Ok, I’m confused. Would it be allowed or not?
If you don’t mind me asking, what do you do for a living Chris?
Unfortunate as it may be, worker-managed firms are bound to the same laws of economics as everyone else. That means that they are no smarter than their dumbest member, and that they won’t stand a chance in competition against privately-owned firms. Labor at worker-managed firms will be much less productive than at private firms, and for this reason worker-managed firms will offer drastically lower wages, until all the workers have left for private firms.
I always thought that the workers could seize the means of production by buying stock in corporations 
Conjecture.
MatthewF: I thought my answer was pretty clear. Nevertheless, to remove any ambiguity, I’ll restate my position as follows: If someone prefers working for a privately-owned enterprise to working for one that is worker self-managed, theoretically I have to say that yes, that would be allowed. But, again, my belief is that, once people have a taste of workplace democracy, they won’t prefer another. Why, if I have the option of not only occasionally speaking up but actually taking part in the decision-making of my workplace, would I want to give up that power and let someone else boss me around with little regard for my say-so? Maybe it’s just because I’m an opnionated guy, but I just don’t think I’d willingly give up that power.
Now, as for what I do, I don’t really mind your asking, but I’m puzzled as to why you’d ask that. Honestly, I prefer not to get into that, but let’s just say that right now, my job would fit into the “professional” category, but I’ve also worked jobs in the past that have included experience with the service sector and blue-collar labor. And, just so you know, I’m not one of those socialist wanna-be’s whose idea of waging social revolution basically includes sitting on my couch all day (or in front of my computer) with my thumb up my butt; I really do know what it means to work.
Stranger: I don’t deny that some workers in some enterprises may make stupid decisions and ultimately ruin the businesses that they work for; that’ll probably happen, unfortunately. But doesn’t that basically happen under capitalism, too, the only difference being that it’s the managers and/or owners making the dumb decisions and the workers are the ones suffering for it? Besides, if your logic is applied to the political realm, it would make a good theoretical argument for preferring some sort of authoritarianism over democracy, but I think history demonstrates that, by and large, democracy has been a success. (Maybe not everywhere or in every single instance; I’m just talking about overall.) There’ve been times whenever the voters have screwed up and voted into office politicians who’ve ultimately proved to be incompetent or unfit for their jobs, but that doesn’t mean that democracy as a political system has been an abject failure. So, in short, I don’t buy your assertion that worker self-managed firms “won’t stand a chance in competition against privately-owned firms.” As concrete examples, consider the Mondragon Cooperatives, AK Press, South End Press, and the worker self-managed factories in Argentina, all of which seem to be doing quite well. Will they ultimately fail? Possibly. But so could privately-owned firms.
Snowflake: Buying stocks doesn’t confer real power on workers. I worked for a corporation that urged its workers to purchase stocks and become “associate owners” (Wal-Mart, actually), but that was just a load of crap. I never purchased any stocks, but those with whom I worked that did purchase stocks had no more real power to make decisions about the way our store was run than I or anybody else did. The real power resided with the hierarchy of managers, on up to the owners. If there’d been any sort of real push to allow “associate owners” to take part in decision-making, it would’ve been quashed–and anyone who advocated it probably would’ve been terminated.
Actually, the very basis of the division of labor economy and the Ricardian law of association is not conjecture.
It is true that one cannot support private enterprise as more efficient and then support democracy as the ideal political system without placing oneself in a contradiction. That is why Austrian economists are on a campaign to destroy the ideology of democracy and restore monarchy to its natural place as the superior, more stable political system.
Allow me to introduce you to Herr Professor Hans Hermann Hoppe’s Democracy: The God That Failed.
As to your first question, the fact that workers suffer due the failures of the capitalist they work for testifies only to the severe competition they face from other, more intelligent capitalists. There is no doubt that worker-owned businesses would collapse even faster. I doubt that the employees of General Motors would (will?) succeed against competition from the Toyotas, the Fords and the Benzes.
Collective ownership a.k.a public property is an oxymoron. Ownership means exclusive a.k.a private. Thus, “collective ownership” is really a free-for-all.
Sorry I forgot to reply to this question, Laughing Man. All of the replies have been coming so rapidly that I’m afraid a few have gotten lost in the shuffle. Thanks for specifying what you’re referring to, by the way.
My response would go something like this (it’s late and I’m tired, so hopefully this actually makes sense): To a degree, I agree with Locke’s conception of property rights. If you move to the Pacific NW, cut down some trees, and build yourself a shelter from those logs, I don’t see a problem with accepting that that shelter is your property, and not that of the community. Further, if you purchase a car with your own money, that’s also your property. I prefer to call this category “personal property.”
In contrast with this, though, is property which is used as capital in a business of some sort. Since this sort of property is privately-owned under capitalism, I refer to this as “private property.” I don’t think that capital should be privately-owned, however, which I suppose is the real heart of the debate between capitalists and socialists, political issues aside. Now, why do I believe that capital shouldn’t be privately-owned? Not because, as you might think I’d say, capital is “social” in nature, and therefore should be socially-owned. Instead, I don’t have a problem with the private ownership of capital per se; I do think, however, that capitalism inevitably tends to allow one class to satisfy the innate human capacity for greed at the expense of another class, which, because of my religious perspective (Christian) I object to on a moral/ethical level. (I realize that that’s an entirely separate discussion in itself.) If socialism in the form of workers’ councils were established, I’m not saying that it would “erase greed,” but I do think it would mitigate its effects and help to make the world a little bit better for everybody. Basically, then, I think that, as C. S. Lewis once said, “no man can be trusted with irresponsible power over his fellows.” Political authoritarianism makes that mistake; democracy is the needed corrective. Likewise, capitalism makes precisely that error; socialism would help to reverse that.
So, I guess, our views of how property ownership is acquired aren’t that far apart; I just happen to think that any system which neglects social justice should be rejected because it violates an important moral principle, and some sort of alternative should be sought. It’s my belief that socialism is that alternative.
I know: I’ve totally opened a can of worms with this statement. Oh well…
Caley: I don’t remember talking about “public ownership.” Let me state, again, I’m talking about workers’ councils, which entails, not public ownership, but worker ownership, which is different. Public ownership basically requires some sort of planning; worker ownership does not. As far as your definition of “ownership,” that’s logic-chopping. If five people in a family live together in a house and agree that they are all owners of the house, is that oxymoronic? No. They all own the house, collectively. Ownership refers to the right to run, operate, dispose of, etc., a piece of property as one sees fit. Sometimes, a single individual makes that decision; sometimes, a whole group of people. Therefore, “ownership” does not necessarily imply “private ownership.”
Let’s say that I’m a very astute man. I have an uncanny ability to see what the masses want to consume, and can naturally discern the best way to produce such goods. Although it’s true that I could try to convince my colleagues about what the company should do, I’m annoyed by how much time that could take. So I amass some capital and start my own business. Perhaps I get some friends who trust me to give up their ‘voting rights’ in the workplace and will simply work for a wage; or perhaps I have enough money to offer high wages, the difference in wage rates being the premium paid for abdicating voting power. Either way, I run an efficient operation and pull in more revenue than my worker-run competitors. I expand and continue to offer high wages to entice people like yourself that want a voice in their workplace.
Do you see something wrong with this scenario? Do you believe that most people would place such a high premium on their ability to affect the policies of their company, even if such a system offers only intermittent success? Do you really believe this system would be more efficient than ‘dictator-run’ businesses?
I want to point out that, as an anarchist, I have no problem if people decide to adopt such systems in the workplace. If that provides greater happiness to the mass of individuals, then great. I’m not trying to dictate the anarcho-capitalist paradise I envision; I only think this is what would naturally arise in a voluntary society. I am not convinced that worker-run businesses would be more efficient than entrepreneur-run businesses, but I’m not opposed to their existence.
Why would your “worker ownership” not entail planning?
As far as your house analogy is concerned, in your view, are those people living in the house sharing it under voluntary association with a single owner or are each of them equal stakeholders individually, therefor making decisions democratically?
Incorrect. They cannot all be owners of the house, regardless of what they “agree” at the initial. All that has to happen is two people disagree on any one decision at any time regarding the house and an impass is reached, which can only end with one decision winning out.
Notwithstanding periodic cases of non-conflict on any decisions, therefore, there is only one real authority at any given point in time.
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This does not make sense. How would a workers council not have to plan? How would you keep it from becoming a beuracracy?
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How do you define “Worker” in a business? Who are the “non-workers” and how are they employed?
Thats not true. 5 people do not own the house unless they came to a contractual agreement originally. At which time than they all privately own it. This is common in large investments and various forms of insurance. Typically family’s however only have one or two owners. If there is a disagreement someone must make a concession. Lesser stakeholders will typically yield to the greater.
FYI but, We don’t make up terms for ownership here. We use Private Property as our definition and various means of becoming an owner involve things like homesteading or voluntary exchange. Your welcome to call it what you like but the Austrian school rarely will do anything arbitrarily.
Read up on the homesteading laws to ownership as well.
If ownership is not privately owned by a single person or party than it is not owned at all. So yes it does imply private property. Whats oxymoronic is collective ownership. Calling it anything other than private property however is only a semantical change.
I’d like you to rollplay your perfect organization for us.
Lets say you just signed up for a Workers Council. A large meeting is scheduled for tomorrow regarding three primary topics. First, the planning of production and how the plant can increase efficiency. The second topic will be capitalist based regarding what new markets to expand or explore into. And finally a third topic on compensation of pay for workers. On your first day your friend Billy has been employed there for 2 years.
Explain to me how this meeting operates an what your roll will be as a new employee? If you don’t like the story I just made up, make up your own and humor us.
Also do you realize that in a libertarian society no one would stop you from making such an organization? We can’t promise that such an organization would be succesfull though. It may be successful however, thats not up to us but up to the consumers. It all depends on how well your organization serves consumer demand.
Just curious but, in your own humble opinion, how do you define what a good “economy” is. Also how do you think business’s should operate in the apparatus of that “Good” economy.
Things to read.
Foundation of Economics can be found in Praxeology. Read the first 300 pages of Human Action.
Private Property
I’ve only skimmed the thread, so I apologize if I am bringing something up that has already been touched on, but would your hypothetical society/government force firms to conform to a worker-owned and -managed model? Also, since you are proposing a state, or at least a state-like institution, how is it to be funded? And what can it actually do, given that you have excluded it from the realm of central planning? What state action can’t be considered to be the product of central planning?
Seriously Stranger, can you offer one sourced quote that unambiguously asserts that the Austrian economist making the statement ‘hopes for’ or is engaged in the political struggle to ‘achieve’ a return to Monarchy? I’m pretty sure Hoppe is an anarcho-capitalist which militates against him having that particular attitude vis-a-vis Monarchy. unless you are using some personal definition of the word…
But if the proletariat had bought up more than 50% of walmart stock, they could control it!
I didn’t claim that Austrian economists were intent on restoring monarchy (although Ludwig von Mises did make some efforts towards this end), but that they were intent on restoring the ideology of monarchy to its place above democracy in the economic and sociological discourse. Certainly this has been the strategy adopted by such outfits as LewRockwell.com.
OK, on the subject of planning, here’s essentially where I stand: I don’t think that it’s a good idea for a government to determine production quotas or set prices, for example. To give a concrete example, I think that it would a bad idea for the government to determine how many car tires should be produced in a year, or to set the price of car tires. I accept the capitalist argument (voiced by a wide variety of people) that this system will result in economic and political disaster: economic disaster, because no system of planning–whether centralized and done at the national level or decentralized and done at the regional, or possibly even municipal level–can keep up with changes in the market, which would result in under- and overproduction of many things, and political disaster, because I think that if you’re not careful in what powers you grant to the state, it’s likely that you could wind up with another USSR, China, North Korea, Cuba, etc.
But I think that there will inevitably be another sort of planning: That within individual firms. There will have to be some decision made by Goodyear’s workers, for example, to determine whether they should produce 100,000 or 110,000 tires, and whether they’ll sell them to places like PepBoys for $70.00/tire or $65.00/tire. But that takes place even in firms under capitalism, with one important distinction: Decisions like that are usually made by a hierarchy of managers and directors, with little to no input from the average worker on the line. There’s little, if any, democracy in the making of such decisions under current conditions. The system of workers’ councils would open such decisions up to (at least brief) discussion and debate, with all interested workers–or their democratically-elected and recallable representatives–being allowed to weigh in on such decisions.
It’s that sort of arrangment that I’m referring to whenever I say that a system of workers’ councils would be able to get around economic planning.
Now, as for how the state would be “funded,” I think my tentative answer would have to be through some sort of progressive income tax. I really don’t see a problem with this at present; I think that, if you avoid developing an extensive system of welfare plans (such as seen in countries like Sweden), it’s possible to avoid massive tax hikes.
Filc: With regard to my “perfect organization,” let me answer, first, that I don’t think any organization will ever be perfect, but it’s possible to see better organizations. Second, with regard to the decisions about how to increase production efficiency, which markets to expand/explore into, and how to determine workers’ pay, I think that the workers at each business will have to decide, first of all, whether they want to discuss all matters directly and vote directly or whether they’d prefer to elect representatives who can discuss and vote on such decisions on behalf of the workers. (If they go with the second option, they’d have to determine precisely what methods/procedures to follow if they want to allow the possibility of recalling their delegates, if necessary.) Once such a decision has been made, the workers “on the line” or their delegates can listen to the data and recommendations presented by technicians and specialists whose particular job it is to help guide the workers/delegates to smart decisions about those sorts of things. Hopefully the workers/delegates will make good decisions; if they don’t, they’ll have to bear the consequences.
As for my role as a new employee: That is, again, up to the decision made by the workers’ council. If they enact a policy which says I have to be employed at a firm for a minimum of three months, we’ll say, before I can vote, so be it; if they enact a policy which says I can vote on your first day, then so be it. If I don’t like their decision, I’ll have the option of either dealing with it or finding work elsewhere. Isn’t that the way capitalism basically works? “If you don’t like the way we do things here, you’re free to find another job.” Well, same goes in this situation.
Now, to be completely clear, I prefer workers’ councils to the current way things are done, but the choice to establish such a system ultimately rests with the workers. I don’t think that it should be forced onto the workers by the state if the workers don’t want it; really, I think that, if such a system is ever established on a wide basis, it’ll be the workers who end up forcing the state to accept the arrangement. And if there are individuals who decide that they’d rather work for a privately-owned firm, they’ll be allowed to do so; I seriously doubt that I’ll be among them, however. Like you, Snowflake, I really like the idea of “free association.”
Finally, with regard to the assertion that privately-owned firms will inevitably outperform worker self-managed firms, I disagree, but I guess it’s really a matter of conjecture. To say that the success of privately-owned firms is inevitable is to fall into the same trap that many Marxists have fallen into: Marxist socialism makes the mistake of declaring the success of socialism to be “inevitable,” but I’ll be honest: I don’t know whether socialism will ultimately be successful or not. I can say that I hope it is, but I can’t predict whether it will be or not. So, maybe privately-owned firms will end up outperforming worker self-managed firms; if so, I’ll gladly join the ranks of those who say, “Socialism sounds nice in theory, but it doesn’t work.” Until that day comes, however, I’m not convinced that all forms of socialism are doomed to utter failure. I’m hopeful, but by no means overly confident. I just want to state that for the record.
Slight correction to my last post: That should read, “on my first day,” not “on your first day.”
Even “workers” as socialist define that have conflicting interests, which is why unions do not accomplish anything without government support. The possibilty of conflict is simply assumed out of existence.
Why on Earth would a Goodyear employee give a damn about the price that tires are sold for or how many are made? All Joe Punchclock cares about is mo money in his paycheck.