Photo credit: Liberty Leading The People, Oil on canvas/Eugène Delacroix/1830
HEN looking at any complication, a person must examine the inter-workings of the issue — open it up and look at the inside — to know exactly what is the real culprit. No body can just ignore what is going on systematically and assume that the problem can be fixed with aesthetics on the outside. In this article, I will explain what a Socialist is trying to tell you when they say that they want to fundamentally change how the Capitalist system works in order for everybody to be more equal. Because in the modern day, when most people think and talk about economics, they automatically assume that all that needs to be done to change society is to vote for a different political party that will usher in that evolution for us. Unfortunately, they couldn’t be more wrong.
This partisan dance, constantly back and forth, between the different “left” and “right” — the Capitalist parties — has only metabolized the growth and concentration of wealth inequality over the past three centuries. And today the gap is worse than that it has ever been with only 8 people having as much wealth as half the world’s entire population. The political charade that continues on uninterrupted and unquestioned — the partisan dance — has masked the true power and influence of the market while most people happily dive into quick fixes to tackle a system that has already failed them.
So, when a Socialist is looking at politics and economics, they imagine more than just petty government intervention to fix the crisis of Capitalism. We acknowledge that we need only to look at our historic faults — say the Soviet Union, Vietnam, North Korea, and all other 20th century attempts at Communism — to see that changing the government does nothing to change the way that people live their everyday lives. During those questionable periods in history, the daily life for the workers stayed exactly the same as it was before even though the politics in the country (the state, the party, the government) had stepped in to radically nationalize all of the private, Capitalist corporations.
What does this teach us today?
There was still oppression by a small group of people and essentially all that happened was that the party replaced the business man as the lever of control — of power — in these different countries. Those many revolutions only helped to create a scarier version of the world; an Orwellian-style Big Brother nightmare where the state really does control absolutely everything you see and do. Those kinds of totalitarian systems — which 19th and 20th century Socialism helped to create — were nothing like what the Socialists had in mind. Especially if we ask those who are living today in western countries these days; those who have rights and freedoms beyond anything someone from another century could even begin to imagine; we believe in something way stronger than just five-year plans, tyranny and distribution of rich people’s wealth.
According to Socialists, in order to clearly see what is going wrong with Capitalism, we must investigate the fundamental bedrock of the economic system itself. Only then we can start to progress forward towards a more equal, free and peaceful civilization. This platform on which everything sits has many names but all that it is: is the enterprise, the business, or the corporation. This is the institution that creates capital. It is where all of the problems lie in every economy that exists today.
It is not important the political action that is taken by individual governments to adjust the outcome of the global economic market. All that matters is the root-operating system of all the institutions which interact with each other to then create the global market. For example, in a Capitalist workplace, there are only a handful of people — the major shareholders and the board of directors — who make all of the real-life decisions for x amount of people. X, in reality, could be thousands or millions of employees. This relationship; this particular way of organizing the production of all the major goods and services that everybody needs to survive, is what is preventing a “free” and “democratic” society from emerging.
Richard D. Wolff is a Marxist economist from the United States. He uploads very educational lectures all over the internet but especially on YouTube. I recommend to anyone who wants to understand the modern complexities of the global market to take the hour to learn from his own words. He got his education from Harvard, Stanford, and Yale, and when it comes down to Keynesian and Neoclassical economics: he knows exactly what he is talking about because that is what those institutions taught him to know. For him to get any education about Socialism, Karl Marx, or anything at all that was critical of Capitalism, he says that he had to look for them on his own.
The video below is of self-identifying Socialist economist doing an hour-long talk at Google and it inspired me to write this entire post. I’ve watched over a hundred of his videos online and I’ve also read his 2012 book called Democracy At Work: A Cure For Capitalism. In that book, he explains how worker-controlled cooperatives are the next step to another system after Capitalism. He’s by far one of the most influential and critical American thinkers alive today, and he really knows how to explain complicated topics clearly in basic terms to the general public. In this talk, there is a short discussion about the core of what Marx’s writing was about: the surplus; the revenue; the profit. Marx identified the surplus as the main reason for inequality, selfishness, and everything else.
Turning the archaic top-down pyramid scheme of the private enterprise into a cooperatively owned, democratically controlled, worker shared collaborative — only produces better products and better communities. The typical example for Professor Wolff gives is the Mondragon Corporation in the Basque region of Spain. It is the largest worker cooperative in the world with over 73,000 workers/owners. Worker cooperatives — unlike any other solution — actually tackle income and wealth inequality by preventing a small group of people from having all control over the finances. By democratically controlling the distribution of the surplus, worker cooperatives are able to keep the concentration of wealth from getting too far out of hand.
Right now in the United States the “CEO compensation at the largest firms dipped temporarily in 2015, but remains 940.9 percent above its 1978 level.” Chief Executives of large corporations typically earn more than 300 times what the average worker makes. According to Fortune Magazine, “if this trend continues, expect lawmakers and regulators to continue experimenting with ways to put a cap on ever-escalating executive pay.” That kind of sentiment isn’t heard that often: a business magazine from the US talking about a cap on income. But with the absurd amount of money that’s being funneled into these few people’s pockets, something has to change quickly.
Before anyone gets confused, there are many different kinds of cooperatives — as in consumer, producer, purchasing, and hybrid — but the one that Socialists pay attention to is the worker cooperative which is “owned and democratically governed by employees who become co-op members.” The largest non-governmental cooperative union, consisting of “284 cooperative federations and organizations in 95 countries” — CICOPA (the International Organisation of Industrial, Artisanal and Service Producers’ Cooperatives) has these 6 basic characteristics for a worker’s cooperatives:
• They have the objective of creating and maintaining sustainable jobs and generating wealth, to improve the quality of life of the worker-members, dignify human work, allow workers’ democratic self-management and promote community and local development.
• The free and voluntary membership of their members, in order to contribute with their personal work and economic resources, is conditioned by the existence of workplaces.
• As a general rule, work shall be carried out by the members. This implies that the majority of the workers in a given worker cooperative enterprise are members and vice versa.
• The worker-members’ relation with their cooperative shall be considered as different from that of conventional wage-based labour and to that of autonomous individual work.
• Their internal regulation is formally defined by regimes that are democratically agreed upon and accepted by the worker-members.
• They shall be autonomous and independent, before the State and third parties, in their labour relations and management, and in the usage and management of the means of production.
Companies in North America too — instead of being sold off to the largest corporation or the highest bidder — are being sold to the employees themselves. Craft beer both in Canada and in the United States are following this trend. There are many examples of American cooperatives and Canadian ones too. Anyone can go to the Canadian Worker Co-op Federation website and see the Worker Cooperatives: Pathways to Scale or Worker Co-op Resource Guide, which both have very useful information to get acquainted with what they typically do, and how to start them in your own area.
Market Capitalism has just been skimming by for over a decade now. The American Dream is just a fantasy. Only billionaires and millionaires — not regular people — are actually making more money than they did before 2008. Millions of educated and able-bodied workers can’t find a job or they’re homeless, and the recovery that everybody was promised at the beginning of this recession has never come. Time and time again the profit-driven media tells us that the government — not the corporations — is what needs fixing. However, the two-party farce that we’re all accustomed to and tired of now, which was an alternative supported and funded by the affluent citizens and the enterprises that they control in order to keep the system exactly the way that it is. They knew that as long as they could keep controlling everyone through economics; as long as they could keep preventing Democracy in the workplace — the place where adults spend a majority of their day — then it really didn’t matter what happened anywhere else.