Book: Democracy at Work by Richard Wolf
I recently read Democracy at Work by Richard Wolff.
This book intended to discuss an alternative to the inequities and crises of capitalism, while avoiding the problems of Communist systems such as the USSR. In building his arguments, he tries to draw a distinction between "capitalism," "socialism" and post-capitalist society using a definition which characterizes social democratic governments and Communist systems as varying degrees of "state capitalism." Understanding which social institutions could maintain a equitable post-capitalist society deserves a lot of thought and discussion in advance. I had a number of questions, doubts and objections to points in this book. However, reading this with critical thinking may help readers work through some of the important factors in making a better society.
While I'm not satisfied with the label "state capitalism," the "Fall of Communism" in 1989-92 raised important questions. The "Eastern European" / Warsaw Pact nations, the USSR (and its splinter nations), and two unaffiliated nations, Albania and Yugoslavia, all established private capitalism with little or no state violence against change. While there were large protest events prior to the changes, historically, nonviolent marches haven't been enough to change economic ownership AND government structure AND one-party rule AND official ideology. The lack of anti-change state violence in so many Communist counties suggests a decisive part of the Communist leaders wanted to go capitalist in hopes of increasing personal wealth. Whatever these systems were seems to revert to private capitalism.
A basic concept in the book is that employees are divided into "productive workers" (directly involved in creating goods or services) and "non-productive workers" (who may be indespensible, but not directly creators.)
The book focuses on Workers Self-Directed Enterprises (WSDE.) WSDE's are independent worker-run companies competing with each other in the market. In Part III, it says:
He even tells us:
This has various elements in common with capitalism.
What is "capitalism?" I ask:
1) What are the differences between a WSDE and a "partnership" in which the partners do the "productive work" and non-partners do "non-productive work?"
2) If a billionaire owns a company where automation does all the productive work (no human productive workers being exploited,) would that be a non-capitalist company? If most billionaire-owned companies had fully-automated productive work, at some point would it no longer be a capitalist society?
3) If a "gig economy" company's production is carried out by self-employed "contract workers," does that mean it's not a capitalist company or doesn't exploit the people who produce the surplus?
Consider what was said in the above quotes:
➤ There are "owners" who get dividends. Wolff doesn't require these be productive workers. (Having wealthy owners would pose risks.)
➤ There are necessary (but non-productive) workers who are hired and have no say in the appropriation and distribution of surplus.
➤ They may spend money to expand and compete for market share.
➤ Such a system must act to avoid business cycles and unemployment, job loss from automation and decreased demand for products, and other supply and demand issues. It would need help from a government with "social safety net" programs. It sounds more like after-the-crisis assistance, rather than mechanisms to prevent overproduction crises.
➤ WSDE's may lobby government officials. So, those who did not anticipate needing a social safety net for its own people could pressure the government to cut such programs.
➤ If giant corporations were transformed into giant WSDE's, they could have dominant lobbying influence
Issues in defining WSDE's
The significance of "productive workers" in this book makes it important to be able to identify who is a productive worker. In a retail store, is it: (1) the people who decide what products to carry and order them, (2) the people who put items on the shelves, (3) the cashiers, or (4) some combination of those? At an "oldies" radio station, is it: (1) the musicians who recorded the music decades ago, (2) The people who actually cause the music to be broadcast from the station's antenna, (3) the people who sell advertising time (which is where the money comes in), or who? For the central company which licenses franchises is it: (1) those who sell the franchise rights, (2) those who are employees of individual franchises who don't have a direct connection to the central company, or (3) who? Wholesale distributors don't create any goods, what constitutes their services (transportation? ordering system?) and therefore what is a "productive worker?"
If a WSDE replaced all the productive jobs with machines, so there were no "productive workers," would it still be a WSDE? If not, what? Who would make decisions? Etc.
Wolff says WSDE's need to make a mutually acceptable agreement between the "productive" and "non-productive" workers. He says both groups must democraticly "answer the questions": (1) how much surplus will be produced and appropriated, (2) how much of the surplus will be distributed to which subgroup of non-productives. He seems to say the non-productive get to participate in those decisions. He says the physical processes of appropriating and distributing the surplus are only decided by the productive workers. As long as WSDE's [productive workers] don't establish government laws against non-productive worker strikes, WSDE's will have to bargain with non-productive workers. (And if government officials and police aren't treated as productive workers, it may be hard to enforce laws restricting labor rights of non-productive workers.) I wonder how will productive workers who are viewed as deserving more power than non-productive workers be inclined to bargain with non-productive workers. As automation, efficiency and other factors reduce the number of productive workers, we may have significant numbers of workplaces where a majority of employees are non-productive workers with less decision-making rights. That might make productive workers take for granted that a minority can control things, and maybe ask whether that should be true outside the workplace.
Just as not all workers in a union shop are active in their union, and not all parents are active in their school's parent-teacher organization, not all employees in a self-directed workplace are likely to be active in the running of the company. And just as there are some people whose egos or other personality elements motivate them to become leaders of neighborhood associations and such - in order to get a sense of power, celebrity or social influence - the same can be true of the workplace decision-making positions. Probably, not all policy discussions will take place before the entire workforce - there could be committees to begin the process. There might be a person who chairs meetings at which the entire workforce assembles. There would need to be mechanisms to monitor for individuals gathering influence in a way that could lead to concentration of power and reduction of majority rule. The people who move in this direction can be charismatic, so there can be cases in which they succeed in decreasing majority control. So, having a mechanism beyond the individual workplace might be protective, although with potential risks of its own.
Perhaps, rather than dividing employees into "productive" and "non-productive" workers, it may be more significant to define employees as either: (1) jobs which may make them more inclined to or have job-related powers which have the potential to interfere with the WSDE's majority rule, or (2) jobs where that potential isn't inherent. Jobs with the risk of anti-majority actions may tend to be a subset of "non-productive workers." But should all "non-productive workers" be second-class workers?
Market economy issues
As long as people who had much in common with the general population continued to make the decisions, one would expect less predatory elitist-type action. But it faces issues of business cycles, supply and demand disruptions, dependence on every workplace having productive workers able to make major decisions, etc.
Being a voting member of a company could likely make employees have a greater sense of loyalty to their company, tending them more to rationalize the actions of their company and view competing company actions more critically. This might lead in one of two directions: (1) accepting cheaper materials and/or lower employee compensation in order to increase market share by lower prices, or (2) try to win market share by advertisements which appeal more to the subconscious than giving usefully informative. .
There can be implications of workers running an individual workplace which is [seen as?] their lifeline. If the individual workplace guarantees them a job as long as they do their work, they would tend to make certain kinds of decisions. They would avoid moving operations overseas to use cheaper labor, because this would mean putting themselves out of work. However, this could also mean they would consider automating job tasks as threatening to result in some of them losing their jobs. A working people's society could use automation to reduce the number of human work hours, and express that as a shorter workweek with workers who lose a job at one workplace being given a job at another workplace. But in a society of competing worker-owned companies, it may not be looked at that way.
In a WSDE market economy, it may be a competitive disadvantage to respond to automation by keeping the same number of employees but having them work fewer hours at the same pay. A central government might require all WSDE's to shorten the workweek, but this could face opposition from WSDE's not affected by automation, which therefore would have to hire more workers to compensate for shorter hours. Market forces respond to automation with layoffs. The WSDE system doesn't necessarily guarantee laid off workers another job or income. If automation affects productive worker jobs more than non-productive worker jobs, that could result in discontent about having to find another job which is "non-productive" and thereby losing decision-making rights.
In the short-run, higher wages would help workers pay for housing, etc. But in a market economy, higher wages tend to be followed by higher prices. So, worker-owned companies acting independently mean market forces. Each WSDE might be more generous in how it compensates its own employees, but each WSDE may try to provide more to its own workers by raising prices. Such a competitive market can result in inflationary spirals, especially if the government is limited in its economic involvement.
In a competitive market economy, each WSDE can be thinking of the short-term, questioning whether they want to have less income now in hopes of getting more market share, looking on the small scale rather than what society as a whole could do...
In cases such as companies being started to produce new inventions, Wolff talks of initial capital from a government agency administering a fund raised by WSDE contributions from their surpluses, getting workers from other WSDE's, higher incomes for workers in startup WSDE's... Getting non-government capital in a country without capitalists may be difficult. WSDE's may not like a government agency being able to pick and choose which WSDE's get government capital which is only contributed to by WSDE's - and those WSDE's which don't anticipate needing capital for new products are more likely to resist (especially when new products threaten old products.)
Wolff assumes that worker-owners will make more just decisions than capitalist-owners. There's probably some truth in that. However, just as coal miners today want to continue use of coal, WSDE's might make similarly bad choices. There are questions as to whether productive workers will make the most well-informed choices.
Non-production workers in some occupations will have to spend more years in school / training than most productive workers. Even if all their expenses are paid during school / training, that may mean more years of training effort and/or fewer years of earning. I think this could be better addressed on a national level.
Wolff argues that if a WSDE needed more funds, the workers could vote to give themselves a pay cut and use that money. He says workers would be more likely to take a pay cut to fund a company they control than a company owned and run by someone else. There's some truth for productive workers, but non-productive workers might feel it was for "a company owned and run by someone else." Perhaps, this could provide enough funds for a WSDE to compete with companies of a similar size. But even if production workers were willing to take a $10,000 / year pay cut, it would take 100 workers 12 months to save $1 million. A WSDE with more workers taking pay cuts could save more, but this doesn't sound like major capitalization for companies of such sizes.
Wolff speaks of rotating workers through different jobs as a way to reduce income inequality. He indicated the various jobs may have different pay. So, is a worker to earn a medium income from the job he works in April, higher income for his May job and a lower income in June? Rotation would be successful for some workers, but others would not learn as fast, function as well, or be as satisfied with some - the question is what is the real life cost-benefit of this, and what do we decide based on that. What would be the competitive advantages/disadvantages of some WSDE's doing this and others not?
It's often argued that competition plays an important role in improving products and developing new ones. I'm not sure that the benefits outweigh the problems. However, if competition is found to be worthwhile, a state-run ecomony could form several divisions which operate as large companies competing with each other.
While I generally consider a market economy to have inherent problems, there are reasonable questions of how to have an independent media if independent workplaces can't exist and survive.
Government
Wolff advocates a combination of worker-controlled workplaces, and geographic jurisdictions with majority rule for residents.
Wolff presents WSDE's as being able to exist in various socio-economic systems. He has some discussion of what he thinks WSDE's would tend to promote for government beyond the workplace. He imagines WSDE's tending to favor certain policies. But he doesn't present a view of an integrated system of WSDE's and democracy outside the workplace. In a WSDE society where being a "productive worker" is treated as granting more power, some productive workers / WSDE's may view community-based elected government as a threat to the proper power of productive workers - and demagogues may use this as a mechanism to justify restrictions on majority rule. Mixed with whatever portion of the population which doesn't participate in decision-making in WSDE's, unions, apartment coops, neighborhood associations, parent-school associations, etc., I feel protections are needed to prevent limits on majority power.
Wolff argues that in a WSDE system, workers would want to have government laws to limit income inequality. That may be true, many workers want such laws today. But will workers and WSDE's (as group entities) which are making above average incomes want such laws? And will those individuals have disproportionate influence? He's describing a market economy with competing workplaces - that framework has been used to justify income inequality as a result of each person's efforts and choices. If some WSDE's took over huge corporations, as large entities, they could have disproportionate influence on government.
Wolff says that experience with state ownership in socialistic systems has shown conflicts between this and democracy. Lack of state ownership doesn't promote democracy under capitalism. If a government can have greater majority rule than systems with a rich and powerful minority, then the majority-run government combined with government owned production may be more democratic. If greater majority rule in government is unattainable, WSDE's may not be sustainable either. If there's an endless tug-of-war threatening government majority rule, can WSDE's somehow remain endlessly majority-controlled?
Transition from capitalism
Initially, I wouldn't expect a post-captialist society to pay all people with jobs the same income. It would cause additional opposition if companies paid engineers the same as handymen. Over time, that can change. What I'm concerned with is what a new society should look like at the beginning stage. Yes, the beginning stage needs to be something which can grow into the form we see as a goal.
State capitalism
Wolff says what distinguishes varieties of capitalism and real socialism is that socialism must have the productive workers be the ones who decide on the distribution of the surplus. So, if government makes those decisions, ipso facto it's not socialism. To him, it's not whether the Soviet system was / wasn't democratically chosen by and acting on wishes of working people, it's whether productive workers directly rule the workplace. His definition of state capitalism doesn't require a repressive regime, that's not his fundamental criteria.
Risks from limited participation and selfish people
There are psychological reason to believe people in a society without workplace exploitation will be less likely to take advantage of others. However, there are people without a functioning conscience ("psychopaths.") Even if we have good reason to believe people who grow up in a majority ruled post-capitalist society would not become psychopaths, people who grew up under capitalism will play central roles in the early years of a post-capitalist society. So, we'll need protections from skillful, manipulative people who don't care about the welfare of society.
I think some people, and maybe more so for blue collar workers, are less inclined to or aren't as strong in areas relevant for board of director-type decision-making. As a result, a portion of productive workers may not take active roles. This could give an opportunity for a minority to make changes limiting the roles of the whole. To limit this, WSDE's may make decision-making time a part of mandatory regular work hours. But if some WSDE's did (say, 35 hours / week of production work and 5 hours / week of decision-making) and other WSDE's didn't (say, 40 hours / week production work and voluntary participation in extra decision-making hours), some WSDE's might choose the latter to get more production time, but have decisions made by a smaller part of the workforce. Government workweek laws might avoid this. (This wouldn't ensure truly informed decision participation if studying information prior to decision-making meetings is needed.)
Misc.
Wolff's list of where the surplus gets distributed didn't mention income for retirees. Do WSDE retirees get pensions? If so, they're no longer doing productive labor, so does that mean they no longer have a voice on the board (which decides what retirees get)? Are WSDE retirees entirely dependent on government benefits? when workers must change jobs because of automation, changes in comsumer buying, etc., what happens in terms of pensions and such?
It may sound biased to suggest not all productive workers would actively participate in decision-making. But I think this is also true of the affluent. Not all rich parents are active in parent-teacher organizations at private schools. Not all affluent residents are active in associations for gated communities or coop / condo apartment buildings. Not all substantial stockholders attend stockholder meetings. I think the question of participation and capability should be discussed in a more realistic manner. The point doesn't have to be certainty that participation is not as great as hoped, but that at least we should have a Plan B.
Wolff discusses various possible combinations of WSDE's and economic systems, various forms of ownership of WSDE's and/or property, WSDE's with or without government planning, etc. This is not done in depth. It leaves the impression of incomplete analysis.
Wolff argues that we can't properly compare the economic efficiency of state planning vs. market forces because there are too many factors / data to be analyzed. Is it possible to predict the effectiveness of WSDE's?
There's a question of direct democracy in WSDE's and size of companies. Consider the number of employees at the nation's 1000 largest companies. Regardless of whether workers turned these same companies into WSDE's or a WSDE competed and grew to a similar size, there would be large numbers of workers at multiple locations - direct democracy might be difficult. This could be circumvented if large corporations or WSDE competitors were subdivided into a number of separate WSDE's (at least one for each location.) But a number of WSDE's operating as separate entities with their own direct democracy decision-making couldn't be expected to be as coordinated and collectively efficient as a single large entity.
Wolff says WSDE's would want schools to teach work skills and skills needed for a productive worker to participate in board of director decision-making. Unless schools segregated students who will be productive workers and those who won't, non-productive workers may argue they got the same board of director skills that productive workers did.
This book intended to discuss an alternative to the inequities and crises of capitalism, while avoiding the problems of Communist systems such as the USSR. In building his arguments, he tries to draw a distinction between "capitalism," "socialism" and post-capitalist society using a definition which characterizes social democratic governments and Communist systems as varying degrees of "state capitalism." Understanding which social institutions could maintain a equitable post-capitalist society deserves a lot of thought and discussion in advance. I had a number of questions, doubts and objections to points in this book. However, reading this with critical thinking may help readers work through some of the important factors in making a better society.
While I'm not satisfied with the label "state capitalism," the "Fall of Communism" in 1989-92 raised important questions. The "Eastern European" / Warsaw Pact nations, the USSR (and its splinter nations), and two unaffiliated nations, Albania and Yugoslavia, all established private capitalism with little or no state violence against change. While there were large protest events prior to the changes, historically, nonviolent marches haven't been enough to change economic ownership AND government structure AND one-party rule AND official ideology. The lack of anti-change state violence in so many Communist counties suggests a decisive part of the Communist leaders wanted to go capitalist in hopes of increasing personal wealth. Whatever these systems were seems to revert to private capitalism.
A basic concept in the book is that employees are divided into "productive workers" (directly involved in creating goods or services) and "non-productive workers" (who may be indespensible, but not directly creators.)
The book focuses on Workers Self-Directed Enterprises (WSDE.) WSDE's are independent worker-run companies competing with each other in the market. In Part III, it says:
In WSDEs, each productive worker’s job description not only includes the specific tasks that he or she performs within an enterprise’s division of surplus-producing labor but also requires each worker to participate equally in democratic decision-making by the enterprise’s board of directors. Each productive worker is an equal member of that board. The collective of such workers constitutes the board.
As such a board, productive workers collectively carry out the social distribution of the surpluses they have produced and appropriated. They use this surplus partly to pay taxes to the various levels of government that provide them with certain conditions of their existence. They use another portion of the surplus to hire and provide operating budgets as needed to managers, clerks, security guards, lawyers, and other workers not directly engaged in producing surpluses but crucial in other ways to reproducing the enterprise. The board distributes the portions of the surplus used to expand production (invest and grow), paid in dividends to owners of the enterprise, used to lobby state officials, and so on.
He even tells us:
...an economic system built upon WSDEs might well be generally concerned about slipping back toward a capitalist system. To that end, it would seek to avoid crises or cycles of the sorts caused in capitalism by overproduction, underconsumption, technological unemployment, and so on. It would work to overcome the social problems created under capitalism when an enterprise discovers a new way to produce output with less labor input, encounters a loss of public desire for its products, or finds that it has overestimated the demand for its output. One way to accomplish this would be to create a fund (by surplus distributions from WSDE boards) and a government agency [to help laid-off workers find jobs, reloacation and training]...
This has various elements in common with capitalism.
What is "capitalism?" I ask:
1) What are the differences between a WSDE and a "partnership" in which the partners do the "productive work" and non-partners do "non-productive work?"
2) If a billionaire owns a company where automation does all the productive work (no human productive workers being exploited,) would that be a non-capitalist company? If most billionaire-owned companies had fully-automated productive work, at some point would it no longer be a capitalist society?
3) If a "gig economy" company's production is carried out by self-employed "contract workers," does that mean it's not a capitalist company or doesn't exploit the people who produce the surplus?
Consider what was said in the above quotes:
➤ There are "owners" who get dividends. Wolff doesn't require these be productive workers. (Having wealthy owners would pose risks.)
➤ There are necessary (but non-productive) workers who are hired and have no say in the appropriation and distribution of surplus.
➤ They may spend money to expand and compete for market share.
➤ Such a system must act to avoid business cycles and unemployment, job loss from automation and decreased demand for products, and other supply and demand issues. It would need help from a government with "social safety net" programs. It sounds more like after-the-crisis assistance, rather than mechanisms to prevent overproduction crises.
➤ WSDE's may lobby government officials. So, those who did not anticipate needing a social safety net for its own people could pressure the government to cut such programs.
➤ If giant corporations were transformed into giant WSDE's, they could have dominant lobbying influence
Issues in defining WSDE's
The significance of "productive workers" in this book makes it important to be able to identify who is a productive worker. In a retail store, is it: (1) the people who decide what products to carry and order them, (2) the people who put items on the shelves, (3) the cashiers, or (4) some combination of those? At an "oldies" radio station, is it: (1) the musicians who recorded the music decades ago, (2) The people who actually cause the music to be broadcast from the station's antenna, (3) the people who sell advertising time (which is where the money comes in), or who? For the central company which licenses franchises is it: (1) those who sell the franchise rights, (2) those who are employees of individual franchises who don't have a direct connection to the central company, or (3) who? Wholesale distributors don't create any goods, what constitutes their services (transportation? ordering system?) and therefore what is a "productive worker?"
If a WSDE replaced all the productive jobs with machines, so there were no "productive workers," would it still be a WSDE? If not, what? Who would make decisions? Etc.
Wolff says WSDE's need to make a mutually acceptable agreement between the "productive" and "non-productive" workers. He says both groups must democraticly "answer the questions": (1) how much surplus will be produced and appropriated, (2) how much of the surplus will be distributed to which subgroup of non-productives. He seems to say the non-productive get to participate in those decisions. He says the physical processes of appropriating and distributing the surplus are only decided by the productive workers. As long as WSDE's [productive workers] don't establish government laws against non-productive worker strikes, WSDE's will have to bargain with non-productive workers. (And if government officials and police aren't treated as productive workers, it may be hard to enforce laws restricting labor rights of non-productive workers.) I wonder how will productive workers who are viewed as deserving more power than non-productive workers be inclined to bargain with non-productive workers. As automation, efficiency and other factors reduce the number of productive workers, we may have significant numbers of workplaces where a majority of employees are non-productive workers with less decision-making rights. That might make productive workers take for granted that a minority can control things, and maybe ask whether that should be true outside the workplace.
Just as not all workers in a union shop are active in their union, and not all parents are active in their school's parent-teacher organization, not all employees in a self-directed workplace are likely to be active in the running of the company. And just as there are some people whose egos or other personality elements motivate them to become leaders of neighborhood associations and such - in order to get a sense of power, celebrity or social influence - the same can be true of the workplace decision-making positions. Probably, not all policy discussions will take place before the entire workforce - there could be committees to begin the process. There might be a person who chairs meetings at which the entire workforce assembles. There would need to be mechanisms to monitor for individuals gathering influence in a way that could lead to concentration of power and reduction of majority rule. The people who move in this direction can be charismatic, so there can be cases in which they succeed in decreasing majority control. So, having a mechanism beyond the individual workplace might be protective, although with potential risks of its own.
Perhaps, rather than dividing employees into "productive" and "non-productive" workers, it may be more significant to define employees as either: (1) jobs which may make them more inclined to or have job-related powers which have the potential to interfere with the WSDE's majority rule, or (2) jobs where that potential isn't inherent. Jobs with the risk of anti-majority actions may tend to be a subset of "non-productive workers." But should all "non-productive workers" be second-class workers?
Market economy issues
As long as people who had much in common with the general population continued to make the decisions, one would expect less predatory elitist-type action. But it faces issues of business cycles, supply and demand disruptions, dependence on every workplace having productive workers able to make major decisions, etc.
Being a voting member of a company could likely make employees have a greater sense of loyalty to their company, tending them more to rationalize the actions of their company and view competing company actions more critically. This might lead in one of two directions: (1) accepting cheaper materials and/or lower employee compensation in order to increase market share by lower prices, or (2) try to win market share by advertisements which appeal more to the subconscious than giving usefully informative. .
There can be implications of workers running an individual workplace which is [seen as?] their lifeline. If the individual workplace guarantees them a job as long as they do their work, they would tend to make certain kinds of decisions. They would avoid moving operations overseas to use cheaper labor, because this would mean putting themselves out of work. However, this could also mean they would consider automating job tasks as threatening to result in some of them losing their jobs. A working people's society could use automation to reduce the number of human work hours, and express that as a shorter workweek with workers who lose a job at one workplace being given a job at another workplace. But in a society of competing worker-owned companies, it may not be looked at that way.
In a WSDE market economy, it may be a competitive disadvantage to respond to automation by keeping the same number of employees but having them work fewer hours at the same pay. A central government might require all WSDE's to shorten the workweek, but this could face opposition from WSDE's not affected by automation, which therefore would have to hire more workers to compensate for shorter hours. Market forces respond to automation with layoffs. The WSDE system doesn't necessarily guarantee laid off workers another job or income. If automation affects productive worker jobs more than non-productive worker jobs, that could result in discontent about having to find another job which is "non-productive" and thereby losing decision-making rights.
In the short-run, higher wages would help workers pay for housing, etc. But in a market economy, higher wages tend to be followed by higher prices. So, worker-owned companies acting independently mean market forces. Each WSDE might be more generous in how it compensates its own employees, but each WSDE may try to provide more to its own workers by raising prices. Such a competitive market can result in inflationary spirals, especially if the government is limited in its economic involvement.
In a competitive market economy, each WSDE can be thinking of the short-term, questioning whether they want to have less income now in hopes of getting more market share, looking on the small scale rather than what society as a whole could do...
In cases such as companies being started to produce new inventions, Wolff talks of initial capital from a government agency administering a fund raised by WSDE contributions from their surpluses, getting workers from other WSDE's, higher incomes for workers in startup WSDE's... Getting non-government capital in a country without capitalists may be difficult. WSDE's may not like a government agency being able to pick and choose which WSDE's get government capital which is only contributed to by WSDE's - and those WSDE's which don't anticipate needing capital for new products are more likely to resist (especially when new products threaten old products.)
Wolff assumes that worker-owners will make more just decisions than capitalist-owners. There's probably some truth in that. However, just as coal miners today want to continue use of coal, WSDE's might make similarly bad choices. There are questions as to whether productive workers will make the most well-informed choices.
Non-production workers in some occupations will have to spend more years in school / training than most productive workers. Even if all their expenses are paid during school / training, that may mean more years of training effort and/or fewer years of earning. I think this could be better addressed on a national level.
Wolff argues that if a WSDE needed more funds, the workers could vote to give themselves a pay cut and use that money. He says workers would be more likely to take a pay cut to fund a company they control than a company owned and run by someone else. There's some truth for productive workers, but non-productive workers might feel it was for "a company owned and run by someone else." Perhaps, this could provide enough funds for a WSDE to compete with companies of a similar size. But even if production workers were willing to take a $10,000 / year pay cut, it would take 100 workers 12 months to save $1 million. A WSDE with more workers taking pay cuts could save more, but this doesn't sound like major capitalization for companies of such sizes.
Wolff speaks of rotating workers through different jobs as a way to reduce income inequality. He indicated the various jobs may have different pay. So, is a worker to earn a medium income from the job he works in April, higher income for his May job and a lower income in June? Rotation would be successful for some workers, but others would not learn as fast, function as well, or be as satisfied with some - the question is what is the real life cost-benefit of this, and what do we decide based on that. What would be the competitive advantages/disadvantages of some WSDE's doing this and others not?
It's often argued that competition plays an important role in improving products and developing new ones. I'm not sure that the benefits outweigh the problems. However, if competition is found to be worthwhile, a state-run ecomony could form several divisions which operate as large companies competing with each other.
While I generally consider a market economy to have inherent problems, there are reasonable questions of how to have an independent media if independent workplaces can't exist and survive.
Government
Wolff advocates a combination of worker-controlled workplaces, and geographic jurisdictions with majority rule for residents.
Wolff presents WSDE's as being able to exist in various socio-economic systems. He has some discussion of what he thinks WSDE's would tend to promote for government beyond the workplace. He imagines WSDE's tending to favor certain policies. But he doesn't present a view of an integrated system of WSDE's and democracy outside the workplace. In a WSDE society where being a "productive worker" is treated as granting more power, some productive workers / WSDE's may view community-based elected government as a threat to the proper power of productive workers - and demagogues may use this as a mechanism to justify restrictions on majority rule. Mixed with whatever portion of the population which doesn't participate in decision-making in WSDE's, unions, apartment coops, neighborhood associations, parent-school associations, etc., I feel protections are needed to prevent limits on majority power.
Wolff argues that in a WSDE system, workers would want to have government laws to limit income inequality. That may be true, many workers want such laws today. But will workers and WSDE's (as group entities) which are making above average incomes want such laws? And will those individuals have disproportionate influence? He's describing a market economy with competing workplaces - that framework has been used to justify income inequality as a result of each person's efforts and choices. If some WSDE's took over huge corporations, as large entities, they could have disproportionate influence on government.
Wolff says that experience with state ownership in socialistic systems has shown conflicts between this and democracy. Lack of state ownership doesn't promote democracy under capitalism. If a government can have greater majority rule than systems with a rich and powerful minority, then the majority-run government combined with government owned production may be more democratic. If greater majority rule in government is unattainable, WSDE's may not be sustainable either. If there's an endless tug-of-war threatening government majority rule, can WSDE's somehow remain endlessly majority-controlled?
Transition from capitalism
Initially, I wouldn't expect a post-captialist society to pay all people with jobs the same income. It would cause additional opposition if companies paid engineers the same as handymen. Over time, that can change. What I'm concerned with is what a new society should look like at the beginning stage. Yes, the beginning stage needs to be something which can grow into the form we see as a goal.
State capitalism
Wolff says what distinguishes varieties of capitalism and real socialism is that socialism must have the productive workers be the ones who decide on the distribution of the surplus. So, if government makes those decisions, ipso facto it's not socialism. To him, it's not whether the Soviet system was / wasn't democratically chosen by and acting on wishes of working people, it's whether productive workers directly rule the workplace. His definition of state capitalism doesn't require a repressive regime, that's not his fundamental criteria.
Risks from limited participation and selfish people
There are psychological reason to believe people in a society without workplace exploitation will be less likely to take advantage of others. However, there are people without a functioning conscience ("psychopaths.") Even if we have good reason to believe people who grow up in a majority ruled post-capitalist society would not become psychopaths, people who grew up under capitalism will play central roles in the early years of a post-capitalist society. So, we'll need protections from skillful, manipulative people who don't care about the welfare of society.
I think some people, and maybe more so for blue collar workers, are less inclined to or aren't as strong in areas relevant for board of director-type decision-making. As a result, a portion of productive workers may not take active roles. This could give an opportunity for a minority to make changes limiting the roles of the whole. To limit this, WSDE's may make decision-making time a part of mandatory regular work hours. But if some WSDE's did (say, 35 hours / week of production work and 5 hours / week of decision-making) and other WSDE's didn't (say, 40 hours / week production work and voluntary participation in extra decision-making hours), some WSDE's might choose the latter to get more production time, but have decisions made by a smaller part of the workforce. Government workweek laws might avoid this. (This wouldn't ensure truly informed decision participation if studying information prior to decision-making meetings is needed.)
Misc.
Wolff's list of where the surplus gets distributed didn't mention income for retirees. Do WSDE retirees get pensions? If so, they're no longer doing productive labor, so does that mean they no longer have a voice on the board (which decides what retirees get)? Are WSDE retirees entirely dependent on government benefits? when workers must change jobs because of automation, changes in comsumer buying, etc., what happens in terms of pensions and such?
It may sound biased to suggest not all productive workers would actively participate in decision-making. But I think this is also true of the affluent. Not all rich parents are active in parent-teacher organizations at private schools. Not all affluent residents are active in associations for gated communities or coop / condo apartment buildings. Not all substantial stockholders attend stockholder meetings. I think the question of participation and capability should be discussed in a more realistic manner. The point doesn't have to be certainty that participation is not as great as hoped, but that at least we should have a Plan B.
Wolff discusses various possible combinations of WSDE's and economic systems, various forms of ownership of WSDE's and/or property, WSDE's with or without government planning, etc. This is not done in depth. It leaves the impression of incomplete analysis.
Wolff argues that we can't properly compare the economic efficiency of state planning vs. market forces because there are too many factors / data to be analyzed. Is it possible to predict the effectiveness of WSDE's?
There's a question of direct democracy in WSDE's and size of companies. Consider the number of employees at the nation's 1000 largest companies. Regardless of whether workers turned these same companies into WSDE's or a WSDE competed and grew to a similar size, there would be large numbers of workers at multiple locations - direct democracy might be difficult. This could be circumvented if large corporations or WSDE competitors were subdivided into a number of separate WSDE's (at least one for each location.) But a number of WSDE's operating as separate entities with their own direct democracy decision-making couldn't be expected to be as coordinated and collectively efficient as a single large entity.
Wolff says WSDE's would want schools to teach work skills and skills needed for a productive worker to participate in board of director decision-making. Unless schools segregated students who will be productive workers and those who won't, non-productive workers may argue they got the same board of director skills that productive workers did.
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