The difference between Mondragon, the kibbutzim, and other successful examples of collective labor, and the Soviet system, is precisely that the former are not governments, and operate in a capitalist system of property rights and free markets (in a practical rather than spherical cow sense of that term).
I'm all for more cooperatives, it's a good model. Operating in a system which doesn't compel that form of organization is what keeps them honest. Mondragon is a profitable company, emphasis on profitable.
The article talks a bit about how, while Mondragon is a pretty good deal for basic labor, they have trouble attracting high-demand talent like engineers, which they also need. In a free-market system, a worker's collective can solve a problem like that, by offering more perks, raising the 'level' for new engineering hires, waiving some amount of the up-front investment, or just getting by through, in effect, paying some of the salary in a nonmaterial reward of belonging to something which better meets some people's sense of ethics and fairness.
That's not how it works when the company you work for is also the police and the military. It's also not how it works when every company is compelled to organize itself this way. That compulsion leads to dysfunction, corruption, cheating, and at the extreme end, gulags.
So let's pass on all that. If you believe that worker cooperatives are a social good, as I do, buy stuff from them. Work for one, found one. It's working so far.
> The article talks a bit about how, while Mondragon is a pretty good deal for basic labor, they have trouble attracting high-demand talent like engineers, which they also need
Perhaps that's not inherent to high-demand talent, but Mondragons current composition and markets. I know a handful of engineering consultancies that are cooperatives in everything but name - and I know ofa couple that are legally coops.
The "soviet system" as you call, started (yes the revolution) with a slogan "power to the soviets". In the slogan the word "soviet" meant "worker coop".
This slogan was abolished when more central planning took over, and the word soviet become more associated with the central govt/ the state.
> The difference between Mondragon, the kibbutzim, and other successful examples of collective labor, and the Soviet system, is precisely that the former are not governments...
I've heard it put as "Socialism works great, as long as the socialist community gets to decide who is included."
I do feel like you've framed this as dichotomy: you either have a capitalist system or you have an autocratic centralized government.
Many socialist democrats (or democratic socialist, whatever your flavour) believe that collectivism need not be autocratic and all encompassing. The negative aspects you're describing, in my opinion, are the results of the fascistic elements of an autocratic communist regime. "The Fascist conception of the State is all-embracing..." and so on.
The liberty that open democracy promises is resistant (but not immune) to the kind of coercion you've correctly identified as being characteristic of the Soviet system.
It's not clear to me how this model can be meaningfully replicated. For instance corporations naturally minimize their labor costs according to the relative economic leverage of the participants often to the point of poverty vs those with little leverage whereas a cooperative would seem to be inclined towards decency at the cost of maximal profit.
This difference in profit is invested back into the company in terms of capital investment and lower prices allowing more capitalist exploitive corporations to out compete and ultimately buy or destroy coops.
Coops that exist in very small not very profitable niches may survive in the form of small businesses that make enough to survive but not to thrive its hard to see how this has any effect on the other 99.99% of the economy where most people are obligated to live.
I've studied and visited Mondragon before, and hosted their students at my company. It's very cool, but I'm unsure how replicable the model really is.
My conclusion is that it emerged out of the unique environment of already high Basque solidarity, but even more so under Franco's oppression. After a few generations, they admit that the hardcore spirit is gone and made initiatives to try to restore it, but still some of the biggest co-ops have died or been sold off (ie Fagor).
My friends from there told me: "It's where your dumb cousin works", as it's very political with a lot of patronage kinds of networks that democratic elections at that scale tend to produce. They made a startup community there, but it seemed like most of the kids were trying to get out, not stay to reform the coop.
I think the Italian Emilia Romagna region cooperatives [1] may be a less centralized model that could be better, as it does away with the big organization that eventually rots, like any big old org.
Based on what I've heard I'd love to visit there and even have a chance to intern there. I'd like to see for myself firsthand what life would be like. Would it be boring? Would it be bureaucratic or unmeritocratic? Would that bother me personally? I don't speak Spanish, unfortunately.
Obviously this article gives a rosy picture. However, the renewed interest in alternatives is precisely due to the new forms of arbitrary oppression that 21st century capitalism inflicts on many people, so maybe that would be one pathway for Mondragon and other meta-coops to flourish. Who knows.
Moreover, it's not like actually-existing capitalism doesn't tend to produce its own forms of inequality. Maybe a sociologist or economist could show that the "patronage networks" in something like Mondragon are an effect of their structure but the overall negative outcomes are lessened/mitigated compared to the negative social outcomes of Western capitalism. A proper comparison would be an open research question.
That's too bad about Fagor, 10 years ago I ordered a pressure cooker from them but had it returned immediately due to an improper lid fit. That would've been around the time of its decline and eventual closing off. I ended up buying a 2x more expensive pot from a Swiss company, it's lasted me 10 years so far.
They also don't speak much Spanish there, as the Basques have their own ancient unique language (a non-Indo-European isolate actually) and culture due to their mountain isolation and resistance to everyone, even the Romans. The people I worked with there all spoke English.
You might try reaching out to these guys if you want to visit. They actually get a lot of visitors, and there's a whole tour program I did when I was there.
As far as the effectiveness of Mondragon, I agree that we shouldn't judge it by capitalist standards, but more ask: Can it survive within capitalism while still doing well by its people?
I worry that Fagor, etc. may point to that not being long-term true, but it has been around for a long time, so maybe not. I more think that their model is hard to replicate outside of their high solidary cultural environment, rather than predicting their demise.
Its interesting that Rojava wasn't mentioned here. After driving out Islamic State, they founded their own country in north east Syria, not widely internationally recognised yet but functioning much better than the rest of Syria.
They are still a developing country and by no means wealthy, but the average income in this area is double what it is in the rest of the country.
Might be because since 2019 and the withdrawal of the US military presence in NE Syria, the relative prosperity of Rojava has plummeted. This draws into question exactly how 'autonomous' said autonomous zone was.
> This draws into question exactly how 'autonomous' said autonomous zone was.
It seems like you're conflating sovereignty with economic dependence, which are two distinct concepts—being entirely economic independent seems highly geographically dependent. Few regions in the world are lucky enough to even have this option. For instance, you can be economically dependent on neighbors but still locally determine who runs the local courts. So it's not great evidence of how their society is run, particularly when other states—say, Afghanistan, where the current government has clearly exercised local sovereignty—have similarly been affected by the withdrawal of US troops and the seizing of assets.
To be fair, reality can often conflate those two concepts too. What I mean is that in some cases a lack of sovereignty can lead to economic catastrophe if people are willing to pillage your economy by force. As you note it depends on circumstance though - Lichtenstein can get away without having an army; Rojava can't.
Sure, but Rojava is very specifically cited by anarchists and left-libertarians in the west as an example of a principality that's self-sustaining and capable of existing apart from global capitalism. Until 2018, evidence suggested this was true. In fact, their economy, ie, the material basis upon which their society exists (which IMO suggests that there isn't a meaningful distinction here), appears to have been scaffolded by its status as a client of the US. None of this is really true of Afghanistan. It's not cast as some kind of role model, and it has no illusions of building a successor society.
Yeah that's on of the things that get hand-wavity when you bring up these city-state type plans as well as anarcho-whatevers. They generally wouldn't be big enough to defend themselves from religious extremists or nation states acting against them--many of them not even figuring in defense against other entities and saying "we're pacifists". That kind of stuff only works when external factors like aggressive neighbors don't figure in.
Most models include various types of People's Militia. YPJ is the military of Rojava. Interestingly, it's a military without a hierarchy, just individual teams with some basic coordination.
Yet with this they were able to beat ISIS when others had failed.
I mean, if you're going to make that kind of political argument you can claim that Western Europe's postwar prosperity and relatively strong welfare states are a by-product of America footing the bill for defense (plus the seed investment of the Marshall Plan).
Iraq and Turkey, as of a few days ago, are making a new agreement for a transport corridor and peaceful coexistence, which includes Iraq getting more reliable access to river water, and Turkey getting more reliable targetting access to Kurds with aspirations of self-rule.
Every regional power seems to periodically crush the population of their sector of Greater Kurdistan, and encourage their neighbors' sectors to start an insurrection.
The US has sacrificed these people over and over again in pursuit of foreign policy objectives.
you might want to look at the social.coop Mastodon instance (or cosocial.ca if you're Canadian).
Not only has the community on both those sites been a breath of total fresh air for me, I am not worried about the server I'm on having decide between disappearing and selling ads, and I feel like I'm partaking in a social enterprise.
Just recently social.coop had an open vote on how to donate some of our surplus to the open software we use and organizations that promote cooperation. It's been so nice to see and be apart of.
cosocial.ca charges CA$50 for its annual membership. Omg.lol charges $20/year for Mastodon and a bunch of services and for $29/year, I can offer Mastodon, Lemmy, Matrix and Funkwhale, with 250GB of storage.
It's not "social washing" if it's actually a working co-operative.
We all collectively own the funds, and if we ever want to lower yearly rates or pay our members dividends from surpluses, members are free to put it to a vote.
Part of the reason we run a surplus is to deal with any unexpected costs (they don't just scale with users, but also the popularity of users on our server), but FWIW I think we should open up a pay-what-you-can tier much like social.coop has. Thanks for reminding me, I'll send it to the coop for consideration.
What would be the point of "paying dividends from surpluses", if the funds are getting in and out of the same (collective) pockets?
And if "everyone" owns the coop, then why do you need to get the surplus in the first place? Seems to be it would be just fine to say "Every month we run a report of the total expenses, and every member pays an equal share".
It's easier (both psychologically and financially) for users to budget for $x per period - with an explicit or implied promise that it won't ever be more than that - and it's easier for the org to plan for y users at $x, than it would be for either to adjust to paying / chasing $z period.
It's a fairly common pricing strategy, which offers stability to both clients and organizations surviving on shoestring budgets and good-will.
If you want to be protected against unexpected costs, you buy insurance, you don't overpay "just in case".
All I am saying is that the coop (at least cosocial.ca) is not more capital and resource efficient than any good old service provider. We are talking here at a 250% price difference for less functionality. How would you justify that for orgs on a shoestring?
What I am saying is that part of entering a contract with a service provider is insurance, e.g, SLA.
The middleman (in the case, the business providing hosting services) also has a vested interest in pricing risk properly and in reducing the costs of accidents.
I don't think that's quite the way to look at it. Insurance is for disasters. Unexpected costs should be covered by a reserve fund - so, in effect, you self-insure for that kind of thing.
Neither of us know anything about the financials of this group, but I can imagine a scenario in which they catch on, and their userbase scales 47x overnight (I mean, they're hoping for that, right?) and they need to spin up new resources right now. Good luck getting someone to write a "we got really popular" insurance policy, let alone pay out within the matter of hours / days they'd need the money. The "extra", right now, could be going towards filling up their reserve fund. Or not - we don't know - but that would be one of any number of legit reasons for asking for more than marginal-cost contributions.
Anyway, people supporting this aren't doing it out of an entirely economic cost / benefit calculation. They believe in whatever mission the org has, and have a high-trust relationship with it, so "paying" more for whatever "product" won't be a concern for them (at least right now). The contribution model the organization has chosen is ideally suited for that sort of (not purely business) relationship.
This group likewise doesn't interest me, but I can tell you stories about organizations I've belonged to and / or helped run that have worked that way more successfully than they would have in any other.
No, insurance is the basic tool for anyone dealing with risk management and financial planning under chaotic variables. One class of these variables are "disasters", but "people get old and less productive in unpredictable rates" is also something that warrants insurance (pensions) and there will be plenty of people making a living by buying and selling options trading in the commodity markets, which also can be seen as "insurance"
> and their userbase scales 47x overnight (I mean, they're hoping for that, right?)
Why would they? They are not looking for boundless growth, just a sustainable operation for their servers.
> They believe in whatever mission the org has, and have a high-trust relationship with it
But what is this mission? "Run a service sustainably, without profiting of user data and contribute to the development of an open social web?" To me it seems there is not much else they can claim beyond what I said, and if that is the case then I can report that all of that is achievable through my run of the mill service that offers more services while costing 40% less.
Everything you say about risk-management is correct, but none of it scales down to non-profit organizations without employees. Pensions aren't involved, commodity trading is irrelevant, and insurance for four or low five-figures of "float" isn't practical.
Your services look great, and I don't "get" these guys either. The people who do are (for now) happy to contribute at whatever level for whatever reason. Not being a "competitor" (as you seem to be?), I'm happy to wish them well.
By the members; we all pay a tiny bit into the co-op each month. Most people pay 1 USD or GBP per month, if you use some of the other services we offer through organizational memberships in other co-ops (ie. we're a member of meet.coop for video calls, May First Co-op for Nextcloud and email and what not, etc.) then some people pay a bit more (normally no more than 3 to 5 USD or GBP).
It's interesting to read about Mondragon in more detail. I just came across the term in Kim Stanley Robinson's solar-system sci-fi epic "2312." The book (highly recommended) heavily references Mondragon; that's the name for the alliance / co-op of all of the planets and settlements that aren't Earth or Mars.
Just wanted to flag that there are areas in the US that co-operative enterprises do flourish and have knock-on effects. This is biased by my food co-operative experience but just to show that there is an alternative to unfettered capitalism where businesses help each other thrive.
- The Minneapolis/St. Paul region has so many food co-ops that there's a co-operative warehouse dedicated to serving them (and other businesses too) https://www.cpw.coop/
- New England has a multitude of 30-40 year old food co-ops (along with startups like mine) and has its own association of food co-ops to help advocate for better state policy/governance http://nfca.coop/
- National Co-op Grocers is a US-wide group that helps co-ops buy food at cheaper rates and provides a ton of great branding food co-ops who are members get to use https://www.grocery.coop/
I'd love to see more tech co-operatives sprout up someday... there is an alternative to VC that keeps ownership equal, and it's been all around us this whole time!
I also have a background in food co-ops (member owned), I was in the bakery of one for 7 years, then served on its board. Food co-ops are really interesting orgs because food is one of the things people can control in their lives so their feelings, neuroses, fears etc. come out.
When we expanded about 17 years ago we managed to drive a new Whole Foods that had sprouted across town out of business within a year. Haven't heard of that happening elsewhere. They had a terrible location which didn't help but I think it was more due to the loyalty of our customers who had buy-in (literally).
The anarchist culture of the 1800s and 1900s in Spain, especially the emergence of anarcho-syndicalist structures [0], is certainly one of the reasons for Mondagon's existence.
I think you misunderstood. I said if someone has heard the term "anarcho-syndicalist", there is a very high chance it's from the Holy Grial. Not 99% of people in the world are familiar with the term.
you're still overestimating how much you know about the world, by a lot. in the spanish-speaking world, for example, anarcho-syndicalism is much better known than monty python (though, not among programmers, because they speak english and write python). and i'm guessing that monty python isn't that widely known among arabic speakers, russian speakers, and chinese speakers, while anarcho-syndicalism is a significant historical strain of socialism a significant number of them are acquainted with
making any statement about 99% of the people who have heard of anarcho-syndicalism represents a staggering degree of unconcern for veracity, given how hard it is to get a handle on that group
I would venture to guess that absurdity is the easiest form of humor to translate by far. I can imagine the parrot sketch, the Hungarian phrasebook, how not to be seen, and most of the bits in "And Now for Something Completely Different" working pretty well with minimal English language comprehension.
When you start a co-op, just like any other bootstrapped business, you're staking your livelihood, but you're forgoing most of the upside. You also need several other people to agree with you. This screens out most of the risk, which is why they're perceived as working well. This works out great if you're lucky enough to be employed by one, but not great for people who need a job immediately.
That's a good question and it seems like it's difficult to separate from people's ideological ideas about whether they are good or bad.
My hometown in Oregon had a cooperative, Burley, that made bike stuff like trailers and tandems and some clothing. Word was that it was kind of dysfunctional because of how democratic it was even if all the people cared deeply. I think they finally ended up selling out to some outfit who scrapped everything but the trailers.
The paradox of worker-coops is that workers capable of successfully running businesses together are also capable of running businesses independently, so there's no need to form a co-op. It's those incapable of running a business individually or collectively that then form co-ops. Mondragon is the exception, not the rule.
Cooperation is difficult and does not scale well. One selfish person can act selfishly alone. But one cooperative person first needs to find someone else to cooperate with... and the other person also needs to have compatible skills and values... so it is often easier for the cooperative person to just give up, and work to make someone else rich.
And the more difficult project you have, the more extreme this gets. If it is something that most people could do, it is easy for the cooperative people to find each other. It if it something that only one person in a thousand can do, the one-in-a-thousand cooperative person will have a huge problem finding the rest of the team.
Put another way: Singers who aren't good enough to make it on their own form large idol groups (eg: AKB 48) to sell themselves, while those who are become stars on their own or form small bands with others of similar success.
Or to put it another way: Ground meat is great, but the components thereof by themselves are generally regarded as waste.
This whole train of metaphors is just bizarre and wrong. Singers who aren't good enough to make it on their own are never heard of or discussed. Ground meat made from poor quality meat is poor quality ground meat, and people do, in fact, grind the good stuff to make good stuff.
And I'm sure that plenty of people who could start a business on their own could start a business with the help and support of like-minded partners, and might even be better off for it. I'm not sure where we get the idea that founders must be lone-wolf savants.
>Singers who aren't good enough to make it on their own are never heard of or discussed.
Correct. I've definitely heard of AKB 48 and other idol groups; I have never heard anything concerning any specific member of one other than randomly showing up on a cheap variety show long after they retired ("graduated") from showbiz.
>Ground meat made from poor quality meat is poor quality ground meat
But it's generally preferable to the poor quality component meats, which was what I tried to allude to.
>people who could start a business on their own could start a business with the help and support of like-minded partners,
People with the chops to become founders on their own can also become co-founders joining with other similar people.
People without the chops can't become founders without joining others to become co-founders.
Basically: All apples are fruits, but not all fruits are apples.
> Why don't workers unite to democratically manage production?
Because the majority of workers are doing the minimum amount of work to get by, because ~50% of workers are below average intelligence, because those with the entrepreneurial skill and/or business management competence necessary to make this happen benefit more from the current system and have less motivation to mess with it.
I can’t speak to op’s emotional well being, but he is spot on with his reasoning. In the rarified air that most of us here inhabit, it’s easy to forget that for every college professor there is someone for whom tying their shoes is a significant cognitive challenge. For every really smart person, there is someone who lacks the cognition to participate meaningfully in society. For every brilliant individual, there is someone whose mental capacity puts them in need of lifelong care.
The bell curve is a bitch.
The average person just gets by and doesn’t think all that much about anything outside of their immediate surroundings. For most, politics and such is a team sport, not an intellectual pursuit.
It’s an uncomfortable fact of life, and those that have talents and gifts above the norm are by default responsible for guiding and advancing society. We ignore that burden at the peril of all.
The only thing either response to your original reply have done is provide uncontroversial and non-conspiratorial reasons why Mondragons are extremely rare. Calling that Social Darwinism is like calling you a Stalinist, a slander based entirely on a superficial similarity of your rhetoric.
I don’t think that asserting that intellectual capacity tends towards a bell curve distribution is an example of social Darwinism. I think that’s just called a testable hypothesis validated by a plethora of studies.
As for the idea that people that bother to think about things like their social responsibility to humanity are , by default, responsible for guiding humanity (because people that don’t think about such things will not take an active role in that effort , by definition) seems also uncontroversial.
In short, I have no idea what you’re on about.
That said, I’m with you on labor movements, and believe that unions and coops are generally extremely positive things most of the time.
I just don’t expect much from the average person anymore. Decades of observation has made me skeptical of the ability of the Everyman to act in his own best interests, on average.
It’s worth mentioning that it is apparent to me that this inability is fostered in no small part by people and entities that make it their business to subvert otherwise good faith actors that don’t exercise very much independent thought into pursuing goals and supporting policies that are explicitly or covertly not in their collective best interest. Gullible people are gullible, and they are exploited all up and down the political spectrum.
If everyone started at exactly the same point, there might be some validity to the idea that the ability to ensure one’s own security was a useful proxy for intelligence. But, clearly, that’s not the world we live in.
The bell curve explains why most people can't do difficult things. It does not explain why most of those who can do the difficult things end up working for someone else (rather than e.g. start a co-op). If stupidity was the entire answer, the smart bosses would be unable to find employees smart enough to work in their companies.
Some businesses only require simple work, so you could argue that they have one smart boss and many stupid employees. But there are many businesses that require highly qualified professionals. And those professionals have mostly been taught that their proper place in life is working for someone else. This is practically what school trains you to do for decades -- there is the teacher who gives commands, and the students who obey. And then you transition to a job where it is the boss who gives commands, and the employees who obey. I wonder whether a different kind of education would result in a different kind of a society.
Yeah, we take a lot of things for granted. Intelligence is relative, and so we do find a normal distribution when defining IQ with a target median and mode of 100. However, we don't have to construct a society where thriving requires a median intelligence! That's a choice made by those who, as you say, benefit more from the system.
It's not so simple to measure intelligence, anyway. I marvel at some of the things a below-average person does every day such as drive a car at high speeds on the interstate, or navigating political bureaucracy. Meanwhile, I'm two standard deviations above the mean but have ADHD and sometimes struggle with basic tasks that even people of below-average intelligence have mastered.
The contrast is so much at times that I can see the confusion and concern in the faces of those around me whenever I have an ADHD moment. Yet, I'm an expert in multiple subjects, a quick learner and have a well-developed sense of intuition. People are multi-faceted, and we're not going to get very far with over-simplistic models of intelligence.
Well actually socialism has been historically concerned with maximizing human creativity. Fourier’s utopian vision was “libidinal” work that aligns passions with labor. Marcuse has a similar view in Eros and Civilization. Chomsky views creativity as axiomatic for humans, and syndicalism the appropriate system for harnessing it.
> Socialists are always concerned with distributing production equally.
Not really. Socialism (the project of the labor movement) is concerned with workers being in control of their own work, not vessels for capitalist exploitation. Syndicalism is a form of socialism that emphasizes decentralization and federation, as opposed to command control. How resources are allocated under conditions of such federated governance is up for debate.
> "From each according to his ability, to each according to his need."
Socialism is older than Marxism and shouldn't be conflated with it.
> Where are all the creative products the Soviets made?
The USSR was a state capitalist/authoritarian regime, nothing like socialism.
The trouble with your definition is the violence necessary to steal the means of production so you can set it up for your workers. A totalitarian government is required to do that. The workers will be severely constrained in what they can do - like set up their own businesses.
You also conflation democracy with freedom. 49% gets subjugated by the other 51%.
> violence necessary to steal the means of production
You could argue that private property is theft, necessarily enforced by a repressive state, and reappropriation is justice. The general strike is non-violent (until the police arrive).
> You also conflation democracy with freedom. 49% gets subjugated by the other 51%.
The interesting part about decentralization is that it somewhat relieves this problem. Federation allows for complex arrangements that coordinate towards consensus. So it might not be necessary to subject populations to laws they don't agree with with such broad strokes.
> You could argue that private property is theft [...]
You could, but it wouldn't be convincing. It's a bit hard to convince me that things I bought or made I actually stole. Are you going to argue that if I hire someone to build a patio, I actually stole it from him?
The Soviet Union was notoriously poor at prioritizing consumer goods, it’s probably one of the reasons for their downfall. One must admit though that both thym and the PRC have achieved something in uplifting backwards feudal empires towards something resembling modernity. I’m not sure that could’ve been achievable counterfactually, and as we saw with the sudden free market capture of post-Soviet Russia in the ‘90s, with a much smaller body count.
Anyway, you asked for Soviet creative products and I’ve named one. For what it’s worth, I’ve also heard good things about Soviet watches, I had a coworker who collected them and they’ve been discussed before on HN.
Digital watches of far greater accuracy are available in a blister pack on a peg in the supermarket for $5.
When the Red Army invaded Germany, the number 1 looted object was wristwatches. Soldiers would have a row of them affixed to their forearms. In multiple books I've read, they were always looking for wristwatches.
My father (B-17 crew) was issued a wristwatch, but I've been unable to find it among his stuff. Timekeeping was essential for coordinated military operations.
> have achieved something in uplifting backwards feudal empires towards something resembling modernity
The USSR was described as 3rd world country with a 1st world military. The PRC launched their economy by abandoning Marxism and embracing free markets. Cuba is a mess as it still tries to hang on to Marxism.
I did read the Soviet watch article when it was here - most interesting!
Cheap digital watches lack the aesthetic charm of mechanical, not to mention are dependent upon battery power.
> The USSR was described as 3rd world country with a 1st world military.
And yet, tsarist Russia was even poorer and had worse standards of living. Pointing out that a change in state led to a difference in quality is not a moral judgment, nor does it necessitate an endorsement of that change.
That’s why cooperatism is superior to socialism and capitalism. It’s a free market of worker-owned companies, creating things by running their businesses together.
The free market is a set of principles between companies, not a principle for how companies need to be organized internally. Capitalism is based on single-owned companies. Cooperatism is based on worker-owned companies. Cooperatism is a better free market based economy. It’s capitalism 2.0.
Ah, the starry-eyed utopianism. Marxists and Objectivists are truly funhouse mirror images; they may look completely different from one another, but both belong at the carnival.
Free markets are a ideal which has never been achieved, much like socialism. There is, and never has been, a market without regulation, and with only voluntary participation and without stolen goods being exchanged.
Does the Basque region produce more engineers than other areas? I'm guessing their issue is more tied to the demographics of the area they are in and less of the compensation side of things. It's far harder to commit to a coop where your contribution is valued thousands of miles away and you don't have the immediate stake in things (e.g. your bar, bakery, barber, etc)
However, if your issues are tied to local characteristics, then (in maybe an abstract way) you still have another fundamental obstacle to scalability, not related to compensation..
(FWIW i think an interesting related question is whether YC might be able to scale outside SF if they werent so into the slogan “do things that dont scale” — which i sometimes interpret as the viridical paradox “scale by not scaling”)
There are a few. There's a tech coop federation in the UK for instance. A big hurdle for efforts like this is access to finance meaning they often have to be bootstrapped.
By historical reasons the Basque country has an special tax regime and economical benefits from the Spanish government. This may have an influence on the outcome. Is easier to win when the other run handicapped, and not so easy to replicate it if we remove that context.
Most people also ignores that this system exists. Out of Euskadi, the name is more associated to the (in)famous band orchestre Mondragon, that was an appropriately anarchical mess, part circus, part rock band.
It might be a lack of education (not a value statement). Socialism in Spain was not established at once. It was an effort spanning many decades.
If we would suddenly find ourselves in a medieval kingdom we would certainly need time (and help) to adapt to that system. Likewise, people from that period would need time (and help) to adapt to ours. Regardless of whether it is better.
Note that Mondragon is not a socialist enterprise. It's not obvious to me whether you're saying it is, but I think one of the interesting things about Mondragon is that it's somewhere in between the socialist-capitalist dichotomy. If you came along and said "good news, the state is in charge of all your businesses now" they would not consider their mission accomplished.
Socialism traditionally meant workers control over production. To the degree that Mondragon is democratic it is socialist.
Socialism came to be commonly associated with "State-capitalist monopoly" (Lenin) later in the 20th century but that does not describe revolutionary Spain at all.
There companies were mostly worker owned, democratically managed and freely associated within democratic regional and industrial cartels representing consumers' and producers' interests respectively. Highly advanced democratic systems. Larger companies were expropriated compulsory. Yes. But they were transferred into the ownership of the workforce. While smaller companies generally were free to operate as "private" enterprises though at a certain size that rarely made sense because all of industry was structured to serve democratically managed industrial operations.
Socialism is about social control over production, not worker control. That's the big difference here, so it's relevant to point out. A co-op gives you worker control within the framework of a private ownership society.
Realistically Mondragon is rooted in Catholic social teaching (founded by a priest). Thus it requires someone to be motivated by something other than money. Religion is one of the few things that will be able to inspire such amounts of work while forgoing most economic upside.
Maybe nationalism can do that, but keep in mind that when this was combined with nationalism we got Nazism (Nazism took lots of inspiration from Austrian corporatism which was similarly influenced by Catholic social teaching here). I'm not sure it's either safe or advisable to do this aside from religion
They don’t allow genuine innovation in any shape or form, and that in particular leads to highjacking by bureaucrats and degradation. So they may work in short term (work for some at the price of oppressing the ones who don’t fit well into the collective) - I’m from USSR for example - yet the result is predetermined.
That is flatly false. Worker cooperatives are every bit as innovative as any other form of private corporation. These are owned by workers not a centralized government. There are quite a few of them and you may well have purchased their products with it even realizing it. Two additional examples you may have encountered are Equal Exchange and King Arthur Flour.
There aren't more of them because they have a hell of a time securing financing when most businesses are financed through equity sales which they can't do.
Example of innovation please. I’ve seen first hand that no collective farm is able to produce nor SpaceX nor even EV nor even plant in time and harvest in time.
I'm not close enough to manufacturing to evaluate how innovative their approaches to factory automation are, but it's not like they're based solely on turnips:
The collective farm that produced SpaceX is the United States Government. It carried out all the research and development necessary to create and further the North American space program. And it is existential in furthering it to this day. Without this source of contracts, research projects and income SpaceX would not be able to produce its commercial spin-off products.
It looks like this system was created out of necessity; there was no viable product for what they needed. Necessity is the mother of innovation after all, and we find this sorts of innovation frequently in non-collectivized entrepreneurships as well. Still, very cool!
By this logic capitalism is the thing holding back capitalist farms from being rocket makers too? Or do you only apply it when you get to use the word "collective"?
Of course it is the logic of collective. In capitalism you decide how you'd want to spend your resources, on a farm or on a rocket. In collective it is collective who decides.
There are multiple Kibbutz in Israel that plant and harvest on time and are the major source of innovation for Israel's AgTech sector (which is only behind the US in terms successful startups).
It seems a bit premature to speak so generally about collectivism. It's quite possible that the USSR failed for reasons that do not apply to Mondragon.
Maybe once we've seen a few hundred of these come and go it'll be time for a general theory of their kind.
>It seems a bit premature to speak so generally about collectivism
2B people spent better part of 20th century doing the experiments, killing tens of millions of those who didn’t completely shared the ideas of the collective, and you think it is premature?
General theory is in the Das Kapital. So far the things have worked as described. People by mistake ascribe happiness to the outcomes calculated there while there is no such happiness predicted by that theory. Ie communism isn’t a happy place like some naïve readers think, communism is prison and oppression.
Totally. The USSR had no worker-owned companies. They all belonged to the state. There was no economy which is based on cooperatives in a free market, yet.
I think we can also say that the former USSR has also failed to achieve capitalism despite having 30 years to do it. So maybe there's some other factors at play.
Mondragon has lasted 68 years and I believe the USSR had lasted 69 years. Why do you think they will fail in the next year? Also given the speed of advancement has increased in the past 30+ years, it seems like they have kept pace a lot better than the USSR (or it's successor Russia)
I don't think the USSR is a great example. The region has been under the thumb of authoritarian dictators for a 1000 years and those who most strongly disagreed with this have for that millennium either left or died leaving behind a nation largely populated by the children of people willing to go along to get along under such a system. Cultures and circumstances leave a mark on a people not least by the process by which survivors are selected.
If anything the current situation stands to worsen that situation with smart young people who might contribute to a better future dying or fleeing.
But not BY Franco. Note in the article how the government removes social security support from the coops and they have to set up healthcare themselves.
Arizmendiarrieta wasn't a Franco follower at all. He fought with the Republicans and went to jail during the war. After that stopped writing in Basque, as that wasn't seen with good eyes in Franco times.
Frankly, people fight on all sides during wars. 20 years later, life goes on. Franco's government was in favor of co-ops and they flourished under his government.
Work syndicates, cooperatives are absolutely in line with the Falange. Straight out of the 26 points
"We seek redistributing arable land in such a way as to revive family farms and give energetic
encouragement to the syndicalization of farm laborers"
I love how this article about a co-op that values workers opens with a clearly AI-generated image that is indirectly derived from the effort of many unpaid artists.
Just like those artists have benefited from the unpaid effort of their ancestors who invented fire. Please let's stop acting as if contributing to civilization is some kind of horrible injustice.
If you make a picture and someone steals it, okay that's not fair. If you make a picture and someone makes a copy, also not fair. But if you and million others make pictures, and someone else looks at them and learns how to make their own pictures... that's basically how people were doing it since ever. Except now this process can also be automated.
Every artist who never studied the art of others, and invented their own style from scratch, has a right to complain, of course.
A thing that is kind of glossed over is: what is "ownership" when we talk about worker-owners at cooperatives?
> The profits generated by each cooperative are put to work for the benefit of the greater whole. Each cooperative gives 14-40% of their gross profits to their division (depending on the division), and another 14% to their parent company. The rest are invested back in the cooperative (60% of net profits), distributed among their employees (30% of net profits), and donated to social organizations in their communities (10% of net profits).
> Workers buy into their cooperative when they become employees, investing up to €16,000 into a personal equity account. They pay 30% of that investment upfront, with the remainder taken out of their paychecks over following 2 to 7 years. After two years with the organization, workers become “members” and start earning interest on their investment at a rate of at least 7.5% annually. If the cooperative does well, they might earn much more than that. Workers can pull this money out of their accounts when they leave the cooperative or retire.
... so it's not ownership, right? It's profit-sharing while you're an employee (the "interest" the worker gets is out of that 30% of net profits discussed previously), but you don't own shares in the company that you can then sell, like an employee who receives an RSU or receives and exercises an option.
In some sense, corporate employees that get some form of equity as part of their compensation are more literally worker-owners. I think the problem with American companies that have an employee stock plan is that the employee stock pool is a small slice of the total ownership, and employees don't participate in any real democratic governance. Despite being shareholders, they get far less information about the financial health or strategic position of the company than investors with board seats. Real partial ownership doesn't lead to real power or access to information. And the aim of the company is still to serve the larger investors, not the workers.
> In some sense, corporate employees that get some form of equity as part of their compensation are more literally worker-owners.
As soon as a worker leaves or sells their shares, these shares aren't worker-owned anymore and the interests of their owner can quickly diverge from the ones of a worker. That's roughly what a coop fixes I think.
I can kinda see how one can argue that this is a feature rather than a bug, but I still think this points to the more distinctive feature in these coops being democratic governance of workers rather than ownership.
I own shares of past companies I've worked at, but I don't have any representation in how the company is run. It doesn't matter if my interests have diverged from current workers, because I have no influence.
If a company compensates its employees partially with RSUs, and those employees own and can eventually transfer those shares freely, and the company was also democratically governed by its workers ... could you not have "real" ownership (by current and past workers) and still protect current workers' democratic governance?
yes and no, i’d call the distinction collective ownership. you can sell your shares (by quitting), or you can stay and participate democratically. but you can’t do both, and that protects your say in the company, preventing investors from overruling worker-owners.
> i have no influence
neither do the current workers. the issue isn’t retail investors, but the ones with board seats. if boards only had one seat for an investor, that’d be one thing, but usually workers only get a single seat, if any.
> protect current workers’ democratic governance
you could do this with preferred shares, voting shares, etc. investor shares are non voting, voting shares can only be owned by workers, etc. you still have to counter their concentration though.
Any organization that arranges for its workers to govern it has some organizing document that describes this structure. Any organization that arranges for its workers to become owners must pick mechanism for this to happen. My view is that these can be basically independent choices:
- A firm can pursue a profit-sharing-for-current-workers approach as described for Mondragon, or can issue RSUs or options ("real" and transferable ownership)
- And regardless of what "ownership" vehicle they pick, they can still be organized to be democratically governed by its workers (establishment of which need not be dependent on any stipulated "ownership"). I.e. your organizing docs can describe a board composed of current employees, elected by employees, etc.
I am skeptical of the claim that profit-sharing while you're an employee is "ownership" in part because you are incentivized to prefer that the firm take profits while you work there. By comparison, if as a worker your vested stake persists even after you leave or retire, you might be much more inclined to vote for large reinvestments this year (and for the next several) which may not yield a profit until after you've left. Temporary "ownership" may not encourage the same long-term view as ordinary literal ownership.
Cooperatives guarantee that only people working in the company benefit from the profit of their own work. If one can stop working and still take a share from the profits, everyone else would have to not just work for themselves and lose part of their profit to an increasing amount of people, who are not taking part in creating that profit. Cooperative guarantee that profit is owned by the people who create it.
I think you may be too committed to dogmatic stances to constructively discuss other possibilities. I think this is no better when it's from the collectivist side than when it's from the capitalist fundamentalists.
> Cooperative guarantee that profit is owned by the people who create it.
I don't think all the value created by workers is realized as profit immediately. Workers can create value which only shows up in contributions to revenue much later. If you and your coworkers figured out the design and manufacturing process for a new product and the product only goes to market after you retired, you helped create the profits even if they arrive after you left the firm.
If the coop structure as you narrowly define it doesn't allow workers to receive the profits of their labor in industries that have a long time to market or R&D cycle, then isn't that a recipe for those high value industries to be inaccessible to coops?
Try to imagine an alternate history where Nvidia was a coop. A lot of the value behind its current high revenue was done many years ago. Cuda was released in 2007. I don't know how much of the hardware has inherited from older designs. If only current workers benefit from the current high sales, has the organization really ensured that "profit is owned by the people who create it"? That seems implausible.
> I don't think all the value created by workers is realized as profit immediately.
And as the worker creating that future profit you are very well aware of that, plus everyone else working on the design and manufacturing is in the same situation as yourself. The good news is: all of you are also owners of the company. So together you can decide how an exit package should look like for people deciding to leave before the design reaches the market and generates profit.
The same situation in a non-cooperative is a lot worse, because you have no stake in the company. The owner might be willing to negotiate an exit package before you even start working there, but they also might not. Plus before working at the company, you have no idea what the profit margins look like and what you might be working on. It’s the worst time for you to agree on an exit pacakge. Also during employment you are in a worse position, because the owner(s) can just let you go, if you are the only one asking for your fair share of future profits. You don’t have a say in the company. Most often they see your current salary as your share of the profit, no matter how much profit your design might create in the future.
I understood from the article that workers remain working for the coop (possibly in different companies) until they retire, and then, the coop provides them with pensions; so they continue to receive value after retirement.
What if they pass away? I assume their shares are sold immediately and the money paid out to their estate.
Now suppose that all the work they did was in the R&D phase (and fundamental to the project) but the final product had not been released at the time of death of the contributor — so the profits had not been realized — thus the payout on those shares would be a small fraction of their true valuation.
Imagine if a novelist died just after submitting their final draft to their editor but prior to the book’s publication. Forcing the estate to sell off the book before it had a chance to hit the shelves — and become a bestseller — would be an outrage, yet the rigid nature of worker co-ops (cessation of work forces the sale of shares) guarantees this.
Where’s the cooperative in your example? Either you are a freelance author who has a contract with a publishing cooperative. In this case you have a contract with that cooperative and during the negotation process both sides decide together what happens in case of death before publication. Or you are an author inside a publishing cooperative, so you own part of that cooperative and decide together with the other authors, publishers etc. what will happen, if somebody dies before the publication of their book. In both cases the author is part of the decision of what should happen in case of an early death.
The example way above was NVIDIA. Suppose the person who passed away was one of the founding researchers at the NVIDIA worker coop. They developed most of the key technologies that go into a graphics card, but they died during the later stages of production ramp up, before the first GPUs are able to hit the market.
The issue is that the deceased researcher's contribution to the project may be so central and foundational that they may be entitled to a large plurality (or even majority) stake, but forcing the other worker-owners to buy out that stake to pay the estate would bankrupt the coop at this critical pre-production stage. Since only active workers are allowed to maintain ownership, allowing the estate to retain those shares and later receive dividends on future profits is off the table. This issue seems to tie everyone's hands and sound the death knell for the coop.
The novelist case was meant to show an extreme non-coop situation. I don't see any compelling reason for writers of books to join coops, since the writing of the book is the only hard part these days (and countless ways to self-publish exist).
I recommend reading more about existing cooperatives. They offer way better packages to their employees than manager-owned companies. This can also include life insurances, health insurances, child care etc. And since everyone working and owning a company, where the profits might come in at a later stage, you can be sure, that these people working towards that goal, will make sure that they have the security they require. Why wouldn’t they? It’s their job and their company. They have everything required to set up the necessary legal work.
The case with the novelist is also easy to answer. Publishers do more than just printing books. They also do marketing, host events, send authors to interviews etc. All of that work becomes smaller if you share it with others. Plus being new to the industry, you can get the help from experienced writers. Cooperating with other people has loads of advantages. I could go on for hours. Also nobody is forced to join cooperatives. Every novelist can decide to remain a freelancer. It’s basically a cooperative with a single worker. A lot of cooperatives are founded by groups of freelancers by the way, because already having a business mindset, having experienced the freedom of owning your own business and wanting to stay in control when collaborating with others, makes cooperatives the obvious choice.
You are always more free, have more options and are treated better when you own the result of your work.
Not all that different from shares in a private company, or an interest in a partnership or multi-member LLC. Many corporate shareholders cannot freely sell; the idea of being able to sell stock for cash whenever you want to is unique to public companies.
And yes, the real problem is information asymmetry. This is always the real problem. Arguably the secretary who knows everything that's going on with the company via watercooler talk has more power than the CEO whose underlings tell him only what he wants to hear. A lot of corporate owners, even powerful shareholders like the Crown Prince of Saudi Arabia, have been bilked by unscrupulous but savvy management who knows how to control information flow.
A workers cooperative is owned by its current workers. Are you going to argue that consultancies and law firms are not really owned by their current partners, either?
Profits belong to the people who create them, not to people who used to work at the same company in the past. Expecting future employees of a company to work for ex-employees in the future is unfair. Having worked for a company, doesn’t entitle anyone to remain on the paycheck until death, despite not working there anymore.
Living in a country with strong workers rights, this is not how pensions work. The pensions people receive every month are literally paid by the taxes which are collected from everybody and every company during that month. Pensions are not saved money from companies you worked for, but money coming from the economy at the time of your retirement. It’s a common misconception that the state has a big pile of pension money sitting somewhere that you then get your pension from. That’s just not how it works in reality. Another difference from pensions to receiving money from a company just by owning parts of it, is also that you don’t continue to be on a company’s paycheck when you quit. You need to reach a certain age to receive money and you get that money from the state, not the companies you worked for. That’s how pensions work.
> The pensions people receive every month are literally paid by the taxes which are collected from everybody and every company during that month.
That might be how your pension works.
Other pension schemes; eg Singapores and some other former and current commonwealth countries pay pension from the returns from 60 odd years of compulsary investment and additional supplementary investment.
That doesn’t change the fact that every month there are people putting money into that fund and people getting money out of that fund. The money you put in, is not the same money you get out of it. It’s still money that people working at that time, put into that fund. Nobody has their own personal savings account inside that fund. You only have a legal claim to a share of that fund once you retire, but that’s not the money from your paychecks and it’s not saved somewhere for you. A pension fund is not a collection of private pensions and it’s better that way. Because with inflation, your pension can increase, even though you didn’t "put in" that amount of money when you were still working. The government is able to increase pensions by shifting money from other parts of its balance sheet or by increasing debts or taxes to meet the pension demand. I’m sorry for Singapore if their state system works more like a private pension, because you don’t know how long you’ll live past retirement age, so you either take too much or too little out of that fund once you have retired and there is no adjustment for inflation. Yes, there are bad private pension systems. That doesn’t change the fact that you benefit more working in a worker-owned compay than in a solely-owned company.
I think that more important than ownership is the purpose of the company. Most companies have the purpose of making money. Few have a purpose which includes contributing to quality of life, unless that’s something which can be sold for a profit.
Not just making money, but making more money than they did last year, forever.
Like a company can't just be cool with the fact that they serve a profitable market niche and gainfully employ people. Investors need capital gains and won't just be satisfied with getting reliable dividends!
What different effects do stock buybacks have on corporate governance compared to dividends?
My understanding is both return $X/share of capital to shareholders, buybacks are just more tax efficient, flexible, and a little more difficult to see the direct effect of.
Dividends get taxed immediately, so there is more pressure to reinvest profits in the company to find organic growth which is captured as capital gains instead. That reinvestment can take a lot of different forms like R&D, training, hiring, etc.
Seems to be not only a Spanish but a predominantly Basque enterprise. Cooperatives are relatively huge in Italy, too https://coops4dev.coop/en/4deveurope/italy Although the structure is a bit less monolithic than Mondragon.
> Mondragon provides us with a successful, working model. It’s not throwing out capitalism, it’s creating a better form of it.
Can any people from this region tell us what the downsides of working for Mondragon are? The article only touched on lower pay.
Also how much does the President of the parent Mondragon Corp get paid? The often cited 6:1 or 9:1 lowest paid worker to CEO seems to be applied to CEOs of the various corporations not the president of the parent company.
“Lorenzo estimates that the president of Mondragon is the highest-paid position (level 6) with a salary of around €200,000. Managers and directors earn between €80,000 and €120,000.”
The article talks about this extensively; both the benefits, and the difficulty hiring American workers because of our (I'm assuming "our", but I suppose I don't know, there are plenty of other countries with similar cultural norms) more individual, selfish, culture.
Well I said that because being an exec tends to be much more stressful, and I saw the discussion about the difficulty in hiring engineers abroad, but not about the execs. But maybe it’s less stressful in a democratically run company where employees vote on plans.
>If the model is a good one, detractors say it can’t be replicated outside of the Basque Country, and there’s some truth to that.
The author doesn't speculate why, but I'd guess it's partly due to Basque ethnic solidarity. Mondragon sounds a lot like the kind of late 1800s / early 1900s syndicalism that later evolved into Italian fascism and German National Socialism.
Of course, another big "collectivist capitalism" success story is China, which is also fiercely nationalist.
I don't see either of those models working in the West on a large scale any time soon.
I've heard this story ever since I was a shit-eating Ron Paul voting right-libertarian. The whole "collectivist success requires ethnic purity" argument. I don't buy it. It is, inevitably, either an excuse to destroy functional collective institutions, an excuse to advocate for ethnic cleansing, or both.
To elaborate on my previous comment: if you want people to be less individualistic and more community-minded, and especially if you want economic organization to be more cooperative, decentralized and bottom-up, then people are going to need to feel a deep sense of buy-in and belonging, and you don't really see that in an undifferentiated mass of atomized "consuming and producing units".
But you do see it among the Amish, and the Basques, and the Boers, and in the kibbutzim, and in families generally, because kin relations are meaningful among humans and elsewhere in the animal world.
And I'm not arguing that "collectivist success requires ethnic purity", just noticing a correlation. Where you see apparent altruism in economics -- including nepotism in hiring -- you tend to find kin relations.
Probably the game theorists and evolutionary psychologists have it figured out.
It's true that, in those groups, a shared ethnic identity enables economic cooperation. But the lack of solidarity you observe is the result of a regime of coercion. The official policy: leave your neighborhood, family, friends, and passions for 40+ hours a week to build a capitalist's business. You have to do it to survive. And the police are there to make sure revolts don't break out.
The claim that work is inherently coercive is crazy to me. In order to live, we need food, clothing, shelter, comforts. Those take labor to produce. We've abstracted labor using money, allowing for specialization, so you can perform some specialized labor to provide for all your needs.
The needs aren't forced upon you. They're inherent. Labor is required to meet the needs you must meet in order to live (and live in comfort). They'd be needed even if no board of directors had ever sat in a meeting room. So who's coercing you? It's like a farmer hating his field: you're mad that companies 'make' you work to survive; a farmer might hate his field for 'making' him plant seeds to produce food.
Automation makes jobs unnecessary. We should build social infrastructure that allows people to pursue their passions with basic necessities guaranteed. This has been possible for awhile now.
Nonsense. You can’t feed people with machines. You need raw materials and you need land to produce those materials from. That productive land is already owned by a bunch of people who currently use it to grow food and sell at market for profit.
Are you proposing we seize their land? That’s what the Soviets did. Millions died. With the weaponry we have today it could be hundreds of millions or billions. All for what? So people don’t have to work?
Now suppose we do collectivize all the farms, this time miraculously without killing everyone, and we successfully set up the automation to feed everyone (despite the fact that a lot of crops still need to be picked by hand due to a lack of robot technology). We still don’t eliminate the need for work. There’s tons of other stuff to be done. Building houses, computers, trains, planes, automobiles, and new factory robots. There’s still tons of research going into all this stuff, maintenance and repair. People still need to do all this work. Who is going to pay them? Who is going to own what they produce?
If I build a robot in my garage to automate harvesting the peppers I grow in my backyard, do I own it?
And how did they come to own their land? You trace the claims back enough and it'll resolve to "some ancestor took it from someone else at the point of a spear". But we don't need to seize the land. A land value tax achieves the same goals while leaving in place all the nice free-market stuff you're talking about.
And how did they come to own their land? You trace the claims back enough and it'll resolve to "some ancestor took it from someone else at the point of a spear".
Yes, this falls under the same umbrella of theories that Nozick's rectification [1] falls under, where the same critiques and remedies apply.
A land value tax achieves the same goals while leaving in place all the nice free-market stuff you're talking about.
Now you're speaking my language. I'm fully on board with land value tax, as it purports to achieve many other goals that I value, such as fixing up a lot of dysfunctional city planning and development.
Only the poors need to. If you chose the right parents, you got a trust fund when you turned 18, and don't need to labor to afford life's necessities. There's just this spigot that gives you $5,000 a month, and you don't have to labor, ever. If rich kids get to live like that, why can't more people?
If we oversimplify a human's needs into clothing, food, and a dwelling, and ignore the concept of money, the industrial revolution has made it so that humanity is able to produce enough of those for everybody. It then becomes a distribution and coordination problem rather than a problem of there not being enough for everybody. Of course, if we abolished money there would be other problems, so it's still delusional, but if 100 people can make enough food and shelter and clothing for 1000 people using machines, why do the other 900 need to sit in an an office making spreadsheets five days a week?
It's not that simple, of course (because those machines have to come from somewhere), and homesteading is a thing, but it's food for thought.
The importance of "leftist" fascism is overplayed.
"Socialism" back then, much like "Human Rights" today, was generally associated with what is morally right. It was not an ideology of extremist groups. Fascism "evolved" from socialism same as everybody and their mother evolved from it.
And because of its dominance, everybody tried to exploit it, too. So you called your organisation "National Socialist Party" and your heads of propaganda copied the rhetoric.
Also, libertarian socialism was nowhere as developed as in Spanish society at that time. This is not the most surprising society to generate Mondragon.
>Mondragon sounds a lot like the kind of late 1800s / early 1900s syndicalism that later evolved into Italian fascism and German National Socialism.
Sure, if you dishonestly use their slogans rather than policy decisions as your barometer. What actually happened is that fascists co-opted the language of the left and deployed it in service of entirely different ends.
Another take on this kind of subsidiarity approach is Joel Salatin's "Memorandum of Understanding" which he talks about in detail in "Stacking Fiefdoms": https://www.youtube.com/watch?v=EbJc8i5B9RU
I read about Mondragon in Pickety's works. That's why I went to Mondragon. I was deeply disappointed, the city and the surroundings look very sad. It reminded me a lot of the former DDR (german "democratic" republic which was under russian control).
Basque people have a distinct culture. You can often figure out someone comes from there just based on their hairstyle, way of dressing or attitude. They will usually favor practicality and durability over style.
You may think it is sad, they may just think it is the way it should be done and that's it. I don't think you can judge the coop concept based on the impression you got from the city. Its inhabitants may on average feel happier than those where you live.
It's located in Spain, a country not known for its vast wealth. Plus, it's in a special administrative region in Spain, the Basque Country. They enjoy subsidies and favorable treatment from the regional government.
I'm from Spain, so I'm quite sure of what I'm talking about. Spain might be a highly developed country, but its gdp per capita is not too high compared to the likes of Germany, UK, France, Denmark, US, et al.
Basque country is, again, rich because it has an special tax treatment and could be considered a tax heaven to some extent.
The Basque Country has a GDP (PPP) of 108 [1]. Higher than France (101), as an average, or Italy (97).
I'd say its a well developed region comparable to Northern Italy. Both were badly hit by the Euro. Had they kept their own currencies, they'd be closer to Sweden or Southern Germany.
Indeed. All they got was inflation. Just like our government flooding the country with printed money. Same cause, same effect It's not a mystery what causes inflation, and inflation does not result in prosperity.
"Could we eventually create a capitalist paradise where democratically run companies use their profits for the good of their worker citizens? Could that even replace our existing governments?"
Dude reinvented the socialist mode of production but renamed it "capitalism" instead lmao
It's a shame there's not a YC like incubator for tech worker coops, cut out the VCs and have milestone based funding in exchange for a percentage of future profits that would be reinvested in future projects.
It's inherent to the way a coop works that it's not possible to follow the same path. There is no 7% equity to be given, only the repayment of a loan. The coop model does not promote taking risk and hence have many fail, yet a few grow very quick.
Another problem is law. At this point it favors the common ownership forms of business. Starting a coop is hence much harder than it should be. This is what i think where the "it's a shame" make most sense. We should make w-coops easier to start and give them tax benefits as they are on the long run much more beneficial/ less detrimental to society.
A possible model is to divide your shares into ownership/control class shares (reserved only for workers) and profit shares which can be bought/sold by third parties. This gives workers ultimate control over the venture while allowing third-party investment. I don't know if this has been implemented anywhere, but it's a possibility. It's not going to fuel explosive growth like VC funds do, but TBH I'm finding as I get more experienced that those types of ventures generally end up being trash dumpsters once the honeymoon phase is over.
If you invest you want some control. The law is very clear (lots of preceding cases) on your power as an investor in case of equity investments. In case of w-coop investment constructions as you mention the law is very unclear. Hence usually they start with basic loans (sometimes that the initial workers bare some responsibility for) or gifts.
I agree with many VC-backed startups develop toxic behavior.
I'm not a finance person, but my understanding is that co-ops more often raise capital with traditional loans.
While I believe you are correct that co-ops are not a great fit for the growth business strategy that VCs make their bread and butter on, I believe that on many metrics co-ops tend to be more sustainable than the corporate alternatives[0]. This means they are more likely to be around tomorrow to pay off a loan.
All this to say, it would be great to see more capital for co-ops in the form of traditional loans with favourable interest rates.
Especially in Canada, where capital is tight and productivity is low, I think incentivizing co-ops is a great idea.
The Canadian gov't offers some grants for co-ops, but they are a pittance. Making debt cheaper for co-ops relative to corps (maybe via additional tax breaks on interest?) is, I think super important.
Quebec probably has the single best cooperative financing ecosystem in the world (1B+$). There’s a need for more risk-driven investment instruments in the sector however to seed early stage ventures. Most of the funds end up getting reinvested in existing cooperatives who can already access traditional funding.
Are there countries with legal structures more friendly to worker coops?
For example I know Germany has structures like works councils that are foreign to us in N. America (though this is not a worker coop structure). However these structures historically arise from labor movements, not from top-down planning from authorities or electoral politics, which takes more than thinking up a design for a better society without considering who and why it would be implemented
I suspect that be in the more socialist countries.
Cuba has many, but also usually are state initiated and somewhat state controlled. China, Vietnam and DPRK have many "not true worker coops" also due to state control.
Finland, Italy and Basque/Spain also score high, and we're talking about actual worker coops there.
Yeah I'd imagine it would have to be a single holding company that has members join, instead of investing for equity.
So as an example you could have hypothetical opensource.coop that funds open source projects like signoz or posthog, giving the team a year of runway in exchange for a cut of future profits, with follow on funding if certain milestones are reached.
Same could work for "indie hackers" or boostrappers, merge a few successful companies into a holding company that shares office space, accounting, legal and etc, and reinvests a fixed % of profits to seed new projects that apply to join.
In a Co-op you put up your own money to buy into a co-op. This is the opposite of VC where an external party joins your org with money.
So a co-op model would only help to serve the already wealthy.
However, maybe it would be interesting to have a co-op for developer resources for example. As in companies or startups can buy into the coop in return for cheaper rates and more vertically integrated team augmentation.
Imagine a indie hackers founders cooperative, you take a few successful bootstrapped founders and start a new holding company that shares an office space and has staff to handle legal, accounting and all the other stuff that most engineers hate to deal with.
You offer founders that apply a coworking space and a stipend that can get renewed each year if the members of the coop agree to keep funding it. In exchange the new member commits to giving up 10% of their future profits that get split into an investment budget and dividends.
If a company is failing the members can vote to stop funding them and set them free of the agreement.
If a company needs way more funds and VC route makes more sense you spin it out as a c corp, convert the 10% profit agreement into equity and let them raise funding like any other startup would.
Start.coop (https://www.start.coop/) comes to mind, but I know I've read about others as well. I don't recall what their exact model is, so it likely doesn't match perfectly with what you're describing.
This was recognized by everyone from Karl Marx to Abraham Lincoln to Adam Smith. Smith even conceded that profit was impossible if workers retain their surplus value, which is exactly the point.
I bring this up because that's what capitalism is: draining the surplus labor value from workers to the capital-owning class. In feudalism, the artistocracy and th emonarchy extracted that value. Jeff Bezos is the new king.
Why do I mention this? Because it wasn't that long ago that this view was universally accepted. The Red Scare post-WW2 spread a lot of damaging propaganda that has led ordinary people to fight for the ultra-rich to have even more money, to their own detriment.
Walmart killing all your local businesses then leaving, leaving you in a food desert with a Family Dollar store maybe. That's capitalism. Locally-owned businesses. That's socialism. Monsanto agribusiness? Capitalism. Family-owned farms? Socialism.
Something like Mondragon shows that large-scale cooperatives can work. And the reason why these sorts of things aren't more prevalent is that laws are passed to make them difficult to set up or outright illegal. Many US states outlaw municipal broadband, for example.
And any country in the last 70 years that even thinks about nationalizing resource extraction finds itself having a coup that nearly always has the CIA's fingerprints over it.
Or we simply starve them to death under the sanitized euphemism of "economic sanctions" (eg Cuba, Iraq, Venezuela). I really want people to understand that we're not doing this for any moral reason. We're doing it at the behest of Western companies who would prefer to steal the riches of these countries.
Co-operatives can go a lot further than manufacturing too. It can be a solution for housing. Housing cooperatives cut out landlords, who are rent-seeking both literally and figuratively.
While this is generally true, it's also not the entire equation. For example, there's no gain without risk.
- When I work for someone else, I am offloading some of the risk to that person/owner. When someone starts a company and hires other people... if the company goes belly up, the founder loses their investment; the workers find another job.
- When I rent from someone else, I am offloading the risk of owning a property to someone else. If I get a job across the country, I don't need to sell my house at a loss to move.
None of this justifies people making insane amounts of money while others are starving. But neither should the worker expect to reap all the benefit unless their also willing to take all the risk.
So does the bank, and the state that (more often than not) subsidised said investment through diverse vehicles. If the bank goes belly up, we've seen what happens, we collectively contribute to save them... because we're collectively sharing all the risk of investment in our financialized economies.
I agree that some people don't want risk and others do, but as soon as you start sharing ownership that dichotomy simply disappears.
We don't collectively contribute to save shareholders. When a bank goes under the depositors are made whole through government insurance programs. Shareholders get nothing.
In 2008 I believe bailouts did go to companies to keep them afloat (and thus helped shareholders). However, TARP returned a small profit for the government, so it didn't end up being a gift of free money overall imo. (reasonable people can say that the bailouts were excessive and introduced moral hazard for sure).
> When I work for someone else, I am offloading some of the risk to that person/owner.
Workers generally risk their lives or simply injury. Owners "risk" capital. I put that in quotes because our government is typically set up to rescue failing businesses and by that I mean bailing out the owners. If the business fails, the owner simply has less money or they have to become a worker.
So who is really taking a risk here?
> When I rent from someone else, I am offloading the risk of owning a property to someone else.
We shouldn't treat housing as an investment vehicle. It is shelter and necessary to live. Every level of government is subordinate to the cause of increasing property prices as society increasingly views housing as a vehicle to build generational wealth.
The majority of housing in vienna is state-owned (so-called "social housing"). Any kind of state housing has been successfuly propagandized as a "slum" ("project") but there's no need for that to happen. The UK, prior to Thatcher coming along and dismantling the whole thing, almost completely got rid of landlords simply by being the buyer of last resort for owners that wante dto sell.
> None of this justifies people making insane amounts of money while others are starving
Our economic system is predicated on withholding basic needs for profit.
> If the business fails, the owner simply has less money or they have to become a worker.
The fact that you consider "losing everything you've saved up for your entire life, plus what you've borrowed, and destroyed your ability to borrow more" as "simply" is... mind boggling to me. I would rather work for someone else than risk losing everything by starting my own business (plus I prefer to develop software rather than run a business); that risk is _way_ beyond what I'm comfortable with.
> An economic system based on "to each according to his need" has been tried many times.
Have there been any attempts since the rise of the smartphone and the Internet? I'm only aware of attempts that predate them and those two things have changed capitalistic societies dramatically, for better or worse.
I don't think they've changed the way free markets work. If anything, it makes them more productive because of the efficiency of having better information.
Summarizing the past twenty-thirty years as "slightly more productive markets due to efficiency thanks to better information" might be oversimplifying things a bit, don't you think?
I can be much more productive these days because I have the information resources on the internet. In the early days, for example, I'd mail order books and wait weeks for them to arrive, and hope they had what I needed in them.
I also collaborate with people all over the world. That simply wasn't possible in the 1980s. I'd mail floppy disks internationally, and would use the fax machine for communication (at a dollar a page!).
There is risk to capital. The government does not bail out every business that fails. That's ludicrous. Investors like VCs can and do lose their investments all the time with no government intervention whatsoever. An owner is also risking in terms of opportunity cost - time lost to starting a business and failing is inherently riskier than working with similar talents and investing in safer assets like index funds for the potential upside of higher returns if the business succeeds.
Bootstrapped companies also come with risks to the founder's own capital and credit risk if loans are taken and the business fails to generate revenue to service them.
Depends on the field what you risk. Many white collar jobs will not risk their lives or injury, plus nowadays regulations should reduce these extreme risks.
Saying "owner simply has less money" can have many implications on their life. If they choose to put money in a company rather than have a bigger apartment/TV/car/whatever, I find it fair for that to be rewarded a bit.
I think it is disingenuous to think "basic needs" is simple to define, considering that there is no cheap and free energy source (and other resources). For someone living in a warm climate, the basic need for heating in north of Europe will look like a waste.
My opinion is that tax systems are completely outdated and they should use more "asymptotic/exponential/complex formulas". Sure a tax of x % on profit worked 100 years ago when most people were "closer" but with today's growth (of many things), you get too much concentration. But of course that would imply that people understand both tax and math, so most will not demand it.
After some initial mistakes, the Soviet system did provide basic needs. It was inefficient, badly led, conservative, repressive, ultimately undemocratic, and often produced very mediocre output (crappy houses, etc), but it ensured that everyone had food, shelter, work, healthcare, and education.
Neither full-collectivism nor full-capitalism are the final answer.
The Soviet system only was able to provide basic needs when it decided to overlook the black market. It also allowed farmers to farm owned plots of land and sell their produce as they saw fit. This was the only way to stop the mass starvation.
Not to mention, non-owner workers still bear some risk by virtue of the fact that they can be terminated at any time without cause. This in itself is a financial risk, as being without employment or income for an extended period of time can be financially devastating.
If we want to play the "risk grants ownership" game, then we have to be honest: at some point, the risk of the initial investment is paid off, and the risk the employees take on collectively matches or exceeds the risk of the investors. If we're being logically consistent, ownership would transfer as these risk pools shift. But we're not consistent, and our system doesn't value risk, it values capital.
there is a risk for the worker and renter, too. and opportunity costs.
my shelter not being destroyed is extremely more important to me and my life than my landlord who has insurance for such things, especially in a place with a housing vacancy less than 1% (aka very very hard to find housing). if i leave, they will have no problem finding a tenant to take my place. any repairs and maintenance are essentially paid for by my rent. they raised property taxes? no problem, just raise rent...
from my POV, seems like a low risk investment to be a landlord.
Other than the risk of being evicted from your rental, a homeowner has most of the risks of a tenant, plus more. And there are a fair number of protections for renters to lower that risk. There are some risks of the landlord being a bad player, which makes the renter's life worse.
The landlord has the risks that the renter doesn't (that a homeowner does); which is risk offloaded from the renter to the landlord. The landlord then has the risks of the tenant being a bad player, which can be extremely financially risky (worse than being fired from your job).
> from my POV, seems like a low risk investment to be a landlord
Your point of view is extremely far from the truth. Especially for landlords that have one or a few places they rent out, it can be extremely risky. Everything from tenants just deciding not to pay (and taking a year+ to evict) to a Pacific Heights situation, where the place is destroyed with no real recourse. Or, on the lower end, tenants just leaving the place in bad shape, with bugs/mice/whatever; that itself can cost tends of thousands of dollars to recover from.
a couple of days ago, i learned that my lease is terminated outside of my control. you want to help me find a new spot? it's very hard with a cat and a dog in this area. all of the available apartments will be at least $300-500/month more within an hour radius of where i currently live.
this puts my life in a very tenuous place (especially bc i don't have full-time employment, took an actual risk to make a living on my own). i don't think the landlord has that risk.
Turning commodity grape juice into commodity wine requires no appreciable extra labor compared to the required labor to prevent fermentation.
The grape juice vs. wine is a rather classic counterexample, but it's hardly difficult to come up with any number of other examples of value absent labor.
Winemaking uses far more, but does it really have to? Does the $10,000 bottle of wine really that much more labor in it to justify that price? or are value and labor only loosely related? If I get lucky and find some diamonds on the ground, have I labored a lot for the value of those diamonds on my patch of dirt compared to your patch of dirt. There's no value with absolutely zero labor, sure, but there's clearly a difference between a carpenter making 100 chairs, and a programmer making 100 copies of a program they wrote.
Grapes will naturally ferment themselves into wine over time, but grape juice essentially did not exist until the industrial revolution because we needed methods to prevent the fermentation. [1]
But there is very little value without tools. In fact, one could argue that all material progress has been in the form of better and better tools. One person with a combine beats 100 people with sickles.
Those tools are necessary for almost all of the value that labor produces.
So if we want those tools, in the real world we need to pay the producer of those tools. (Or make them ourselves, which is possible, but runs into division-of-labor issues.) The people who manufacture combines aren't a charity; they want to receive the value of their work too.
And unless the farmer (or custom cutter) has the money to buy the combine, then there's a third party in the situation - the capitalist, the person who provides the money to buy the tools that will give the increased productivity. That person usually isn't a charity, either. They need to get some return on their money.
But the place where I at least partly agree is this: The worker who knows how to use the tools is deserves at least part of the value provided by using the tool. The tool-maker deserves part of the value; the capitalist deserves part of the value; and the worker also deserves part of the value. (If you don't like the word "deserves", well, without all three parties, the value isn't produced, and none of the three are charities, so if we want the value, we need to give them part of the returns.)
And currently, you can make a very solid case that the worker is getting the short end of the stick. I can't buy "the worker deserves it all". No, the worker does not. But I can agree that workers deserve more than they're getting.
(In the cases where the workers either make their own tools or have the money to buy them, this argument breaks down. But in an industrialized society, that seems to be the exception, not the rule.)
Did those tools magically come into existence? Or were they made? Who made them? More workers. Where did the materials come from? More workers.
The point here is that everything we as a society do is so fundamentally interconnected that thousands of people contributed to pulling gold out of a mine, for example, both directly and through the tools that were created to make it possible then why are we concentrating the proceeds of this enterprise onto the capital owner who got a lease from the government (with the threat of violence backing it) just because they wrote a check to fund the operation?
> ... there's a third party in the situation
Yes, more products of labor.
> I can't buy "the worker deserves it all"
I don't believe you intended it this way but it reads as a false dichotomy.
I don't expect radical change in our economic system. I would be happy to see more cooperatives for housing and manufacturing (like Mondragon). This requires some class consciousness and collective action.
So much of our modern society deifies hyper-individualism. You ever wonder why that is? It's sold as "freedom" but it's really to manipulate you because there's a massive power imbalance between your employer and you. If you withhold work, most likely that employer will be fine. If that employer withholds work, you might end up homeless. The only way to counter that power imbalance is with collective action.
Modern political discourse is dominated by manufactured culture war issues. This isn't new. Post-Civil War there was fear in the South of emancipated slaves and poor white people uniting [1].
To be absolutely clear, I'm not accusing you of racism or similar. My point is to show how this is manufactured to divide workers. Even the idea of the "middle class" is intentionally divisive. Why do the interests of a white-collar (middle class) worker differ from a blue-collar (lower class) worker? Why are we making that distinction?
I'm pretty sure your economic terms are not what the consensus of professionally trained economists would say.
>>>Locally-owned businesses. That's socialism.
There is definitely nothing in the definition of socialism that says everything is locally-owned. Moreover, that can be a way to end up with things like Redlining and other institutional racial issues.
>>>There is no value without labor.
The great thing Marx did was show that everything could be converted to a value measured by labor. But, economists afterwards showed that once you have that conversion, you can do it literally with anything. We could have a system based on the number of bumblebees required to build a house. That is a normative judgement that labor is somehow special.
Now, our current implementation of Capitalism is clearly wreaking havoc on our environment. But it has brought the standard of living up across the entire world past a Malthusian cycle of more food means more people, means they eat the food, and we have starvation.
The same can be said for current implementations of Communism all across the globe.
Lastly, cooperatives may be a great solution for a lot of manufacturing and housing challenges. And when you get to the scale of a country, a co-op is just a government, and a capitalistic democracy feels a lot more like a co-op than a dictatorship or authoritarianism even with all its pitfalls. A populous who then really starts to demand through votes that we change to improve the blight of our fellow humans seems an even better place to live, if we can just get there.
> I'm pretty sure your economic terms are not what the consensus of professionally trained economists would say.
It's an oversimplification to highlight the main point: workers' relationship to the means of production. In capitalism, capital owners own the means of production. In socialism, the workers own the means of production.
IME most Americans not only don't know what socialism is (despite being opposed to it), they don't know what capitalism is either (despite supporting it).
> Now, our current implementation of Capitalism is clearly wreaking havoc on our environment.
It's doing an awful lot more than that. It's pillaging the Global South. It's impoverishing us under the massive weight of housing, medical and student debt. And it's quite literally killing people. People decry the failures of the USSR, for example, but 9 million people die of starvation every year. Why isn't this attributed as a failure of capitalism in the same way?
Because the failures of the USSR occurred entirely within the USSR's borders, under its jurisdiction, and were entirely within its power to resolve. Meanwhile, the 9 million deaths of starvation you cite are across multiple countries with multiple overlapping legal regimes and are multi-causal, from corruption to war and failed states like Haiti and Syria.
"communist" countries are simply countries that are still operating within Global Capitalism that happen to be run by parties that are made up of communists. They would also freely admit that. There are no communist countries because communism isn't here yet.
I know. Every failure of communism is because it wasn't really communist! I wonder where the tipping point of "true" communism is? Because the closer one gets to communism, the worse the results.
Free markets, on the other hand, work even if they aren't perfect. The more free they are, the better they work.
On the other hand, countries with more regulated markets such as European nations, the U.K. and Commonwealth nations, and Japan and some of the East Asian Tigers might have less pollution than the United States. You get Americans importing EU baby formula because they are more restrictive about what chemical additives can go into them.
Couldn't it just be argued that free market extremism is as much folly as a pro-central planning position?
> Couldn't it just be argued that free market extremism is as much folly as a pro-central planning position?
The trouble with calling free markets folly is they are enormously successful, in every place and time where they have been tried. The trouble with central economic planning is it always does badly.
BTW, one of the functions of government in a free market is to regulate the externalities - costs of doing business that are not borne by the business. Pollution is the most obvious one of those externalities, so calling a polluting business "extreme free market" is incorrect.
The paradox of maintaining free markets is that you often need state power to ensure competition is being done fairly. That means regulations, and intervention from time to time. That’s at least the ordoliberal line in Germany, at least, the Freiburg school. They seem to have built a quite successful postwar economy there. Endorsing free markets does not have to equate with an unquestioning obsession, bordering on fetishistic, with liberty.
I don't question it. We are agreement that a strong hand is necessary to reduce externalities that arise in the course of commerce; we are simply quibbling about what is within that purview.
>> Couldn't it just be argued that free market extremism is as much folly as a pro-central planning position?
You shouldn't have a problem demonstrating this then? It's easy to enumerate all failed central planned economies, there really never was one that succeeded. Why don't you give an example of country that failed miserable with millions of deaths because of too much free markets.
Why don't you give an example of country that failed miserable with millions of deaths because of too much free markets.
The beauty of capitalism is that it works (or seems to work for some people, for the time being) by externalizing its true costs to other countries, other social strata -- and indeed far into the future.
Though mortality rates seem not to have risen (and may in fact declined) in the U.S. during the peak depression years (1930-1933) -- as a global phenomenon, the collapse of a system based on "too much free markets" is generally seen as one of the primary drivers of WW2, so we would have to attribute some share of its 70-85 million fatalities this market-driven collapse as well.
And not just by accident. There's also the fact that "free market" interests and Western financial support were key to Hitler and Mussolini's rise to power in the first place, as the former saw the latter as a perhaps unsavory but ultimately necessary bulwark against the rising spectre of a global socialist movement (whether on the Bolshevik model or otherwise).
Plus the whole European colonial project in Asia, Africa and the Americas, and the several hundred million deaths that it brought to the table. Though to be fair, this wasn't so much a matter of any collapse of the free market system of the time -- but rather of it working exactly as it was intended, from the very start.
And of course now we're headed for a much larger disaster with likely at least as many hundred millions of deaths looming on the horizon -- in the form of climate change and its attendant disruptions, also very much a direct result of "too much free markets".
> The beauty of capitalism is that it works (or seems to work for some people, for the time being) by externalizing its true costs to other countries, other social strata -- and indeed far into the future.
Are there any sustainable socialist economies by any metric?
> European colonial project
Colonialism is not free market.
> also very much a direct result of "too much free markets"
Again, communist countries are the most polluted ones. The reason is straightforward - their economies produced so little, they couldn't afford environmental protection costs.
Are there any sustainable socialist economies by any metric?
China has hit it out of the park, I think it's quite fair to say. (Could easily name a whole bunch more, but gotta keep this short. It's also a moot subject, per my last item below).
Colonialism is not free market.
That's the thing -- "free market" societies have never really been free, once externalities are accounted for. But the multi-century European colonial project was no mere externality. Its genesis, ideology and economics were inseparable from the development of Western-style capitalism as we know it.
Again, communist countries are the most polluted ones. The reason is straightforward - their economies produced so little, they couldn't afford environmental protection costs.
I wouldn't be so sure about that. But this also gets into a much more important topic we've been leaving out: there's no dichotomy between "socialism" and "capitalism" -- and never was. Nearly every modern, large-scale economy has been a working hybrid of both systems.
>> or seems to work for some people, for the time being
It seems to work for any country that embraced free market ideas the same way socialist policies predictably don't work in any country that tried them.
You are seriously claiming WW2, colonialism and climate change is a direct consequence of people having too much choice? If only Germany had a strong dictator preventing people to be too free to choose, oh wait,...
The vast majority of folks have comparatively few meaningful choices available to them. About things like Android vs. iPhone, sure. But about things that actually matter -- like the fact that they have to work so hard all their lives; and that they probably have to drive a car to get there; that the oceans are filling up with microplastics, and their drinking water with something called PFAS that very few people had even heard of until very recently, and so on -- not all that much.
What I mean is that these bad things are the result of centuries of the elites of these partially "free" societies having too many choices available to them.
Or more specifically: of not having to account for the true costs of their choices.
How are the events you listed a consequence of too much free markets?
You just proved my point with your examples.
Collapse of the Soviet Union was literally a direct consequence of failed central planing. It didn't work that is way it collapsed, hence crash in standard of living. Pyramid schemes were also very popular in the eastern European countries before the fall of communism as well.
>> There is definitely nothing in the definition of socialism that says everything is locally-owned. Moreover, that can be a way to end up with things like Redlining and other institutional racial issues.
I read the OPs post as an example of propoganda (mega corp - capitalism, small company - socialism) not reality.
Same here. It's to display the hypocrisy of those in power who declare things in their favor as beneficial and those that are not beneficial as harmful and bad.
In reality it's almost the opposite, it's bootstrap capitalism for the little guys, and "socialism" and government handouts for the ultra wealthy. (I put socialism in quotes because this term is extremely commonly misused.)
As wikipedia says, "modern mainstream economics rejects the LTV" (for very good reasons). It leads to some pretty obvious absurdities if you take it seriously. For example, 10,000 people digging holes should be more "valuable" than one guy designing a microchip, because hey! The holes take more labor.
Nice try, but getting 10,000 people to dig holes (e.g. gigantic infrastructure projects) ends up costing much more than what it takes for "one guy" to "design a microchip"
Sure, it costs more, and everyone agrees on that. Where we disagree is whether it provides more VALUE. The LTV says that it does by definition, because labor = value, and therefore more labor = more value.
You may choose to disagree. Just as modern economists disagree with the LTV.
You are completely wrong. This stupid example of digging holes is dismissed even in the first chapter of Das Capital if I'm not mistaken. First because if you do not provide use value (like digging useless holes), you cannot produce exchange value. Second because what really matters is the social necessary labor to dig the holes, assuming that there is a market for this. You will just waste money paying people to dig holes if we live in a world with technology to use backhoe excavator.
Economy is not a natural or exact science. There is a mainstream. But this does not mean that there is no valid inquiries and theories outside mainstream.
The market does not always choose to use the maximum amount of automation for everything. For example, a small business may rationally choose to wash dishes by hand rather than paying for a dishwasher. Are their meals more valuable (because more labor intensive) than the big restaurant across the street that does own a dishwasher?
You are the one defending the LTV, not me. If value = labor, but not when that would be silly, it's a bit like saying F = ma, but not when that would be silly. No serious scientist would accept this formulation. You would be laughed out the room.
After millions of deaths, environment devastation, and political repression, Marxism deserves to be laughed out of the room as well. I hope it will be, some day.
The exchange value produced in the business with or without the dishwater would be exactly the same if they are from the same society. It is not the individual labor, but the socially necessary labor that is counted. Moreover, value is also entirely different than price.
I never said anything about "use the theory, except when its silly". What was silly was the example because of the lack of understanding of the parent comment: LTV does not work like described by that comment. You can not even properly criticize something if you do not understand it.
The moralist excuse to forbid or negate certain knowledge is also silly. Depending on where you live (USA, Europe), you probably post these comments in a society built (and perhaps even mantained) by an even larger kill count, but I never will use this as a way to refuse or negate discussion or knowledge.
I never said we should forbid discussion of Marxism. I just think it should be treated the same as Nazism, with which it shares many similarities. The general pattern of "find a minority, say that they are the source of all problems, argue for dictatorship so you can solve the problems" is clearly present in both. This is called "vanguardism."
I've already presented several scenarios where a different amount of labor did not produce a different amount of value. Your response has just been that "socially necessary labor" is different than "labor." But this is nonsense since we don't have any authority to tell us what is "socially necessary" and what is not. Indeed, we have many examples of socialist governments deciding that it's not "socially necessary" for certain groups of people to eat at all -- the Holodomor in Ukraine, or der Hungerplan in Nazi Germany.
> I've already presented several scenarios where a different amount of labor did not produce a different amount of value.
Your examples are exactly as expected by LTV. LTV agrees that they do not produce different exchange values. The problem is that you are just ignoring what the LTV says, ignoring the theory definitions and is coming with your own ideas of what you think it says. And when I try to give you what the theory says, you just say that it is nonsense, saying more things that confirm that you have no idea about what you are talking:
> But this is nonsense since we don't have any authority to tell us what is "socially necessary" and what is not.
You do not need the authority. The theory describes the functioning of free markets, and capitalism running without hindrances. But taking into account the material reality that you need nature + labor to socially produce things and that in one side you have production, at the other side you have consumption and these things need to be balanced.
Pro tip: LTV was the mainstream of economical theories during the era when Adam Smith, David Ricardo, Marx, and all other classical economists published their contributions. All them agreed with LTV. Do you really think that you can refute it using so silly examples? In fact, there are several criticisms and known paradoxes that applies to older forms of LTV, but your attacks are missing even these older and more naive forms. Which is expected: you cannot formulate proper criticism for things that you do not fully understand and did not study.
The LTV effectively argues that competition brings prices of mass-produced commodities down to a magical threshold, and that magical threshold is the aggregate cost of labor in order to produce whatever commodity is being examined.
The LTV absolutely accounts for demand (what capitalists call "value") and in fact requires it for its description of how capitalism operates. It's really just saying there are two forms of value: aggregate demand and aggregate production costs, with competition driving prices down to production costs. If you don't agree with that, I don't really know how else to help because it's kind of a universal truth in a mass production market economy.
This is a common misinterpretation of the labor theory of value. I understand it like this:
I am a capitalist and my money goes to pay labor to create a thing that I sell in a market. The workers create thing in the production process. I have captured a portion of the labor's true value based on the market, bringing me profit - what Marx called "surplus value."
I turn around and reinvest that profit into another business that brings me more profit. Rinse and repeat, forever.
But that profit is nothing but a portion of the labor's true value as reflected in the market price, and therefore the labor created the value. The market did not create the value. The market decided on a price to pay for the value created by the labor.
Much like "machines all the way down", value is labor all the way down.
It's not tautological because it assumes that __management contributes nothing.__ Management's decisions about what to build in, how to build it, etc... are worth __nothing__ to Marxists.
Related: when Marxism was actually implemented, they had big problems with not building the right things, and building the things they did build poorly. For example a factory was assigned the task of building N pounds of nails a day, so they just built one giant nail that weighed N pounds (and was totally useless) rather than buliding what was needed. Because it turns out, management is actually needed and useful.
[And so are price signals, but let's take baby steps here!]
The Marxist view is that capitalism is inherently exploitive. You said it yourself: the capitalists are "captur[ing] a portion of the labor's true value." That isn't something you say about someone who is doing an essential part of the work.
In the Marxist view, the work just inherently "happens" (like water flowing down a stream) and capitalists can only be like a water wheel "capturing the value" that's flowing past. Of course, this is bullshit, but that is the mentality.
It would be more accurate to say "modern mainstream economists". To say "economics" here is a real failure on Wikipedia's moderation. Because what they're actually talking about, is the Austrian School of Economics [1]:
> The Austrian school is a heterodox[1][2][3] school of economic thought that advocates strict adherence to methodological individualism,
"Individualism" is the key part here because it betrays the intent, which is to disempower people from acting collectively, such as by forming unions. This is a key tenet of classical liberalism so an appeal to authority like "modern mainstream economics" we're really just saying "neoliberalism".
Neoliberalism isn't a neutral account or critique of capitalism. It wholly embraces capitalism as a solution to all problems. Neoliberalism can pretty much be summed up as weaker/smaller government (because it hurts profits) and indivudalism (because collective action hurts profits).
> 10,000 people digging holes should be more "valuable" than one guy designing a microchip
That's an asinine example. I mean what hole are they digging? If it's the Panama Canal, that's pretty valuable. Also, the example of one person designing a chip goes to the heart of the problem that LTV addressses. What does that design do? Well, nothing. It only has value if you make something with it you can sell (or you sell it to someone who does). You want to fab it? Well, TSMC involves a lot of labor. ASML involves a lot of labor. The materials required require a lot of labor.
Plus there's the issue that the chip design itself is intellectual property, which itself is an enclosure (in the capitalist sense).
Everything we as a society is so fundamentally interconnected that it's arbitrary and selective to attribute the value created to a tiny few. And it's done for the gain of the few at the expense of the many.
Look. The LTV has been rejected by mainstream economists. And this has nothing to do with Austrian economics (which has also been rejected by mainstream economists, for different reasons.) Now of course, you may choose to disagree, and say they're all wrong! But that's the current academic consensus.
That's an asinine example. I mean what hole are they digging? If it's
the Panama Canal, that's pretty valuable.
It might be more valuable if they used construction equipment to dig it, rather than shovels. But that would mean acknowledging that "value" is different from "labor cost," which apparently is impossible for you.
Marx wrote a gigantic book called Capital and it provides a thorough analysis of investment and risk. He wrote a great deal of words describing how investment relates to surplus value (hint: investment is simply a capitalist's way of generating surplus value - profit, which is then used to generate more surplus value, which is... you understand the systemic contradiction here, I hope). You should probably read it if you want to discuss it!
If you think Das Kapital is scientific work, you will have no problem providing a reference to any successful society or a company following the principles from it.
I enjoyed reading Toliken's fantasy LODR very much, but my attempts at reading Marx's fantasies felt like hammering a nail into my skull.
The attempts at implementing Marxism all ended in misery and famine. What more would anyone need to know about it?
BTW, a capitalist investing money also entails risk. How it works is the more risk, the more potential reward. Does Marx account for risk? I ask that because the Marxists I hear never mention the essential role risk plays, they usually just assume there is no risk.
There are so many interesting things to learn that are reality (like reading history books), why waste the precious remaining few years of my life reading books promoting nonsense?
I read historical accounts about the Kennedy assassination, but don't waste my time on the conspiracy theory books. Nor do I bother with treatises on ancient aliens or UFOs. Or books on astrology, kirlian photography, ESP, flat earth, religions dogma, etc.
If Marxism worked, I'd be more interested in it. But it doesn't, so why bother?
I understand it well enough by reading history books on what happened in them. Have you ventured out of academic theories and read any histories of Marxist attempts?
Why should I waste time on a theory that has been proven false every time it was tried?
I'm not a Marxist so I have no interest in justifying their theories. However, if I made my personal brand all about being what a staunch anti-Marxist I am, I would hazard an effort to try to understand their position, if for nothing else but to understand why so many others have bought into it, and to be a more effective opponent against it.
Marxism is just one of many utopian schemes that do not work.
I do not need to study every perpetual motion machine design to dismiss them. It's their job to show that they work.
What amazes me is the people who desperately cling to Marxism despite its 100% failure rate. How can they make a career studying it and never notice its history?
Do you notice that nobody has been able to point to a Marxist success story, after what, 150 years of trying?
BTW, the fundamental flaw of Marxism is it fails to understand basic human nature - that people are selfish. You are selfish, I am selfish, everybody is. Marxism requires rejection of selfishness. This will never work. You cannot cajole it out of people, educate it out, indoctrinate it out, or shoot it out of them. They'll still act selfishly.
Free markets work because it creates a framework where selfishness benefits others.
> I do not need to study every perpetual motion machine design to dismiss them. It's their job to show that they work.
What amazes me is the people who desperately cling to Marxism despite its 100% failure rate.
Maybe if you bothered to try to understand the perpetual machine that everyone’s bought into then you wouldn’t be so amazed by people buying into it all of the time
Surplus-value as a notion is frankly completely barking mad, and bred from a mix of multiple different fallacies mixed together including the labor theory of value.
In what universe does water by the river cost the same as water in the middle of the Saharra desert? A plant worth the same whether it is local or highly exotic? Where buying lumber at $300 a cord to burn fair, but buying it for the same $300 a cord but operating a warehouse selling it for as so much as $301 a cord retroactively somehow robbing the lumberjack? The madhouse world of surplus-labor-value! Boy, if Lewis Carroll had a field day with imaginary numbers then he missed truly golden opportunities of exploring an utterly mental system which demands fixed globally perfect valuations to avoid exploitation!
> In feudalism, the artistocracy and th emonarchy extracted that value.
Feudalism was in some ways a bit kinder, because part of the basic arrangement was the expectation that the nobles would protect the peasantry (for pragmatic that's-where-the-food-and-supplies-come-from reasons, not ethical ones). Capitalism has no such expectations or incentives.
I'm all for more cooperatives, it's a good model. Operating in a system which doesn't compel that form of organization is what keeps them honest. Mondragon is a profitable company, emphasis on profitable.
The article talks a bit about how, while Mondragon is a pretty good deal for basic labor, they have trouble attracting high-demand talent like engineers, which they also need. In a free-market system, a worker's collective can solve a problem like that, by offering more perks, raising the 'level' for new engineering hires, waiving some amount of the up-front investment, or just getting by through, in effect, paying some of the salary in a nonmaterial reward of belonging to something which better meets some people's sense of ethics and fairness.
That's not how it works when the company you work for is also the police and the military. It's also not how it works when every company is compelled to organize itself this way. That compulsion leads to dysfunction, corruption, cheating, and at the extreme end, gulags.
So let's pass on all that. If you believe that worker cooperatives are a social good, as I do, buy stuff from them. Work for one, found one. It's working so far.