This is Richard Wolff, from Democracy at Work, responding to another “Ask Prof Wolff”
question from our Patreon community. This one comes from Adam Martin
and has to do with worker co-ops on two fronts. He’s concerned that they may not be,
or are not, interested in expansion the way capitalist enterprises are, on the one hand,
and on the other, he wonders about how they could get financing to grow, to develop, to start,
given the likely hostility of the current environment to enabling worker co-ops to grow.
So, let me take first the question of expansion. In one sense, you're right. Worker co-ops are
not driven to expand by the pressure and logic of competition the way capitalist firms are. That's
an enormous advantage when it comes to ecology and [the] environment. You do not have a system
with worker co-ops in which a relentless logic of the economy drives ever more production,
using ever more raw materials of the earth, polluting ever more, etc., etc.
Worker co-ops will decide democratically not only how, where, and what they produce,
but they will also decide democratically about whether or not to expand.
This will not be a requirement to survive. That's not the way they're going to work.
That's not the system that gets set up with worker co-ops.
But it is the system of capitalism. Because capitalism puts profit as the bottom line,
and because the competitive structure means you either expand your profit and your production,
or you are eliminated and die. Under that kind of pressure,
yeah, you get expansion, whether you need it, or want it, or not. And you get the kind of absurdity
in which not only do you expand, but you expand so fast that you run out of customers. So you
have to take a portion of the income you earn and pay it to advertisers to get the public
to buy what your expansion demand had you produce. It's a little bit upside-down.
Would worker co-ops expand? The answer is yes, if and when the demand
of the population were to increase, when more of whatever they produce is wanted, then either
existing worker co-ops will enlarge, or new worker co-ops will be set up to meet the demand.
That's what they teach you in economics, even though in capitalism, expansion doesn't happen
because of demand any more or less than it happens without an increase in demand because
of this hysterical pressure of competition, which we are supposed to only look at as having
positive consequences, even though the entire ecological disaster we're living through indicates
that it happens independent of its negative consequences, when they aren't even admitted.
So, I think the important thing about worker co-ops is that they make profit a part of what
they're looking for. They would like to make extra money, a surplus. That would allow them, then,
to do all kinds of interesting things, whether it be provide daycare for their workers’ children,
whether it be to provide some benefit to the community where they live,
whether it be to enhance their individual incomes, or some combination of those.
Those are democratic decisions made by the workers, one person, one vote,
and also made by the surrounding community, since they affect each other, and therefore,
have to be co-respective in the decisions that they take.
Now what about an investment bank for worker co-ops? Absolutely. Good idea. Exists already
in some parts of the world. Could and should exist here in the United States.
Capitalist enterprises over the last several centuries, when they grew to a certain size and a
certain number, and they needed to better organize the flow of capital so they could grow, they
organized investment banks to do that for them, and there's absolutely no reason why worker co-ops
couldn't and wouldn't follow suit and do that, with the following difference. These investment
banks would be there to enable worker co-ops to expand, to grow, to become more productive,
just like investment banks did that for capitalist enterprises during the period of capitalism.
So, it's a good idea. It will help develop the capital resources that an expanding worker co-op
sector needs. These are problems of a worker co-op sector, as it grows,
as it expands, and as it increasingly replaces capitalism, much again
as the growth and development of capitalist enterprises, within the shell of feudalism,
eventually outgrew that shell, feudalism fell away, leaving us with capitalism.
My guess? Worker co-ops will do to capitalism, what capitalism did to feudalism.
This is Richard Wolff, for Democracy at Work.