Property developer and CEO Tim Gurner: “We need to see unemployment rise. Unemployment has to jump 40, 50 percent in my view. We need to see pain in the economy. We need to remind people that they work for the employer, not the other way around.”
Property developer and CEO Tim Gurner: “We need to see unemployment rise. Unemployment has to jump 40, 50 percent in my view. We need to see pain in the economy. We need to remind people that they work for the employer, not the other way around.”
A worker cooperative is just another business, albeit one where ownership is distributed among the workers. It still functions within the capitalist system and must follow its dictates. They start with capital, employ wage laborers, and must create profit to survive.
I mention this because really your question might as well be, “well why don’t people just start more businesses to make more people employed?” The answer applies to co-ops as well: because unemployment is controlled by making it more costly to do business, forcing a need to cut costs (usually starting with labor) and often simply failed businesses. Co-ops are not free from this, they need capital to survive just like a capitalist-owned business.
The only way to free ourselves from this system is to expropriate control of the businesses and put it into workers’ hands, which necessarily happens under the same conditions under which we could eliminate artificial unemployment (control of the state).
Put another way, we need to control the means of production, not be minor players still at the whims of capital.
Edit: I should probably mention that there’s more to it than this but it requires getting into the weeds of Marxist theory.
Thanks for your detailed answer.
I wouldn’t call it capitalism but markets. How can you escape markets, even if you control a state? Some people argue that the soviet union broke due to low oil prices.
Have you considered that coops need less capital to survive? When doing business becomes costly, coops could be the only businesses that survive. They could then keep unemployment rates ar zero while making profits.
Markets don’t really mean anything nowadays outside the context of capitalism. It’s a place you sell commodities and where there is a presumption of competition. Where does competition come from when production is not capital-driven (and then profit-driven)? The capital valorization process is still there and therefore the slew of horrors forcing humans to destroy each other so there can be 7 brands of blood diamonds.
Socialists have different perspectives on markets after there has been a socialist-won revolution. All of us know they are imbued with capitalist relations, the question is about how they might be used transitionally.
You can skip markets through nationalization, for example. A nationalized power grid operates better and more cheaply than those that operate as markets, for example. Or running a transit system. Maybe nobody needs 7 brands of bland diced tomatoes. That kind of thing.
The Soviet Union broke due to constant and merciless capitalist violence. Everything else is just responses in that constellation, like failing to sufficiently oppose that violence. A simple example is the decimation of the Soviet population by the invading fascists - the genocidal capitalists that were gladly supported by other capitalist nations so long as they thought they would destroy the Soviet Union. This hollowed out the conveyer belt of competent political actors and is why Kryschev came to power and was able to maintain it for his wing of revisionists (possibly the only time you’ll hear me use that term unironically).
Co-ops would likely need more capital to survive, as they’ll be less preemptively brutal towards their workers (themselves). This means lower rates of profit, requiring a larger scale of operation. Co-ops are often driven out of business by capitalist competition, where the organization of production is forcefully focused onto increasing profits by reducing what is paid for inputs: tools, materials, and labor. Co-ops are forced to operate in the same market and therefore risk going out of business when a competitor undercuts them in prices by 50%. This is one of the reasons that China forces the creation and maintenance of several worker co-ops and is careful about unions. They want those businesses to succeed and export, as China’s strategy is to accept most forms of capitalist exploitation in order to draw productive capacity into its borders. They know that co-ops generally need help to survive.
Competition is inherent to our existence. Not everybody can have a house of gold or even live on the coast. How do you allocate scarce resources? Competition is everywhere.
Nationalizing supplies only hides the true prices and will create a grey market for undervalued goods. Problem is that most goods will be overvalued because, as you write, only capitalists are incentiviced to reduce costs.
No leadership can overcome the misalignment of incentives. The sovjet union could have had better leaders but which resources can they use if managers don’t dare to cut costs?
Coops can be more competitive when workers understand that they are not only compensated with money to consume but also influence. At least the unemployed should be willing to participate.
If workers cannot be motivated to support coops, how can socialism be sustained?
This is capitalist propaganda talking. We are discussing a recent economic system with a very specific manifestation of “competition”, something that drives little petty fiefdom holders (business owners) to preemptively degrade working conditions and pay for workers and to gradually shift more and more to fixed costs. We live in the world of real things, not little phrases passed on from our oppressors. The divine right of kings was also supported as “the natural state of things”. How convenient for our oppressors!
Is your argument that only competition can resolve scarcity?
A house of gold: need not exist at all. This kind of thing is reserved for the dragons sitting atop their treasures as a way to show off.
Living on the coast: this is a so-called natural monopoly, something that cannot be reproduced and scaled up. There is an actual scarcity of livable coastline. Let’s talk about how “competition” currently addresses this.
A tiny minority, mostly those in the exploiter class, use their ill-gotten gains to purchase these desirable properties, often only living in them for a few weeks out of the year. They buy them with the expectation that values will increase, as they are dependent on the financialized housing system that increases housing prices far faster than the rest of inflation, than population increase, etc. The decision of who gets to live there is made implicitly, as so many things are in this system, by whether you have joined the exploiter class.
The idea that this is the only way to organize a scarcity is capitalism stealing a person’s basic imagination. Humans have invented many systems for doing this and humans can do so again. That’s democracy, isn’t it? Here’s two examples: (1) there could be a lottery or (2) they could be held in common and used by all for vacations. The two options could be combined. And in both cases, addressing the poverty induced by capitalism should come first: who gives a shit about how we decide to redistribute fancy housing until we actually house everyone? The system you’re defending forces a good percentage of the population to have no housing at all.
There are also natural monopolies that are already state-run and normalized, as they align with the capitalist system. Individual capitalists don’t own the roads, they are held (and paid for) in common. Same for all kinds of utilities. You cannot build 10 totally separate road systems to get from A to B, so they are owned by government agencies. Somehow, they do this without competing with one another.
Hides what prices? To what concept are you referring? Capitalism and markets already hide the true costs, as society pays for so much that isn’t on the sticker price. Even putting common infrastructure aside (capitalism requires a state), the capitalist isn’t including the environmental degradation or public health impacts of their productive process on their sticker. They’re not paying for the cancer they inflicted on your relstive, nor did they ask permission to inflict it. They are, instead, constantly trying to minimize their costs regardless of how much it hurts everyone else. Climate change is another example. A civilization-ending apocalypse is looming due to the failure of capitalism to do anything other than seek profit at the cost of all else.
A nationalized productive process also has the same ability to do accounting on its costs, so who knows what you’re talking about. There are entire industries that have been nationalized and work quite well, even in capitalist countries where there’re constantly undermined by privatization.
Finally, let’s not have any illusions about the actual existence of competition. Capitalism creates a psychology among the exploiter class to cut costs or die. Often this is true. But another way to increase profits and survive is to become a monopoly, which are now ubiquitous. Monopolies end up running their own little planned economies largely free of competition and are about as efficient as anything else under capitalism. They just charge far more than they need to. Imagine if they weren’t hellbent on taking as much from you as they could.
I never said anything like that, lol. I’d feel silly if I did.
Leadership inherently uses incentives so this means nothing. Every decision by leadership must be backed by an incentive or it won’t happen. But don’t limit your concept of incentives to be merely the mechanisms of capitalism, of course.
As I mentioned, Soviet political leadership was cut off at the feet by a genocidal campaign by capitalists. Capitalists are incredibly violent - violence is what sustains their system and attempts to prevent other systems from taking hold. This implicitly suggests a viability to the alternatives.
Soviets did all kinds of things, they took a non-industrialized, largely feudal country and turned it into an industrialized superpower within 10-15 years. This involved cutting costs all the time, so I have no idea what you’re talking about.
Similarly, compare blockaded Cuba to Haiti. We haven’t even touched on imperialism, a form of capitalism between states, but Haiti is what an imperialized country gets under global capitalism and Cuba is what you get despite the violence and extreme hardship forced on them by capitalist countries. The imperialists have literally and figuratively never forgiven Haiti for their self-emancipation from slavery, rewarding them with massive debt and regular coups.
Under the capitalist system, competition is defined very simply: your business lives or dies. Your business lives because it is profitable or is playing some game to become profitable that is underwritten by finance. Your business dies because it is not profitable or similarly underwritten. Workers being compensated with workplace power does not inherently make a business more profitable and will definitely lead to a higher floor on what costs get cut (labor).
A simpler way to put it might be that if co-ops were simply more viable under capitalism than capitalist businesses, they’d be dominant. Instead, they are usually kept to small-scale outfits. There are exceptions, but they are rare.
This does not mean that co-ops are bad or disorganized. It means the capitalist system barely permits them to exist by its fundamental nature.
Workers do support co-ops. Every worker would rather have a say in their own workplace conditions than get fucked over by some small business tyrant.
But we live under a capitalist system that does not support co-ops and it isn’t exactly democratic. We do not control capital, petty tyrants do. We can’t just wish for more co-ops, or just want them, we need the capital, the means of production. Socialists know this.
Again, you don’t just get access to capital and profit because you want it or even because you’re particularly good at organising production. You have to be able to undercut or eliminate the competition. You have to worship the gods of CMC’ or delve into the dark arts of bullshit (finance).
Thank you for that analysis.
Right, you didn’t write that. You wrote that a coop could struggle when a competitor undercuts costs.
Right now, in this channel: Consequential Efficiency https://reddthat.com/post/3221538
Coops could reduce costs easier with a lower floor than regular companies if workers participate in a long-term reward.
I believe that most people don’t want socialism. But the people who do could create a network of coops and share their resources however they like.
There are many markets where businesses can be bootstrapped without capital. Why not enter those markets and have the best margins by offering the best products? There is only a limited need to cut costs if a product doesn’t compete on price.
A co-op has a certain harder floor on how much it will cut labor value costs, yep. A private corporation will cut labor costs to below basic needs, eventually. Workers will not do that to themselves, generally speaking, and will push back long before that. Regimes in which wages are maintained due to things like promising better in the future are generally predicated on imperialism, i.e. the worst tendencies have been temporarily foisted onto the imperiakized peoples of the world. But that is temporary: eventually it comes home. We see that happening now through neoliberalism. Wages don’t keep up with inflation, social programs are cut, and a resurgent labor (and social) movement is combated with bureaucracy, police, and jail while poverty is criminalized. Left to its own devices, capitalism is constantly in crisis.
Most people have absolutely no idea what socialism is and are only familiar with flimsy capitalist propaganda against it. For example, the arguments you’ve made against competition are addressed in the basic foundational texts of socialism and have been known to be false for at least two centuries.
Capitalism constantly teaches the basic need for socialist responses. The only question is whether we can organize more effectively and faster than capitalism’s solition: naked fascism. Liberals that adopt the pretense of opposing it adopt obviously milquetoast strategies that end up empowering fascists and murdering the left.
No such thing. Even pure knowledge workers require basic materials to support their work like computers and a space to work in. The exceptions are where the employer has offloaded even those costs, which is an effective wage reduction, not a change to how production requires capital.
The point I already raised addresses this. Your scenario is, “what if fixed costs were negligible?” The answer is that this leaves variable costs, i.e. labor, and capitalists will cut labor costs below what co-ops will bear, eventually. And again, if co-ops were more viable under capitalism this would already have happened.
Every product competes on price when it becomes a commodity, i.e. the vast, vast majority of things and services sold. At least, until monopoly takes over. Exceptions are just minor exceptions that eventually disappear due to commoditization.
Somehow you see all the reasons why coops are hard but you beleave sharing could easily resolve the conflicts about scarce resources.
Establishing successful coops would allow socialists to show that their values are rooted in reality, especially because it is difficult.
That’s funny, I don’t remember saying that.
I invite you to respond to the content of my critiques of co-ops