One of d@w-DC’s member explores the idea that if democracy is an ideal that is worth aspiring to, than the workplace would be the first place where it should be allowed. Worker cooperatives offer an antidote to the ills of to today’s economic systems.
Worker Coops: The Democratic Alternative to Organizing Our Economy
October 19, 2018, By Cinar Akcin, Democracy at Work DC
The terms socialism and capitalism are often mentioned without much consideration for what these economic systems look like in practice. The dominant narrative in the US is that capitalism is synonymous with democracy and free markets, whereas socialism is believed to be anti-democratic and inefficient. Since the 2009 financial crisis, however, people have started to question these assumptions—forming their own critiques of capitalism while discovering principles of socialism in the process. In order to make sense of capitalism and socialism in practice, however, it is important to dispel certain myths about both systems and begin to consider worker coops as a much needed alternative.
One common misconception is that capitalism is somehow synonymous with democracy—that you cannot have one without the other.
Capitalism is broadly defined as the private ownership of production in which goods are produced and exchanged for profit within a market system. These elements exist to an extent under capitalism today in the US, for example, but they are often misrepresented and confused with other principles. One common misconception is that capitalism is somehow synonymous with democracy—that you cannot have one without the other. Upon closer analysis, we realize that this is not the case. The private control of production is a fundamental principle of capitalism, yet most working people do not have this right. Most of us are forced to rent ourselves to capitalists, depriving us of the right to make crucial decisions at work—where we spend almost half of our adult lives. When wealth is concentrated in fewer hands, as is the tendency under capitalism, the chances of meaningful participation dwindle even further.
We are also told that free and open markets are integral to capitalism, but in reality they are anything but free and contain a number of contradictions that prevent them from functioning as optimally as classical economic theory would have us believe. In today’s capitalism, monopolies set the rules of the game and have enormous advantages—such as access to information and economies of scale that distort the market—which prevent smaller enterprises from competing in, let alone entering, the market in the first place. Markets under capitalism are also quite restrictive in that they limit the available choices to what is profitable first and useful second, which often results in suboptimal choices for the public.
The government under capitalism plays an active role in the enforcement of property relations between the capitalist and the working classes. As wealth becomes concentrated, the capitalist class exerts substantial influence on government, shaping policy that strengthens private ownership at the expense of society—resulting in the erosion of basic democratic rights in both the private and public spheres.
Recent examples of socialism, on the other hand, involve State control over production in a planned economy with a limited markets—as exemplified by the Soviet Union during the Cold War. Under this arrangement, all economic decisions concerning production are made by the State itself, primarily by a cadre of bureaucrats that are not directly involved in the production process. Markets are restricted and replaced by planned exchanges orchestrated by the State. In a planned economy, the ups and downs of speculative excesses experienced routinely under capitalism are constrained, but effective planning is also compromised—resulting in continual shortages and mismatched production.
One criticism often leveled against socialism in the Soviet Union was that authentic democratic participation was restricted and civil liberties were curtailed. Even though this is true to an extent, there was also a tacit social contract where the State would guarantee basic human rights such as universal education, housing, full employment and health care—rights that capitalist countries like the US never fully committed themselves to.
Despite their differences, there is one way that these examples of capitalism in the US and socialism in the Soviet Union are quite similar. In both systems, the means of production is not under the control of the people who actually produce the things that we need in society. The majority of workers in farms, offices and factories do not decide what those places produce (or how).
For all of its celebration of democracy, capitalism in reality denies these principles exactly where people spend the majority of their lives and where it is needed most.
Under capitalism, the enterprise is controlled by private individuals, generally a Board of Directors, who decide what the enterprise produces, where it produces, how it produces and what it does with the profits. Under this arrangement, workers are forced to sell their labor, with little to no say in how the business operates. For all of its celebration of democracy, capitalism in reality denies these principles exactly where people spend the majority of their lives and where it is needed most. Workers simply take orders from above and carry them out, similar to authoritarian structures of control.
In the Soviet instance of socialism, we notice the exact same trend where the State controls the means of the production and the workers are relegated to taking orders from the top. State officials become the Board of Directors in this system, appropriating the surplus labor of workers, deciding how the company should function, without having a direct role in the actual production process. For this reason, the practice of socialism seen in the Soviet Union is quite often described as “State capitalism”, since the State controls the actual process of production similar to the capitalist class under capitalism.
They take away the actual production process from workers—those of us who are most knowledgeable about the work—and place it in the hand of private individuals or the State.
Under both arrangements, we also notice harmful externalities such as wastefulness, corruption, inequality and worker exploitation. At the end of the day, both systems are strikingly similar in that they take away the actual production process from workers—those of us who are most knowledgeable about the work—and place it in the hand of private individuals or the State who are unaccountable and removed from what the enterprise does, resulting in a tremendous misallocation of time and resources.
Proponents of capitalism point to the existence of democratic institutions and the wonders of the free market as a defense of the system. Socialism, on the other hand, takes the moral high ground by proclaiming that its economy is managed in the interest of the public, ensuring fundamental rights such as full employment and universal health care. However, neither system permits workers to actually control production at the workplace. Even though some democratic rights are afforded under both systems, they are actively denied where we spend most of our time—at the workplace.
If democracy is an ideal that is worth aspiring to, than the workplace would be the first place where it should be allowed.
If democracy is an ideal that is worth aspiring to, than the workplace would be the first place where it should be allowed and worker coops would become the primary mode of economic management. Under this economic system, workers would make all vital decisions on what to produce, how to produce it and what to do with the profits. We would have ultimate say on whether we should outsource jobs, or make a product that pollutes the environment where our families live, or pay certain people huge salaries at the expense of fellow workers, or lay off our colleagues in order to ensure a suitable rate of return. By placing the production process in the hands of the people who actually produce, we would ensure ownership, accountability and responsibility towards each other and the wider community rather than to shareholders far removed from our day to day concerns.
It is time to popularize worker owned coops, where the workplace is run democratically, as the basis of a new economy. As we build these worker owned coops, we will be able to do away with the tremendous waste and income inequality generated by today’s economic systems and move towards a democratic alternative to organizing our economy. For the sake of future generations and the planet, it is a system we desperately need now more than ever!