Tuesday, February 5, 2013

Book review - Democracy at Work: A cure for capitalism

Sluggish job growth. Declining real wages. A sputtering economy.

We don't just have a few minor problems to tweak to get the country moving again - we've got systemic problems that won't go away.

Economist Richard Wolff's new book, Democracy at Work: A cure for capitalism, takes the struggle for democracy to a new place - the workplace. Mr. Wolff believes we can have all the democracy we want in our electoral system, but unless we make the workplace more democratic, our electoral democracy will never be complete.

Corporations have spent decades trying to squeeze out every last drop of profit from their workforce. When they had squeezed as hard as they could but couldn't get one more drop, they packed up the factories and moved them overseas to take advantage of cheaper labor and more favorable government treatment abroad.

The result has been more and more profit for those running the show and less for most everyone else.

Lest you think Mr. Wolff is just spewing vitriol on one side, he also has very harsh words for the former Soviet Union and its allies. As Mr. Wolff explains, there was little difference between a Soviet state-owned enterprise and a shareholder-owned enterprise in the US. In both settings those who ran the plants controlled the surplus value created by the workers (the profit). In neither instance did the workers have a say in how the business operated. Hence, there was (and is) no democracy in the workplace - and the workplace is where we spend the majority of our waking hours.

Mr. Wolff's solution? Workers' Self-Directed Enterprises (WSDEs).

In a WSDE the workers who create the surplus value determine how that surplus is distributed. The workers decide what is made, how it is to be made and how to divide the labor. The worker is no longer a cog in a large wheel, the worker now has a stake in the future of the enterprise. As an example of a successful WSDE, Mr. Wolff directs our attention to the Mondragon Corporation in the Basque region of Spain.

He is under no illusion that the transformation will be easy. But it's a pretty good bet that the workers directing the enterprise won't be voting to send their jobs overseas in the name of higher profits. It's a good bet that the workers directing the enterprise won't choose to use production methods that are hazardous to workers or the environment.

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