This article originally appeared at Truthout.org
Over the last century, capitalism has repeatedly revealed its worst tendencies: instability and inequality. Instances of instability include the Great Depression (1929-1941) and the Great Recession since 2008, plus eleven "downturns" in the US between those two global collapses. Each time, millions lost jobs, misery soared, poverty worsened and massive resources were wasted. Leaders promised that their "reforms" would prevent such instability from recurring. Those promises were not kept. Reforms did not work or did not endure. The system was, and remains, the problem.
Inequality likewise proved to be an inherent trend of capitalism. Only occasionally and temporarily did opposition from its victims stop or reverse it. Income and wealth inequalities have worsened in almost every capitalist country since at least the 1970s. Today we have returned to the huge 19th-century-sized gaps between the richest 1 percent and everyone else. Rescuing the "disappearing middle class" has become every aspiring politician's slogan. Extreme inequality infects all of society as corporations and the rich, to protect their positions, buy the politicians, mass media and other cultural forms that are for sale.
Recent Crises in the History of Capitalism
Capitalism in Western Europe, North America and Japan -- its original centers -- has boosted profits in four basic ways since the 1970s. First, it computerized and robotized, not to lessen everyone's work time, but instead to raise profits by reducing payrolls. Second, it exploited low-wage immigrant labor to offset wage increases won by years of labor struggles. Third, it moved production to lower-wage countries such as China, India, Brazil and others. Fourth, it divided and weakened the labor unions, political party groups and other organizations that pursued labor's interests. As a result, inside nearly every country of the global capitalist system, the rich-poor divide deepened.
The Great Depression provoked economic "reforms," such as FDR's New Deal. These included regulations restricting risky bank and other market practices. Reforming governments also established public pensions, unemployment insurance, public employment systems, minimum wages, monetary and fiscal policies, and so on. Advocates believed that such reforms would end the 1930s depression and prevent future depressions. They dismissed critics who diagnosed depressions as systemic and prescribed system change (or "revolution") as the necessary solution. "Reform versus revolution" was then a hot debate.
In the US, the reformers defeated the revolutionaries as preparation for war -- and then war itself -- finally ended the Great Depression. As capitalism rebounded after 1945, capitalists increasingly evaded the Depression-era reforms, using their growing wealth to buy the political influence needed to gut many reforms. Later, Reagan led the frontal assault, repackaged as "globalization" and "neoliberalism" to undo the New Deal. When that rollback of reforms culminated in the 2008 crash, it exposed capitalism's instability and inequality yet again.
The continuing post-2008 economic crisis has reproduced both the kinds of suffering that happened after 1929 and the reform-versus-revolution debates. The difference this time is that we know what happened last time. While the reformers then defeated the revolutionaries, their reforms failed to prevent the continuation of capitalism's instability and inequality, and their harmful social effects. Reformism today advocates the same (or a slightly varied) set of reforms as last time. It thus represents a refusal to learn from our history. The revolutionary alternative now makes more sense. "Revolutionary," however, need not evoke romantic notions of storming barricades: Today, revolutionary refers to the recognition that system change, not another reform, is our primary task.
What System Change Requires
What differentiates system change from reforms? Reforms refer to government interventions that still leave employers in the exclusive position to make the basic enterprise decisions: what, how and where to produce and what to do with profits. Reforms include minimum wage laws, redistributive tax structures, and enterprises owned and operated by the government. They range from the mildly Keynesian (the New Deal) to the democratic socialist (what we see in Scandinavian countries) to the state socialist (the model of the USSR and People's Republic of China). All such reforms retain the core relationship inside enterprises as that of employer-employee, with private or public directors controlling the mass of workers and making the basic enterprise decisions.
In contrast, system change means reorganizing the core human relationship inside the factories, offices and stores of an economy. That relationship connects all who participate in production and distribution of goods and services. It shapes (1) who produces what, how and where; (2) how much surplus or profits are available; and (3) the disposition of the surplus or profits.
Truly moving beyond capitalism means breaking from the employer-employee core relationship. It means no longer assigning a relatively tiny number of people inside each enterprise to the employer position of exclusively making the sorts of decisions outlined above. In private corporations the employers are the boards of directors selected by the major shareholders. In state or public enterprises of the traditional socialist economies, the employers are state officials. Instead of either kind of employer-employee relationship, system change installs a different core relationship inside enterprises. A different group of people -- all workers in the factory, office or store -- democratically makes those same decisions. The rule is "one worker, one vote," and in general, the majority decides. The difference between employer and employee dissolves.
Such system change beyond capitalism means something quite different from shifting to public directors from private directors, which is a reform. System change entails the democratization of the workplace. The logic governing the economic system, then, would no longer be capital-centric (making decisions (1) through (3) in such a particular way that the capitalist employer-employee relationship in production is reproduced). The particular connecting relationship at the core of capitalism will have been superseded: rather like what happened earlier to the slave-centric core relationship (master-slave) and the feudal-centric core relationship (lord-serf). Instead, the post-capitalist core relationship will be democratically worker-centric, with the central type of workplace being the worker cooperative.
Among the goals driving an economy based on democratic worker coops, job security, quality of workers' lives and reproduction of the worker coop core relationship in production will weigh more heavily than enterprise profits. Because different people will be making the key enterprise decisions and because those people will be driven by different goals, the post-capitalist society will develop very differently from the capitalist. Democratic worker coops will likely (1) not relocate themselves overseas, (2) distribute incomes far less unequally than capitalist enterprise, (3) not install ecologically damaging technologies near where their families and neighbors reside, and so on.
Responding to reductions in demands for their outputs, worker coops will more likely stress sharing any reduced work hours among all workers rather than forcing a few into unemployment. The needless social irrationality of capitalist downturns -- when unemployed workers coexist with unutilized means of production to leave social needs unmet -- will be much more apparent and thus widely unacceptable.
In an economy built on worker coops, children, retired people, people living with disabilities or illness and others outside the labor force would be sustained from the worker coops' "surplus." The latter comprises what the coop labor force produces above and beyond what it consumes and requires to replace used-up means of production. Adults in and out of the coop labor force would together and democratically determine the sizes and recipients of all the distributions of the surplus. They would decide how much of the surplus would go to expanding production, to provisions for future contingencies, to providing for children, for those in other social institutions, and so on. In place of capitalists (a social minority) distributing the surpluses produced by and appropriated from their employees, a genuine democracy would govern that distribution, much as it governs other worker coop decisions.
Worker coops mark a qualitative and quantitative advance beyond capitalism. They represent a system change adequate to key problems capitalism has shown it cannot overcome, even after centuries of failed efforts to do so.
Showing 28 comments
I’m probably the only one who sees a world where we could simply choose to live without thinking any object has a value greater than another. That ideology is the only thing standing in the way of equality itself. I’m not sure if I’m horribly wrong, but something tells me I’m an idiot for ignoring the idea if I’m not.
We don’t need to kill for things, nobody has reasons to die anymore. The battlefield took the form of a pen long ago, not with what has escalated into cowardly drone strikes as seen a day or so ago in Syria.
The employer/employees system with Capitalism is a grade above:
Lord vs Serf
Master vs Lord
Let’s try:
Supply vs Demand
Producer vs Consumer
Desire vs Necessity <—- I’m an advocate for that one, but I’m simple in my tastes.
Let’s think about the homeless and get them into Zombie Homes and take it further.
We could focus on who’s hungry and get people in society into good health.
We educate, change our attitude of controlling substances toward harmful ones like pesticides or substances which could be the real danger to cancer leading illnesses.
You have no idea how easy everything could be if we were managed appropriately and utilized our resources in ways that worked for the people, because it’s going to take the work of the people.
If Work = Force X Distance then I’m wondering when we decided to see how far people could be pushed to work and sustain a viable system based upon pure manipulation, before enough people catch on.
I think there are plenty of people who want to work that cannot for either economic reasons, stigma, governmental policy restrictions, and the list goes on. A lot of people working to the bone and not able to see what is going on around them right now is a difficult thing to witness. We’ve grown well beyond our borders, and I think it’s time to bring our troops home while there’s something left to defend. If POTUS has taught US nothing at all, let it be that any fool can be king. Let’s hope it’s not much more than for 100 days. lol
Let’s all think more kindly about our neighbors. Not saying we don’t, but continuing with what has proven to ‘not’ work probably won’t in the future. Everybody is either feeling the crunch or about to. All we need is a garden and library after all :-) #Peace
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” – Aristotle
As for the devils and angels within us, non dual psychology points out that they are two sides of the same thing, with the “devil” acting out on deep wounds. Greed is a desperate need for something that material cannot satisfy and only increases the desire like any addiction. That is just an example of the kind of work that must be addressed or even the best of structures will be corrupted and they may not even be allowed to arise. And if we demand they rise through violence we nourish the beast that much more.
So work for those structures now, but the structures we get are really a reflection of the state of mind we have. So we need to work on that basic state to allow truly healthy and caring community structures to arise.
To me, the structures used at Mondragon, where workers appoint the board, the board hires managment, and managment runs the Co. This allows the separation needed between the worker-owners, and those that manage them, but still empowers workers to vote out the board, when they think managment is not serving them.
I think most ESOP’s can be managed this way. An ESOP is just a mechanism for the transfer of ownership.
Of course we could keep trying the democratic / consensus base managment I was used to in the late 70’s and early 80’s that was fought with so much conflict. Ideally this is better, but practically, especially Americans, are not culturalized enough to manage themselves this way. Maybe as a long term goal, but we need structures that work now.
But other than Mondragon, what ways are you and others reading this seeing that are generating effective managment systems for worker owned businesses?
I spent many years, years ago, arguing inside of failing cooperatives. The idealism, love and passion were great, but the ability to survive as businesses was horrible. I think the point that we need a change is obvious, and much more talk of this is really a waste of time. What are the real alternatives you all have worked with that are working?
Thanks ahead of time for any and all replies.
So, you have your perception and I have mine.
As for Liberal Arts, I totally agree that that’s what it should be but that does not mean that’s what it is or even really was. Also the time to begin addressing those issues is not in college but in kindergarten.
So, you have your perception and I have mine.
As for Liberal Arts, I totally agree that that’s what it should be but that does not mean that’s what it is or even really was. Also the time to begin addressing those issues is not in college but in kindergarten.
As for a liberal arts education, I would think that the goal of such would be to develop well-rounded people who would be able to answer the questions, “What is human nature; What is life,” in their individual ways as they go about their social lives. Instead we exist in a capitalist system we serve in our many ways as a profitable means of our self-destruction.
Will Cooper and I agree that it will take a revolutionary/transformational movement to change matters.
If it didn’t include that “stuff” then it wasn’t a liberal arts education. The central questions of a liberal arts education revolve around what does it mean to be human and how should we live. A person with a liberal arts education is well-read in the humanities.
Have a great day!
Adam Jacobs
LOL how cool! Well, in my opinion all ideologies blind us. Nothing wrong with it as long as you realize it’s an aspect of truth rather than Truth.
I’ve had a liberal arts education as I’m 63. It didn’t include that stuff. Of course those ideas are thousands of years old (possibly some new ones) but I don’t think it’s ever been popular as it would cause people to look within for their authority and rulers don’t like that.
Steve
I’ve used the term “educationalism” to describe my ideology and it’s one I continue to believe in. And the “phenomenal” education you lay out has existed for thousands of years; it’s called a liberal arts education and all humans should be entitled to one.
Meanwhile, I think his ideas on changing the economic structure are excellent. However, the deeper problems cannot be ignored or we will shape whatever structure we create to enslave us to our addictions. We therefore need to focus much more on what are our beliefs, our values, what we hold dear and having cultural self-concepts that serve us. This would be a phenomenal “education.” This would be real and powerful education – rather than pouring in more information and technological know-how. That has its place too, but will never save us. The real education is who are we and what is important in life?
Being educated and broke sucks, too. Of course there are outliers (N. Korea) but the general trend remains. (that countries with stronger checks on capitalism have better educational systems)
I am well-educated, but want of meaningful work and a dignified income have made me more sympathetic with Dr. Wolff’s cause. I like the idea that the correct sociopolitical and economic systems could make work and dignity human rights guaranteed to everyone. In any event, we Americans certainly can and must do better, and a socialist reorganization of the means of production (and/or other economic resources) would likely be a step in the right direction.
Having been dominant world powers for the last coupla centuries, England and the USA are in fashion. Scholars flock to the prestigious universities in those countries because it is the done thing, despite equally important contributions to the literature occurring in relative backwaters like Seoul, Bangalore, Taipei, Budapest, etc.
I do not seek to establish causation or provide proof. That countries with socialist economic systems are better at providing for every aspect of the well-being of their citizens (this includes education) is evident to me.
I don’t always agree with Dr. Wolff, but he’s not blind, and to the extent that he is an ideologue, I prefer his ideology to that of his detractors and opponents.
You’ve pointed to socialist places (although Scandinavia isn’t pure socialism) that focus on education and get results.
But we have seen, in this discussion, that capitalist nations can have good schools and socialist places can fail miserably to educate.
Back to my original point: EDUCATION is the most important element when organizing society and NOT the means of production.
I would rather be in a capitalist nation with a great education system than a socialist one without. I would also rather be in a socialist nation with great schools than a capitalist nation with bad schools.
Education is the key. Any system can only be as good as the people running and regulating it.
You say in the 1980s California had the best education system. In the 1980s California was capitalist, which undermines your argument.
Cuba and Scandinavia have focused very heavily on education but you have provided no evidence that it is “socialism” which causes that.
Why do many of the best universities exist in the USA and England? Dr. Wolff himself studied at Harvard, Yale and Stanford. He didn’t go to Helsinki or Havana. Why not?
Being a costly social need, education suffers under a capitalist economy but flourishes within socialist systems.
In the 1980’s my Californian school teachers bragged (correctly) that they worked in the best education system in the world. The best education system in the world is now located in Scandinavia in a socialist country. Likewise, no one would argue that your average Cuban in the 1950’s was a paragon of erudition.
Having been one of the least educated nations on earth, how did Cuba become one of the most educated? Socialism. That’s how.
Having been the best educated nation on earth, how did Americans become so ignorant? Capitalism. That’s how.
That isn’t going to work.
The socialism quote you shared from Einstein a few months ago included a critical provision for education.
If Education isn’t at the foundation of your “ism” your “ism” isn’t going to work.
“If a nation expects to be ignorant and free…it expects what never was and never will be.”—Thomas Jefferson.
I think Professor Wolff is blinded by his ideology.