This is Richard Wolff with a response to a question sent in by a member of our
Patreon community,
in this case
Daniel
Bonucci. I want to thank Daniel for his question and to respond.
Basically, Daniel wonders about how worker co-ops
will be funded, how we can make a transition to a worker-co-op-based economy,
where will the funding come to enable these co-ops to start,
and to enable them to grow. And
perfectly good question, and one that arises often.
I'm going to give you a theoretical answer, and then I'm going to give you an example of how in one country -- in this case,
the United Kingdom --
this is being concretely planned
by one of the two major political parties.
So first, theoretically:
Well, you could fund it in a number of ways. Probably the most logical
would be out of taxes. In other words,
that in an economy based on worker co-ops, the
government would establish, based on taxation, a huge fund
whose purpose would be
to help start, and to help grow, worker co-ops.
This money would be made available
to worker co-ops, because it's a social objective to grow them,
probably on a
preferential basis. That means perhaps at lower interest rates,
if it were loans, than what they would have to pay at a bank;
perhaps grants; perhaps a mixture of loans and grants.
People planning to start a worker co-op would have to submit a work plan,
a
program, if you like, for how they're going to proceed. There would be experts with experience and so on,
sitting on government boards to decide which plans look reasonable, which meet an important need --
regional or industrial -- and so on. That would be one way to do it.
But there would be no need to limit it to that. You could allow
decentralized funding -- that is, not just the federal government, but state governments, local
governments, could have funds like that set up
to facilitate the growth and expansion of worker co-ops --
just the way, by the way, that we have in the past set up such funds to help particular
distressed industries. Farmers, for example, had special farm banks set up, farm loan
situations set up.
Minority businesses were able to tap local, state, and federal resources
when they were shut out of the conventional market.
Women's
industries, and so on. There are countries doing this for businesses that are interested in
climate change, in doing something about the environment. All that would have to happen
is that the plans of such institutions would now include the purposeful
development and building of worker co-ops, as something we want the society to have so that our people can look at them,
can work in them, and can make informed decisions,
democratically, about how much of the economy should be
organized as worker co-ops.
Local churches
could be a source of funding.
Self-funding, through various crowdfunding mechanisms, could be developed, with or without government support.
There are lots of ways of raising the money, nor would I necessarily be opposed to
having public borrowing.
Securities could be issued, loans in effect, in which people who want to see this kind of
economic system develop are in a position to lend money
and to get a reasonable -- not very large, but a reasonable -- rate of return,
much as they might have gotten if they put it in a savings bank, only now
they're putting it somewhere where their beliefs, and where the society's well-being, is part of the motivation.
Now for the example:
The Labour Party in England, the number-two political party, has
committed itself to the following law --
which they say they would pass once they were elected to become the next prime minister,
become the majority party in England -- they would pass a law that has two parts. Part number one:
Any business in England that wants to continue the way it is, is free to do so.
But if the industry -- or the firm, rather -- were to decide either to close down, or
to move out of the country, or to sell itself to another company, or to go public by issuing shares,
the law would require such a firm to give what's called the "right of first refusal"
to the workers in that company to buy it and convert it to a worker co-op.
Of
course, the owner would only have to sell it to the workers if they had the money to buy it,
which leads to the second part of that law.
Where would the money come from -- the funding, in effect -- for such worker co-ops
when workers chose to go that way? And the British Labour Party's answer is
the government will lend it to them. And why? Because the Labour Party is on record saying
the British people have the right for free choice: to choose between a top-down,
hierarchical,
capitalist system on the one hand, or a
democratic, worker-owned and -operated,
co-op system on the other. And the only way to have a
democratic free choice is for the government to create, alongside the existing
capitalist enterprises, a whole network of worker co-op
enterprises, so people can shop from them, work in them, observe them, and then decide
how they want the economy of Great Britain in the future to look--
more capitalist or less, more worker co-op or less.
It's a commitment the Labour Party has made, and it shows that this funding problem is well understood and
solutions to it are coming down the pike, and they're coming fast.
Thank you again to Daniel Bonucci
for sending in an important question.
I hope it's of interest to our larger Patreon community, whose support and interest is
valuable to us, as I never tire of saying.
This is Richard Wolff for Democracy at Work.