Capitalism without a working class

Karl Marx and other socialists believed that capitalism depended on exploitation of workers, and that workers could liberate themselves by taking control of the means of production.

But the driving force in capitalism today is to eliminate workers as much as possible.  Manufacturing jobs are being eliminated through automation.  Now service jobs are being eliminated through use of artificial intelligence.

The end result would be a capitalism without workers—just investment in capital goods such as robots and AIs.

I don’t say this would ever happen completely, and it wouldn’t happen any time soon, but this is the direction we’re heading.

Treating people as unnecessary, and telling them that they are unnecessary, is wrong and very dangerous.

Almost everyone has it in them to do something that is useful and beneficial to others.  An economic system should be set up to honor and encourage this.  Investing in machines rather than investing in people is a choice, not a law of nature.

Another way of looking at things

Murray Bookchin is a leading anarchist thinker whose work I had never thought about until I learned that he is, of all things, respected by the Kurdish people in the Middle East.

The Kurds have struggled for decades for independence for decades against the governments of Iran, Iraq, Turkey and Syria.  They are the most effective fighters in their region against the Islamic State and the successors to Al Qaeda in their region.

In all this, they have not engaged in acts of terrorism against civilians.  They respect the rights of women, and even have women in their fighting forces.  Although mostly Sunni Muslims, they gave refuge to people of all religions, including Christians, who suffer religious persecution.

Of course all this does not necessarily stem from their admiration for Murray Bookchin, but I am intrigued that this American thinker finds admirers in admirable people in a (to me) unlikely part of the world.

Bookchin is an anarchist, which means that he is opposed both to capitalism and to state socialism, a point of view I have come to share, late in life.  Some other anarchist writers I admire, and have posted about, are David Graeber and James C. Scott.

I just finished reading Bookchin’s Remaking Society, a quick and readable, but somewhat superficial, outline of his views.  I have started reading his earlier and longer book, The Ecology of Freedom: the emergence and dissolution of hierarchy, which is more detailed and profound, but more difficult to follow.

Bookchin is opposed to hierarchy as such.  He thinks all domination is connected – political domination, economic domination, racism, patriarchy and the domination of nature.

His ideal is the “organic” society, in which people cooperate voluntarily for their mutual benefit, and seek to understand natural processes rather than override them.

He thinks organic societies existed in pre-historic times.  Tribes based on kinship worked together for the benefit of all.  Persons of superior ability became leaders, but not rulers.  They had prestige, but not the power to coerce.  Men and women had different functions, but neither ruled the other.

Their principle, he said, the equal treatment of unequals, which sound to me very like the Marxian principle of “from each according to his abilities, to each according to his needs”.  Our present capitalist society, he said, is based on the opposite principle – the unequal treatment of equals.

Can workers own the means of production?

The Marxist economist Richard D. Wolff thinks that a new form of economic organization, the worker self-directed enterprise, can gradually replace the for-profit corporation.

Richard D. Wolff

I hope he is right because the world needs something better than predatory corporations or oppressive government bureaucracies, which are the main choices on offer now.

But successful worker-owned enterprises have been around for a long time, and yet have never reached the critical mass that would enable them to become an important part of the economy.

Advocates of worker-owned businesses cite the example of the Mondragon Corporation, which originated in the Basque country in Spain in 1956 with a half dozen people and now is a federation of 257 businesses and co-ops employing 76,000 people in 31 countries.  But why is there only one Mondragon Corporation?  Why hasn’t it become a template for other successful efforts?

One of the things that limit worker-owned businesses, as I see it, is precisely this lack of critical mass.  There is a societal infrastructure of business schools, business services and business finance to serve the new for-profit business.  Worker-owners would have to learn as they go.  This takes a level of commitment of which many people aren’t capable, unless they are in dire straits.

One of Wolff’s ideas is to provide seed money for WSDEs by giving the unemployed their compensation in a lump sum rather than weekly checks.  This shows how he underestimates the difficulty of implementing his program.

To begin with, starting a successful small business is not something everybody can do, although many people think they can.  If you wanted a pool of people with the ability to succeed in business, you probably wouldn’t choose them from among the unemployed.  You’d be more likely to find them among people who have good jobs and money in the bank.

Then again, the American Dream is to own your own business.  Generally speaking, it is not to be part of a community of comrades who share and share alike.   We Americans think of ourselves as individualists, no matter how subservient to authority we may be in practice, and we only abandon the dream of self-sufficiency for compelling reasons.

Farmers’ marketing co-ops came into existence because farmers thought they were being cheated by middle-men.  Electric power co-ops came into existence because the investor-owned utilities weren’t interested in serving them.  Savings and loan associations, and later credit unions, were formed because people were dissatisfied with banks.

Workers have been known to take over factories from bankrupt employers and restart the businesses.  Some co-ops are formed around political and social movements, such as selling organic food.  But worker-owned and cooperative businesses are not the norm.  There has to be a compelling reason to commit to starting one.

The commitment tends to fade when the compelling reason fades.  Even the successful cooperatives tend to wither away, or be bought out, or to incorporate.  Even the successful utopian communities, the Oneida community in New York state and the Amana community in Iowa, wound up as corporations.

Is economic democracy possible?

Richard D. Wolff, a Marxist economist, wrote in his recent books that capitalism has failed, and that it is necessary to replace for-profit corporations as we know them with what he calls worker self-directed enterprises.

But for-profit corporations aren’t going to go away, even if—which remains to be seen—worker-owned enterprises offer a better alternative.

If economic democracy is the only means by which workers can keep the value of what they produce, then it is going to be necessary to reform existing corporate structures.

The USA needs legislation to curb abuses in corporate management, such as leverage buyouts, in which slick financial operators can gain control of a company with borrowed money and then milk it for their own benefit, regardless of its impact on the company.  We need enforcement of anti-trust laws and prosecution of corporate and financial fraud.

Beyond that, the USA needs to build up labor unions as a countervailing power.  Congress should enact the Employee Free Choice Act, aka Card Check, in which employees get the right to bargain collectively when a majority sign up to join a union.  It should repeal or reform the Taft-Hartley Act and Landrum Griffin Act.

But all of this falls short of true economic democracy.  True economic democracy would mean something like Germany’s co-determination system, in which employees of firms are represented on the board of directors.  I think this should be required of all companies whose stock is publicly traded.  If an entrepreneur doesn’t want to share control of a company,  then don’t sell its shares on the open market.

Economic democracy also would mean letting workers share in day-to-day management of the company, along the lines suggested by W. Edwards Deming.  Knowledge in any institution is widely distributed.  No small group has a monopoly on useful information.  I think a company will be better managed when workers and managers have the same information available.

Banking and finance are a separate issue.  There can be no economic democracy when financiers have a veto over democratic decisions.  Banks should be regulated utilities.  Bankers should be servants of the people, not masters of the universe.

When and if these things can be achieved, there will be a favorable environment for Wolff’s worker-self-directed enterprises.  The government would give them the same kind of support across the board that rural electric co-ops got in the 1930s and 1940s.  Otherwise, probably not.