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EACH MODE OF PRODUCTION PRODUCES THE SEEDS OF ITS OWN DESTRUCTION (MARX)      

With the increasing globalization of the world, we worry about how we will be able to fight the domination of a global capitalist economic system. Some even worry if it will be possible to end capitalist hegemony at all. Yet it is the very domination of the neoliberal capitalist system that may have created the conditions for a new anti-capitalist movement based on the cooperative model. The advance of communications technology has led to increased mobility of capital. Under the auspices of the neoliberal agenda, capital moves quickly from one underdeveloped area to another seeking ever lower wages and leaving destruction and large numbers of unemployed in its wake. Multinationals are routinely broken down into specialized modules and scattered around the world. The parts of one GM car are manufactured in many different countries.

In many of the countries that have been ravaged by the multinationals' capital flight, workers struggles have increasingly taken the form of developing worker-owned and managed cooperatives as part of the larger social movement toward economic justice and democracy.  When the Argentinian economy collapsed in 1991 and a quarter of the workforce was unemployed, workers took over their abandoned or bankrupt workplaces, restarted production and democratically decided how they would organize their work. “Occupy, Resist,  Produce” became the movement’s cry.  As the mode of production continues to change from a centralized industrial economy centered in the United States, to a decentralized global economy based on outsourcing  and the social gains that labor has won in the past hundred years are being eroded, even traditional industrial unions are willing to look to alternative models of organizing workers, including the formation of worker cooperatives and other worker ownership programs.  

Following  a long drawn-out  collapse of the U.S. steel  industry during which several shops represented by the Steelworkers converted to cooperatives, U.S. Steelworkers have decided to open several pilot cooperatives in the U.S. which, with a nod to the internationalization of labor, will be part of the Mondragon Corporacion Cooperativa (MCC) in Spain. Formed in 1956 Mondragon is the oldest and most successful of the cooperative networks with over 100,000 cooperative workers and assets and sales in the tens of billions in euros.

A cautionary note: Worker-owned and managed cooperatives have always be used to help stabilize depressed economies with high rates of unemployment. This can be shown as far back as the depressions of 1883 and the depression of the 1930s, as well as the recessions of the 1980 and 1990s. Once the economy improves, however, cooperatives, as a form of business enterprise, are once again relegated to the sidelines. Whether or not the cooperative movement has revolutionary potential or is simply a stabilizing element under a faltering capitalist economy remains to be seen. The number of new worker/producer coops formed in France and Spain continue to steadily grow, in part due to the development and support of worker cooperative networks and NGOs as well as inclusion in government programs that support social economy networks.  In England, the current resurgence in the cooperative movement tapered off, however, when economic conditions improved after 1988 (this might also be due to a change from a conservative government to a labor government that prefers a fully publicly-owned social welfare state to privately owned cooperative enterprises).  In Argentina, ten years after the collapse of the economy, there are 205 active cooperatives in 2011.  Twenty-two cooperatives have closed or made deals with their previous owners. One cooperative, a clinic, nationalized.  This is a 90% retention rate, and even though unemployment has dropped to 7%, workers still prefer to stay in the cooperatives rather than get another job. The number of people working under some kind of worker ownership plan in the U.S. has, at this point, surpassed the number of workers in traditional union plans. Over 10% of the U.S workforce is currently working, if not in cooperatives, in some kind of worker-ownership arrangement.  Only 8% of today’s workforce is organized in a traditional union. Many of these “worker-owner forms,” however, may benefit traditional capitalist owners more than the workers. While the record is uneven, the current world wide global crisis may provide the tipping point where the cooperative movement finally becomes, not just a Utopian alternative or an alternative in hard times,  but a mainstream approach to making social change.

WORKER-OWNED AND MANAGED COOPERATIVES AS AGENTS FOR TRANSFORMATIVE CHANGE: AN ANARCHIST-SYNDICALIST ANALYSIS

           Anarcho-syndicalists put forward the concept of democratically run cooperatives and worker-owned and managed enterprises as a transformative economic form that could replace the rapacious capitalist system which has so brutalized and exploited workers.  Based on the ideas of economic democracy and voluntary cooperation without class conflict or labor exploitation, anarchists focused on organizing from the ground up, establishing locally managed cooperatives, linked through confederations of unions, cooperatives and communities.

Cooperatives are defined by the International Cooperative Alliance’s Statement on Cooperative Identity as autonomous associations of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through jointly owned and democratically controlled enterprises.

In order to evaluate the inherent transformative nature of the cooperative movement,  it is  necessary to look at the underlying structure of worker-owned and managed enterprises and how they differ from traditional capitalist enterprises. There are many types of cooperatives: People band together for their mutual aid in housing coops, daycare coops, credit unions, health insurance coops, etc. Many of us buy our groceries from food coops, a form of consumer coop. Consumer coops still form the bulk of the coop movement. The worker/ producer coop, however, is the basic building block of a cooperative economy. A "pure" workers' cooperative is owned and democratically controlled by its "worker-owners". There are no outside owners, Only the workers own shares in the business. Each worker has one share and one vote and the money made by the coop is equally distributed to all members, giving the worker/producers total control over their labor. Unlike volunteer cooperatives, consumer coops or cooperatives developed to fulfill a specific social ideal (I want to promote organic foods),the worker/ producer coop is the only cooperative form that requires the production of  the goods and services necessary to society and insures the worker a non-exploitive means of survival. By the very structure of the cooperative, the workers as a group can only be successful by creating a successful product or service in the real economy. It is only in a cooperative where the producer is both the worker and the decision-maker, that we can see what distinguishes a capitalist from a cooperative economy.

As capitalist corporations as have grown into multinationals, creation of maximum profit is based on financial aspects only.  Buying and trading of corporations and stock become further and further removed from the production of actual commodities. Profit becomes abstracted from the underlying real economy.    In corporations, decisions are based, legally, on the interests of shareholders.  Usually, however,  they are shareholders only in the most indirect sense, investing in a company primarily to seek a financial profit. The number of shares is not based on any actual relationship with the company or the workers but on the monetary value of the share.  Most shares are usually owned by a small number of wealthy investors so even if smaller shareholders do want to influence the policies of the company (as in the TIACREF campaign to get the insurance company to divest from Israel) the shareholder management operates in the interests of a few wealthy investors, regardless of what the minority of small shareholders want.  

Management increasingly ties wealth and profit to “money wealth” at expense of the wealth creation based on producing a better product more efficiently.  Considerations for a safe commodity of value, for retaining an experienced workforce do not apply. With the increased domination of financial capital, CEOs go for immediate, short-term maximization of profit by cutting workers at plants to increase the cost benefit ratio. GM or Chrysler can declare a 15 million dollar profit by cutting 10,000 workers instead of producing a better car or worrying about whether or not there are actual consumer markets for their commodities.  With a better short term financial bottom line, the shareholders will still get their dividends – and vote large salaries, bonuses and golden parachutes to the CEOs.  

The culture of capitalism also invades the unions and workers. As unions negotiate with multinationals for a piece of the financial pie, they put financial considerations of their individual members over the general well-being of workers as a class.  The New York City DOE pension plans are invested in companies that produce the maximum financial profit, even as those companies  are paying other workers sweatshop wages or eliminating workers altogether, because it has been more profitable to the workers in the pension plan.  Workers have become investor/consumers, wanting maximum financial value from the investment of their money.  If a CEO cuts a bunch of companies in California and my pension stock goes up, I, as a consumer have made a $10,0000 profit so I’m not as concerned about where that money is coming from (unless I’m concerned about my company cutting me next).  Under this “business union” model prevalent in the U.S. and increasingly in other industrialized countries, the union, when negotiating with a company, is protecting the rights of the individual workers and not protecting the class of workers as a whole. This attitude becomes part of the worker ethos.  I want to get maximum wages so I can get my RV and retire. When new workers come in, let them get lower wages.  Short-term, individualistic perspectives are part and parcel of the alienation in the traditional capitalist workplace.  

The cooperatives offer a much more grounded way of encouraging democratization in the work place and stabilizing the workforce by emphasizing the group ethos over the individual..  Since the “stakeholders” are the workers, it is in their interests to make the actual product they produce successful.  This stabilizes the economy from the productive end.  It is not based on maximizing money profit, but maximizing “labor value” of the goods produced—that is, the workers are rewarded by improving goods, keeping the enterprise solvent. E.g., One company saved $18 million on employee innovation not previously allowed.  Another had parts sitting in a storeroom for 2 years not used because management kept reselling the company.  Management was maximizing stock value , financial profit, not producing goods.  Although some cooperatives have hired some outside expertise or management, most worker-owned enterprises have saved substantially by cutting down administrative costs (getting rid of the bosses).  The most interesting statistics come from some of the worker-owned and managed cooperatives in Argentina where it was discovered that the major expenditure that was driving the company into bankruptcy was the administrative costs of the foreign owners.  Without the bosses, the companies were financially sound.  While any Marxist would assume that once we got rid of the bosses, the profits and the money laundering that this might be true, it is nice to have this verified.

In worker-owned cooperative the orientation is toward building profitability of the cooperative based on use value for the group rather than exchange value for the individual.  Instead of chasing around the globe looking for bigger monetary profits, cooperatives tend to focus on their local economy, where their life is. The workers’ goals often include a sense of how their work fits into the community.  They buy from other local producers, they are concerned about the education their kids will get in local schools, they are concerned about how their workplace effects the environment and the health of their neighbors. The shift in direction is from the primary goal being financial profit for a few to the use value of the enterprise to all the workers.

THE MARXIST CRITIQUE:

Traditional Marxists, (who as socialists also worked for the goal of democratizing economic relationships) would argue that you can’t  just “grow” another economic form within capitalism. According to the Marxist critique, privately owned enterprises in capitalist states, however democratic and egalitarian coops are internally, are at best Utopian alternatives. They will eventually be co-opted by the system, especially since they lack the economies of scale and sufficient capital to produce the necessary goods for society.

Moreover, if a cooperative movement did start to overtake the capitalist mode of production, the capitalist owning class would bring all its political, military and cultural might to crush such a movement so that it could retain its control over wage workers. According to Marxists, before a new, more egalitarian system can be implemented, workers will have to expropriate from the capitalist owners their collective political control of the state, either through electoral democratic socialism or a revolutionary dismantling of the state.

In the past, Marxists saw the wage workers in the large industrial plants as the core which would form a revolutionary proletariat to overthrow capitalism. However, with globalization and decentralization unions can no longer organize large numbers of workers in multinationals under centralized contracts. In situations with an unorganized workforce fragmented by subcontractors, where employers can pick up and disappear at the drop of a hat, where workers are spread out in small decentralized shops or where there are few or no employers at all, the traditional model of trade union organizing is no longer viable.

One can fault some Marxists for getting stuck in dogmatic orthodoxies and failing to follow Marx’s own dialectic perspective that the paradigms of the modes of production are in constant flux that might require changes in tactics. However, the Marxist critique that the cooperative model may, at times be viewed through a Utopian lens that does not take into account the immense pressures brought to bear in a capitalist environment have some merit.

Most worker-owned and managed cooperatives vary to a greater or lesser degree from the “pure” model, depending on the needs and wishes of the worker-owners, the type of enterprise, the regulations/laws of the particular state or country and the economic environment in which the cooperative has to operate. While some of these variations can be explained by the particular situation of a particular cooperative and do not threaten the democratic or equitable nature of the cooperative, most of the deviations are determined by having to exist within a competitive capitalist economy.  For example, worker/producer coops breakdown into those that produce commodities which are capital intensive, and those that produce services, which are generally labor intensive. Obtaining the capital and economies of scale necessary for capital intensive projects is one of the major problems the cooperative movement has faced  

Even in Argentina, where laws provide some support for recovered factories, economic pressures of a failing economy suggest that some enterprises have become nothing more than exploited subcontractors. Several workers themselves mentioned that in some cases, it would have been impossible to recover the factory successfully if they had not had the capital goods and machines that the owners had left behind.  

In a high tech cooperative such as Isthmus, which appeared in the Michael Moore movie Capitalism: A Love Story, although workers shared the company’s dividends equally among all members, each worker was also paid a differential wage depending on their training. The workers felt this was necessary to attract certain skills in a competitive capitalist market.  Another frequent variation from the “pure’ cooperative is the hiring of outside workers as part of the cooperative.  This is potentially a dangerous deviation since the coop members might end up in a boss relationship to the hired workers. This, in fact, in recent years has become an issue when Mondragon, the “model” cooperative network, opened a number of groceries in Europe where employees were not cooperative members so that the mother cooperative network could avoid certain tariffs. At this time, approximately half the businesses in the Mondragon cooperative network do not have cooperative structures.  In another case, a Steelworker cooperative in Baltimore admitted that they purchase some of their raw materials from China instead of a local distributor because of “cost efficiencies.”

Another factor which can either help or undermine cooperative enterprises is its relationship to the Nation/State or government.  In countries with a long history of cooperatives and social democratic states, such as France and Spain, the cooperative networks continue to grow.  In Venezuela, with a very activist socialist government, the cooperative sector is being used as a transitional form to socialism and is growing by leaps and bounds.

While Mondragon was able to develop internal methods for raising capital, many manufacturing cooperatives have had to resort to borrowing from the State (when the loans are available) or other large capitalist institutions.  Usually certain restrictions and top down requirements influence the structure of the cooperative. In countries that favor the capitalist “business model” over the more “socialist” cooperative model,  laws governing coops can undermine the egalitarian nature of cooperative enterprises. This is particularly true of the Employee Stock Option Plans (ESOPS),the most  common form of worker ownership in the United States. The  number of ESOPs have grown dramatically in the last ten years .  The worker-owned and managed cooperatives are less prevalent due to federal laws which actively restrict cooperative formations while giving tax breaks and other advantages to the ESOP form of ownership.  Under this plan, workers own shares in the company, the profits of which are added to their retirement pension under the ERISA law.  In ESOPs, there is no guarantee of democratic control of the management by the workers. This form is most favored by management as a way to provide incentives to increase production, raise cheap capital, and woo workers away from organized unions which protect worker rights.  The transformation into ESOPS was one of the owner’s bargaining tools in the GM restructuring which workers wisely turned down.  In most cases, the workers do not own a majority of the stock and share stock ownership with outside (non-worker) shareholders.  Even as owners, they have no control over the hiring and firing of workers .

It is interesting to note that socialist leaning parties in the Argentinean worker movement encouraged the workers to demand that the expropriated enterprises be nationalized as public state entities under worker control so that they would have the financial support of the state and all profits would go to the public sector. It is also important to note that in states where a public government owned form of worker-management is available, there has been criticism that these worker-managed enterprises (which are often large and taken over by the State directly from the owners), tend to use less “real” (not just “formal”) democratic processes and tend to be run from the top down.  This critique also appears in countries with a more socialist leaning project.  As one Argentinean worker noted, “I don’t want to trade one boss (the corporation) for another boss (the State).

Even if you do not see the cooperative model as a transitional for or do not believe that it will overthrow capitalism, it is clearly a player in the organizing of workers to a progressive agenda and can no longer be ignored..

NEXT MONTH:  PART 11. POSITIVE AND NEGATIVE ASPECTS OF THE RELATIONSHIP BETWEEN WORKER-OWNED COOPERATIVES,  COOPERATIVE NETWORKS, UNIONS  AND THE NATION STATE.

Originally posted to Anti-Capitalist Meetup on Sun Jul 24, 2011 at 03:00 PM PDT.

Also republished by Anti-Capitalist Chat.

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Comment Preferences

  •  Marx Quote? (4+ / 0-)
    Recommended by:
    NY brit expat, DavidW, Justina, Geminijen

    Where from?  I don't find it.

    •  good point, I think we will need to wait (3+ / 0-)
      Recommended by:
      DavidW, Geminijen, Mnemosyne

      for the diarist to come by to add it to an otherwise excellent diary.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 24, 2011 at 03:08:50 PM PDT

      [ Parent ]

      •  Beautful quote in your signature (2+ / 0-)
        Recommended by:
        NY brit expat, Justina
        •  Something that I have found as an historian (3+ / 0-)
          Recommended by:
          Justina, Mnemosyne, shantysue

          of economic and political thought is that we are constantly reliving the same dribble at higher levels of absurdity each time irrespective of the level of failure of the argument or policy; it is a wonderful insight by Marx even if there is no point that Hegel may have said it exactly. But Marx is simply spectacular at getting to the point of something far better than the initial writer actually did.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 24, 2011 at 03:19:25 PM PDT

          [ Parent ]

    •  Partial quote from the Capitalist manifesto. (4+ / 0-)

      I cheated slightly, but I still think it is relevant.

      •  Never cheat (8+ / 0-)

        on a quote.  It undermines your credibility.  I say this as a friend.

        I raised the question because Marx is commonly represented as having a very simplistic approach to historical change, in the form of a feudalism/capitalism/socialism dialectic.  This may fit his vocabulary, but it doesn't get to his understanding of how things change, which is not a neat process at all.

        •  Actually, I'm not sure where I got it from this (4+ / 0-)
          Recommended by:
          NY brit expat, TPau, MKSinSA, shantysue

          time.  It is such a common quote and concept.  If you google it you will see that it has numerous references from Foucalt, the german Ideology, etc.  I didn't reference it because this is a diary, not an academic treatise.  

          I agree that many marxists can be very reductionist in their anaylsis of the Modes of Production.  But I find Marx's paradigm of the dialectical process works very well and this was what I was trying to suggest with this quote.  Also, as an activist who has spent time both in academia and on the street arguing the merits of both the anarchist and marxist perspectives, I like to use aspects of many radical strands.

          BTW I don't have an answer to the question raised. and  I think both views have value and play off each other.So  Please don't get hung up on the quote.  Read the article and then you can blast away with real differences. That is why I posted the diary -- so that we could discuss and add or perspectives to finding a solution.

          •  Read it (4+ / 0-)
            Recommended by:
            NY brit expat, Justina, MKSinSA, Geminijen

            loved it, it's a great piece.  The reason I harp on the quote is that I think Marx's description of historical change is often misrepresented as a totalizing dialectic, as if feudalism existed, antitheses sprang up (or were present from the start) and then boom! everything changed.  In fact, it didn't happen like that, and Marx never said it did, though he certainly provided a sketch of history that followed those broad outlines.  I am someone who thinks that dialectic gets overemphasized in discussions about Marx and, more importantly where to go from here.  It's a form of logic by which we understand things.  It helps us from getting mentally stuck in one place, and imagining only one solution.  Dialectic was multi-directional and dimensional, so to speak: things did not move in one direction, and were neither purely material or ideal.

            Why is this on-point?  Because if you want to solve the problem of capitalism as a total system, coops are woefully, WOEFULLY (shouting!) inadequate.  Fortunately for us, we don't have to and indeed cannot solve the whole problem of capitalism at this moment.  We are looking for actually existing forms and relationships that change property from an individual to a social, indeed, for me, communal form, in which people actualize themselves through their social relationships.  Coops in that sense are entirely adequate and at the moment entirely necessary.

            •  Here's the context of the quote from Marx (2+ / 0-)
              Recommended by:
              NY brit expat, Geminijen
              It will be the workers, with their courage, resolution and self-sacrifice, who will be chiefly responsible for achieving victory. The petty bourgeoisie will hesitate as long as possible and remain fearful, irresolute and inactive; but when victory is certain it will claim it for itself and will call upon the workers to behave in an orderly fashion, and it will exclude the proletariat from the fruits of victory. ... the rule of the bourgeois democrats, from the very first, will carry within it the seeds of its own destruction, and its subsequent displacement by the proletariat will be made considerably easier..

              Marx, Address of the Central Committee to the Communist League (1850)

  •  I like that you brought out the community... (5+ / 0-)

    oriented nature of coops as opposed to the rigid individualism in capitalist thinking.  I was very struck by that while I was doing my research on Mondragon.

    De air is de air. What can be done?

    by TPau on Sun Jul 24, 2011 at 03:22:53 PM PDT

  •  Quick first response (6+ / 0-)

    The older I get the more I think coops are the best immediate way forward.  There's a lot of great detail in the diary and much information was new to me.  A couple things pop into mind:

    1.  The Anarchist/Marxist argument gets really old.  I don't blame the diarist: she's merely reporting what is out there.  That said, I want to keep my side of the street clean and say that Marxists need to go back and read Marx, who, while he had a personal beef with Bakunin (and who wouldn't? who didn't?), didn't make any fundamental arguments that were incompatible with anarchism.

    2.  I find it helpful, when trying to use a Marxian lens to understand things, to go back to the bit on Estranged Labor, and ask, what are the fundamental relationships of people to themselves, socially, in any particular moment?  Are they socially self-actualizing?  If so, keep on it.  If not, change course.  If x moves us closer to social self-actualization, let's do it.  Coops certainly fit that bill.

    I don't think there's anything Marxist in a meaningful sense in pooh-poohing coops because they are not a final solution to capitalism.  It was Hitler who saw final solutions, not to make a pun.  Marx proposed no final solutions to anything nor did he seem to think such things were possible.  I'd be interested to read some of the "dogmatic" Marxists on the subject.  I have a feeling I've been stuck in conversations with some of them.

    •  I agree with almost all of your comments. I am all (3+ / 0-)
      Recommended by:
      NY brit expat, TPau, MKSinSA

      for looking at the cooperative model as a transition form.
      Marxists also support cooperatives as part of the solution.  For many Marxists, it was just a point of tactics and emphasis whether the change would come thru the cooperative model or traditional trade unions and we still have that fight today.  Which I think prevents many people from seeing the critical role coops are beginning to play.

      The one other point I felt comes out of a discussion of the two points of view is that many of my friends in the cooperative movement do not seem to understand the degree to which capitalism will go to prevent the development of coops that are truly progressive because it threatens capitalism's existence.  And since they have the power of the state, military, etc. it is something we should be aware of.

    •  I am finally answering this post (a day late (0+ / 0-)

      cause I didn't want to get into a long discussion about various Marxists and their contributions and frailties), but I have to tell you I read Bukharin and thoroughly enjoyed it and many parts of his perspective.  What I find is that a revolution isn't made by one person but the ideas of many interacting, conflicting, etc.  And out of that we get the real dynamics. If we could have kept the original leadership of the Russian Revolution (all five) plus a couple of women.....
      P.S. I also enjoy reading Mao -- find it a very different take in a very different situation.  

  •  One point that I have always thought (4+ / 0-)
    Recommended by:
    Geminijen, Justina, TPau, MKSinSA

    incredibly important and which you raise in the diary is the idea of a cooperative as transitional towards a socialist or anarchist based system.

    One of the main problems which you cover quite well raised by Marx was the fact that creating an alternative economic system in the middle of the capitalist economic system which on the one hand still subsumed it to capitalist economic system outside of the worker owned coops when trading; while on the other hand, they still attempted to do things in a fairer context for both workers and members of the coops. Part of the problem is that it is not only the private ownership of the means of production, but also the means of distribution and exchange which have created problems historically for the earliest versions of coops.

    However, I think that they can still serve a transformative role. This is the case for the worker-owners that can make both production and investment decisions and also determine their own remuneration; this empowers people and demonstrates that things can be done differently. It is also the case if these exist in a wider context guaranteeing that goods can be distributed in a fairer context as well offering an alternative to the extreme exploitation in a capitalist framework.

    I think your cautionary points are well-noted; we also do not want workers to get screwed and used by the powers that be in a crisis and then to lose out when the system recovers. excellent points

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jul 24, 2011 at 03:31:51 PM PDT

    •  thanks. I absolutely agree with your comments. (2+ / 0-)
      Recommended by:
      NY brit expat, TPau

      the reason I emphasized the productive aspect so much is that , in a capitalist society whose ideology operates from an exchange perspective, the productive side often gets lost.  Just a small example:  I was in a room with the bunch of economicst and they started the meeting by putting up a very skimple definition of economics:

      The ___ and d____ and c_____ of g__ and services.  The economists were able to fill in all the blanks except the first one.  I remember they tried price as one of the answers.  No one thought of production. Production has completely disappeared from the capitalist neoclassical conversation of economics.

      •  I think a large part of that is due to the (1+ / 0-)
        Recommended by:
        Geminijen

        fact that they have such a convoluted idea of what production actually is and the fact that they are unable to provide a coherent description of the determination of profits which if you are unable to do this you really cannot describe the capitalist system as you are unable to explain its primary motivation. It is a theory that has eliminated the possibility of explaining the motives and rules of the system in favour of a view of class harmony and everyone getting what they deserve in the system.

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jul 24, 2011 at 03:54:15 PM PDT

        [ Parent ]

        •  We disagree on this one. I think you have far (1+ / 0-)
          Recommended by:
          Justina

          too benign a view of the Capitalist theorist.  I think they know perfectly well that if people start looking at production where the workers are(including themselves),  that workers will figure out how they are being ripped off. Indoctrination is a beautiful thing.

           Of course, the smoke and mirrors is even easier now that they have added a whole other layer of "financial products" instead of real products in a real economy and made the majority of productive workers disappear by putting them way offshore in China and small unknown islands.

          •  I do not have a benign view, they have done (0+ / 0-)

            this deliberately love. The whole idea of marginal productivity theory was to remove the notion of exploitation from the analysis; this was done deliberately ... everyone gets their contribution to production. I have actually traced the beginnings of this point back to James Mill in 1824 ... this is what I wrote my thesis on in terms of classical theory, the influence of ideology on the abandonment of classical economic theory. Neoclassical arguments adopted the points in the post-ricardian tradition; I really wish you would not tell me what I think about things, I find it annoying.

            "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

            by NY brit expat on Sun Jul 24, 2011 at 05:11:35 PM PDT

            [ Parent ]

    •  and (3+ / 0-)
      Recommended by:
      NY brit expat, Geminijen, shantysue
      means of distribution and exchange which have created problems historically for the earliest versions of coops.

      And current coops.  It bears emphasizing that Marx critiqued capitalism rather than planned socialism.  I am thinking about his critique of money relations I just got done with in the Grundrisse (I sound like one of the Batman nerds at Comic Con across the street, with a different crush) where Marx shows how any way you slice it, money screws workers, and I'm left feeling boxed in.

      I suppose the answer is that you do it anyway and trust in the future to build on what you do.

  •  Historical change (2+ / 0-)
    Recommended by:
    NY brit expat, Geminijen

    It's one of the unfortunate accidents that the Manifesto was written in the middle of a revolutionary adrenaline rush, because it gives the impression of historical change that doesn't actually fit with the thrust of Marx's work in general.

    Capitalism did not overthrow feudalism in any meaningful sense, and certainly not in a political/revolutionary one.  The French Revolution, to take the classic example, fit the government to the already-existing capitalist economy, not the other way around.  Capitalism, to belabor the point, already existed materially when the revolution took place.

    It was the big mistake of 20th century socialism to place its bet on a political solution to the economic problem.  Marx at various places had different senses of what the role of the state might or might not be in historical change, but with him, as I point to in another comment, the real question is, what is the relationship of the community [my word] to the economy?

    There will be no radical change until things have already changed radically.  Bourgeois property in Europe supplanted feudal and common property piecemeal before being enshrined in (inter)national law.  Such changes, toward a different end, must similarly take place to move past capital.

    •  I agree that until the objective conditions are (3+ / 0-)
      Recommended by:
      Justina, NY brit expat, shantysue

      rights, we have little control over history.  But as actors in history, our subjective actions can sometimes have an effect.  For example, much of the social liberation dialogue goes right along with a grassroots approach to change.  But when it gets hijacks by T-Party types, it changes the whole dynamic.  
      Many times in history, we have had polarized societies that could go either to dictatorshps and fascism or democracy and eqalitarian goals.  As an actor in history, I at least want to weigh in and try to get us to at least my preferred society. So, yes, i do think politics count, but definitely cannot make major change by themselves without economic, cultural and even geographical changes (global warming).

  •  Cooperatives are 1/2 the equation (2+ / 0-)
    Recommended by:
    NY brit expat, Geminijen

    Consumer support comprises the other half.  Consumers must be willing to support the co-ops (and other, non-global businesses) in preference to the global corporations.

    •  exactly, it is not only production (2+ / 0-)
      Recommended by:
      Geminijen, shantysue

      but consumption that is important; some of the earlier problems that beset the British co-operative movements in their infancy can be solved easier today than they were in the past. Consumer cooperatives to ensure distribution and the continuation of the chain for worker cooperatives that produce intermediate goods can be accomplished if the movement is large enough to offer a true alternative to corporate and capitalist based production.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 24, 2011 at 03:46:55 PM PDT

      [ Parent ]

      •  Yes, but that is a two edged sword... (3+ / 0-)
        Recommended by:
        NY brit expat, Geminijen, shantysue

        In this system, the Coop must offer something the Corporation does not.  Economy of scale is one thing they could offer, but that is fighting the dragon of Capitalism on its own territory.  They could offer stability of local economy and a sense of community where corporations are tearing away the social fabric of local communities.  That would not require economy of scale but networking at the local level--something multinationals are incapable of doing.

        De air is de air. What can be done?

        by TPau on Sun Jul 24, 2011 at 04:28:37 PM PDT

        [ Parent ]

        •  Well put (3+ / 0-)
          Recommended by:
          TPau, NY brit expat, shantysue
          fighting the dragon of Capitalism on its own territory.

          It seems to me that a big issue is that work under capitalism is divorced from the rest of a community's existence.  Reconciling that would go a long way toward a better world.

        •  I agree, but I think, eventually, we are going to (2+ / 0-)
          Recommended by:
          NY brit expat, shantysue

          have to deal with capital intensive economies of scale, not matter how we do it.  Capitalism is already giving us a suggestion by decentrilzing parts of the production.  I think some version of "Think Globally, act locally " is part of the answer.  BTW that perspective also takes the onous of wanting to keep jobs in our own regions without turning it into a Natinalist diatribe.

    •  I hope to get into this aspect of the cooperative (2+ / 0-)
      Recommended by:
      NY brit expat, shantysue

      in the next article I am doing. Under capitalism, you have to have a supportive market -- the question this raises is will people support egalitarian solutions or go for their own financial self-interest?  (See section on the NYC DOE and teachers' union.

      •  People need to stick (4+ / 0-)
        Recommended by:
        Justina, NY brit expat, TPau, Geminijen

        to their real needs, and not their imagined ones.  I am as guilty as anyone, though less so.  I don't feel a need to have an iPad.  I seriously don't.  I did feel a need to have a G4 laptop, though.

        Socialism will not outproduce capitalism, thank God.  Khrushchev was wrong on that.  What it can offer us is relationships with other people rather than things.  Human relationships do take more effort than consumption, though, which is a real problem.  Again, I'm as guilty as the next, and more so likely than most.

        •  Let me add (2+ / 0-)
          Recommended by:
          Geminijen, NY brit expat

          "less so than I used to be."  Not "less so than other people."

        •  one of the most important parts of how (1+ / 0-)
          Recommended by:
          shantysue

          capitalism has kept growth moving (to enable profitability) is through the creation of wants rather than concentrating on the needs of the population. This forms the basis of much of the product creation as well as product development in the system. Something recognised early by Marx was the attempt to commoditise the joint products of industry (joint products are products that are created simultaneously with the main good under production); this need for constant product creations and selling these goods as something desirable is a hallmark of the system.

          Removing the profit motive and the need for constant growth will alter substantially the basis for production of goods. As far back as 1824, William Thompson (one of the leaders of the cooperative movement in Britain) discussed how capitalism skewed the production of goods to suit the needs of the system rather than the needs of the people (see, Thompson, William, An Inquiry into the Principles of the Distribution of Wealth Most Conducive to Human Happiness; applied to the Newly Proposed System of Voluntary Equality of Wealth, (Longman, Hurst Rees, Orme, Brown & Green: London), 1824).

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 24, 2011 at 04:45:42 PM PDT

          [ Parent ]

        •  Who knows -- It may outproduce us in social (1+ / 0-)
          Recommended by:
          shantysue

          commodities 9i.e., healthcare), not so much in individeual commodities.  Which was one of the issues with the earlier socialist models.  She had helped democratize Poland.  After a few years here, she wanted to go back to the social safety net for her and her son.
            don't know if we are just conditioned or if people just need some frivolous things to be happy.  I just know I want a bit of both.

      •  something that I have found interesting (3+ / 0-)
        Recommended by:
        Geminijen, shantysue, tardis10

        in Europe is the strong support for fair-trade produced products, local and regionally produced agricultural products and organic produce even though it is more expensive. This gives me hope that we can get people to use cooperatively produced products. In terms of consumer cooperatives, they have a long history here and are able to compete with corporate produced and distributed goods in terms of both price and quality. If they had more cooperatively produced goods available they could sell final goods; the network is there.

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jul 24, 2011 at 04:05:02 PM PDT

        [ Parent ]

  •  diary scheduling (2+ / 0-)
    Recommended by:
    Geminijen, MKSinSA

    next sunday's diary: T'pau will be discussing cooperatives

    we need diarists for all of august and september. If you want to do a diary, please tell me here or write to the group email:

    dkanticapitalistgroup@gmail.com

    or send us a message here. The message system seems a bit problematic, so if you could do one of the first choices, it would be appreciated.

    I also was wondering if anyone can write a diary on the Spanish indignados movement? This is important and it should be covered here. Can anyone volunteer or is capable of doing this?

    "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

    by NY brit expat on Sun Jul 24, 2011 at 03:42:31 PM PDT

    •  Can you put me down for the Second week in Sept (2+ / 0-)
      Recommended by:
      NY brit expat, shantysue

      for the second part of this article?  The third part is the best cause I have interviewed a whole lot of cooperatives at the recent regional conference and can't wait to share their very specific experiences!

    •  NYB...The Mondragon article is way out... (2+ / 0-)
      Recommended by:
      NY brit expat, Geminijen

      of control.  It could be chopped into three parts if you want.  If you send me an email address I'll give it to you as an attachment to see what you think.

      De air is de air. What can be done?

      by TPau on Sun Jul 24, 2011 at 04:41:33 PM PDT

      [ Parent ]

      •  T'pau that would be great. I sent an (1+ / 0-)
        Recommended by:
        shantysue

        email from the group site. I do not put my email here as I engage in I/P diaries and do not want to have my personal email invaded by those that I am arguing with. Get in touch with me on the group email and I can give you my email there. :)

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jul 24, 2011 at 04:52:36 PM PDT

        [ Parent ]

      •  How do I send you the e-mail without making every (2+ / 0-)
        Recommended by:
        shantysue, NY brit expat

        thing public?  is your e-mail on your page?  It is beginning to look like we might have a cooperative study group come out of this thing!

        •  that was one of the reasons why we set (1+ / 0-)
          Recommended by:
          shantysue

          up the group email, we can talk to each other w/o putting our personal emails on site. It is to help us stay in touch and try and work together as well as share information w/in the group.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 24, 2011 at 05:23:39 PM PDT

          [ Parent ]

          •  if you want to be added to the group email (0+ / 0-)

            list send a message to our group email: dkanticapitalistgroup@gmail.com or to join the anti-capitalist meet-up or anti-capitalist chat groups, please send a message here to the groups and we will add you.

            "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

            by NY brit expat on Sun Jul 24, 2011 at 06:29:39 PM PDT

            [ Parent ]

  •  Interesting Over-View! (7+ / 0-)

    Here in Venezuiela, worker-cooperatives are recognized as a constitutional right and their start-up and expansion is subsidized by low-cost or free government loans.  

    There are now thousands of them here, but not all survive.  One problem is that the world capitalist market is still very much determinative of both viability and the type of products that can be economically produced.  

    Thus, even though the workers in a given cooperative might want to produce a beautifully carved, ornate wooden bookcase, they are competing at the market with the cheap wood look-a-like from China.  Thus, the model seems to work better in some industries (agriculture, markets, services) rather than others, depending how tied in a given industry is to the capitalist world market.

    That being said, I don't think you can make a blanket statement about what "Marxists" believe about worker cooperatives.

    This particular Marxist sees the development of workers' cooperatives as a dialectical development arising out of the capitalist division between owners, managers and workers.  While workers'cooperatives might not, in themselves, bring down capitalism, they show the way as another mode of organizing production, one in which the worker producers- managers are both the thinkers and the doers in the process of production, thus hugely reducing the alienation of labor in the production process, a pernicious, inhuman division that capitalism has perfected.

    Breaking down the division between the thinkers (planners) and the doers (workers) is a very revolutionary act, and, at least here in Venezuela, that is a legal requirement for running a cooperative.

    Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

    by Justina on Sun Jul 24, 2011 at 03:44:11 PM PDT

    •  I absolutely agree. I should have left in the (3+ / 0-)
      Recommended by:
      NY brit expat, MKSinSA, shantysue

      article the line that marxists also believe in the cooperative model -- just not as the total solution.  BTW, I was in Venezuela in December of 2009 and have plenty of info on the Venezuelan coop movement.  I hear your criticisms and agree.  I also, believe, however, that Venezuela was looking for a program that could offer the poorest of the poor an opportunity. They didn't require the level of collateral that microbanks did and didn't have the same standard (repayment of the loans) for success.  So where traditional banks have a success rate of 92% in micro loans (even if all it does is raise the woman from starvation to subsistence - still pretty miserable). Venezuela (at least at that time) had a success rate of 50% but that was because they ran it as an entitlement program and experiment in teaching a socialist group ethos. personally, I think that is 50% of the people who might have fallen over a cliff if they hadn't had that opportunity.  And wouldn't have gotten that opportunity from a microbank.

      Will discuss more in the third part of the series -- hope you will be there and maybe can help me put the part on Venezuela  together!

  •  I have a lot to say on your excellent piece (4+ / 0-)
    Recommended by:
    NY brit expat, Geminijen, MKSinSA, DawnN

    Geminijen, please give me an hour to post on this excellent diary.

    I love this subject.

  •  Great diary, Geminijen (3+ / 0-)
    Recommended by:
    NY brit expat, Geminijen, shantysue

    I find coops appealing, though it's not a one size fits all model and there are some problems, but ultimately where they can thrive it does bring hope.

    Even for someone with a post Keynesian mind and that of Minsky moments which is a large part of what we see now with this crisis, financialization and speculation steals from the worker but also form a demand driven economy. If workers have a voice in what they produce and don't have to rely on management, layoffs won't steal from the economy as well by firing workers, in my view, to increase the unsustainable model of management maximizing stock value, financial profit, not producing goods.

    I mean this shit is not rational, and it owes labor it's start and it lies and says it's based on what consumer buy purely and that's somewhat true, but not really in the game of short sellers and naked short sellers which is illegal but it happens all the time, this whole system and peoples retirements are based on market hysteria. Market hysteria causes a lot of bubbles. call it irrational exuberance or whatever you want, it's delusional. I may nto be a full on socialist(this is what appeals to em the most though via Syndicalism).

    Working and producing things is what an economy is built on, whether the hoarders of capital can take generations of that production and not give anything back to future generations(except their offspring a financial royalty through generations Rockefellers, Vanderbilts etc) via what we are seeing in America and the UK sad to say as we speak or not. They wouldn't be there without generations of workers building Wall St.

    I somewhat reject the Marxian critique because that model of revolution trying to rid the capitalist class with the dictatorship of the proletariat(which doesn't naturally dissipate) power structures have been somewhat proven to be damaging and exploitative as well(like what you mention with the state owning coops in Argentina etc) and violence begets violence, but even if that were desirable, as you say, the Neoliberal model is too big and has its tentacles within too much. I think Marx is right about the diagnosis as to why coops rise up and although some flaws, there are aspects of the labor theory of value that have value in this.

    I hope I'm not stepping on anyone's toes, I'm just stating my opinion, but I am fully down with this mode of anti-capitalism as what we know as capitalism in the Neoliberal age is just not stable and it's anti-economic on what makes a real economy work as opposed to just a finance's, ponzi economy whether one is an anti-capitalist or not.

    Pro Life??? Conservatives want live babies so they can raise them to be dead soldiers!- George Carlin

    by priceman on Sun Jul 24, 2011 at 03:53:22 PM PDT

    •  I think you are where a lot of people are (4+ / 0-)
      Recommended by:
      priceman, NY brit expat, shantysue, DawnN

      right now.  What I consider a truly revolutionary change, no matter how we get there, is when competition and exchange on a market (a defining characteristic of capitalism) is not the form of distrubution. No matter how we get there.  Because it is through competitive profit driven production and a market exchange that relies on money where the rich trump people power.    
            Can anyone imagine a method of distribution wwithout moeny since the Incas that doesn't end up either in the immizeration of the people like our current system or in bottle necks in a bureaucratic bought off state?

  •  I don't have a lot of hope (5+ / 0-)

    that this will get sufficient attention just now, when DC seems to be melting down (and is sucking all the O2 out of any discourse), even though it should probably be required reading for everyone on Congress.

    T&R.

    Yesterday's weirdness is tomorrow's reason why. -- Hunter S. Thompson

    by Mnemosyne on Sun Jul 24, 2011 at 04:01:54 PM PDT

  •  Voices From Venezuelan Cooperatives. (4+ / 0-)

    Here's an interesting article from www.venezuelanalysis.com which reports interviews with worker-owners of various Venezuelan cooperatives.

    www.venezuelanalsis.com

    Convict Bush, Cheney and their torture cabal. Support single-payer health care,unions, and WikiLeaks.

    by Justina on Sun Jul 24, 2011 at 04:13:47 PM PDT

  •  The issues at Mondragon (3+ / 0-)
    Recommended by:
    Geminijen, NY brit expat, shantysue

    have certainly caused me to rethink  this, which, being at heart an anarcho-syndicalist, had always been my preference for the organization and "ownership" of the means of production.  Unfortunately as yet I can't come up with anything that offers a superior alternative.

    "Tu vida es ahora" ~graffiti in Madrid's Puerta del Sol, May, 2011.

    by ActivistGuy on Sun Jul 24, 2011 at 04:56:59 PM PDT

    •  This is a work in progress. that is why we are (1+ / 0-)
      Recommended by:
      shantysue

      doing the ACM.  I love the exchange of ideas and possibilities!

      •  Activist Guy was one of the original (2+ / 0-)
        Recommended by:
        Geminijen, shantysue

        founders of the ACM and is one of our admin. One of the things that I love most of this group is anarcho-syndicalists and Marxists and social dems discussing things, exchanging ideas and trying to figure out how we move forward as an anti-capitalist left.

        "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

        by NY brit expat on Sun Jul 24, 2011 at 05:27:18 PM PDT

        [ Parent ]

    •  More and more I have come to the conclusion (2+ / 0-)
      Recommended by:
      shantysue, Geminijen

      that cooperatives are essential not only for transformation, but as what we are looking for in the future as a basis for the formation of a socialist economy. There are problems, but I think that they can be coherently worked on to develop a full transformative basis to a new future. The problems come from having to function in competition with capitalism; perhaps we can switch that so that we are not competing with them in their world but creating an alternative network and economic form.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 24, 2011 at 05:30:26 PM PDT

      [ Parent ]

  •  Nope. n/t (0+ / 0-)

    I'll Rochambeau you for it.

    by Rich in PA on Sun Jul 24, 2011 at 05:12:21 PM PDT

  •  Okay, here's my passion on coops - it's yin! (2+ / 0-)
    Recommended by:
    NY brit expat, Geminijen

    I think of a capitalist economy the same as I do a one night stand with a hooker. No accountability, no commitment, and you don’t know what “extra special goodies” you might get.

    For instance, take food. We don’t know where our food comes from, what’s in it, how much of the cost is brokered and what the true cost is to us in every way.

    A coop is a relationship economy. For instance, if you put your money in a mutual fund, you have no idea of the impact of that money, where it’s circulating and who’s really benefiting.

    If you invest with coops, whether through banking, work, home, entertainment, community, the ecosystem that is served IS the relationship.

    Local living economies shift the focus of power to the community, and because financial markets recognize only money, the value is squarely placed within that thriving community.

    When the power exists in Wall Street, there’s a power disconnect. It does not allow for your decisions, how you operate and the broader public interests.

    We have been trapped in an accumulation economy, so it takes a shift in mindset for small businesses to change, but it’s being done in the banking industry and in business. Communities are going further than just food coops or green sustainability. Employees are building equity as part-owners of the businesses they work for and some of the wages are pumped into the community, creating more jobs. Call it industrial-strength structural change.

    For example, three work coops does not make much of a difference. But take multiple inner cities locked into generational poverty, tap into major institutions and you have a movement, which is exactly what’s happening. Strategically, for instance, take one large institutional clinic/university hospital, with a purchasing power of $3 billion, but that type of business is not mobile, so work coops are offering them an alternative of shifting business to local coop workers. The money then creates inner city jobs within the community. It’s win-win.

    Worker ownership is the wave of the future, democratizing ownership and rooting it in community with a sense of pride. It grows upon itself, creating large-scale enterprises and coop banks, as well, with the roots staying within the community.

    What role does this leave for Wall Street and capitalism once we go to local banking, businesses, coop neighborhoods, transportation, time share, etc. Well, nothing unless the people choose to offer them reform. No more fraudulent mortgages, hedgefunds, betting against your own country, ad nauseum.

    How do we reorientate markets to make them more long-term? By design, that’s how. Make them non-profit or owned through workers, community charities, local grants and make them micro-economic based and lend locally. Since depositors are already local, reinvest the money right back in the form of local loans and investment.

    Capitalism is dead. It just doesn’t know it yet. Progress is here. It’s showing it’s ugly head in the form of greed and fear, but we are here to change that. Changing short-termism into long-term interest and investment with community money, jobs and energy. We are right there right now.

    The changes we have to make for our future are the same ones we dream of in which an economy brings prosperity to everyone through the natural environment, a sense of community and a strong commitment to worker ownership, which is not only our only option, but it happens to bring with it a lot of happiness. It’s called the bottom-up solution and it works.

    How do we make it happen? Using community banks as a model where local businesses get credit from bankers who know them. Creating jobs through local communities by creating pride through worker ownership. The clue is right in front of you. Your cell phone and the internet. A cell phone is connected to a tower, which is connected to the next, and so on. Those "towers of power" communicate with each other. Using that analogy, the network is our economy, one community at a time. Once each project spreads through mutual awareness and connection, it grows into a powerful movement.

    There are so many ideas on sustainability, community and coops, but I should stop now. I’ve turned this comment into a diary. And I apologize for that. It’s just my passion.

    Bringing it back full circle, it’s all about the hook-up, long-term community style, that is. In other words, it’s a sexy idea whose time has come.

    •  excellent points shanty sue (1+ / 0-)
      Recommended by:
      shantysue

      I think that you have hit the essence of why I love coops as well and said it far better than I could:

      A coop is a relationship economy. For instance, if you put your money in a mutual fund, you have no idea of the impact of that money, where it’s circulating and who’s really benefiting.

      If you invest with coops, whether through banking, work, home, entertainment, community, the ecosystem that is served IS the relationship.

      Local living economies shift the focus of power to the community, and because financial markets recognize only money, the value is squarely placed within that thriving community.

      thank you for this, wonderful ...

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 24, 2011 at 05:47:13 PM PDT

      [ Parent ]

    •  thank you for your vision. I agree with much of (3+ / 0-)
      Recommended by:
      shantysue, NY brit expat, tardis10

      what you say.  The model where cooperatives are embedded in a supportive coop network,including  the large institutions that are important to the community, and that is also geared to serving poorer depressed communities is the model for the Evergreen Coops in Cleveland.  I was able to talk to some of the folks that set that up and are actively trying to make it happen and will discuss it in the article I am doing next month.  I have plenty of positive things to say about it and a few  critiques.

      P.S. You have got to write a whole diary.  these long coments are just too good to waste in just a comment. More people should see them.

  •  Mutualist Political Economy (2+ / 0-)
    Recommended by:
    Geminijen, FG

    I have read Kevin Carson's Studies in Mutualist Political Economy. It is an impressive work, indeed. Unfortunately, it tries to rehabilitate the classical labor theory of value by giving it a subjectivist spin. Any Mutualist organization relies on some form of labor theory of value. The true nature of exchange value rests in subjective theory of value based on the principle of diminishing marginal utility. Risk and time preference are the two most important distinguishing differences that subjective marginal utility addresses and labor theory can not.

    I will not go into detail here. Robert Murphy and Walter Block have presented detailed critiques of Carson's work, and Mutualist economics in general.

    Perhaps co-ops could work in certain situations, and in certain markets, but even then, these co-ops would still have to trade in a free market where subjective marginal utility would prevail.

    The best business model I have found is a regional retail owner's co-op. Individual store owners pool their resources to gain buying power, yet still retain the independence to adjust their stores to meet the needs of their communities.

    http://www.shoprite.com/...  

    Another successful co-op, before the advent of big agri-business was the independent farmer's co-op auction.

    http://www.nytimes.com/...

    Of course, there are also credit unions and mutual savings banks that are successful. There are at least 5 credit unions, and 2 mutual savings banks within 10 miles of me. All are successful and have been around for a very long time.

    There are many different business models that could be adopted in a free market environment where there is no government coercion. I think the large C-corp model would be the first to fall once the control of the money supply is taken away from the collusion between the banking cartel and the government known as central banking. Certainly some Mutualist factories would evolve in certain industries, but I think the bulk of business would be conducted by small and medium sized entrepreneurial based businesses.

    •  Interesting, though I prefer the collective (1+ / 0-)
      Recommended by:
      NY brit expat

      orientation of a full worker-owned and managed coop.  Will be writing about verys pecific coops and how they work in the third article.  Some of these are of the type you are talking about.

    •  we will have to agree to disagree on (1+ / 0-)
      Recommended by:
      shantysue

      so much of what you have written from your point on valuation of commodities on the superiority of a subjective criteria over an objective criteria of either cost of production or a labour theory of value; you do realise that subjective criteria for pricing theory has nothing to do with a theory that is based on production and is limited to pure exchange in neoclassical models? Diminishing marginal utility? please, that has not been used in NC modelling due to the difficulties in comparing subjective valuation, that is why they switched to the axioms of choice and ordinal measurements of utility and even then the theory is overrun by income effects even in pure exchange.

      Amazing to me that we are still discussing Bohm-Bawerk on Marx when even B-B fell into the same problems of a labour theory of value when he tried to deal with capital; this has never been solved coherently in NC thought in all its variants (from Walras, the value of capital to the Austrians treating capital as time); instead of admitting defeat they changed the question and now their theories are even more incoherent and useless than they were earlier.

      No one here in this series is interested in maintaining a free-market capitalist system; even less so are they interested in these old falsehoods proposed by a useless ideologically driven economic theory.

      "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

      by NY brit expat on Sun Jul 24, 2011 at 06:42:53 PM PDT

      [ Parent ]

      •  It didn't sound right to me either NYbe but (2+ / 0-)
        Recommended by:
        Geminijen, NY brit expat

        I wasn't sure why. After reading your explanation, I'm still not sure why because I'm not highbrow like all of you, so I don't understand a lot of what you discuss on this board, but I think I'm one of you and I just don't know it.

        Some of what I think doesn't sound right to me either. argh

        One day you will have to explain things to me in a low-brow way so I can figure out what I am.

        The only two things I know are that (1) I want matriarchal thinking (yin) as part of the solution because (2) the earth and all her people are . . . suffering.

        •  the person made a suggestion based upon (1+ / 0-)
          Recommended by:
          shantysue

          marginalist (or neoclassical) economic analysis that was abandoned by the theory when they switched to an ordinal analysis as we cannot compare subjective valuations between people using a cardinal utility analysis back in the 1930s by Hicks. It was like going back in time and reading Austrians like Menger and Bohm-Bawerk by someone that never read the tortuous discussions of capital theory written by these people ... in fact, it read very close to Bohm-Bawerk's Karl Marx and the Close of his System; methinks that he did not think that someone that read and understood Bohm-Bawerk would be on this site. I could not believe my eyes and am still laughing (I have an odd sense of humour).

          What I was discussing is not important, it was a response from an historian of economic thought to someone who thought they were being clever so that they would not think that they could get away with this of all things ... in many senses it is completely irrelevant unfortunately ... I can try sometime to explain the differences between these theories, but quite honestly they have no bearing on anything outside of academic discussion (and have nothing to do with anything that is relevant to the real world and organising for a better future). The question of a labour valuation for commodities is relevant in that it could be used as a measure for what a commodity could be worth; but it is complicated and I actually avoided it in my discussion of exploitation in the capitalist system as it only confuses things rather than aids understanding sometime; but if people are interested, I can try and explain the differences between theories and how they explain the system sometime ...

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 24, 2011 at 07:13:09 PM PDT

          [ Parent ]

      •  Just for me, please tell me how they are trying to (1+ / 0-)
        Recommended by:
        NY brit expat

        determine the value of capital in their newest incarnations.  Thanks.

        •  the problem comes down to (1+ / 0-)
          Recommended by:
          shantysue

          how to treat the capital endowment in the theory; the use of a value of capital to treat the endowment meant that we need to know distribution in order to determine distribution (circular reasoning); moreover, if we treat the factor of production capital as the value of capital, the value of capital expressing technical choice changes with changes in w/r. What they have done is two-fold: 1) treat capital in a walrasian manner as physical capital goods; 2) abandon the uniform rate of profits condition and discuss instead own-rates of return between commodities over time (as discounted goods) so that each good has its own rate of return with no tendency or capital mobility to ensure the formation of a uniform rate of return, hence abandoning the notion of competition.

          Subjective valuation then relates to whether you pay for goods today for delivery in the future at different time-periods which then relates to the own-rates of return on goods ... it tells you nothing except perhaps how derivative markets work rather than explaining how the capitalist system works. If we cannot explain the latter, change the question; that is how the theory works. Garegnani has argued that in the saving-investment market, the theory still falls into the capital controversy which will arise once you abandon a single commodity world in these theories. Far too complicated for a discussion here; it is an internal logical consistency question ... so even if we ignore that the theory tells us nothing of how the system works, it is also internally problematic.

          "Hegel noticed somewhere that all great world history facts and people so to speak twice occur. He forgot to add: the one time as tragedy, the other time as farce" Karl Marx, The Eighteenth Brumaire of Louis Bonaparte .

          by NY brit expat on Sun Jul 24, 2011 at 07:28:27 PM PDT

          [ Parent ]

          •  Actually, I do have a pretty good idea of how (2+ / 0-)
            Recommended by:
            shantysue, NY brit expat

            derivative markets work and I got some of what you were saying.  I am actually going to have to go back and look at some of this stuff -- it is important to do to debunk some of the financial stuff.  If you have any good readings, let me know.  It's been a long time since I looked at any of this stuff (actually not true, URPE dealt with some of it last summer conference -- sat in for some of it, given the financial crisis, but maybe I was at the pool.

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