For all the fearmongering of the Red Scare, this is what socialism looks like. Socialism is an industrial co-op like this where workers are fairly paid for their labor. Capitalism is Walmart where all profits are captured by a handful of shareholders and executives, being subsidized by the Federal government through food stamps to employees and decimating local economies to the point where they're left with dollar stores.
There's a Tiktoker who is having the Amish build a barn on the land she bought in upstate New York and she keeps calling them "capitalist". The Amish in question are entrepreneurial for sure but that's not capitalism. The Amish keep their surplus labor value. It saddens me to see how fundamentally people misunderstand what capitalism actually is.
All we've done is replace the divine right of kings and landed aristocracy with the capital-owning class of the likes of Jeff Bezos. It's sad to see how many people champion their own serfdom when examples like Mondragon show it doesn't have to be that way.
The problem is that socialism doesn't scale without force. Eventually you'll run out of people who willingly go along with doing things for the greater good. Looking at history, once you get larger than a commune or coop it all falls apart. You need force to seize the means of production, and the leaders of this force never give up their "temporary" powers. You also need force to get people to do the necessary but undesirable jobs, usually resulting in a centrally planned economy, which history again tells us results in misery, famine, and failure.
It is also human nature that most of us want someone that tells us what to do. Humans consistently organize into social structures where there is a leader in charge, whether it is a patriarchal or matriarchal extended family structure, a tribe, a club, a company, or a government entity a leader always emerges.
Capitalism is very much like Democracy. It's the worst system other than all the others that have been tried.
There are other systems that we've tried which work much better than the corporate Capitalism that we have in the United States. Most notably democratic socialism/social democracy/mixed economies (with the exact dividing lines between those three depending a lot on who you ask).
I completely agree that capitalism as we know it is highly flawed, but history has proven that socialism is not the answer.
Think you are mixing up Communism and Socialism.
Socialism is alive and well and working.
Every major capitalist society today (including US) has a percentage of Socialism sprinkled in to keep it functioning. Pure capitalism leads to a brutish tragic world, so some socialism is added to at least keep people from outright starving and rising up in revolution.
Yes you're talking about hybrids of socialism with capitalism, which are absolutely the way to go. History has shown that nation-scale "pure" socialism (which in practice nearly always results in a flavor of Marxism/Communism) is even more brutish and tragic than "pure" capitalism.
What would you say about President Julius Nyerere of Tanzania? His term in office was characterised by a peaceful transition from British colonialism to such a 'pure' form of socialism (including a full public ownership of all land and enterprise). This survived for three decades of almost completely peaceful, slow, and steady economic growth before the 90s, when it democratically voted itself into the capitalist state it is now. In fact, the only war Tanzania fought in that period was against Idi Amin's Uganda, which was widely regarded as a far more brutish and tragic country than Tanzania could ever have been accused of.
I would say that it was one of the most successful attempts at nation-scale socialism, but ultimately still a failed experiment. As you said yourself the people themselves democratically voted for capitalism.
Above quotes were taken from https://en.wikipedia.org/wiki/Ujamaa
The entire world was socialist from the time of the Lubang Jereji Saleh cave paintings 40,000 years ago until 10,000 years ago. Societies with different classes only sprung up 10,000 years ago. They only scaled with force, and the literature from 4000 years ago to now attests to this.
Hunter gatherer bands in the Amazon live the way they have for 50,000 years - even prior to crossing the Bering Straits. Whereas societies where the capitalist mode of production predominant were barely even formed less than 500 years ago. Also from the time of the Paris Commune to the Cold War until now, it has been racked with threatening crises. Even in the US we see self-described socialist politicians being elected nowadays.
It's hard to make capitalism sound permanent when it has been so impermanent.
That's not scale though. Socialism works great in small loosely organized tribes, but fails at nation scale every time.
It doesn't even work that well at the local level. The Kibbutzim in Israel were socialist for like 70 years, but now are almost all mixed market capitalist in some form or another.
Capitalist internally or externally?
Do Kibbutz have highly paid CEO's that earn much more than the members, and subject them to pay cuts?
As pointed out in this thread, a Co-op is socialist internally by sharing wealth across more of the labor. But capitalist externally since it sells to a capitalist world.
As much as “noble savage” is a comforting story, the truth is likely more complicated.
https://www.bbc.com/news/science-environment-67940671
https://www.npr.org/2011/01/12/132853997/Amazon-Once-Was-Hom...
https://davidgraeber.org/books/the-dawn-of-everything-a-new-...
Technically everything is more complicated. In threads like this, people play fast and loose with terminology.
Well, for what it's worth democracy doesn't scale without force either. Somebody, i.e. the state, has a monopoly on violence, to protect our property. In any case, you're just talking about state based socialism, like marxism.
But there are other forms of socialism that do just fine and are alive today, like syndicalism. They work because they don't rely on a government to exist, correctly recognizing their power in industry.
The best years of America for the middle class were when there was a good balance between decent paying, unionized manufacturing jobs and the customers who chose to pay higher prices and get American products.
There was a time when paying for US-made products was paying for better quality products (among other properties).
As offshore manufacturing got better, buying American became much higher percentage “feel good” and much lower percentage “get better product”. Right now, there are some product categories where the highest-quality product in the world is not capable of being produced in the US.
Sadly true. There are also major product categories that are literally impossible to buy US made goods in even if you're willing to pay the premium for it. Additionally, many of the "US made" products are merely assembled here from foreign made components.
Syndicalism in practice is closer to capitalism than socialism, and the syndicates are the de facto state.
Mondragon's example goes exactly against all of your points. It's a 70k workers company ran as a co-op. You can have co-ops running and trading between them, the only point where capital is necessary is for investments in new businesses lines (in the sense of financing capital, not all capital, financing capital from banks can also come from co-op banks).
Undesirable jobs are done either way if people are paid, there's no difference if it's run by capitalists, the government or a co-op, you need to hire people and pay them. A co-op would work the same way.
Capitalism is definitely not like Democracy, democracy has been proven since ancient Greece to be a decent system to organise power, and it has evolved over time to be more inclusive. Capitalism has only shown that if left untamed and to grow on its own it will only consume more, exploit more, and remove freedoms of being a human being in the world if you don't pay up.
Capitalism is useful but every decade it seems to be reaching the limits of what it can be, no better version of capitalism has emerged, every evolution of capitalism has only magnified its destructive power. Democracy has done the exact opposite.
capitalism is about accountability and trust at scale compared to previous systems that worked on connections that didnt scale well across classes / countries / cultures. Bankruptcy, is probably the best idea came out capitalism.
Competition between humans can turn ugly wheter on economic or political fields and "common folks" do ends up as collateral victims. Thats unchecked human nature
To counter you, at nation scale I can list off dozens, perhaps even oven over a hundred highly successful capitalist nations, with generally happy and prosperous citizens, but I can't think of a single successful attempt at communism/socialism at that scale.
Eh, not a problem unique to socialism, or devoid from capitalism.
The history of labor in the United States is rife with both socialist (well, maybe anarchist) bomb-throwers and rich capitalists hiring private armies to gun down striking workers.
striking workers usually would occupy factories, property they had no right to "seize". If workers quit / stopped showing on mass, nobody would have done anything
Socialism is a big tent, by definition that's only one possible manifestation. Incidentally co-ops are not mutually exclusive with Capitalism (private property + market economy), for the same reason mixed-market economy (as practiced by most liberal democracies) represents not purely one thing or another. Co-ops are nothing new.
People don't want to live like the Amish.
The right to private property + market economy.
As I just explained, that's not what capitalism is. Capitalism is a relatively new invention (~500 years) that arose from the ashes of feudalism. Exact same economic structure. Different exploiters.
Consider this: markets exist in supposedly non-capitalist countries. They existed in the Communist bloc. We've got cuneiform tablets describing markets going back 5000+ years. Capitalism didn't create markets or a market economy.
This is what I mean when I say that not only do people not know what scoaialism is, they don't know what capitalism is either. Yet the instinct to defend it is so strong, particularly in Americans. That too is relatively new. Abraham Lincoln was a Marxist, for example.
Who says they have to? We can point to an example of people living co-operatively in, oh I don't know, the article of this submission?
Then why did market economies exist before and outside capitalism? Private property is a core tenet of liberalism (which really means "neoliberalism" today). Private property in capitalism can be more accurately traced back to enclosures, which are really an evolution of land grants under feudalism.
Private property under feudalism wasn't available to all. There can be no capitalism without liberalism. Property rights as a matter of law and everyone being equal under the law is essential.
Earlier partial market economies were in practice more like command economies with relatively small free markets in certain sectors.
Monarchs and nobles having estates is functionally indistinguishable from private property.
They key difference is that only nobles could have private property.
A market economy is one where resources (commodities, labour, services) are distributed primarily via the pricing mechanism, prices can be set freely by market participants and the market is generally open. It isn't merely an economy where markets exist.
Your examples were not market economies. They heavily restricted market access through guilds, hereditary jobs, serfdom, feudal law and trading licenses. They fixed prices through price edicts and decrees. On top of that, the majority of the population were subsistence farmers who also made most of their tools themselves. This means that the vast majority of resources were not traded in a market.
Really? You're just going to state this as a fact without any backing at all?
Capitalism has a definition, and you don't get to change it. https://en.wikipedia.org/wiki/Capitalism
They are State Capitalist. There's no supposition about it. That the governing body is captured by Communist ideologues has no bearing. Hence there are now billionaires operating in China and Russia.
They were re-introduced so fast it would make your head spin when Lenin's reforms were shown to be a disaster.
I did not say so, and this is perhaps where your confusion lies. I said Capitalism is the right to private property and a market economy. I did not say markets are strictly endemic to Capitalism. Although you'll find no scalable one in a liberal democracy devoid of Capitalism.
A co-op is not tantamount to a society, it's an employer. The existence of a co-op in itself does not jeopardize the right to private property, or by extension Capitalism.
This is why the quiet part the zealots eventually meander to is "see, we just have to force people to..."
Is this widely accepted by historians or is this a fringe theory? Marx's Capital wasn't published until after Lincoln's death, so I'm a bit skeptical.
To the OP's point, do you think living like the Amish is necessary to keeping surplus labor value?
Labor theory of value is bunk.
Gotcha. That makes your above point somewhat confusing, since it makes it a moot point whether people want to live like the Amish or not.
In my experience, people would rather be employees paid in cash whose amount is agreed ahead of time than partners where they're paid depending on the company's profits.
I have been wondering if you could make it work in Silicon Valley for a small firm. Take 2-10 people that could be founders and give them the alternative of being the Nth partner. They’d need to bring in 1/N of the profit to earn their keep. I think it’s doable.
They already exist, but aren't especially common.
As you point out, the challenge is always around revenue sharing. From what I have seen, they last maybe 5 years and then break up when people feel like they are putting in more than they are getting out.
The productive difference between the top and bottom half of the N needs to be less than the extra efficiency the coop provides the top half of N. This isn't easy.
Eg top performer brings in 150k revenue, receives 100k salary, but can only make <100k without the coop.
Others have brought up this issue when I’ve discussed it with them. I wonder if there’s a solution. Perhaps something in game theory? When productivity is more easily measured then there’s little debate - like making commission on sales.
There are a lot of solutions, each with different tradeoffs. By far the most common solution seen is limited Partnerships, where those individuals with enough Revenue and Leverage become the co-owners, and those that are replaceable are not co-owners but receives the salary based on Market rates.
I'm sure commission works well in companies where individual basically Works in isolation, but it is notoriously difficult to quantify productivity in teams and larger organizations. How much value does a engineer at Google create? Does a janitor at Google create? Of course you can divide the company profit by headcount, but that number is largely meaningless. Some people will be far higher some people will provide negative value.
For a co-ops, I think the game theory solution quickly converges on something that looks like a traditional company. You pay employees a market salary, and then split the corporate dividend proportional to salary. To account for differences in performance, the employees hire management too fire workers and give out raises. This works well for large co-ops, but obviously can lead to a lot of drama for a 10-person company
I have long suspected a model like this, borrowing from lawyer shops and worker co-ops, could be pretty good for software. Since software is sort of inherently project based, could have a mix of product and contracting, and could have wins both on the co-op side and whoever the co-op is doing work for/selling product to
I think that could change if the workers are not living paycheck to paycheck. It would also probably be possible to develop some sort of middle ground. For example, workers could be paid a conservative salary and then profits could be distributed as a bonus at the end of the year.
It could with hierarchy of needs, but what would the gain really be of doing so? Mostly ideological. And that is putting aside any of the other 'competitive balance issues' vs other business structures.
Doesn't that depend on how profitable the company usually is? I know plenty of people in the finance world who, if paid only their salary, would be searching for a different job.
The upside is larger, but is longer-term and uncertain.
You don't get the offer in the first place if it is certain.
Depends on how much say they have.
If employees have no say in how the company is run, CEO & board could easily run it into the ground (but jump ship with a gold parachute), then: yeah, most people will prefer a fixed paycheck.
But if regular employees are at the helm, company is more likely to do what's in the (long-term!) interest of employees.
Surely that'll make employees more willing to share in financial risks (+rewards!) of the organization. They're more personally invested in it - literally.
Let's hope this model gains more traction.
Socialism as practiced also implies heavy centralized planning to mandate these arrangements and then set price floors and ceilings to set production capacity.
The Amish tend to reject social ownership of land so they are not socialist or communist by any means. Distributist would probably be the best description with any mention in the literature.
Heavily centralised economic planning is a feature of Marxism-Leninism, not of Socialism.
well, also the modern corporation. I think the centralized planning aspect is actual orthogonal to the resource distribution/means of production aspect
The modern corporation is in no way able to mandate the corporate structure of other corporations.
What large corporation doesn't have central planning? Do you think every factory just makes up their own schedule and makes what they want?
To be clear, I'm usually against large corporations as well, because of this very point. Especially, when they -- as in America and many other non-socialist states -- use their lobbying power to capture the market via regulation.
However, there still is a fundamental difference between centralized corporate planning and centralized planning by the monetary authority. Corporations have to deal with market supply/demand, and we've seen enough examples of large companies simply going bankrupt to rest assured that large corporations are not invincible.
Centralized planning is only a feature of certain forms of socialism. It's generally not a feature of democratic socialism or the various anarchist forms of socialism.
This reminds me of the yearly complaint in French politics that CAC40 companies are paying monstrous dividends, to which the answer is always: If they are so monstrous then surely you should simply buy the shares yourself?
You could just be an Amazon or a Walmart shareholder by logging into your Robinhood account, unlike the feudal regime where to become an aristocrat you would need to be some sort of famous knight, which seems much harder.
First, intended or not there is an incredible amount of privilege in the idea that “everyone can be a shareholder”. An awful lot of Americans live paycheck-to-paycheck and struggle to afford housing and food. Increasing homelessness is, first and foremost, a consequence of housing unaffordability.
Second, owning 10 shares of Amazon doesn’t make you a capital owner. If you still need your paycheck to survive, you’re a worker, subject to the whims of your employer.
The really damaging thing about retirement accounts, for example, is that it has convinced people that they are current or future capital owners. It makes workers advocate against their own best interests.
I dare say that Americans not being able to afford housing has very little to do with Walmart or Amazon, since it was neither that decided to turn housing into a very safe and investable financial asset, but rather the government.
The definition of capital owner being someone who doesn't need a paycheck to survive is weird. Your average startup founder needs a paycheck and he is clearly not a simple worker. As soon as you own shares in a company(or a bond) you are a capital owner. The question is then how much that capital is worth and what you can do to make this capital worth more.
Do the CAC40 companies have fixed-percentage-of-profit dividend yields?
Dividends (can be) just writing cheques to yourself with your own money.
I mean depends on if they are mature or not, but the complaints in France are about the absolute amounts in euro, not the %s paid out(for example this year the complaints are about Total making a lot of money from oil and banks making a lot of money from higher interest rates, the proximal causes of both being completely outside their control).
Well, yes, since as a shareholder you technically "are" the company.
Many Walmart and Amazon employees could not, due to lack of capital.
Even if they did buy stock in their company, I think it's pretty clear that is very different from being in a co-op as described in the article.
Correct me if I'm wrong, but there's nothing actually legally preventing a Mondragon-type industrial co-op like this from existing in the US, right?
That it's not so common is an interesting question: does it get outcompeted by your standard corporation? Would people rather generally work as employees than take on risk as owners? Something else? I think in a co-op like this, employees would still be eligible for food stamps, and there's nothing preventing them from "decimating" a local economy, either.
I think this is "socialist", and it seems to be working, and everyone is happy, so more power to them. But my understanding is since there's nothing preventing people from setting this up, the "Red Scare" was not a bunch of people going, "hey, change the laws so me and my buddies can set up a co-op". Like, what's the actual policy change desired? "Let folks who want to run corporations and work for them do so, and let folks who want to operate in a co-op do so?" No, because that's our current situation.
Every part of our economy and government is dedicated to wiping out any form of socialism.
A developing nation even thinks about nationalizing their resource extraction? Suddenly there’s a coup with the CIA’s fingerprints all over it.
NATO is a foreign policy arm of the United States dedicated to crushing any leftist momentum. Hell, we recruited Nazis to run it.
We constantly back totalitarian regimes to crush leftists.
At a more local level we do things like make municipal broadband illegal.
Our government uses eminent domain to seize property for corporate interests.
The only non-terrorist domestic law enforcement the FBI does seems to be union busting.
We’ve started wars over communism.
We had private organizations like the Pinkertons crush collective action. Look up Homestead.
It was rumored that when the UK wanted a post-Brexit trade deal, one of our conditions was privatizing the NHS.
Every level of our society is devoted to crushing collective action.
In the Cold War, yes, because then it was assumed (rightly in some cases, wrongly in others) that any country who would nationalize their stuff was simply a Soviet puppet state following orders from Moscow. After the Soviet collapse, that isn't what the CIA (or American policy in general) cares about.
Everybody used Nazis after the war. Both the US and USSR snatched up every competent Nazi scientist, engineer, and intelligence officer they could and cut deals with them not to charge them with war crimes if they'd work for them. (Operation Paperclip for the US, Operation Osoaviakhim for the USSR). And of course NATO today isn't focused on containing Communism but rather the right-wing dictator who rules Russia today, and unlike in the Cold War, the current critics of NATO are almost entirely right-wing.
There are some large co-ops in the US. The largest iirc is CHS, a tier 2 co-op (co-op made of smaller co-ops).
The Barrier to entry is probably capital costs.
Probably difficult at this point for enough lowly workers to pull their money and form a company, open stores, and compete with a Whole Foods.
The mega corps already dominate and can undercut anything that is starting up.
Amazon is kind of like a fiefdom where if they see someone building a castle in the distance, they can send some knights out to attack before it gets too big.
What is "fair pay" for labor in your eyes? Is it the entire surplus being generated? Why is that considered fair?
Yes.
Because there is no value without labor.
When the company takes a loss, do you agree that all of the workers should go hungry?
Socialism (communism?) is usually framed as "workers earning their full worth" but the dirty truth is that it is more "workers earning their preset cut of the pie, which is independent of the work they put in".
So while the shelf-stocker might be earning $24/hr, their actual hard economic output is much less than this - $19/hr. The difference is made up by the salesperson making $26/hr, instead of $31/hr.
Many sales people might be fine with this sacrifice, but even more likely will not, and will tire of being the ones who need to sacrifice.
In a real company, it would be the shelf stocker making $13/hr vs their output of $19/hr, the sales guy making $26/hr vs their output of $31/hr, and some jackass who inherited an oil fortune making the surplus $11/hr from their economic value of $0/hr.
Is this really socialism? It seems more like a company with lots of owners. I can imagine that the local residents who must buy from this cooperative may feel pretty excluded, especially if the cooperative overcharges. The insiders can still screw over the outsiders. It's just the proportions are a bit different.
This is not socialism, it is syndicalism. Some argue that syndicalism is a type of socialism, but in practice, it behaves more like a type of capitalism.
Mondragon was founded by a Catholic priest and IMHO is more accurately described as Distributist than classically Socialist:
https://distributistreview.com/archive/mondragon-revisited?f...
wish more people understood the historical roots of the word "entrepreneur". americans conflate business/enterprise/entrepreneurship with capitalism. i think most people would be more open to these ideas if it weren't from the misinformation dating back to the red scare.
The semantic challenge is that unlike the claimed differences between communism and socialism, Capitalism and capitalism share the same word, similar to Liberalism and liberalism.