All Things Co-op: Lessons from Venezuela’s Social Economy

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In this episode of All Things Co-op, Larry, Kevin, and Cinar talk to Michael Lebowitz about his perspective on the social economic models in Venezuela and Yugoslavia. They speak about the creation of the social economy, the experience of Chavismo in Venezuela, and the differing goals of some cooperatives and traditional trade unions. Lebowitz highlights the importance of self-actualization through protagonism and how the most successful of these models focused on solidarity over self-interest.

Transcript has been edited for clarity

This is Richard Wolff. Welcome to All Things Co-op, a podcast by Democracy At Work. 

CINAR AKCIN: Welcome to another episode of All Things Co-op. I’m Cinar, one of your co-hosts, and with me, as always, is Kevin and Larry. 


AKCIN: Today we're really excited to have Michael Lebowitz on the show. Michael is a Professor Emeritus of Economics at Simon Fraser University in Vancouver, Canada, and the author of several books, including “The Socialist Imperative”, and “The Contradictions of Real Socialism.” He was Director of the Program in Transformative Practice and Human Development, Central International Miranda, in Caracas, Venezuela, from 2006 to 2011. Welcome to the show, Michael.

MICHAEL LEBOWITZ: Happy to be here.

AKCIN: Great, great. So one of the first questions I had to kind of kick-off the session is that you’ve obviously written a lot about a socialist alternative to the capitalist system in which we live. One question I had about that is: What is the importance of worker co-ops and communes in the transition to a socialist alternative, and how do those two entities support one another and reinforce one another? 

LEBOWITZ: Well, I should start by simply stressing an element that's been in many of my works , which is the centrality of protagonism, the absolute necessity for people to engage in activity and, in doing so, they develop their capacities. This is an idea that went back certainly to Marx, where he talks about what he calls “revolutionary practice,” which is the simultaneous change in circumstances and human activity, or self-development. That concept is one that I think is absolutely central, because it does point to the importance of people working together, and developing trust, and developing a sense of their pride in in their ability to carry on things. So in that respect, I was always attracted for that reason to workers co-ops, or working workers control, and when I was the Policy Director of the New Democratic Party in British Columbia in the ‘70s, we made a point of emphasizing the absolute importance of opening the books of companies, transparency, and also worker councils that would in fact have access to the books and to make decisions on their own. So in that context, I think cooperatives, workers councils, workers control, are absolutely central for being able to develop the capacities to build a new society. And that's true in co-ops, the activity that occurs in cooperatives, but also in communal councils with which we became very familiar with during the period of our stay in Venezuela. Certainly, even though I theoretically had this sense of the importance of protagonism ,and worker councils, and communal councils, there I could see it absolutely in practice. I worked especially with a number of cooperatives that had basically taken over the firms from below that they were in, and how they functioned in directing the firms. A mixed situation and also, at the same time, we saw especially the way in which people developed in the communal councils, and took so much pride in what they were able to do by working together. So I think those things are absolutely essential. They’re important with respect to changing people's sense of themselves but, at the same time, they have limits because they develop in the context of a capitalist society, and that brings a number of potential problems, which I’ve seen not only in Venezuela, but also when I was studying the Yugoslav self-management situation.

LARRY FENSTER: We did an episode, I think a while ago, about the takeover in Argentina. One of the interesting things in some of the reading we did, I don't know how strongly we emphasized it, but that there were pretty established unions that were tied into the government in a lot of ways, and they weren't that supportive. That’s not where the big takeover happened. It happened a lot spontaneously. It was almost like spontaneous takeovers, really a lot, and they did it in smaller sectors, smaller enterprises too ,a lot of times. What's your sense of — I don’t know where to place this geographically, this question — but is there an inherent conflict, do you think, between unions doing what they do, and an activist co-op, an activist organization, workers that want to try a co-op or take over a business and turn it into a co-op? Can they do without union help in this country, or can they cooperate with unions? And then what would be the basis of that? Are they kind of, you see — you don't have to say, I know. If you've had any experience with it, share with us your experience, let me put it that way. If you haven’t then, we talked about it a bit, but you mentioned from the bottom up like that . It rang a bell with me. 

LEBOWITZ: Well you know, the important thing, I think to understand, is that cooperatives, or any kind of institution, don't drop from the sky. They emerge in a particular context, with particular social relations, that are already present. The experience we had, for example, in Venezuela with state companies at which Chavez encouraged to engage in, have worker control. Workers elect the President, etcetera. Those companies where there were these initiatives had a very strong feeling for the importance of workers councils. In the few cases I’m thinking of were sabotaged by the economistic trade unions. They did not inch. They had no interest in worker management. They, in fact, were strongly antagonistic, and what they were interested in was wages, wages and hours of work. Anything that seemed to go contrary to that, or reduce their power within the particular workplaces, were challenged. And in one case, the aluminum firm Alcasa, they in fact blocked the entry of the workers council people into the factory. So very, very problematic in that particular case. 

FENSTER: So how did that work out?

LEBOWITZ: I don't think there's anything inherent. If you had a progressive, strongly socially-oriented trade union, that would not necessarily move contrary to workers management, but that's the necessary condition. On the other hand, as long as I'm talking about Venezuela, I can tell you that what many of the cases of takeovers in Venezuela occurred because the firms that engaged in the lockout against Chavez's government, many of them in fact, if they thought it would just last a week or so and the government would be gone. It went on for for months, and many of them in fact went broke. So you had workers who had been promised that they would receive wages all the time that the companies were closed, basically striking and setting picket lines in order to avoid the companies selling the machinery in there. And in some cases, several cases, there were cooperatives, groups of people, who took over the plants. 

Now here's the story, and this is a sad story in some cases. What you had was a situation in which these companies would ask the workers, would ask the government to take over the company. And the government worked out a mechanism that the labor minister, with whom I had disagreed on this point, which would be 51ownership by the state, 49 by the cooperative of workers. This was a problematic way of dealing with this, and what happened in one case that I was quite familiar with, is that the cooperative started production again, but many of the people who had occupied the plant who formed the cooperatives, many of them were not working there, were not part of the occupation, because in the period they went off and got different jobs. So how did they come back to the firms? They came back as wage laborers working for the cooperative. At one meeting, the president of this co-op — this was Invepal — said, “All right we have 49 percent. We should have 99 percent, and just let the government just have the one percent.” And that was indicative of where they were going, because what happened was when the people were working as wage laborers for the smaller group that had occupied, which was the official co-op, when they came up, the existing law was six months as a wage laborer, then you have to be brought into the cooperative itself. So that’s what happened. So the sad story there is that they ended up being fired shortly before six months was up. So that was the self-interest of this small group which is, I think, a problem that you have to talk about when we talk about cooperatives. 

There was another company, similar story, and in that case a key point is very strongly political in terms of this organization, and in that case the cooperatives — this is a company called Invavel which provided pipes for the oil company — they said we're not going to repeat or renew our cooperative papers. We think there should be 100 percent state ownership,100 percent workers control. That reflected the ideology that had been built up of solidarity, in the one case, versus self-interest in the other case. And I think that's a question that has to be looked at in all talks of cooperatives. I like to talk about as well the the Yugoslav experience, which I studied there too, which is state ownership or social ownership, but controlled juridically by workers. 

KEVIN GUSTAFSON: That brings up my kind of question, a deep question I have, because I think what you find is I think, in the cooperative sector, you find a group of people who are really interested in developing cooperatives for a number of different reasons, but maybe not specifically political reasons, and they're just for their own sort of sake, because they're good, and they’re interesting, or something like that. Then you have people who are very political on the left, on the radical left ,who are very much not interested in cooperatives, using traditional Rosa Luxembourg and even some things from Marx in terms of the criticism of cooperatives, even a little bit that you mentioned (that they develop within the capitalist system) and so they have to deal with the situation of capitalism, and the competition that arises there from, and stuff like that. I think on this show we've tried to find a middle ground, that suggests that there can be a role for cooperatives in terms of the, like you said, the sort of the process of management, and worker control of actual industries, and things like that. But if it’s disconnected from a larger political project, it’s not just going to grow the cooperative sector until one day we have socialism. And you can't ignore workers owning and controlling the means of production, at least in isolated areas, if you're engaged in a political struggle for socialism. 

And so I'm curious to sort of pick your brain about the relationship between the sort of political and the economic two sides of this. If you look at something like Venezuela ,there was obviously a political movement that had multi-faceted positions, in terms of wanting to develop a social economy and specifically focused on cooperatives, but also like housing and different areas — education and all that kind of stuff — some of that being very specifically state owned, controlled, and oriented, and then the cooperative sort of development. So there is this conflict I feel between this approach of lpure state ownership and control, and pure workers control. And there has to be some kind of mix of a relationship between those two, but that's always been for me a bit difficult to tease out, what that relationship really should be to make sure that we're not missing the ball on either side of that. And I think as somebody who's both had a lot of theoretical work on this, and also actually on the ground, there is as you described the Yugoslav model of state ownership kind of worker management and then there's a model of pure state control and state management in terms of the Soviet Union, and some attempts at creating at least parts of an economy like in Emilia Romana, or Mandragon even itself, of trying to do it without grasping state control. So I’m wondering just how you think about this from that kind of larger theoretical perspective?

LEBOWITZ:  Well, I think it's wrong to focus on the question of ownership, juridical ownership certainly The question in Yugoslavia was when they called them social enterprises or socially-owned property, what was left for the state? What did it mean that the state owned? It meant that workers could not sell the means of production. It meant that they were trustees of the means of production, but it didn't mean that state ownership prevented them from being able, juridically, to make the decisions in the workplace that were necessary. Certainly there was a political thrust in Venezuela. There was a political thrust in Yugoslavia, but what was missing in in Yugoslavia, for example was that, while each enterprise was engaged in basically serving their self-interest, their point was to maximize income per worker. And in so far as their main focus was self-interest. And this was encouraged by the League of Communists, the communist party of Yugoslavia, that they should engage because the lower phase of socialism means emphasis on self-interest to each according to his contribution. That was the the focus. That was one of the problems in Yugoslavia. 

But beyond simply the question of ‘let us impose a progressive ideology on the people and therefore everything will go well,’ what was missing I would argue (and I've read some Yugoslav writers who would agree) that what was missing essentially was a commitment to the society, a commitment to the community. And in so far as this commitment to the community could work effectively, the workers could — and the workers councils could — work with a counterpart of their local communities. That was certainly something that this second case in Venezuela, of Invavall, was involved in. They as their workers council, which was politically advanced, made contact with the communal councils in their area, and asked ‘how can we serve you?’ This was particularly true, because they were having difficulty selling their pipes to the Petavesa, the oil company, presumably — it was never exactly proven — because they weren't doing, like the company had previously done, bribing the officers of Panavasa — so they didn’t have the sales that they could have had. So they turned to the community and said ‘what can we do to serve you’ and serve ourselves in that process. That’s, I think, an essential element. Workers councils or co-ops, by themselves, absent from a commitment to the society in some form, in fact, do not develop the potential of what cooperatives can do in this process of development in the direction of socialism.

GUSTAFSON: That’s fascinating. The thing for me is that you'll find a lot of people who want to develop into individual co-ops for for their own sake but, in the sense like ‘all right, if the state oil company’s not buying our pipes, can we do the sewer? Can we do something else? There's there's obviously a lot of need, especially in a more developing area like Venezuela, for that kind of work, and so making those connections are… I think, in some ways too, in terms of even growing a larger interest in a co-op, if the co-op is actually doing something for the community, then people see it as as a potential alternative to simply looking for the state for everything, and that you begin to develop a less traditional, bourgeois liberal kind of relationship to to the state, and you’re talking about more local connections, and decentralized connections, that are made between these representative bodies of individuals, whether it be a community a school or a or an enterprise of some kind, it seems to me.

LEBOWITZ: I think that's essential, and that has to be, I think, part of the the perspective of people who are focused on co-ops, the necessity to to go beyond the focus on self-interest. Another aspect in Yugoslavia was that the problem that they faced was that even though the expectation — and certainly Marshall Tito had said ‘when you have workers councils, people will learn etcetera how to run the factories etcetera’ like that — it didn't happen really .And the reason it didn't happen was because workers, even though they had juridical power in the workplace, they didn't have the knowledge to be able to do this. So, for example, there were experts, there was the manager, the manager would come forward with the proposal for what products to sell, how much to put aside for investment, etcetera, and the workers council would rubber stamp it because their view was, “Well, these are the experts. We don’t really know. We know how to work well, but we don’t have the expertise to do this,” etcetera. And one writer in Yugoslavia said, “Well, the problem was, they'd work a hard 40-hour week, etcetera, and then they didn't have time to learn this process.” So based on that knowledge, one of the proposals we made in Venezuela when there was discussions of lowering the work day, was to say, “No, we have to transform the workday. Move it from eight hours to six hours, with the two hours being used for training in accounting, in management, in all these marketing issues, etcetera, like that.” Okay, well, here is a question: Chavez was interested in this idea, but the trade unions were not. The trade unions said, “Okay, yes, let's reduce the workday, but rather than reduce it, we'll go home earlier or, even better, let’s have four day weeks, and then we'll have longer weekends, etcetera, etcetera,” And so there was no pressure from the unions, and there's in fact that general disregard for anything of that kind, but that is not inherent in unions. That was certainly something characteristic of the unions that emerge in this rentier capitalism, in which the whole thing was “How do we get the rent?” and that was the focus of the unions there. Not all of them, there were some good unions, but they were the minority 

LARRY FENSTER: Yeah, yeah. I just, as a comment I mean, I think we've talked about…Well I think Lenin said this is, maybe apocryphal or something, but that “We've got a revolution.Why can't it work? Why doesn't anybody understand accounting?” That the workers have to do that, if they're going to be able to make enterprise level decisions.

LEBOWITZ: Yeah, well, I can't remember the exact quote from Lenin, but it was that was the goal, the ideal, that every cook could do this.

FENSTER: Yeah. But also from the perspective of the co-op, I have this fear that co-ops have been given this opportunity. Hopefully it'll be democratic. Do they create their own enterprises, because our society is sort of cracking a bit, you know, so a lot of people — municipalities and whatnot — are kind of desperate to try different things, but you know, it could all be attacked eventually, or squeezed out financially, and it's really important, I think, for co-ops to start making just marketing connections, helping the community by serving them with products, getting ideas from them about what they want, and so that they’ll have some defense if bad times come, or if political pressure, or financial pressure starts coming down on them. So many movements have…(inaudible)  But if aids doesn't have an institutional basis, but at the same…part of that institutional basis is not just what you're doing, you know, either politically or economically, you've got to join the two, and the community itself is a close and it's right there for you.

LEBOWITZ: If you recognize the importance of working with the community, they’re there. You know, I think that there is the problem, something that Che Guevara stressed, which was the pipe dream that you can get to the new society with material interest, leads you into a dead end, and you don't know where you went wrong. You can't find it. That’s not the exact quote. I could give you the exact quote if you need it, but the the focus on self-interest in Yugoslavia meant that they said, “Well, how are we going to get the highest possible income?” We get it by listening to the people who will help us do it because their interest is the same as ours. It’s higher income for the for the enterprise, etcetera. And one of the issues, because they effectively did not have the knowledge — there was transparency but they didn't have the ability to work with those records etcetera, to make the right decisions — what you have is a devolution of workers control and workers council to, in fact, a process in which there are those who who make effectively the decisions, and those who are not . It’s the conductor conducted the money.

GUSTAFSON: Yeah, and this is the new class, right, that G Loss talked about and, to a certain degree I think, took it a little too far or something, but there was this idea that almost, there becomes this new division of labor and a new position where the state might “own,” as you're talking about the owning is just a different. There’s this managerial class that you see emerge in structures that are not intending to raise up that bottom, and make everybody — the cook and the gender and also able to look at the books and so that, when you have open books, everybody knows what's going on. Is that it? You essentially reify a class kind of division in terms of who’s actually operating and making the decisions, and then just who's doing the work and getting paid?

LEIBOWITZ:  Right, exactly, but there is within a given process of self-interest in each of these enterprises. It meant that they were also competing against each other, and that again was something that Che posed quite early when visiting Yugoslavia in 1960, saying, “How does this build a socialist society when workers are competing with each other?” And that's one aspect of the the problem of self-interest, but there’s another which is this tendency I think for enterprises, co-ops, worker controlled enterprises, juridically controlled, to in fact devolve into that same kind of question of “those who know, and those who don’t know.” I think that because there is a focus of ‘you’re living in a competitive society’ and ‘you’re oriented toward your income,’ that there's a tendency under these circumstances, I think, to move away from worker management to in fact a more traditional model, even though it’s not exactly the same. I think that's what happened in Argentina with a number of the co-ops that were established there. And it certainly — I’m also of the impression, but I haven't followed it up enough — that effectively also has occurred in Mondragon, that the workers, while they have this sense of themselves and as being the the ultimate decision makers, that they are not in motion in terms of the protagonism in developing those enterprises. It's the managers. It's a group of people at the top. And there's a writer — I forget her name — who wrote a book on the myth of Mondragon, which talks about how the different consciousnesses that developed within those enterprises.


FENSTER: Generally no that’s enough I think.

CINAR:  Yeah, that's very interesting and Michael, I think when we were referring to Che, I think he was thinking about “creating the new human being” or “moral human being,” right? That would not only think of the self-interest, but actually have the community in mind, and actually be happy and convinced, and working with the community, and sacrificing for the community at large. And I think that’s kind of the experiment that you've been working in and what you've been doing. And practically, I was just curious. You mentioned elements of this I think, but I wanted to see on the ground you've done this in Venezuela to a great extent, and I just was curious to see how this has developed with regards to the communal aspect of it, worker ownership, and production for social needs. These are kind of I think what they are called. or what Chavez called, “the elementary triangle of socialism in Venezuela.” How did that play out, and where do you see it going?

LEBOWITZ:  Well first of all, recognize that that elementary triangle is like a goal. It's not, was not, necessarily in practice. What was happening was a process in each of these cases, unevenly, in that direction. Certainly there was the emphasis on social ownership, the nationalization, or the de-privatization of a number of firms that had been privatized in the preceding period. And certainly there was also the production for social needs, in the sense that the activities in the communities, the property councils first, and then the communes, has been and was the most exciting part of Venezuela. And right now you can see this if you go to Venezuela Analysis, which is a great site, which emphasizes a lot the discussions and interviews with people in the communes. Chavism lives in the communes these days. It does not in the state. In fact there’s been — one of the problems again, because things don't drop from the sky to a tabula rosa — what you had in Venezuela was a long tradition of corruption and clientelism, all linked to the oil revenue. So that in process, people would join the party of the time in order to move up, in order to have better access to the rents, etcetera. I wrote about this culture in my book “Build It Now” This is the last possible place under these cultural conditions to imagine socialism being built, and in fact, the emergence of Chavez with his strong emphasis on protagonism, it didn’t it didn't disappear, all these this cultural issues. So that was the problem. And again, right now, the Maduro government is basically engaged in trying to do whatever it can to have the sanctions removed and doing so by making overtures to the conservative, or the bourgeois opposition, but in fact challenging very strongly any of those on the left who say this is contrary to Chavez, this is moving back to Capitalism, etcetera, Those people, as in the last elections, have no access to state TV and, in fact, in some cases, were attacked physically in running candidates. It was what's called a popular revolutionary alternative.

GUSTAFSON: And the communes and the co-ops when people are talking about the failed nature of Venezuela and stuff right now, the thing that I do come back on is I think (and I’ll be curious your position) is not only does that there's Chavis mo live on in the communes, but that they're actually still working, The the real relationship between the cooperatives and communes and those things are still a vibrant tradition, and the existence of democratic participation and economic activity despite all of the difficulties generally, in terms of the great inflation and all that kind of stuff, that's there because there is that connection. Whatever connection was built between the community and the co-ops ,they’re still able to provide a lot of the basic needs and things like that, that allow people to kind of continue on. And maybe you're not flourishing in the way that you might if you were not under a massive sanctioned regime which hasn't had change from Trump to Biden — we should probably be clear about that. So it's always been to me, if you’re really talking about the the socialism in Venezuela, you shouldn't be looking at the state-owned oil company and or even the the Maduro government. What you should be looking at is the communes and those are working.

LEBOWITZ:  Yes. And they're very exciting. They work out. Some of the best ones, the ones that are most developed and — I can’t remember offhand the name, but there's an article, I think ,that covers this recently in Monthly Review

CINAR: I think it’s probably the El Maizal Commune, probably.

LEBOWITZ: Yeah that's right, exactly, that's the one. They’ve made links with other cooperatives. They have exchanges, not on prices, etcetera (inaudible) difficulties, but the main difficulty is the difficulty in getting fuel to run tractors, etcetera, but they are really exciting.

GUSTAFSON: Awesome. Well, so we're running up to the end of the time. 

FENSTER: Right. Just a last thought. It's not mine and this might be super hard. So we’ve been talking about Venezuela and Latin America, Yugoslavia. Would I be wrong in saying that one of the big messages that, from your experience, might apply to what's the co-op development desire, efforts, that are happening on piecemeal basis in this country, is “Don't think just co-op. The education in the, I don't know, joi de vive, or spirit of ultimately becoming a full member of your community, and working, and believing that that's a possibility, not just through your own efforts but as part of the building of the co-op and connections with the community.” It's almost emotional, in a way, not just juridical. Is that too far?

LEIBOWITZ: No. no. I want to just emphasize something, which is Marta Harnicker, my wife, and I became advocates of socialism for the 21st century. And we developed a program in Cuba, and Cuba is certainly a top-down process even though there’s substantial participation in discussing the ideas of the party, but not anything coming from below. Our proposal was to create a socialism for the 21st century, which would involve stressing worker management cooperatives and and the question of communal control, much like the model in Venezuela was set up. And we gave talks, we just published about five small booklets, etcetera, on ‘What Is Socialism for the 21st century?” A number of good, strong party members that we knew in Cuba were very attracted to this, and we hope that those ideas will bear fruit at some point. Or I do, at this point, because Martha's gone.


FENSTER: We should look at them ourselves, if we haven't already, or some of us haven’t. I haven't . 

LEIBOWITZ: Well, I had an article in Monthly Review called “What is Socialism for the 21st century?” You can find it somewhere.


LEIBOWITZ: It’s on my website, it's on my website

GUSTAFSON: Yep, you can find a lot of good stuff on YouTube. I devoured a lot of stuff that I found of yours, Michael ,on YouTube. I was like, ‘oh yeah, this is speaking my language. I like it.’

LEIBOWITZ:  Okay. So I hope I haven't haven't discouraged the co-op model. 


GUSTAFSON: No, I think you’ve encouraged it.

FENSTER: You’re great. 

CINAR: Yeah, you've expanded it beyond the walls of the co-op and that’s what's needed.

GUSTAFSON: Not self-interest, social interest.

CINAR: Yeah. 

GUSTAFSON: We need to have that as our focus, for sure.

LEIBOWITZ: But that's the process. It doesn’t happen overnight.

CINAR: Yep, it doesn’t.

GUSTAFSON: It took capitalism a long time to develop too, and a long time to develop the institutions, and the theory, and all that kind of stuff, and so it's going to take this a while too, and we just have to be intentional about it and…

LEIBOWITZ:  Yeah we don't have that, not with the crisis of the earth system, we don't have that.

GUSTAFSON: Yeah, right, we don’t have the time, you're right. Yeah, the world's on fire so it's time to need to put it out and the social co-op, and inter-social economy, with the orientation towards actually fulfilling needs, rather than making shit we don't need, is going to be the thing that we need to do. 


GUSTAFSON: Michael thank you so much. 

LEIBOWITZ: All right. Thank you 

CINAR: Michael thanks for joining us, really.

GUSTAFSON: Take it easy, take care 

FENSTER: Thank you.

LEIBOWITZ: One minute!


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About our guest: Michael A. Lebowitz is a professor emeritus of economics at Simon Fraser University in Vancouver, Canada and the author of several books including The Contradictions of "Real Socialism" and The Socialist Imperative. He was Director in the Program in Transformative Practice and Human Development at the Centro Internacional Miranda in Caracas, Venezuela from 2006 to 2011.

References: https://monthlyreview.org/2016/10/01/what-is-socialism-for-the-twenty-first-century/

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