In 1906, a British Christian socialist named Arthur J. Penty had a straw-that-broke-the-camel’s-back moment. Penty loved the decentralized economic democracy envisioned by two Victorian literary icons, Oxford art critic John Ruskin and radical novelist William Morris, but there was no organization devoted to these ideas. Ruskin and Morris had passed on, and the dominant movement for socialism in England was the Fabian Society, which promoted a centralized government collectivism that nationalized all means of production, exchange, and distribution. Penty, a reluctant Fabian, did his best to stifle his revulsion at Fabian meetings and admonished himself to be realistic – after all, Fabians undeniably prevailed on the British left and were the most politically viable option. But when Fabian Society leader Sidney Webb hired a utilitarian architect to design the buildings for the school he founded, the London School of Economics, that was more than Penty could stomach – he couldn’t work with philistines. Fabian collectivism, he fumed, was socialism without a soul. Somehow the ethical, human-scale socialism of Ruskin and Morris had to be renewed in a twentieth-century form. The movement he sparked would call it guild socialism.

More than a century later, with capitalism run amok and several purportedly socialist states spectacularly come and gone, guild socialism might be just what we need. The cry for an alternative to corporate capitalism is certainly getting very strong. Decades of letting big banks and corporations do whatever they want have yielded a revulsion against neoliberalism from many sides. Americans are losing their tolerance for extreme inequality, an ecological crisis is pressing upon us, and an overdue reckoning for America’s long history of racism has come. The convention that Americans have nothing to learn from the history of socialism has become unsettled, to put it mildly. Democratic socialism has made a dramatic comeback as the name for a different kind of society in which freedom and equality strengthen each other and no group dominates any other.

But democratic socialism has a complex and problematic history of its own. The name registers that socialists who were committed to democracy had to distinguish themselves from socialists who were not. Democratic socialists ran for office, appealed to socialist ethical values, and achieved progressive reforms through coalition governments. Their socialist values should have made them principled feminists, anti-racists, anti-militarists, and anti-imperialists, but many settled for weak gestures toward these causes. They should have welcomed Christian socialists into the parties they created, but only in England, select British colonies, and Switzerland did that happen.

Democratic socialists never achieved democratic socialism anywhere. Instead, they built Social Democratic parties, enacted progressive reforms, and built advanced welfare states, which came to be called, revising the meaning of a distinguished name, social democracy. Democratic socialism has a predominant legacy of state socialist aspirations inspiring campaigns for progressive reform. I do not say this to slight social democracy. Only social democracy has come close to fulfilling the doctrine of human rights expounded in Christian social ethics, by establishing nationwide policies of universal health care, a living wage, generous parental leave, and free higher education. In Germany, social democracy has reached into the management of corporate enterprises, creating supervisory boards in which 50 percent of the board members represent workers.

But democratic socialism is not inevitably about aspiring to state socialism and settling for social democracy. The deepest impulse in it is the original socialist vision of cooperative community. Christian socialists championed this idea long before German Marxists (against their intention), Continental neo-Marxists (ambiguously), and British Fabians (very intentionally) made socialism a project of the state. “State socialism” was an oxymoron to the radical democrats, communitarians, Marxists, anarchists, and Christian socialists of the early socialist movements. Karl Marx himself envisioned a revolutionary order featuring collective ownership, no classes, and no state. The Marxian fantasy of a stateless communist utopia was a major problem for every socialist party that competed for votes and sought to take the reins of the state. Even as the Social Democratic parties drifted toward state socialism, equating socialism with nationalization, dissenters within these parties resisted this trend or tried to bend it in the direction of worker guilds, guild networks, and other forms of decentralized economic democracy. In Britain, guild socialism was the leading resistance movement. It was loaded with Christian socialists and secular ethical socialists who renewed a politics of radical democracy that is still worth reviving today.

Socialism was originally a vision that society could be organized as a cooperative community. In the 1820s, Charles Fourier in France and Robert Owen in England championed the idea of an economy based on cooperation and community. Instead of pitting workers against each other, a cooperative mode of production and exchange would allow them to work for each other. Fourier and Owen founded socialist movements that dreamed of replacing the state, or restricting it, or enlisting it to support producer cooperatives. Debates over these issues roiled the socialist movement from the beginning and sundered the first movement for Christian socialism.

Christian socialism began in the 1840s with the Anglican trio of Frederick Denison Maurice, John Ludlow, and Charles Kingsley. Maurice, a theologian and cleric, argued that cooperation is the moral law of the divine moral order. Socialism reflects the divine order by creating a cooperative society. Fatefully, the first Christian socialists clashed over consumer cooperatives, the state, and cooperative syndicates. Why should producer cooperatives be favored over consumer cooperatives? Should the state finance producer cooperatives? Are labor syndicates inevitably divisive and radical? Debates over these issues thwarted the first wave of Christian socialism.

The mighty second wave in Britain, beginning in the 1880s, was mostly Anglo-Catholic. Many Anglican socialists were stubbornly cooperative in the Owen and Maurice mode, some joined the Fabian movement after it arose in 1884, some joined the Christian Social Union reformers who came out of Oxford, some gave highest priority to socializing land, and many joined the workers party movement after it arose in 1893. But Christian socialism had an ethical wellspring that qualified its commitment to these ideologies. Christian socialists were committed to an ethic of equality, freedom, cooperative community, and divine love. No ideology, whether Fabian or Syndical or Social Unionist or Marxist, was more binding than these religious and ethical convictions.

In 1893 a Christian socialist labor leader, Keir Hardie, founded the Independent Labour Party (ILP), which compelled many socialists to make an excruciating choice: Should they stay in the radical wing of the Liberal Party or join the party of actual workers? A worker’s party might be a disaster for anti-imperialism and anti-racism. Joining the ILP might destroy the anti-imperialist wing of the Liberal Party, and it might hand the government to the Tories, which, in fact, it did. Christian socialists Stewart Headlam and Scott Holland stuck with the left wing of the Liberal Party for these reasons. Christian socialists S. G. Hobson (who would coin the term “guild socialism”), Charles Marson, and Conrad Noel countered that socialists had to be with the workers and convert them to anti-imperialism, anti-racism, and anti-militarism.

Both of these groups had contentious relationships with the mainstream of the Fabian Society, an activist powerhouse led by sociologist Sidney Webb, his wife Beatrice Webb, and literary star George Bernard Shaw. The Fabians contended that British socialism did not need Marx’s glorification of revolutionary violence or his exotic doctrines; all it needed was to proceed on its present course. The reach of government grew every year. This process was relentless, beneficial, and civilizing. It tamed the predatory impulses of capitalism, making society rational. Soon the flow of progress would civilize England and the entire world. All manner of late Victorians believed the world was progressing toward higher forms of civilization and democracy. Even Marxists held a version of the belief in progress. The Fabians turned this belief into an argument for bureaucratic state collectivism. Socialism was government ownership directed by elite managers, that is, Fabians. footnote

But Christian socialists fit their ideology to their ethical convictions, not the other way around. Even those who joined the Fabian Society fought for the ethical difference when it arose. It arose repeatedly over imperialism and racism. Britons were schooled in the lore of the British Empire, a tale of mercantile colonization under the Stuarts and Cromwell; war victories against the Dutch, French, and Spanish in the seventeenth century; the acquisition of eastern North America; slave-trading outposts in Africa; commercial interests in India; and Disraeli’s incursions into Egypt, India, Afghanistan, and South Africa during the 1870s. In the 1880s a new kind of imperialism emerged, one that had to be opposed differently than the old kind. Old-style anti-imperialists conceived of empire as a problem of power lust and military overreach cured by left-liberal politics. The new imperialism was driven by fierce economic competition for new markets, and it grew no matter which party won office. John Hobson wrote about this historical turn as it happened, publishing ten books before he wrote his famous book Imperialism in 1902, contending that modern capitalism was unsustainable without exploiting colonized markets. Hobson did not say that economics explains everything. He made moral and political arguments, providing sermon material for Christian socialists. Noel, Marson, Holland, and Charles Gore blasted the Boer War and the plunder of Africa. They fought against Shaw and the Webbs for touting their patriotism with racist arguments. British Christian socialists were vocal anti-imperialists right in the belly of the beast. Some made bishop anyway, notably Gore and William Temple, because that was England too.footnote

John Ruskin, Study of the Marble Inlaying on the Front of the Casa Loredan (Public domain)

Edwardian England, a brief and hollowed-out version of Victorian England, crashed ingloriously just before World War I. The Victorian expansion of the British Empire had waned. The Boer War drained the English economy and dominated English international affairs. The clash between corporate capitalism and a growing union movement made labor strife routine. The Victorian belief that England had a national mission waned along with the British Empire and economy. In 1910, nine kings rode in the funeral procession for Edward VII, a formal ending. Britain seethed with protest movements over economic oppression, imperial overreach, women’s rights, Irish home rule, and political representation. Syndicalists won beachheads in the railway unions and Welsh mines, espousing the syndical doctrine that workers should run the country and One Big Strike would make it happen.

This was the context in which guild socialism arose. It was a declaration that the nineteenth century had not settled what was possible and what socialism should be. Guild socialism was a blend of Christian socialism, radical democracy, syndicalism, Fabian theory, and nostalgia for the medieval artisan guilds. Syndicalism had a marginal status in British unions, which did not like the rhetoric of violent overthrow. Guild socialists played down the syndical fantasy of One Big Strike. They contended that socialism should be about worker determination, not building a collectivist government. The productive life of the nation should be organized and operated by self-governing democratic organizations embracing all workers in every industry and service. These national guilds would emerge from the existing union movement.

Guild socialism attracted Christian socialists from the Maurice tradition, secular readers of Ruskin and Morris, followers of Catholic authors Hilaire Belloc and G. K. Chesterton, who wanted to recreate the medieval guild economy, and disciples of political theorist John Neville Figgis. For twenty years it attracted the best of the upcoming generation and caused a ruckus in the fledgling Labour Party, opposing its Fabian leadership. The guild movement, which began in 1906 when Penty’s book The Restoration of the Guild System registered the disgust he felt at Fabian meetings, had become a force to be reckoned with.footnote

To describe Penty’s book more positively, it showed why he treasured Ruskin and Morris. Ruskin said trade unions should convert themselves into self-governing guilds, refashioning the medieval guilds. Morris imagined a decent, beautiful, civilized society in which people found happiness in equality. Penty grieved that Fabian technocrats brushed aside these ethical visions of a good society. It seemed Ruskin’s dream of worker self-governance had died with Ruskin and Morris. Resurrecting it was imperative.

Somehow the medieval traditions of craftsmanship, self-regulation, and self-government had to be recovered. Penty said capitalism was corrupting and dehumanizing, while Fabian collectivism was corrupting and balefully bureaucratic. The guilds could not be recovered by refashioning modern lines of development. Only social forces that opposed modern development could do it. He named three: trade unions, the arts and crafts movement, and religion. Religion was crucial because it always linked back to something; Penty argued that any serious hope for the future must be rooted in reverence for the past. His book inspired two Fabians, A. R. Orage and Holbrook Jackson, to revamp an old radical magazine, The New Age, in May 1907, with Shaw’s money. Orage, a brilliant editor, turned The New Age into a must-read sensation, the best politics-and-culture magazine of its time. He recruited a sparkling cast of writers featuring Shaw, Penty, Belloc, Chesterton, Ezra Pound, Havelock Ellis, H. G. Wells, Belfort Bax, and most importantly, S. G. Hobson, a political economist and Quaker.footnote

Orage and Hobson got a movement going for guild socialism. Yet The New Age was more than a movement vehicle, and it acquired its must-read status by not hewing to a party line. It had a flank of writers that idealized medieval society in Penty’s style, imagining a communal society lacking a division of labor. Meanwhile Orage and Hobson wrote edgy, worldly, intellectually serious articles, winning converts to guild socialism. Political theorist G. D. H. Cole became a major player in the guild movement. Anglo-Catholic socialist Maurice Reckitt teamed with Cole to build a guild movement within the unions, and Conrad Noel pulled the Church Socialist League into the movement. Meanwhile Belloc and Chesterton popularized a Catholic anti-modernist version of the guild idea, “distributism” – a return to the guild economics that prevailed in Europe for the thousand years it was Catholic.

Distributism had a British tradition dating to William Cobbett’s History of the Protestant Reformation in England and Ireland (1824), which contrasted an idealized medieval society with the degradation wrought by the Reformation. Belloc’s The Servile State (1912) shrewdly reworked this story, contending that capitalism shaped the course of industrialization in England as a consequence of the destruction of English monasteries, not as a natural outgrowth of the Industrial Revolution. Belloc transmitted the teaching of Pope Leo XIII in Rerum novarum (1891) that property ownership is a fundamental right that should be widely distributed in society. Chesterton wrote as an Anglo-Catholic on his way to Roman Catholicism, converting in 1922. Both were dazzling writers who reached mass audiences. Guild socialists counted Belloc as an ally even though he repeated the Vatican’s condemnations of the socialist attack on private property and religion. Christian socialists wagered that another kind of socialism was possible and desperately needed.footnote

The guild movement made deep inroads in the unions and shook the Labour Party until the early 1920s. They created guilds in several industries and a backbone organization that coordinated them, the National Guilds League. But Britain’s economic crisis of the early 1920s created the first Labour government, which stopped funding the National Guilds League and focused on Fabian governance. Three figures symbolize the legacy of the guild movement. Cole acquiesced to a regnant Fabian orthodoxy after the guild movement faded, training a generation of political theorists at Oxford. He was an atheist contrarian who made socialism his religion. R. H. Tawney became the leading British socialist of the twentieth century by mixing Fabian, Christian, and guild themes. He and William Temple were close friends and allies. Temple, the leading British theologian of the twentieth century, developed an argument in the early 1940s for a refashioned guild socialism that was ahead of its time and still is.

These theorists envisioned forms of economic democracy that were subsequently achieved and others that remain to be achieved. Social control can mean cooperative worker management based on individual ownership in which each member owns one share in the enterprise, as in the longtime cooperatives of the US Pacific Northwest that play a major role in the plywood industry. It can mean cooperative worker management in which workers own a firm collectively as a group, as in the famous Mondragon cooperatives in the Basque region of Spain, an integrated network of more than two hundred industrial cooperatives. It can mean government-directed public management representing the community at the local, regional, or national level, as in various forms of government socialism. Or it can be a blend of cooperative and public models, as I have advocated for forty years.footnote As a general principle I favor cooperative worker ownership over government ownership because cooperatives achieve direct, democratic, humane, interpersonal self-determination at the firm or guild level. But public forms of social ownership generally pay greater heed than cooperatives to the needs of the entire society and the common good; public ownership may work better in industries and enterprises with large economies of scale or extensive externalities, where cooperatives would have trouble scaling up. Either way, we need new forms of social ownership that facilitate democratic capital formation, are entrepreneurial and innovative, have a capacity for scaling up, and don’t replicate the bloated bureaucracies of centralized state socialism.

Here is where Temple still matters as a theorist of guild socialism. In the early 1940s, both before and after he became Archbishop of Canterbury, Temple got very specific about how to democratize economic power. He was incredulous that modern democracies tolerated big private banks, lamented that Christian socialists turned away in the 1890s from the land issue, and proposed a new form of guild socialism. The banks, he argued, should be turned into utilities or socialized; otherwise the rich controlled the process of investment. God made the land for everyone, and society creates the unearned increment in the value of land; therefore the increment should go to society. Above all, though Temple took for granted that certain natural monopolies must be nationalized, the centerpiece of his proposal was an excess-profits tax payable in the form of shares to worker funds. These funds, over time, would gain democratic control over enterprises. Economic democracy, he argued, can be achieved gradually, peaceably, and on decentralized terms, without abolishing economic markets or making heroic demands on the political system.footnote

Forty years later this proposal to build economic democracy through worker funds was embraced by the union movements in Sweden and Germany. It was called the Meidner Plan for Economic Democracy, with no mention of Temple, and it remains the gold standard of public bank theory. In 1983 the Meidner Plan was instituted in Sweden, where it got a nine-year run and worked perfectly well, except politically. A tax on the excess profits of major companies was paid in the form of shares to eight regional worker funds. The funds were managed democratically and a 40 percent ceiling was placed on the degree of worker control that could be attained in any company. Conservatives and the corporate class railed against it constantly, loathing the very idea of economic democracy, and in 1992 they got rid of it. That is the closest that any nation has come to democratizing economic power on a national scale.

The public bank model is a step beyond the Mondragon cooperatives and Germany’s co-determined supervisory boards – the most advanced forms of economic democracy yet to be achieved. For the past generation, large-scale economic democracy has seemed out of reach; even in Sweden it is a taboo subject for Social Democrats, a reminder that they once reached too far and got burned for it. But the day is coming when social ownership will not be taboo in electoral politics, because the rebellion against forty years of neoliberalism is just getting started.

Footnotes

1. Sidney Webb, Socialism: True and False (London: The Fabian Society, Fabian Tract No. 51, 1894); Webb, Twentieth Century Politics: A Policy of National Efficiency (London: The Fabian Society, Fabian Tract No. 108, 1901).
2. John A. Hobson, Imperialism (1902; reprint, London: Allen and Unwin, 1948).
3. Arthur J. Penty, The Restoration of the Guild System (London: Swan Sonnenschein, 1906).
4. Editorial [A. R. Orage and Holbrook Jackson], “The Outlook,” The New Age: An Independent Socialist Review of Politics, Literature, and Art, New Series 1 (May 2, 1907), 1.
5. William Cobbett, A History of the Protestant Reformation in England and Ireland (1824)? (some say 1896); reprint, New York: Benziger Brothers, 1938). G. K. Chesterton, “Why I am Not a Socialist,” The New Age (January 4, 1908), 189-190; Hilaire Belloc, The Servile State (London: T. N. Foulis, 1912).
6. Gary Dorrien, Soul in Society: The Making and Renewal of Social Christianity (Minneapolis: Fortress, 1995); Dorrien, Economy, Difference, Empire: Social Ethics for Social Justice (New York: Columbia University Press, 2010); Dorrien, Social Democracy in the Making: Political and Religious Roots of European Socialism (New Haven: Yale University Press, 2019).
7. R. H. Tawney, The Acquisitive Society (New York: Harcourt, Brace, 1920); Tawney, Religion and the Rise of Capitalism (New York: Harcourt, Brace, 1926); Tawney, Equality (first edition, 1931; fifth edition, London: George Allen & Unwin, 1964); William Temple, The Hope of a New World (New York: Macmillan, 1941); Temple, Christianity and the Social Order (Harmondsworth, Middlesex: Penguin Books, 1942), 77-78; Temple, The Church Looks Forward (New York: Macmillan, 1944).