7 p. Is “COOPERATISM” another classification, like Capitalism, Socialism, and Communism?

SECOND OF A SERIES ADDRESSING SOCIETY’S ILLS. From a book by Richard D. Wolff, written in 2016. Economic alternatives that could cure much of INEQUALITY.

Society continually improves when FAIRNESS is increasing.  Society continually degrades when FAIRNESS is consigned to the rubbish heap, (TINA). 4,000 words

THIS IS MOST IMPORTANT: Any new system planned to be introduced gradually, HAS TO BE COMPATIBLE WITH THE OLD SYSTEM. They have to function together.  It is not a flip of the switch nor a Revolution.  That is the beauty of these ideas.

My objection of this book and most other analysis is that the terminology is purposefully kept very vague and uncertain.  Much talk about society centers around ideology and the words Capitalism, Socialism and Communism are used to battle out the alternatives.  What does C., S., and C. mean when so many variations have been, and are practiced? 

NOTHING!  These words must be retired before we can make any headway.  To state the obvious, those who benefit from the status quo and TINA, do not want to make any headway.  So, they love these words, and continually obfuscate with the biased interpretation that they put on them.

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Here’s a Manifesto for Economic Democracy and Ecological Sanity, Written on February 2, 2012

A new historical vista is opening before us in this time of change. Capitalism as a system has spawned deepening economic crisis alongside its bought-and-paid-for political establishment. Neither serves the needs of our society, but serves well the desires of corporate owners, (their shareholders). Whether it is secure, well-paid, and meaningful jobs or a sustainable relationship with the natural environment we depend on, our society is not delivering the results people need and deserve. We do not have the lives we want, and our children’s future is threatened because of social conditions that can and should be changed. One key cause for this intolerable state of affairs is the lack of genuine democracy in our economy as well as in our politics. One key solution is thus the institution of genuine economic democracy as the basis for a genuine political democracy. That means transforming the workplace in our society as we propose in what follows:

We were encouraged by the Occupy Wall Street (OWS) movement spreading across the United States and beyond. Not only does OWS express a widespread popular rejection of our system's social injustice and lack of democracy. OWS is also a movement for goals that include economic democracy. We welcome, support, and seek to build OWS as the urgently needed, broad movement to reorganize our society, to make our institutions accountable to the public will, and to establish both economic democracy and ecological sanity.  [Some say that OWS was a testing ground of those same corporations and banks.  It was financed by them and the moment they pulled the plug, it vanished.]  A Testing of public sentiment.

Capitalism and “Delivering the Goods”

Capitalism today abuses the people, environment, politics, and culture in equal measures. It has fostered new extremes of wealth and poverty inside most countries, and such extremes always undermine or prevent democratic politics. Capitalist production for excess profit likewise endangers us by its global warming, widening pollution, and looming energy crisis. And now capitalism's recurrent instability, (what others call the “business cycle”) has plunged the world into the second massive global economic crisis in the last seventy-five years, (2008).

[of course, “a thing” called capitalism doesn’t have any cycles nor any properties in itself.  Business cycles are what the people do, who operate behind the façade-word, Capitalism.]

Yet both Republican and Democratic governments have failed to bring a recovery to the great mass of the American people. We continue to face high unemployment and home foreclosures alongside shrinking real wages, benefits, and shrinking job security. Thus, increasing personal debt is required to secure basic needs. The government uses our taxes to bring recovery from the economic crisis to the banks, stock markets, and major corporations. We have waited for bailouts of the corporate rich to trickle down to the rest of us; it has never happened. To pay for their recovery we are told now to submit to cuts in public services, public employment, and even our Social Security and Medicare benefits. The budget deficits and national debts incurred to save capitalism from its own fundamental flaws are now used to justify shifting the cost of their recovery onto everyone else.

We should not pay for capitalism’s crisis and for the government’s unjust and failed response to that crisis. It is time to take a different path, to make long-overdue economic, social, and political changes.  We begin by drawing lessons from previous efforts to go beyond capitalism. Traditional socialism—as in the Soviet Union—emphasized public instead of private ownership of means of production and government economic planning instead of markets. But that concentrated too much power in the government and thereby corrupted the socialist project.

Yet the recent Russian reversions back to capitalism neither overcame nor rectified the failures of Soviet-style socialism.

Side note: Communism and Soviet-style socialism was always associated with heavy handed repression and killing of the opposition by the western controlled oligarch world media.  In fact, you cannot hear the word “communism” without immediately thinking of evil Stalin.  (By the way, to say the most obvious, one man, Stalin, cannot kill millions of opposition figures.  The whole of the Politburo was involved in the repression, except maybe one or two.)  Khrushchev who initiated and sponsored the purge of the “Stalin Cult”, was the greatest killer of them all.  *(More of the bending of useless word-connotations.)

We have also learned from the last great capitalist crisis in the United States during the 1930s. Then an unprecedented upsurge of union organizing by the CIO, Congress of Industrial Organizations, and political mobilizations by socialist and communist parties won major reforms: establishing Social Security and unemployment insurance, creating and filling 11 million federal jobs. Very expensive reforms in the middle of a depression were paid for in part by heavily taxing corporations and the rich (who were also then heavily regulated). However, New Deal reforms were evaded, weakened, or abolished in the decades after 1945. To increase their profits, major corporate shareholders and their boards of directors had every incentive to dismantle reforms. They used their profits to undo the New Deal. Reforms won in this way will always remain insecure until workers who benefit from the reforms are in the position of receiving the profits of their enterprises, and using them to extend, not to undermine, those reforms.

The task facing us, therefore, goes well beyond choosing between private and public ownership and between markets and planning. Nor can we be content to re-enact reforms that capitalist enterprises can and will undermine. These are not our only alternatives. The strategy we propose is to establish a genuinely democratic basis—by means of reorganizing our productive enterprises—to support those reforms and that combination of property ownership and distribution of resources and products that best serve our social, cultural, and ecological needs.

**Economic Democracy at the Workplace and in Society

The change we propose—as a new and major addition to the agenda for social change—is to occur inside production: inside the enterprises and other institutions (households, the state, schools, and so on) that produce and distribute the goods and services upon which society depends. Wherever production occurs, the workers must become collectively their own bosses, their own board of directors. Everyone’s job description would change: in addition to your specific task, you would be required to participate fully in designing and running the enterprise. Decisions once made by private corporate boards of directors or state officials—what, how, and where to produce and how to use the revenues received—would instead be made collectively and democratically by the workers themselves. Education would be redesigned to train all persons in the leadership and control functions now reserved for elites.

[It doesn’t mean workers would make day-to-day decisions.  You still need specialists and corporate officers.  But policy would be directed toward the worker’s needs and wants, not only to shareholder profit.  It doesn’t mean you would go on a nepotism hiring spree, or bleed the enterprise.  A cooperative enterprise needs surplus, reserves and profit, just like the absentee shareholder corporations.  They would have to guard their surplus judiciously.] It is not SOCIALISM, too big to fail and easy to rip off.  It is cooperative capitalism, perhaps fragile initially, and must be nurtured.

Such a reorganization of production would gradually, and finally, and genuinely subordinate the state to the people. The state’s revenues (e.g., taxes) would depend on what the workers gave the state out of the revenues of the workers’ enterprises. Instead of capitalists (a small minority) funding and thereby controlling the state, the majority—workers—would finally gain that crucial social position.

Of course, workplace democracy must intertwine with community democracy in the residential locations that are mutually interactive and interdependent with work locations. But the local goals are the same. Economic and political democracy need, and would reinforce one another. Self-directed workers and self-directed community residents must democratically share decision making at both locations. Local, regional, and national state institutions will henceforth incorporate shared democratic decision making between workplace and residence-based communities. Such institutions would draw upon the lessons of past capitalist and socialist experiences.

Benefits of Workplace Democracy (cooperative ownership)

When workforce and residential communities decide together how the economy evolves, the results will differ sharply from the results of absentee shareholder capitalism. Workplace democracy would not, for example, move production to other countries as capitalist corporations have done. Workers’ self-directed enterprises would not pay a few top managers huge salaries and bonuses while most workers’ paychecks and benefits stagnate. Worker-run enterprises sharing democratic decision making with surrounding communities would not install toxic and dangerous technologies as capitalist enterprises often do to earn more profits.

They would, however, be far more likely to provide daycare, elder care, and other supportive services. For the first time in human history, societies could democratically rethink and reorganize the time they devote to work, play, relationships, and cultural activities. Instead of complaining that we lack time for the most meaningful parts of our lives, we could together decide to reduce labor time, to concentrate on the consumer goods we really need, and thereby to allow more time for the important relationships in our lives. We might thereby overcome the divisions and tensions (often erroneously defined in racial, gender, ethnic, religious, and other terms) that capitalism imposes on populations by splitting them into ✓fully employed, ✓partly employed, ✓contingent laborers, and ✓those excluded from the labor market.

A new society can be built on the basis of democratically reorganizing our workplaces, where adults spend most of their lifetimes. Over recent centuries, the human community dispensed with kings, emperors, and czars in favor of representative (and partly democratic) parliaments and congresses. The fears and warnings of disaster by those opposed to that social change were proved wrong by history. The change we advocate today takes democracy another necessary and logical step: into the workplace. Those who fear (and threaten) that it will not work will likewise be proven wrong.

[What is left out of this analysis is the undermining effect of our central currency, the dollar.  When programs begin to take effect, corporate giants will move to bankrupt them at all costs.  Kind of like the full oligarch mobilization to discredit and hobble socialism and communism.]

In order to provide jobs for others, (OUR OTHERS), cooperatives could easily issue chits, “discount coupons” as part of the salary.  If their products were consumer goods, these discount coupons could circulate, almost like a currency.  It is like loyalty programs, you get 20% off, if you buy locally.  Then groups of local cooperatives could begin to use the same coupon, and it would be a parallel currency for all of their products.  But only for the top fraction of the purchase, the bulk of which would still be in dollars. Many raw materials must be sourced from the outside with dollars.]  Guess what?  You could also hire people for services, and pay them with a fraction of discount coupons, which they could redeem for the things they need.

A special benefit would be a new freedom of choice for Americans. As a people, we could see, examine, and evaluate the benefits of working inside enterprises where every worker is both employee and employer, where decisions are debated and decided democratically. For the first time in US history, we will begin to enjoy this freedom of choice: working in a top-down, hierarchically organized capitalist corporation or working in a cooperative, democratic workplace. The future of our society will then depend on how Americans make that choice, and that is how the future of a democratic society should be determined.

The Rich Roots Sustaining this Project

Americans have been interested in and built various kinds of cooperative enterprises—more or less non-absentee-capitalist enterprises—throughout our history. The idea of building a “cooperative commonwealth” has repeatedly attracted many. Today, (in 2016), an estimated 13.7 million Americans work in 11,400 Employee Stock Ownership Plan companies (ESOPs), in which employees own part or all of those companies. So-called not-for-profit enterprises abound across the United States in many different fields. Some alternative, non-capitalist enterprises are inspired by the example of Mondragon, a federation of over 250 democratically run worker cooperatives employing 100,000 based in Spain's Basque region. Since their wages are determined by the worker-owners themselves, the ratio between the wages of those with mostly executive functions and others average 5:1 as compared to the 475:1 in contemporary capitalist multinational corporations.

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Yes, There Is an Alternative to Capitalism: Mondragon Shows the Way

An article from June 24, 2012

There is no alternative (“Tina”) to capitalism?  Really? We are to believe, with former British prime minister Margaret Thatcher, that an economic system with endlessly repeated cycles, costly bailouts for financiers, and now austerity for most people is the best human beings can do? Capitalism’s recurring tendencies toward extreme and deepening inequalities of income, wealth, and political and cultural power require resignation and acceptance—because there is no alternative?

I understand why such a system’s leaders would like us to believe in Tina. But why would others?

Of course, alternatives exist; they always do. Every society chooses— consciously or not, democratically or not—among alternative ways to organize the production and distribution of the goods and services that make individual and social life possible.

Modern (western) societies have mostly chosen a capitalist organization of production. In capitalism, private owners establish enterprises and select their directors who decide what, how, and where to produce and what to do with the net revenues from selling the output. This small handful of people makes all those economic decisions for the majority of people—who do most of the actual productive work. The majority must accept and live with the results of all the directorial decisions made by the major shareholders and the boards of directors they select. This latter also selects their own replacements.

Capitalism thus entails and reproduces a highly undemocratic organization of production inside enterprises. (The Central Planning of all Corporations. How different is that from State central planning?) Tina believers insist that no alternatives to such capitalist organizations of production exist, or could work nearly so well, in terms of outputs, efficiency, and labor processes. The falsity of that claim is easily shown. Indeed, I was shown it a few weeks ago and would like to sketch it for you here:

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In May 2012, I had occasion to visit the city of Arrasate-Mondragon, in the Basque region of Spain. It is the headquarters of the Mondragon Corporation (MC), a stunningly successful alternative to the capitalist organization of production. [It is capitalist too, but with different ownership parameters.]

MC is composed of many cooperative enterprises grouped into four areas: ✓industry, ✓finance, ✓retail, and ✓knowledge. In each enterprise, the co-op members (averaging 80-85 percent of all workers per enterprise) collectively own and direct the enterprise. Through an annual general assembly, the workers choose and employ a managing director and retain the power to make all the basic decisions of the enterprise (what, how, and where to produce and what to do with the profits).

[Here we come up against what is called the “Dunbar Number”.  It refers to tribal society, that about 150 people is the most that can operate as a direct tribe, direct democracy or cooperative.  More people begin to add confusion.  That is why there are 250 cooperatives within Mondragon.  They have a know-how about direct cooperation.  Then there is some central protective “Federation” that organizes markets.]

To put this into perspective, we are talking about small to medium enterprises.  But since big corporations do not vertically integrate, but outsource so many sub-assemblies, these coops will be able to integrate into the economy.  Furthermore, they are a model of a different system.  When these communities and these workers are shown to be much better-off than other “corporate employees”, people’s attitudes will change and they will demand more.  Even 15% - 25% of worker coops could change the whole economic structure?  I can’t predict.

As each enterprise is a constituent of the MC as a whole, its members must confer and decide with all other enterprise members what general rules will govern MC and all its constituent enterprises. In short, MC worker-members collectively choose, hire, and fire the directors, whereas in capitalist enterprises the reverse occurs. One of the cooperatively and democratically adopted rules governing the MC limits top-paid worker/ members to earning 6.5 times the lowest-paid workers. Nothing more dramatically demonstrates. the differences distinguishing this from the capitalist alternative organization of enterprises. (In US corporations, chief executive officers can expect to be paid 400 times an average worker’s salary—a rate that has increased twentyfold since 1965.)

Given that MC has 85,000 members (from its 2010 annual report), its pay equity rules can and do contribute to a larger society, with far greater income and wealth equality than is typical in societies that have chosen traditional capitalist organizations of enterprises. Over 43 percent of MC members are women, whose equal powers with male members likewise influence gender relations in society different from capitalist enterprises. [I CLAIM WORKER-COOPS ARE CAPITALIST, Librarian.]

MC displays a commitment to job security I (Wolff) have rarely encountered in capitalist enterprises: it operates across, as well as within, particular cooperative enterprises. MC members created a system to move workers from enterprises needing fewer to those needing more workers—in a remarkably open, transparent, rule-governed way, (FAIRNESS) and with associated travel and other subsidies to minimize hardship. This security-focused system has transformed the lives of workers, their families, and their communities, also in unique ways.

The MC rule that all enterprises are to source their inputs from the best and least costly producers—whether or not those are also MC enterprises—has kept MC at the cutting edge of new technologies. Likewise, the decision to use a portion of each member enterprise's net revenue as a fund for research and development has funded impressive new product development. Research and development within MC now employ 800 people with a budget over $75 million. In 2010, 21.4 percent of sales of MC industries were from new products and services that did not exist five years earlier. In addition, MC established and has expanded Mondragon University; it enrolled over 3,400 students in its 2009-2010 academic year, and its degree programs conform to the requirements of the European framework of higher education. Total student enrollment in all its educational centers in 2010 was 9,282.

The largest corporation in the Basque region, MC is also one of Spain’s biggest corporations (in terms of sales or employment). Far better than merely surviving since its founding in 1956, MC has grown dramatically. Along the way, it added a cooperative bank, Caja Laboral (holding almost $25 billion in deposits in 2010). And MC has expanded internationally, now operating over seventy-seven businesses outside Spain. MC has proven itself able to grow and prosper as an alternative to—and competitor of—traditional capitalist organizations of enterprise.

During my visit, in random encounters with workers who answered my questions about their jobs, powers, and benefits as cooperative members, I found a familiarity with and sense of responsibility for the enterprise as a whole that I associate only with top managers and directors in capitalist enterprises. The easy conversation (including disagreement)—for instance, between assembly-line workers and top managers inside the Fagor washing-machine factory we inspected—was similarly remarkable.

Our MC host on the visit reminded us twice that theirs is a cooperative business with all sorts of problems: “We are not some paradise, but rather a family of cooperative enterprises struggling to build a different kind of life around a different way of working.”

Nonetheless, given the performance of Spanish capitalism these days—25 percent unemployment, a broken banking system, and government-imposed austerity (as if there were no alternative to that either)—MC seems a welcome oasis in a capitalist desert.

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The US cooperative movement stretches today from the Arizmendi Association (San Francisco Bay) to the Vida Verde Cleaning Cooperative (Massachusetts) to Black Star Collective Pub and Brewery (Austin, Texas), to name just a few. The largest conglomerate of worker-owned cooperatives in the United States is the “Evergreen Cooperative Model” (or “Cleveland Model”), consisting of the Evergreen Cooperative Laundry (ECL), the Ohio Cooperative Solar (OCS), and the Green City Growers. These cooperatives share (a) common ownership and democracy at the workplace, (b) ecological commitments to produce sustainable goods and services and create “green jobs,” and (c) new kinds of communal economic planning, mediated by “anchor institutions” (e.g., universities, nonprofit hospitals), community foundations, development funds, state-owned banks or employee ownership banks, and so on. Such cooperatives are generating new concepts and kinds of economic development.

[I have been following https://www.fiftybyfifty.org/ for 8 or more years, and they have the same goals.]

These examples’ varying kinds and degrees of democracy in the workplace all attest to an immense social basis of interest in, and commitment to non-capitalist forms of work. Contrary to much popular mythology, there is a solid popular base for a movement to expand and diversify the-options for organizing production. Workplace democracy responds to deep needs and desires.  I’ll repeat my initial statement:

THIS IS MOST IMPORTANT: Any new system planned to be introduced gradually, HAS TO BE COMPATIBLE WITH THE OLD SYSTEM. They have to function together.  It is not a flip of the switch nor a Revolution.  That is the beauty of these ideas.

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