Is There an Alternative for Capitalist Economics and Politics? Richard Wolff Says Yes
by Mark Karlin
Mark Karlin: Refreshingly, you offer a key alternative to capitalism in decline. You promote Workers' Self-Directed Enterprises (WSDE) in Part III of your book. What would be a succinct description of a WSDE?
Richard Wolff: Quite simply, a WSDE entails the workers who make whatever a corporation sells also functioning - collectively and democratically - as their own board of directors. WSDEs thereby abolish the capitalist differentiation and opposition of surplus producers versus surplus appropriators. Instead, the workers themselves cooperatively run their own enterprise, thereby bringing democracy inside the enterprise where capitalism had long excluded it.
Mark Karlin: In your sixth chapter, you contrast WSDEs with worker-owned enterprises, worker-managed enterprises and cooperatives. What are the primary differences?
Richard Wolff: Workers have a long history of multiple kinds of cooperatives. That is, workers can cooperatively own (e.g. their pension fund holds shares in the company that employs them), buy (e.g. the many food coops around the country), sell (e.g. grape growers who combine to market their outputs), and manage (e.g. workers take turns supervising themselves). All such cooperatives can and often do co-exist with a capitalist organization of production in the precise sense of workers being excluded from the decisions of what, how and where to produce and what to do with the profits. What makes WSDEs unique is precisely that they are about cooperative production, about ending the capitalist division of producers from appropriators of the surplus, and replacing it with democratic cooperative decisions governing production and the social use of its fruits.
Mark Karlin: Where does the much-celebrated (and world's largest) Mondragon cooperative model fit in with your vision of WSDEs?
Richard Wolff: Mondragon is the world's largest and perhaps most successful example of WSDEs' successful growth in competition with conventional capitalist enterprises. Begun in 1956 with six workers organized into a cooperative enterprise by a Spanish priest, the Mondragon Cooperative Corporation (MCC) now employs over 100,000 workers, is the largest corporation in the Basque part of Spain and the tenth largest corporation in all of Spain. It has extensive research and development labs generating new ways to produce new products and maintains its own university to train its workers and interested others in all the ways of running and building democratically cooperative enterprises. MCC is thus a remarkable testimony to the contemporary viability and strength of non-capitalist production systems.
Mark Karlin: I recently asked this question in another interview on labor and economics and received an answer that amounted to a sigh. Although there is definitely a growing cooperative movement in the United States, it is still struggling. What will be the tipping point that will persuade US workers that WSDEs are preferable to the current managerial capitalist system? So many workers in the US have been brainwashed that any alternative to capitalism is satanic and communist. How does an idea like WSDEs change from an intellectual concept to a grassroots labor movement?
Richard Wolff: As has happened often in human history, what provokes change is less any clear vision of where we go next and more the intolerability of where we are. Capitalism is no longer "delivering the goods" for most people.The circle of its beneficiaries grows smaller and richer and more out of touch with the mass of people than ever. In the US, this is particularly problematic because the rationale of US capitalism has long been its creating and sustenance of a vast "middle class." As capitalism's evolution destroys that middle class, it opens the space in minds and hearts to inquire after alternatives to an increasingly unacceptable system. WSDEs offer precisely that. Nothing better illustrates that growing interest than the fact that Democracy at Work is going into a second printing three months after it was first published.
Mark Karlin: Republicans and Democrats both tout the alleged benefits of free trade agreements, despite their lack of adequate support for labor rights and worker remuneration. One thing that free trade advocates claim is that by moving to lower-cost labor, products will be cheaper in the US. While this may be true in some cases, this hardly appears to be the case in name brand products (particularly clothes) and trendy hi-tech products such as Apple. For instance, I went to a retail store and looked at items made by Calvin Klein, Nautica, and IZOD. Not one of the items, not one, was made in the United States. Most were made in China and Southeast Asia. Supposing we assume a worker who gets a few dollars a day produces a Nautica polo shirt for $1. Add the costs of material and equipment and maybe we get to $3. Add management and shipping and maybe we get to $5 per shirt, maybe. But the retail price on upper end brand name polo shirts could be as much as $70. So the shirt is not less expensive; the company is just making a greater profit off of exploited labor overseas. Is that correct?
Richard Wolff: When US corporations producing for the US market move existing (or open new) production facilities overseas, their usual goal is more profits. They relocate to exploit cheaper labor, lax environmental rules, lower taxes, etc. If they lowered their prices, then the cheaper labor, lax rules, and lower taxes would raise their profits less or not at all. So they rarely drop prices much when they move and then only temporarily to gain market share (thereby pressuring competitors to similarly relocate). Of course, relocating corporations could choose to lower their prices, but profit considerations usually render that a last resort. Finally, corporations in lower-cost overseas locations can usually more easily manage competition among themselves than they do in the US (because local rules against monopoly are less effective and relatively low-cost bribes are more effective).
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