Dan Little: Worker-owned enterprises as a social solution

Dan Little writes that Worker-owned enterprises as a social solution.

The central insight of Marx's diagnosis of capitalism is couched in terms of property and power. There is a logic to private ownership of the means of production that predictably leads to certain kinds of outcomes, dynamics that Marx outlined in Capital in fine detail: impersonalization of work relations, squeezing of wages and benefits, replacement of labor with machines, and — Marx's ultimate accusation — the creation of periodic crises. Marx anticipated crises of over-production and under-consumption; financial crises; and, if we layer in subsequent thinkers like Lenin, crises of war and imperialism.

The shorthand for this is alienation.

The logic is pretty clear. When an enterprise is owned by private individuals, their interest is in organizing the enterprise in such a way as to maximize private profits. This means choosing products that will find a large market at a favorable price, organizing the process efficiently, and reducing costs in inputs and labor. Further, the private owner has full authority to organize the labor process in ways that disempower workers. (Think Fordism versus the Volvo team-based production system.) This implies a downward pressure on wages and a preference for labor-saving technology, and it implies a more authoritarian workplace. So capitalist management implies stagnant wages, stagnant demand for labor, rising inequalities, and disagreeable conditions of work. 

When workers own the enterprise the incentives work differently. Workers have an interest in efficiency because their incomes are determined by the overall efficiency of the enterprise. Further, they have a wealth of practical and technical knowledge about production that promises to enhance effectiveness of the production process. Workers will deploy their resources and knowledge intelligently to bring products to the market. And they will organize the labor process in such a way that conforms to the ideal of humanly satisfying work.

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Who owns the means of production greatly affects how workers are treated.

Worker management has implications for automation in a different way as well. Private owners will select forms of automation based solely on their overall effect on private profits; whereas worker-owned firms will select a form of automation taking the value of a satisfying workplace into account. So we can expect that the pathway of technical change and automation would be different in worker-owned firms than in privately owned firms.

In short, the economic and institutional realities of worker-owned enterprises are not entirely clear. But the concept is promising enough, and there are enough successful real-world examples, to encourage progressive thinkers to reconsider this form of economic organization.

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Getting workers to voluntarially increase their productivity was a big problem user USSR Socialism. We need to understand this problem in greater detail.

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Chris Dillow: The Wykehamist fallacy

Chris Dillow examines The Wykehamist fallacy.

I suspect it’s partly because of a longstanding assumption among much of the Establishment, of which the BBC is part. This assumption is a form of the Wykehamist fallacy, the belief that members of that Establishment are jolly good chaps, usually because they went to the right schools and universities.

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In truth, of course, the Wykehamist fallacy is an ancient one. Adam Smith was describing something like it when he wrote:

We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent. (Theory of Moral Sentiments, I.III.29)

I think Dillow misses the class basis for the Wykehamist Fallacy — it is the objective of the ideological superstructure to convince us everything is fine with Capitalism. Theire relentless message is that Capitalism is Good, and Socialism is Bad.

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Steve O'Brien: Russian Revolution's legacy worth celebrating

Steve O’Brien writes that Russian Revolution’s legacy worth celebrating.

In the contemporary context, however, it is capitalism, more than socialism, which is falling short. Voters are feeling disenfranchised by a political system which sees the 1% get richer, as rents, house prices, student debts and utility prices soar.

The powerful minority that dominates capitalism says it is not the system which is to blame for low wages and longer working hours, but rather refugees, single mothers, climate activists, trade unionists and the unemployed.

Their neoliberal answer to social and economic problems is to offer more of the same: more privatisation, tollways, coal mines and budgetary restraint.

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Rather than excuse the failure of Socialism in the USSR, we should examine the trajectory of Socialism there and seek out lessons for Australia.

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Paul Le Blanc: The Russian Revolutions of 1917

Paul Le Blanc writes about The Russian Revolutions of 1917.

The collapse of the tsarist regime thus left in its wake two centers of political authority: (1) the traditional politicians of the Provisional Government, who had little control over the people, and (2) the democratically elected soviets, which exercised more political power owing to support from the great majority of workers and soldiers. This system of dual power proved to be unstable. The instability grew as the moderate politicians proved increasingly unable to meet the rising expectations of the laboring masses.

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With armed workers and revolutionary troops controlling the streets of the capital, political realities now tilted in a much more revolutionary direction. The Russian workers and peasants saw clearly that the landowners and capitalists and their leading political representatives had actively supported Kornilov. Kerensky was badly compromised because of his earlier overtures to Kornilov. The moderate SR and Menshevik leaders were discredited for supporting Kerensky. The Bolsheviks—who had built an effective political organization and put forward the popular demands of “Peace, Bread, Land” and “All Power to the Soviets”—had greater mass support than ever before.

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Trotsky’s failure at the peace talks led to another crisis that undermined soviet democracy. After a fierce debate, Lenin persuaded a Communist Party majority in the government to accept the harsh peace terms. The Left SRs strongly opposed any agreement to the German demands, which included Russia’s giving up the Baltic states, Finland, Poland, and Ukraine. The Treaty of Brest-Litovsk was signed on March 3, 1918, and the Left SRs angrily walked out of the government and began organizing against both the peace settlement and the Communists. The Left SRs had a far better understanding of realities among the peasants than did the Communists. Their departure from the government opened the way for serious (sometimes even criminal) misjudgments by the government in dealing with the rural population. In particular, efforts to secure grain from the countryside in order to relieve bread shortages in the cities resulted in violent conflicts that undermined support for the Communist regime.

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In this same period the Communists carried out a shift in economic policy that was to cause lasting problems. Threats of economic sabotage by capitalist factory owners who were hostile to the regime led the government to take over more and more of the economy—much more rapidly than originally intended. Ordinary workers were put in charge of factories, and their inexperience as managers resulted in economic difficulties. The government’s expansion into the economy also generated the growth of bureaucracy. A bureaucracy involves a hierarchy of administrators, managers, clerks, and others who are supposed to coordinate and control complex political, social, or economic activities. Often, a bureaucracy becomes an extremely impersonal and relatively inefficient structure, notorious for its arbitrary power and unnecessarily complicated procedures. Some historians believe that as the Soviet bureaucracy grew larger and more cumbersome, what was left of political democracy and economic efficiency degenerated. This bureaucratic degeneration added to the severe strains of the civil war and the foreign economic blockade. These added strains, in turn, resulted in a devastating breakdown of much of Russia’s industry.

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As the USSR was experiencing significant economic development and becoming a major world power, the bureaucratic and authoritarian nature of the Stalin regime gave Communism the profoundly undemocratic connotation that it has for many people today. For many, socialism came to mean not economic democracy but merely state ownership and control of the economy. Even the word soviet became associated simply with the USSR’s dictatorial regime. Stalin’s successors in subsequent Communist governments of that country later denounced his crimes, but they were never successful in overcoming the dictatorial legacy. That legacy ultimately undermined the country’s future development, contributing in significant ways to the collapse of the USSR in 1991.

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Workers should learn from this history.

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GLW: Ireland's Che stamp sells out amid unprecedented public demand

Ireland's Che stamp sells out amid unprecedented public demand.

The Che Guevara stamp produced by the Irish republic’s postal service (An Post) has sold out its initial 120,000 print run. The stamp was released to mark the 50th anniversary of the Latin American freedom fighter’s murder on October 9, 1967 by CIA-backed Bolivian state.

The announcement confounds right-wing critics, who opposed the stamp. An Post has described the demand for the €1 stamp — using Irish artist Jim Fitzpatrick’s image of the revolutionary icon — as “unprecedented”.

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Right-wingers cannot understand the appeal of Che. They always to submerge the resistance of the past:

• Censorship of Che mural sparks uproar
• Che mural removed! A victory for intolerance and a defeat for freedom of expression!

For right-wingers, Che is a callous murderer. For the oppressed, Che is a liberator.

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