The goal of Socialism is and has been the democratization of the economy, society, and politics through the efforts of the working classes for Freedom and Equality. In the 20th century the priority of most Socialists was the nationalization of all, or at least the “commanding heights”, of the economy. While this approach accomplished much (particularly in the development of peripheral economies such as Russia and China), it failed in its goal of bringing substantive, democratic control, management, and ownership of the means of production such as factories, shops, land, rail & roads, etc. Instead, in most cases, a set of privately appointed managers and bosses were replaced by public appointees. Whether the managers were appointed by a Liberal-Democratic Parliament or an authoritarian Communist Party-State the difference for workers in these nationalized firms was that of degree and not kind. That is to say, there was a change in the quality of working conditions, pay, etc (usually for the better) but not a fundamental change in how work is managed and performed.
Not only did this limit the ability of working people to manage their own affairs, but it also created a large and growing class of professional managers and administrators with its own political and economic class interests. Whether they were appointed by the state or the board of a private corporation this class had, and has, a strong material interest in inserting itself forcefully as a middleman between the owners and the process of production while simultaneously strengthening its authoritarian control over workers. This Professional-Managerial Class (PMC) was and is the primary mass social base of today’s Neoliberal (austere and market fundamentalist) political economy. In the East it was the state appointed professional managers, planners, and technicians who laid the groundwork for and carried out the Neoliberal transformation of the former Communist eastern bloc. In the West, Neoliberalism sprang from the public and private sectors of the PMC alike.
This is not to say that Nationalization is never the correct decision to make. But Nationalization without Democratization is grossly insufficient.
Not all 20th century Socialists/Communists favored nationalization as their means of constructing Socialism. In particular, the Italian Communist Party (PCI) developed a program of establishing and encouraging the development of cooperatives. This development was particularly successful in the region of Emilia-Romagna. While the region already had a strong tradition of mostly agricultural cooperatives, the Communist Party/Movement played a major role in expanding the cooperatives into a network, an ecosystem, of enterprises across all sectors of the economy: worker-owned firms in manufacturing, construction, and healthcare; consumer/worker-owned hybrids in retail; producer-owned co-ops in agriculture.
At first the Party took a more Orthodox Marxist approach to the economy and was skeptical of the usefulness of cooperatives. Most of the Party’s support went to the retail co-ops that provided cheap consumer goods to the Industrial working class or to agricultural co-ops that they believed would help to incorporate the peasantry into the Communist movement/party. Over time, disillusionment with the Soviet/Eastern Bloc model grew and the Party began to increasingly recognize the potential of the cooperatives. Slowly a “Democratic Road to Socialism” was developed where the democratization of the economy through the cooperative movement would occur simultaneously and in a complementary fashion to the political effort for greater popular control over the State. The co-ops would form an economic and institutional base for Socialist political organization while also providing vital services, reducing unemployment, and raising the standard of living.
Party politicians at the local and regional level supported (often cash-poor) cooperatives with affordable land, facilities, and credit. Substantial investments were made in infrastructure, education, and public services. The Communists also set up a federation/league of cooperatives (Lega Coop) that provided technical and educational assistance to cooperatives and ran a fund (financed by mandatory contributions from existing co-ops) that supplied credits to entrepreneurial workers who wanted to establish new co-ops. With the Party’s turn towards co-ops also came an increased effort in turning the co-ops into serious businesses that could survive and thrive in a Capitalist environment. Existing agricultural co-ops that had been created to ensure that small producers received good prices for their wares were re-oriented towards ensuring that large portions of their proceeds were reinvested into modernizing & mechanizing agricultural production. A particular focus on high value goods like cheese (all real Parmesan is from Parma in Emilia) and wine helped turn Emilia-Romagna into one of the most agriculturally productive regions in Europe. Other efforts included a focus on highly specialized manufacturing in which cooperatives excel. These efforts substantially contributed to the transformation of Emilia-Romagna from a poor & rural region into one of the most economically developed regions in Italy (and Europe).
While the Communist Party died in the early 90s with the collapse of the Soviet Union, the cooperative economy it established in Emilia-Romagna did not. Whereas unions and other traditional social bases of Socialist politics have taken a serious beating from decades of austerity and Neoliberalism, co-ops have proven remarkably resilient and adaptive. All that is lacking is a political party and/or social movement(s) with a clear ideological viewpoint and program that support(s) the development and expansion of cooperatives as an active alternative to Capitalism, and not merely as a tool to reduce unemployment.
The course of development in Emilia-Romagna was deeply rooted in the particularities of its history, politics, and culture. However, the general model of a mass Socialist Party using its social and political influence to foster the creation of a democratic & cooperative economy as a vital step on the road to Socialism is universally applicable, particularly in nations and regions that have been under-developed, or de-developed, by the current Neoliberal political economy.