Owen would probably have liked the way the net facilitates a new type of artisan, someone perhaps with multiple skills, using the internet to find buyers for those skills.  In his argument for the formation of labour exchanges, Owen wrote: ‘Now there is no necessity for the middleman. Producers can do without him—they merely want to come in contact with each other’ (Podmore, 1907: 406). The internet does not just reduce the transaction costs of finding trading partners, employers and contractors, and negotiating contracts with them. It also offers ways to facilitate other, non market driven forms of collaboration.

The most celebrated examples of this include the Open Source movement and Wikipedia. Open-source software is not strictly speaking an internet phenomenon: it is rather a methodology for collaboration. It works on the principle that software I have written is not mine. I offer the ‘source code’ for anyone to see and modify as they require, on the sole proviso that whatever modifications they make are similarly open for others to use and modify. This has two important effects: people can save a lot of time in developing a piece of software to do something specific by basing it on software someone else has written; and the competences of several people can be used to improve the core software because their bug fixes and improvements are available to everyone. The internet makes this simple principle even more powerful because it offers the means to distribute the software and the changes to it, and because it can involve very large numbers of people. This has enabled Linux to become one of the most used operating systems in the world, with a reputation for reliability and security that is due to the armies of software enthusiasts ready to fix bugs and security holes as soon as there are found (and to assist in finding them). The web browser Firefox has a similar reputation and success, now with an estimated 20 per cent of the market (Keegan, 2007).

The motivation for programmers to take the trouble to modify the software is three-fold. Firstly there is ‘giver’s gain’, similar to the motivation for file sharers: if I give my bit and everyone else gives their bit, we will make it work and I can then benefit from what we make. Secondly the ability to modify the software makes it very valuable both to freelance programmers and (increasingly) programmers in firms who need a solution to a particular problem (like IBM, who now make extensive use of open-source software: Tapscott, Williams, 2006: 77). Thirdly there is the simple joy of making a positive contribution to a giant project that belongs to the people working on it.

This last motivation, together with the givers gain principle, is the driver for Wikipedia. If Wikipedia did not exist, it would seem a very unlikely thing. Much more than an encyclopaedia, it is a vast knowledge bank (with more than two million English language articles at the turn of 2008), made entirely of contributions from its users. Anyone can create or edit a Wikipedia article, correct mistakes and fill gaps. Wikipedia has been much criticised as unreliable because so much of it is written by amateurs and because it can so simply be vandalised. And yet it has become the first place that many millions now look when searching for information. The reason for this success is very similar to open-source software: far from being unreliable, Wikipedia is for its many millions of users actually very reliable because there are so many eyes watching for mistakes and vandalism (Observer, 2007).

The idea that giant computer networks would democratise access to information and facilitate a new wave of co-operation is not new. There is a tradition of wider political thinking and activity associated with the net which goes back a quarter of a century. The author was associated with a co-operative called Poptel, which started in the 1980s with the aim of encouraging the use of on-line computer technology in campaigning and development organisations.

Technology and co-operatives

Under its slogan ‘connect, inform, empower’, Poptel explicitly promoted the idea that the internet is a powerful tool for the promotion of democracy and co-operation.  Working with the National Co-operative Business Association of the USA, it made a successful bid to create a new top-level internet domain exclusively for co-operatives (‘.coop’), creating a space where co-operative business could flourish on the internet. But while there are a few co-operatives providing internet access services (the most significant being NRTC in the USA), none since Poptel have attempted to make the link between the co-operative business model and the levelling effect of the internet, its power to facilitate collaboration. The response of co-operatives worldwide to the internet opportunity has been disappointing.

The modern co-operative movement is fond of talking about its values and principles, which—uniquely for a worldwide movement of such a size—have been codified in a universally-accepted statement. Those values and principles are about the way that a co-operative enterprise should be structured, how it should be governed, and how it should behave. They stress the ideas of equity, democracy, community—ideas associated with the political left. Co-operative activists see these values and principles as the key distinguishing characteristic of co-operatives—their ‘USP’ (unique selling proposition).
And yet arguably what marks the co-operative movement out is not its attachment to basic enlightenment values, shared with progressively minded people and movements across the world, but its practical demonstration and implementation of utopian ideas. Unlike many who share their values, co-operative activists see business and commerce, of the right sort, as a positive force, a practical, no-nonsense way of making a difference.

Followers of Robert Owen, keen to establish new communities based on his ideas, were called ‘communists’. But they were very different from the followers of Lenin who foresaw the creation of a socialist ‘dictatorship of the proletariat’ through revolutionary political action, followed much later by a communist society after the end of scarcity and the ‘withering away of the state’ (Lenin, 1919). Owen’s communists owed more to the libertarian thinking of the anarchist Godwin, who was almost certainly a strong influence on Owen (Podmore, 1907: 119). Libertarians have been mistrustful of the separation of ends and means implied in political programmes that have a start, a middle, and an end, preferring the changes that can be brought about directly and immediately through the actions of individuals and communities.

It seems that the further Owen got from his original business success and the more he came to think politically, the less impact his ideas had. It was New Lanark that inspired with a demonstration of what was possible, how things could be done differently, not the more ideologically-driven experiments such as New Harmony in the USA. New Lanark was not a co-operative, but it had some characteristics which it shared with later co-operative practice, and which are worth re-examining. Firstly, and perhaps most importantly, Owen treated his workers differently. A (critical) letter from Ebenezer Elliot to Owen in 1834 is revealing: ‘Kind and Dear Sir, You came amongst us—a rich man amongst the poor—and did not call us rabble. This was a phenomenon new to us. There were no sneers on your lips, no covert scorn in the tones of your voice’ (Podmore, 1907: 435).

It was probably this apparently unforced and natural affinity with other human beings who happened to be poor that made Owen behave so differently, and New Lanark such an example. Owen saw—and argued strongly—that the proper treatment of workers was in the interests of the owner. His famous ‘silent monitor’ device, which nowadays seems rather a patriarchal and onerous means to control behaviour was in the context of its time a progressive alternative to more draconian forms of punishment used by mill owners. Owen is almost as famous among management theorists as he is in the co-operative movement, because he understood the importance of motivation for productivity. Much of what Owen did is now seen as simple good management practice: an example of conventional business learning from utopian thinking. But it seems that Owen did it because of a natural sense of solidarity with his workers rather than as a calculated attempt to increase productivity. He recognised his workers as stakeholders—a key notion for co-operatives.

Secondly, Owen saw the improvement of the welfare of the workers, their families and the rest of the community, as a legitimate application of the profits of the business: something that contemporary owners and businessmen found baffling. Modern co-operative activists would see this as an example of the ‘multiple bottom line’, which measures business success not just by the profits, but by its beneficial effects on the employees and the wider community. This is embodied in the seventh co-operative principle, ‘concern for community’. The clearest demonstration of this was the use of profits—from the New Lanark store in particular—for the provision of free education, not just for workers’ families, but for children of other people living in the village (Podmore, 1907). This is not the same as philanthropy—common enough in Owen’s time. A multiple bottom line implies a mutual interdependence of the different goals; rather than one (the philanthropy) being entirely contingent on the other (the profit). Owen seems to have seen it this way too. Nowadays the more sophisticated notion of ‘corporate social responsibility’ (CSR) sees the concern for community as a driver of profit as well as being contingent on it. CSR too is an example of conventional business learning from utopian and co-operative thinking.

Thirdly, Owen believed in a self-sufficient, well-rounded community of an appropriate size. As well as providing for its material needs, Owen also saw the community as the source of culture and entertainment. His emphasis on education is an example of this, but a repeated theme from New Lanark, New Harmony and Orbiston is the opportunity for people to dance and to sing, apparently just for the pleasure of it. An Orbiston colonist reports: ‘I have been at a meeting last night, and such mirth I never knew. There is dancing three times a week. Indeed there is nothing but pleasure, with the best of eating and drinking’ (Podmore, 1907: 370). Owen’s insistence on the maximum size of the ideal community, his preference for a community surrounded by nature, and his encouragement of dancing and music, all speak of a concern to get away from the growing alienation of industrial and city life.

Alienation is indeed a common theme to all three aspects of New Lanark: the treatment of workers as stakeholders, the ‘multiple bottom line’, and the goal of a spiritually and materially self-sufficient community. Each of these strengthens (or remakes) the connection between the individual and the community, between the worker and what he produces, between the worker’s labour and the benefits he enjoys. Alienation was an important concept for Karl Marx. In his Comments on James Mill, Marx explained his notion of economic alienation: ‘Presupposing private property, my work is an alienation of life, for I work in order to live, in order to obtain for myself the means of life. My work is not my life’ (Marx, 1844). In the modern world too, as the machinery has become more complex and the industrial conglomerates bigger, so the experience of alienation has become more general; so that we now fear that our increasing disconnection from nature is leading us to ecological disaster.

It is widely believed in the co-operative movement that the key factors which led to the explosion of retail co-operatives after the Rochdale Pioneers were the principles that they codified and adopted, in particular the concept of the profit share linked to the member’s trade with the co-operative, affectionately known later as the ‘divi’ (Birchall, 1994). Modern-day supermarket loyalty schemes replicate some of the advantages of the divi—possibly another example of conventional business learning from co-operatives—but the co-operative dividend forms a direct connection between the consumer and the business, because it is linked both to the amount bought and to the performance of the business as a whole; whereas a loyalty scheme merely rewards in proportion to the amount bought. The dividend scheme is thus a mechanism that reduces the alienation between the consumer and the business and hence between the consumer and the product. The success of major open source projects such as Mozilla ( in involving not only the contributing programmers, but also the users in the refinement of the product, shows a way for large scale consumer co-operatives to incorporate their members into the business itself and further reduce the alienation of modern consumption.

Employee co-operatives owe less to the Rochdale example and in the UK did not enjoy the rapid expansion that made consumer co-operatives such a significant force by the early 20th century. There are many successful employee co-operatives elsewhere (famously at Mondragon in Spain), but the movement has remained small in the UK. A notable exception is the John Lewis Partnership where staff members (‘partners’) are rewarded each year with a bonus that goes up or down depending on commercial success. By treating workers as stakeholders these businesses reduce the alienation between them and their work.

After the establishment of the national Co-operative Development Agency in 1978 many employee co-operatives were created in the UK, but very few survived. There are doubtless many factors responsible for this failure, but there is a common theme shared with Owen’s New Harmony venture: the promotion or proof of a political idea became the mission rather than the business at hand. The co-operators in some of those businesses were more interested in the politics of how they were organised than in the business itself (Landry et al.: 1985).

In recent years there has been a new emphasis in the movement both on the importance of good business practice and on the need for a co-operative difference. In the report of the Co-operative Commission, the point was made strongly that without business success, social goals could not be pursued, but that meeting social goals could help create competitive advantage, which in turn would create business success (Co-operative Commission, 2001). This was visualised in the form of a virtuous circle. What is missing from this analysis is the notion that something might be worth doing for its own sake. Perhaps this is a fundamental flaw in the notion of consumer co-operatives—the business of running shops being a humdrum affair, as Owen himself seemed to think (Birchall, 1994: 22). Simply stressing the importance of business success as well as social purpose, or vice versa, does not fix the problem of alienation. Co-operatives can spin ever faster round their virtuous circle without answering the most crucial question of all: whether the thing itself is worth doing in the first place; and without answering that question you are condemned to a profound alienation between action and purpose, means and ends.

As business methods and society evolve, the ideas of the co-operative pioneers have been adopted by mainstream business. Owen’s enlightened managerial methods, popular capital aggregation, loyalty schemes, and more recently corporate social responsibility and fair trade: the practical manifestations of co-operative values and principles no longer separate co-operatives from ordinary private and shareholder-owned businesses. And yet so long as these ideas are used by business as a way of maximising a single bottom line, the alienation inherent in their business model, between producer, consumer and product, will remain. Co-operatives are successful and remain distinct when they reduce that alienation.
Many fear that the new wave of technological change is increasing the alienation in modern life. That with email, instant messaging and ‘social networking’, people are more rather than less isolated from each other; that the increasing complexity in the production of goods and services makes it more difficult than ever before for individual workers and consumers to feel that they are any more than cogs in a giant machine. The internet itself is so complex that no human being can possibly grasp what is happening. And yet being able not just to contribute to a giant encyclopaedia that millions of people use, but then to see your contribution become part of that encyclopaedia instantly, immediately available across the planet, surely reduces the alienation between writer and reader. An alienation that began with the invention of the printing press, giving the printed word an authority it did not always deserve. The thousands, millions of programmers who contribute to Firefox, Open Office, Linux or one of the other great open source projects, are not only able to introduce modifications and enhancements to make the software do what they think is important, but also they enjoy it. They think the thing itself is worth doing for its own sake. To paraphrase Marx, their work is their life.

The common theme linking the Owenite successes with the more successful co-operative practice since the Rochdale pioneers, and with the modern utopian experiments associated with the internet, is their impact on the problem of alienation. The new technology offers enormous scope to create new organisational and business models that can incorporate this theme for success. The co-operative movement—inheritors of Owen’s forward thinking—could play a leading role in developing these models. But first it must learn from the internet utopians for whom the participants in a collaborative, co-operative enterprise are not just guarantors of the values and principles, spectators at the whirl of the virtuous circle, but integral to the enterprise itself.


1. ‘During the Californian gold rush 150 years ago, the people who made the real fortunes were the merchants selling picks, shovels and jeans, rather than the gold miners. The story is similar in today's telecommunications industry.’ (Jamieson, 2001)

2. Podmore (1907: 43) quotes Owen’s autobiography: ‘I had not the slightest knowledge of this new machinery’.


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