Many people have come to the conclusion that capitalism must either be radically altered or replaced entirely, especially after the ongoing worldwide financial disaster created by Wall Street in 2008. At least a dozen recent books deal with the topic, including People Before Profit, by Charles Derber; Doing Capitalism in the Innovation Economy, by William H. Janeway; Democracy at Work, by Richard Wolff; Capitalism 4.0, by Anatole Kaletsky; Economists and the Powerful, by Norbert Haring and Niall Douglas; Bad Samaritans, by Ha-Joon Chang; and After Capitalism, by Dada Maheshvarananda. Some propose changes to capitalism, some say capitalism must be replaced entirely. [An Earthday update: Gar Alperoviz’ What Then Must We Do? is hot off the press, and is a thoughtful overview.]
Capitalism must either be radically altered
or replaced entirely.
A number of new laws in various nations are designed to escape the clutches of oligarchs who essentially take their riches from the poor, leaving suffering in their wake. Having finally seen the light, Latin American countries are relying on themselves to build their economies, rather than allowing themselves to be victimized by the unholy trinity of neoliberal hegemony, the IMF, World Bank, and WTO.
Ecuador is only one of the countries successfully clawing back their democracy and wellbeing. Under president Rafael Correa, the whole purpose of national law has been redirected to help the people, not American corporations. Among other things, there is to be no more borrowing for “restructuring” purposes (which always hurts the people), and no privatizing of necessary industries (which increases the cost of essentials). Any business that declares bankruptcy is automatically nationalized, and becomes available for sale to its workers to operate as a cooperative, worker-owned enterprise. The effects of these and other changes are readily apparent, and widely supported.
Latin American countries
are refusing to be victimized by the
IMF, the World Bank, and the WTO.
In Italy, the Marcora Law enacted in 1985 allows laid off workers to use their unused unemployment benefit to purchase a company as a cooperative venture. They thus have a better chance against capitalists who have decreed them redundant. There are a number of other specific instances of similar laws written with the actual persons who produce the goods in mind, not the rich owners.
I have written about the power of worker-owned and managed enterprises a number of times, but until recently I believed they had inherent limitations in size, and therefore limited effectiveness overall. I underestimated the potential of worker-ownership because the sheer size of capitalist corporations greatly outweighs them at present. But capitalist corporations are inherently anti-democratic, and in recent times their employees have had to bargain from a position of increasing weakness, resulting in the huge rise of inequality we experience today. Worker-owned enterprises are inherently democratic, and immune to the most damaging flaws of capitalism. They hold the key to the future.
Here are some ways in which new kinds of worker-owned enterprises might build stronger democracies with much more equality.
The Equality Bank would deal only
with worker-owned enterprises.
The Equality Bank would take only deposits from worker-owned enterprises and their worker-owners, and make loans only to them. Stock market speculation would be forbidden. An Equality Bank would be a small bank, run on conservative principles, and protected from crashes caused by mega-banks and Wall Street speculators. In this era of instantaneous communication, they need have no geographical constraints, and could operate nationally and maybe even internationally as the law allows.
The worker-ownership employment clearinghouse. Worker-owned companies could be linked up with people who want to work in a worker-owned setting. As with the bank, geography does not limit its activities. A worker from Arkansas might be very pleased to find a worker-owned company in Seattle looking for the right person.
Laws like those in Ecuador that require any business to become the property of the state the moment bankruptcy is declared, the state then required to offer the company for sale to the workers as a worker-owned company, not a capitalist enterprise. This would mitigate against the way takeover experts buy companies in trouble, then hollow them out by selling off their assets and closing them at the expense of all the workers.
Capitalism has reached a point of extreme inequality
from which it might not be able to turn back.
Various kinds of worker-owned businesses could coordinate the way worker-owned companies do business with each other. They might connect worker-owned manufacturers with worker-owned retailers. They might coordinate US worker-owned enterprises with offshore fair trade businesses and the like.
It is clear that the path capitalism has taken, while it may have improved the general level of income, has reached a point of extreme inequality from which it may not be able to turn back. Its serious shortcomings often wreak havoc with the lives of the producer-employees. This is because the entire purpose of capitalism is to direct all profit to the firm’s owners. The owners themselves rarely suffer from a failure of the business, whereas workers can lose everything, from their homes and security, to the education of their children, and even their very lives if they contact a serious disease.
Capitalism had its chance. It brought many worthwhile things to the world, but it easily succumbs to inherent flaws that create great inequalities and put the natural world at great risk. Perhaps the worst trait is that great capital wealth in the hands of a few leads too easily to corrupt control over government and the law. That describes the US today. Business enterprises that are owned and managed by all of their workers do not share these flaws, and have the potential to change the entire world for the better. For democracy. For equality.