Comparative Economic Systems - Worker Ownership and Control

It has been a long time since I studied Comparative Economic Systems (in the 70's) and, needless to say, much has changed in the former Soviet Union sphere, and not much was ever known and/or documented in the "Western world" about "economic systems" in the Peoples Republic of China and in Cuba and other places. Much of what we hear or ever heard about changes in China, especially since the passing of Mao must be filtered through the lense of Western propaganda. With respect to Cuba, we get both reactionary Capitalist propaganda and eutopian socialist propaganda (such as the organic gardening and farming movement).

With regard to China we get charges of "State Capitalism", with respect to Cuba, we get promising reports of cooperative communitarianism in action.

Suffice to say, there is no perfect model, nor in a dynamic world rife with the horrors and continuing horrors of human history, could we expect such.

I hope that there are people on this list that remember and understand more about the economic systems in the second (Soviet sphere) and third (China, Cuba, and others) world when they were functioning at their best and their deterioration and/or adaptation in relation to the Capitalist pressures that have been applied. Such could lead to some interesting discussion and perhaps, at the risk of losing my ultimate cynicism, move us forward towards world unity in the hope of realizing an economic democracy.

From this point on, I want to discuss attempts to democratize the economy in the Capitalist world. There have been attempts at succession in the form of utopian communities such as New Harmony and various others that I can't remember to name. There have been attempts to compete, with mutual organizations (one person/one vote), the most salient being credit unions (which are very far from exemplary because they are in the business of making loans (reduced usury is still usury in a Capitalist Financial System which is fundamentally usurious)) and mutual insurance companies, which by their very existence in the Capitalist system have to compete for "investors" and therefore, and by definition of the workers' cooperative, can only hold Capitalist portfolios (for-profit companies).

There are marketing cooperatives, consumer cooperatives, and producer cooperatives (not really owners' cooperatives because they are (or were?) found mostly, if not exclusively, in the farming sector and it is well known about the history and existence of the dominance of the credit sector relative to farms. Such producer cooperatives really can't be considered workers' cooperatives because of the nature of their relationship to wage labor (particularly burdened by seasonality).

There appears to be an effort, if not a tiny minority of success of workers' cooperatives, in Capitalist Europe, Africa, South America, and Asia. I say this because of the existence of offices of the Internaional Cooperative Alliance in these areas. I have no other evidence.

A very famous recent experiment in economy of scale has been the Mondragon Cooperative Society in the Basque Region of Spain. Suffice to say, as they continued to expand, they ran into non-cooperating Capitalist pressures, coupled with the overall deteriorating economic conditions in the Capitalist world, it has caused them to buckle; to compromise their ideals, and to begin to experience business failures.

In the United States and elsewhere, Corporations sometimes offer Employee Stock Ownership (ESOP) Plans to workers, thus making workers into small-time Capitalists. Such workers probably tend to hold these relatively small holdings closely. So, if the Corporation is faring well then the workers reap some of the benefits of being Capitalists (dividends and to a much lesser extent profit-taking on speculation and equity trading). In the past twenty years or so, particularly in the Midwestern United States Capitalists have negotiated increasing use of ESOPs in lieu of wages to sell obsolete capital to workers (including management).

There have been some initiatives to organize workers into workers' cooperatives in the failing mill regions of northern New England to sell the obsolete capital to the workers' cooperatives. Semi-fortunately, they were repeatedly advised by a Consulting Group in Boston, not to buy. However, when the mills closed they were left out of work.

In a quasi-syndicalist "movement" by Labor Unions in Capitalist Europe, the Unions in some countries bargained for or legislated equal representation with the Capitalists on the Boards of Directors of Corporations. This is called co-determination. In the United States, the only known or well known instance of Union Representation on a major Board of Directors was ONE SEAT given to the UAW as part of the US Government bailout of Chrysler (before they were bought/merged with Mercedes).



Mike Morin