Richard D. Wolff - Worker Cooperatives versus Capitalist Enterprises & the Labour Movement



okay there's a number of things you've just put together let's put them you know let's deal with them one at a time number one cooperative ways of working are as old as the human race this is not a new idea this is not a concoction today of some utopian future it is a recognition that human beings have had alternative ways of organizing production from what we talked about most of the time and we've always had it and the really interesting question is why the co-operative mechanism hasn't been attended to talked about written about more given its history we have in the endless literature about slavery about feudalism about capitalism and so on why don't we have a comparable literature about the long history of various forms of cooperative labor number one number two cooperative is a name given to many different things when I talk about cooperatives I'm talking about cooperation in the work process I'm not talking about cooperation in the purchasing process for example here in the United States we have many thousands of what we call food co-ops what that is is a collection of people who get together and form a cooperative to buy their daily food they cooperate in buying it they don't cooperate in producing it they don't cooperate even in the store that makes it available to you they cooperate in the act of purchasing and they recognize that if large groups of people purchased together they can buy things for less money than they would have to pay if they buy individually that makes perfect sense that is indeed how capitalism works but that's not what I mean when I talk about cooperatives nobody the authority to tell you who can and cannot call what they do cooperative I'm just saying that what I mean and what the people like me mean about worker cooperatives is that they cooperate in organizing the work and basically what that means is no hierarchy no board of directors supervisors capitalists at the top deciding what you produce how you produce where you produce and what to do with the profits instead you democratize the workplace you say that all the people that come to work in a store or an office or a factory together one-person one-vote make all those decisions that's all it's not very complicated and as I say it has existed from time immemorial let me end then with a couple of examples one small and one large and I will choose as my examples existing businesses today that I personally have visited just so you know where I get my information from one of these businesses is located in the Bay Area of San Francisco California it is a bakery it is a bakery and a cheese store it is a bakery and a cheese store that has expanded and is now also a pizza restaurant it employs over a hundred people it has expanded over the last thirty years that it has existed because it is stunningly successful it is located in San Francisco Berkeley and other communities in that part of California everything they do is collective they all get together and make the decisions what are they going to sell what are they going to produce how are they going to do it what technology are they going to use what are their hours how are they going to divide up the income amongst themselves how much of a surplus for expansion are they going to remove from their income rather than give it to themselves use it all of those decisions normally done by the capitalist minority at the top is instead decided and debated collectively and democratically they have been stunningly successful either as successful or more successful than the capitalistic ly organized bakeries cheese stops and restaurants in that area by the way a few miles north of them in California is something called the Alvarado Street bakery even more famous a much larger entity has been equally successful in becoming one of the major bread making factories and distributors in Northern California I could give you many more examples the the number of worker coops is growing now as interest expands in them but what all of these examples are is relatively small these are companies that often start with 10 or 20 employees getting together and then they grow let me switch them to a large example in this case I'm going to pick the most famous in the world because it's something that people interested in this topic should explore it's called the Mondragon cooperative corporation it's located in the Basque Country in the northern part of Spain just below the Pyrenees Mountains that separate Spain from France back in 1956 this part of northern Spain was very very poor it had become even poorer because of the Spanish Civil War in the 1930s and then World War two so by 1956 this was a desperately poor part of Spain and a local Catholic priest named father Arizmendi gave a speech to his parish and he made a joke he said if we wait for a capitalist to come here to employers to give us jobs we will all die of old age before that happens so if we don't want to die sooner than later we're going to have to become our Oh employer and with that idea he set up under the protection of the Roman Catholic Church Oh a worker co-op in a little city of Mondragon in this north of Spain okay now we go to the present the Mondragon cooperative corporation today is the seventh largest corporation in Spain its total employment is over a hundred thousand workers not all of them but a large portion of them work in cooperatives worker cooperatives and in those cooperatives they have figured out not only how to grow from six to a hundred thousand in 2018 today they have competed against many capitalist enterprises in that part of Spain and they have won in those competitive struggles because it turns out that a co-op can be just as efficient often more efficient in producing goods and services for the minimum cost as a capitalist factory can and in part that's because in a worker co-op all the workers being owners and runners of the enterprise have much more of a commitment to making it efficient than the workers in a capitalist enterprise ever do that's why capitalists have to use up money to have counseling and music and benefits trying to get workers to have a feeling towards something they don't control that is not necessary in a worker coop because it's not a feeling it's the reality that they control the situation so in Mondragon for example workers decided that the highest paid workers should not get more than somewhere between 6 and 8 times what the lowest paid worker does they don't want terrible inequality what kind of inequality the kind we have here in the United States with a typical relationship between a corporate CEO and the worker at the bottom is more like three hundred to one not six or eight to one if you want to do something about the inequality that haunts the capitalist world this is how you do it they've already done it if you visit the city of Mondragon you'll see that they don't have the inequality that other cities even in Spain will show you unfortunately in great detail they've done other things they have decided that the workers will elect hire and fire the supervisors the exact reverse of capitalism once a year the workers in Munger Don meet and they discuss and assess the supervisors and if they're not happy with the supervisors they fire them the workers fighter their supervisors not the other way around and they've been doing this for the entire 6070 years that they have grown and been successful so here you have it worker coops that are small worker coops that are large these I picked of course those that have been very successful I'm not suggesting that if you have a worker co-op you have no problems worker coops fail just like capitalist enterprises do but it's a completely different experience when they fail they handle it in different ways they have mechanisms to cope better than I think capitalist firms do when there's a downturn they don't fire people they work other ways of getting around it and the point is they've done well there is a professor at the Leeds School of believes University in England School of Business her name is vir Jeanie pelota she is the leading business school expert whose research is to compare worker coops and capitalist enterprises PDR ole UTI FM turn up a hotel find her look at her work it's available through the internet she does the best job of literally comparing and her research has an unambiguous conclusion worker coops are more efficient production mechanisms then top-down hierarchical capitalist enterprises yes but let me begin by explaining why it's always been a struggle to get decent public services for the mass of people today fifty years ago a hundred years ago that struggle never stops and before I show you that let me explain why because in a capitalist system the success the competitive success of any enterprise depends on it being successful in competing with other enterprises that produce the same thing so one shoe producer has to worry that the other shoe producers will make a better shoe or a cheaper shoe and so there's this endless pressure in capitalism on each capitalist to make as much profit as possible so that you can buy the machine that allows you to compete successfully with the others you can find a new and cheaper source of leather in other words the more profit you make the better able you will be to survive and win at the competitive struggle well that means you don't want to use your money the revenue you earn in your business for anything other than willing in that competition you want every last euro every last dollar to be available so that you can compete therefore for example you don't want the government to come and tax away your profits in order to give people welfare benefits or public housing or free schools or health care you don't want this this is money you could keep for yourself and use to compete and survive better instead your ability to compete and survive is weakened because you are asked to help other people this strikes you as absurd and there's crazy and that's why the business community is always either trying to block social programs for the mayors of people or if they failed at that and those programs exist to attack them to weaken them to reduce them because that's in their need that that's what they need and they are angry and bitter and so it becomes very easy for them to ridicule the people who get help on the grounds that they're lazy that they don't really need this then this is a way of making them dependent on the government they should be made to go out there and struggle like we businesspeople are and you can even go to the other worker who earns an income tell him the same story your money that you need to send your child to school to get a nicer home is being taken to take care of these people who don't really need it who aren't victims of a system but are actually failures in their personal life this is a disgusting way of dividing people from one another it's usually wrong it is overdone at the very least it is divisive of the community that you try and live in these are all the costs of capitalism but it's hidden from people because the question of capitalism cannot be raised and you're only forever struggling who gets the money him or me or her and so on as a result no sooner do workers succeed make a struggle get a benefit then the capitalists fight against it that's why you always have this fight that's why it's always a problem that the capitalist especially when you're not looking take back a benefit that once had to be forced from that I'm gonna give examples from the United States because I know the history here better so let's go back to the last time that the working class in America rose up demanded fought for and God major social services it's the depths of the Great Depression of the 1930s in 1933 for example the rate of unemployment in the United States official by the government twenty five percent one out of four members of the working class had no job what that meant was every single American family had either a brother or a sister or a cousin or an uncle who had no work and that person became dependent on the rest of the family which is why the problem of unemployment was a problem for everybody right very serious nobody had prepared the American working class for such a situation the entire ideology of the preceding century was that the United States was a special place where things only got better where capitalism was exploding Lee successful the idea of a general collapse was unthinkable for America so there was no ideological preparation but the mass of the working class in the 1930s suffering this unemployment came together they formed the greatest union organizing Drive in American history we have never seen anything like it before we have never seen anything like it since in a matter of months millions of people who had never been members of trade unions whose parents had never been members of trade unions joined trade unions as a way to get through the Great Depression with less damage than you otherwise would have we also had two strong large socialist parties and one strong large Communist Party it's hard to understand but United States had those things and in the 1930s the Communists socialists and unionists worked together and as a bloc they went to the then President of the United States Franklin Roosevelt and they basically said the following to him not in these words but this was the message we voted for you to make you president you must help us the mass of people and if you don't we will not vote for you again you will never be president again and something else some of us the Socialists in the are prepared to make a revolution if you don't help us and remember in the 1930s everybody had a very clear up remembrance of the 1917 revolution in Russia which wasn't that all at that time okay here's what Roosevelt did he understood he was talking to millions and millions of Americans this was not a small labor movement this was a big powerful one becoming larger every day likewise the socialist and communist parties were strong organizations national so mr. Roosevelt went to the corporation's from which he came and to the political leadership and he said we have to meet these people we have to do something or else we're not sure we can survive and he said particularly to the corporations in the rich you better give me the money because the government has no money it's the Great Depression nobody has a job nobody's paying taxes the government has no money you must give me the money to take care of this mass of people and I advise you to do that give me the money so I can do it but I'm telling you he says to them in a room if you don't give me the money you may not have any money to give anybody pretty soon it was real clear and if you had a trouble understanding it every day there were pictures of communists led marches through the downtown of New York and Chicago and Los Angeles and Houston just to help you understand this was not a threat that was idle this was real okay here's what Roosevelt accomplished he split the industrial ruling class half of them agreed with him the other half hated him hated him felt he had betrayed them didn't think it was necessary to give the mass of Americans anything but a half was enough between the mass support he got from the working class and a half of the ruling class he was ready to go and here's what he did first he created the social security system it's important for people to understand before the depths of the depression we had no public pension system for people you got old you depended on your family or you depended on the church or you just died those were your options okay suddenly the president says I am going to give every person who reaches the age of 65 a check in the mail once a month for the rest of their lives no matter how long they live unheard of in the United States for the first time in 1933 we have a public pension system for people to rely on it costs a huge amount of money where did he get the money it's very important he taxed corporations and the rich the very thing that we are supposed to believe today can't be done mustn't be done is unthinkable politically he did it and as you'll see in a minute he did it for more social programs not just Social Security and did that destroy him politically not at all Roosevelt was reelected three times to be the President of the United States no other president ever had that before he was the most popular president in the history of the United States precisely because he taxed corporations and the rich to produce programs for the mass of people well what else did he do besides social security number two he developed and started the federal unemployment compensation program here's what it was if you lose your job through no fault of your own you didn't do anything wrong you didn't destroy a machine or anything like that if you lose your job because the company can't justify hiring you the government will give you a check for a year or two every week to help you work through finding a new job surviving we never had that before if you were unemployed before you went to your family to your friends to your local community and begged third for the first time mr. Roosevelt passed a minimum wage law you could not pay a worker at less than an amount of money that was enough to get a minimum standard of living for your family we never did that before we had never had unemployment compensation we had never had Social Security and we had never had a minimum wage forth and finally he went on the radio and he said if the private capitalist sector cannot provide work for the millions of Americans who ask only to have a job then I as the president will do it and between 1934 and 1941 he created and filled roughly 15 million jobs for Americans who were unemployed where did the money come to pay that where did the money come further unemployment check it all came from taxing corporations and the rich or at least a large part of it came from there proving that that's a viable politics so that's how the benefits that Americans to this day enjoy especially the Social Security system and unemployment compensation because the minimum wage has been destroyed here and public employment in the last ten years of the Great Crash of 2008 we didn't even discuss public employment in this country neither the Republicans nor the Democrats neither Bush nor Obama said a word about they didn't do it they didn't even discuss it that's how hard the capitalists pushed back against all of this that's why we have to keep struggling but the reason we struggle is because the capitalist system creates an in as incentive for the capitalists never to rest to either block services for the mass of people or if they can't do that like in the 1930s they couldn't prevent it well then they wait wait a few years and then begin to undermine it to weaken it and eventually when they could get rid of it it's it is a tragic waste of popular energy to keep fighting the same battle that's why those of us who are radicals explain to people don't keep fighting for another reform this is a system that undoes the reform as fast as we create them this is a problem of a system and it's the system change that is the only real solution you




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