Not the Monthly Post

Systems That Suck Less

Last week’s post on political economy attracted plenty of disagreement. Now of course this came as no surprise, and it was also not exactly surprising that most of the disagreement took the shape of strident claims that I’d used the wrong definition of socialism. That’s actually worth addressing here, because it will help clear the ground for this week’s discussion.

The definition I used, for those who weren’t here last week, is that socialism is the system of political economy in which the means of production are owned by the national government. Is that the only possible definition of socialism, or the only definition that’s ever been used? Of course not. The meanings of words are not handed down from on high by God or somebody; the meanings of words are always contested among competing points of view, and when a word has become as loaded with raw emotions as the word “socialism” has, you can bet that every one of the definitions you’ll be offered is slanted in one direction or another.

That’s just as true of the definition I’ve offered, of course, as it is of any other. I want to talk about who owns the means of production in society, since this is arguably the most important issue in political economy, and it so happens that socialism, capitalism, and many other systems can be defined quite neatly in this way. A century ago, when it was still acceptable to talk about systems of political economy other than capitalism and socialism, the definition I’ve proposed was one of the most common. You don’t hear it very often now, and there’s a reason for that.

Since 1945 the conventional wisdom across most of the world has insisted that there are two and only two possible systems of political economy: socialism on the one hand, capitalism on the other. That’s very convenient for socialists and capitalists, since it allows both sides to contrast an idealized and highly sentimental picture of the system they favor with the real and disastrous failings of the one they don’t, and insist that since the two systems are the only available options, you’d better choose theirs. This allows both sides to ignore the fact that the system they prefer is just as bad as the one they hate.

Let us please be real. In theory, socialism is a wonderful system in which the workers own the means of production, and people contribute what they can and receive what they need. In practice, as seen in actual socialist societies? It sucks. Get past the rhetoric, and what happens is that the workers’ ownership of the means of production becomes a convenient fiction; an inner circle of politicians controls the means of production, and uses it to advance its own interests rather than that of the workers. Centralized bureaucracy becomes the order of the day, fossilization follows, and you end up with the familiar sclerosis of the mature socialist economy, guided by hopelessly inefficient policies mandated by clueless central planners, and carried out grudgingly by workers who know that they have nothing to gain by doing more than the minimum. Eventually this leads to the collapse of the system and its replacement by some other system of political economy.

In theory, equally, capitalism is a wonderful system in which anyone willing to work hard can get ahead, and the invisible hand of the market inevitably generates the best possible state of affairs for everyone. In practice, as seen in actual capitalist societies? It sucks. Get past the rhetoric, and what happens is that social mobility becomes a convenient fiction; an inner circle of plutocrats controls the means of production, and uses economic power backed by political corruption to choke the free market and stomp potential competitors. Monopoly and oligopoly become the order of the day, wealth concentrates at the top of the pyramid, and you end up with the familiar sclerosis of the mature capitalist society, in which the workers who actually make the goods and provide the services can’t afford to buy them, resulting in catastrophic booms and busts, soaring unemployment, and the rise of a violent and impoverished underclass. Eventually this leads to the collapse of the system and its replacement by some other system of political economy.

Yes, this is as true of capitalism as it is of socialism. Unrestricted capitalism has already collapsed once—the aftermath of the Great Depression saw it replaced by social democracy, socialism, or fascism over all of the industrial world—and we didn’t begin to return to it again until the Reagan-Thatcher counterrevolution of the 1980s. Now that we’ve gotten back to something fairly close to unrestricted capitalism, we’ve got all the same spiraling dysfunctions that brought things crashing down in the 1930s. The possibility that it could end the same way, with a similar quota of armbands and jackboots, is rather hard to dismiss out of hand just at the moment.

At the same time, the notion that we can fix the current mess by exchanging capitalism for socialism doesn’t bear close examination. We know how socialism works out, just as we know how capitalism works out. As previously noted, both of them suck. The obvious solution—unthinkable these days, oh, granted, but obvious—is to look for other options.

The best way to do this, it seems to me, is to pay attention to the core similarity between capitalism and socialism. Both systems reliably end up dominated by massive bureaucracies—corporate bureaucracies in the former case, government bureaucracies in the latter—and the bureaucracies do so stunningly bad a job of getting people the goods and services they need that it becomes necessary to paper over the gaps with propaganda and police violence. There’s a reason for the similarity, and it’s one that people who studied political economy a century and more ago had no trouble at all recognizing: in capitalism and socialism alike, control of the means of production is concentrated in too few hands.

Promoters of socialist systems like to pretend that if the means of production are owned by the government, they’re really owned by the workers, but I trust none of my readers are simple-minded enough to fall for that bait-and-switch tactic. In the same way, promoters of capitalist systems like to pretend that if the means of production are owned by stockholders, a little old lady who has five shares of Microsoft has just as much effective ownership as Bill Gates; here again, the old bait-and-switch tactic gets a hefty workout. In socialist systems, control of the means of production is kept within a small circle of upper-level bureaucrats; in capitalist systems, control of the means of production is kept within a small circle of upper-level plutocrats.

That’s not something either socialists or capitalists like to talk about, in turn, because once you start looking at who owns the means of production, it really doesn’t make sense to insist that the only choice your society has is either to hand them over to a small coterie of bureaucrats, or to hand them over to an equally small coterie of plutocrats. Most people, considering that choice, will quite sensibly ask why some other arrangement is out of the question—and that is not a question either socialists or capitalists want to answer, or even to hear.

Here again, there’s good reason for that. In a modern industrial society, after all, the people who control most of the wealth are also the people who exercise disproportionate influence over the political system. The choice between capitalism and socialism thus amounts to asking whether you want the means of production in the hands of corporate bureaucracies owned by the elite class, or political bureaucracies controlled by the elite class. “Meet the new boss,” sang the Who, “same as the old boss.” There are other options, and they begin with getting the means of production into many more hands.

What happens if we ask ourselves how control over the means of production can be spread more widely? Why, then we would end up revisiting the lively world of alternative systems of political economy that existed before 1945, when the US and the Soviet Union between them squeezed out every alternative to social democracy on the one hand and socialism on the other, and kept on squeezing. We would find that the question of the ownership and control of the means of production was the focus of vigorous and thoughtful discussion from the second half of the nineteenth century straight through the first half of the twentieth. There were quite a few systems proposed during that time, but those that didn’t gravitate either toward capitalism or toward socialism generally embraced one form or another of syndicalism.

Syndicalism? That’s the form of political economy in which each business enterprise is owned and run by its own employees.

Before we go on, I’d like to encourage my readers to stop, reread that definition, and remember that we’re talking about the ownership and control of the means of production. It’s possible to approach political economy from other directions, sure, and there’s a point to those discussions as well, but—ahem—not when those discussions are used to try to stonewall discussion of who gets to own and run the means of production. We can talk about those other things later.

Okay, with that settled, let’s talk about the most important feature of syndicalism: it’s already been tried, and it works. Right now there’s a very large number of employee-owned enterprises in the United States, and an even larger number elsewhere in the industrial world. They are by and large just as successful as companies owned by stockholders who aren’t employees. There are several different ways to set up a worker-owned enterprise—the two most common are the worker-owned cooperative, on the one hand, and the closely held corporation whose stock can only be owned by employees, on the other—and they’ve been around long enough to have had the bugs worked out. Thus we’re not talking about a pie-in-the-sky system, we’re talking about something with a long and relatively successful track record. You’ve probably shopped at worker-owned enterprises, dear reader; I certainly have.

In a very real sense, syndicalism is what happens when you take the basic unit of a market economy—the individual sole proprietor with no employees, who sells the product of his or her labor directly to customers—and maintain the same relationship with the means of production at a larger scale. In a capitalist society, only the owners of capital own the means of production: the mass of the population, not being rich enough to be able to invest in ownership of the means of production, are excluded from any economic activity other than selling their labor at whatever wages employers want to pay, and buying products at whatever price companies want to charge. In a socialist economy, no individual owns the means of production: everyone is an employee of the state, and the bureaucrats who draft the latest Five-Year Plan in blissful ignorance of shop-floor realities have no more of a personal stake in how things turn out than the working stiffs on the shop floor who have to carry out the dictates of the plan despite its obvious cluelessness.

In a syndicalist society, by contrast, every employee is an owner. Every employee benefits when the business prospers and suffers when the business takes a loss. Every employee has some influence over the management of the business—the usual approach is to have employees elect a board of directors, which then hires and fires the management personnel. Every employee thus has a personal stake in the business—and every business is owned and run by people who have a personal stake in its success. That’s one of the reasons syndicalism works well.

Let’s deal with some of the usual questions at this point. Do sole proprietorships exist in a syndicalist system? Of course. An individual who goes into business for himself or herself is the simplest form of syndicalist economic organization:  a business wholly owned and operated by its one employee. A family business—the sort of thing where Mom and Dad own the business and their kids work there—is also a syndicalist business in miniature. It’s when things get larger than that, and there are employees other than the individual proprietor or the members of a family, that the classic forms of syndicalist ownership come into play.

Wouldn’t syndicalism mean that new employees coming in could simply take over the business and throw the founder out on his or her ear? Not at all, because the way you organize a business in a syndicalist society prevents that. Let’s say you’ve founded a blivet-making business, just you and your blivet press, and you do well enough that you need a second employee. You hire someone, and part of the terms of hire are that she gets a share in the business for each year of employment. The business is worth thirty thousand dollars at the time of hire, we’ll say, so she gets, as part of her compensation package, one share with a five hundred dollar face value each year. This cannot be sold or transferred; it remains with her only as long as she remains an employee of the company; but it gives her voting rights in the shareholders meeting and a cut of the annual dividend. A year after she’s hired, she has one vote in the shareholder’s meeting and you’ve got fifty-nine, so she’s not going to be throwing you out any time soon.

By the time she’s put in thirty years, she owns half the original value of the company, but of course by then you’ve retired, and your shares are the basis of your pension. (Your shares revert to the company when you retire, remember—they can only be owned by employees—but your pension makes up for the income.) In the meantime, as the business grows and you bring in more employees, they also start earning shares on the same basis. A hundred years down the road the business you founded is a thriving blivet firm with three hundred fifty employees, all of whom are part owners, and each new employee starts out in the same place as your first hire, working for a year and getting that first share. Again, this was all worked out a long time ago.

Can you fire someone in a syndicalist company? Of course, if they’re not doing their job, or do something that deserves termination. That’s why the employees elect a board of directors, and the board hires management: so there’s somebody who’s not on the shop floor who can take responsibility for hiring and firing, and the other tasks management has to do. A management team that tries to offshore jobs to Third World sweatshops is going to be out on its ear in a hurry, of course, because the board of directors has to worry about being thrown out by vote of the employees; in the same way, any board of directors that tried to pay a management team the kind of absurdly kleptocratic salary packages that management thinks it deserves in today’s America had better empty its desk and pack its bags in advance. When every employee has a personal stake in the success of the enterprise, though, firing somebody who’s not pulling their weight, or is a problem in some other way, is rarely a controversial issue.

Now, the big one: could such a thing actually happen? Of course it could, for the same reason that unrestricted capitalism gave way to social democracy, socialism, and fascism across the industrial world in the 1930s. Capitalism, as we discussed last week, has a self-destruct button wired into it:  as the distribution of wealth becomes more and more imbalanced, the production of goods and services stops being profitable, speculative booms and busts replace investment in productive activity, and sooner or later the economy hits a crash devastating enough that the voters turn to somebody who promises to replace unrestricted capitalism with something else. We’re arguably not that many crises away from such a moment here in America right now.

That’s why it’s time to start talking again about the alternatives to capitalism and socialism. Since, as already noted, both of them suck, and the third alternative most often tried back in the 1930s—fascism—sucks even more, other options are worth considering.

It’s worth noting that classic social democracy is also an option. That’s the system we had in the United States from 1932 to 1980—a period, please note, when this country achieved the highest standard of living and the widest distribution of wealth and income in its history. As mentioned in last week’s post, social democracy balances the power of government against the power of the corporations. It’s an unsteady balance, and eventually breaks down when the wealthy forget that limiting the excesses of the capitalist system is the one thing that keeps them from being strung up from lampposts, but during the time that it works, it sucks less than either of the two alternatives that get all the air time these days.

It’s also worth noting that syndicalism comes in many flavors. Those of my readers who happen to be Roman Catholics will want to check out distributism, the specifically Catholic version of syndicalism, which draws its basic principles from encyclicals issued by Leo XIII and Pius IX in the nineteenth century, and was worked out in some detail by G.K. Chesterton in the early twentieth. Those who aren’t Roman Catholics, or sympathetic to Catholic moral doctrines, will probably not find it to their tastes, because it incorporates quite a bit of conservative Catholic morality; I mention it here partly because I have quite a few readers who are either Catholic or comfortable with Catholic moral thought, and partly as a reminder that syndicalism isn’t necessarily associated with the political left—you’d have a hard time convincing anyone who knows the first thing about Pius IX or G.K. Chesterton that either man was a leftist.

There are other versions, ranging from anarchosyndicalism on the extreme left to national syndicalism on the extreme right. The version I tend to favor, as previously noted, is democratic syndicalism: the system of political economy that combines a syndicalist economy with a politics based on constitutional representative democracy. I also favor a firm distinction between public utilities, which are best owned and operated by local governments, and private businesses, which are best owned and operated by the people who work for them; readers of my book Retrotopia already know that I consider banking to be a public utility rather than a private business, but that’s a matter for another post.

Is what I’ve just very roughly sketched out a perfect system? Of course not. In the real world, there are no perfect systems.  Every possible system of political economy will inevitably turn out to have glaring flaws, for the simple reason that human beings have glaring flaws. The best we can hope to achieve is a system that sucks less than the ones that have been tried so far.

I think that’s potentially within reach, even given the many other pressures on the United States and industrial society in general as we lurch through the opening phases of the Long Descent. If such a thing is going to be possible, though, the first step is to break out of the mental rut that insists that the only choice we’ve got is between capitalism and socialism, two systems that both unquestionably suck. Attention to the ownership of the means of production is one tolerably effective way to leave that rut and start exploring the vast and interesting spaces outside it.

266 Comments

  1. I often hear the conservative claim “I believe in small government.” My reply is usually along the lines of, “Fine, so long as you also have small corporations, small unions, small religious organizations, deal with other small governments…and face only small problems.” Balance, as always, is part of the key. Another is the understanding that cooperation lies close to the foundation of all successful power structures.

    But I suspect there is an even deeper truth; any political / social system can function a little bit better than the congregate of those who make it up, but only a little bit better. A violent, self-absorbed, and self-destructive collective of people will fail regardless of the declarations of their political system. A peaceful, cooperative, and intelligent collective is much more likely to succeed and prosper – so long as they are not caught up in the collapse of the violent, self-absorbed bunch sharing their boarder or, maybe, their world.

  2. “Sucks” is such a casually-used term these days that I’ve heard various etymologies for it (some more vulgar than others). I prefer to think of it as “sucks the joy out of our lives, as one might suck the juice from an orange, leaving us with only a crushed and bitter rind.” One might also imagine that it “sucks like a vacuum cleaner, leaving us holding the bag of dust and dirt as we trudge away from the clean home of the rich”. I have also seen references to “sucking eggs”, and if one were to suck a bad egg, that would certainly leave a bad taste in your mouth. The most vulgar associations I’ve heard (in my sheltered life) have the sense of being abused by unbalanced power, with disappointing results. That seems entirely appropriate for this essay. A situation that “sucks” doesn’t necessarily turn out badly for everyone.

  3. Something just clicked in my brain this evening.. since humans, and all are constantly evolving so too are the things we create. These economic systems will function for a time but just as we grow old and lose function, so also will the economic systems and other of our creations. I’m not sure exactly what phrase it was of yours tonight which made this connection trigger but thank you JMG!

  4. Well said, as usual.
    I find it fascinating that baby boomers tend to remember the “good ole days”, while damning democratic socialist ideals. The very past they wish to repristinate, as you so appropriately pointed out, was founded on dem soc ideals and legislations. Those legislations, I would venture to say, could be considered centrist, and in some cases conservative today.
    In NW Ohio, where I currently reside, there is much disdain for anything that even remotely smells like socialism, or communism; yet, Ohio used to be a state that had quite a population of socialists, social democrat movements, and many syndicats.
    Peace,
    Timothy Reynolds

  5. With respect to contemporary capitalism, a certain William Baldwin on Forbes actually predicts that between 2018~2043 the stock market is “poised to deliver not even half its historical return.” He writes, “If you are still working, plan on working longer and saving more of your paycheck. If you’re retired, live frugally.”

    That Forbes would publish this opinion strikes me as remarkable and a sign of the times. Moreover, other authors in Finance are seemingly more often than before questioning how much longer the post-2008-crash bull market can last. Like Bitcoin, it is clear there is a bubble, but there is no political will to address what the long-term consequences will be.

    Still, on an optimistic note, maybe over the next decade or two people will start looking at alternate options, especially once their standard of living stagnates or declines. There might even be discussions concerning how to address environmental issues in relation to industrial society, but then again environmentalism in the 80s and 90s was bought out, so it all remains to be seen.

  6. I heard a story on the radio about a man who owned a small company which made some small metal widget. It might have been a specialty screw or bolt, something like that. He said that when a Chinese manufacturer started competing with him, the finished Chinese product was priced, per pound, less than he was paying for his raw materials! How could he survive? Even if his labor, equipment, and energy were free, he still couldn’t match the price. His response was to review the product specifications with his biggest customers, and together they agreed that the product would still be acceptable if he were to use a cheaper grade of raw material. (Whether or not that was enough to ensure their long-term survival had not yet been determined when the program aired.) I wonder whether an employee-owned manufacturer would have the agility needed to respond promptly to crisis conditions. The process for making major decisions at my church, for example, is measured in months, not hours (even though we don’t insist on concensus).

    Of course, there’s not much reason to think that other corporate governance models would be much better.

  7. This year being the 100th anniversary of the Russian Revolution, I spent some time reading about how it happened. In fact, syndicalism was a major player in October: after the February Revolution in 1917, worker-owned industries (called “soviets”) became a major political force. It was Lenin’s idea to have these industries transfer their political allegiance to him in order to gain total political power. The weight of the largest industries in the great cities eventually fell behind Lenin.

    Of course, the soviets had multiple options for political change, which they debated freely amongst themselves after February, and the Bolsheviks were only one of these options. But I thought I would point out how rapidly a weak, corrupt government fell when the soviets became the most powerful places for ordinary citizens to express their desires freely, and how the structure of syndicalism contributed to that.

  8. Very welkom and good analysis. Syndicalicalism would be a very welkom system. However in combination with a strong social democratic government for the common good of all the people in our country’s. The public infrastructure, social welfare etc. and the borders in wich organisations can develop their work. And also pay their share of the public goods.
    Thank you very much for your wonderful work!!

  9. The first thing I would point out is that capitalism didn’t become dominant because capitalists won an election or mounted a revolution. It gradually replaced feudalism due to a variety of factors. I think syndacalism, in which ever form, also needs to do that, and in fact is doing that. But as that takes time and things are careening badly now, I think we need to bring back some measure of social democracy in order to hold back calamity.

    As a side note, I think a discussion of why we never had a true democratic socialism needs further examination. Was it because socialism is inherently anti-democratic, or were their other reasons – like resistance from capitalism or centralized socialism? If capitalism could morph into social democracy for a time, why was there not a similar process for the communist countries? What if the Prague Spring had been allowed to flower?

  10. @Timothy – I think what you point is gets to the problems with modern democracy. Voters are subject to all manner of manipulation and elections are hardly perfect measures of the public opinion. Vast money in politics is a big part of the problem but not all of it. And these problems will be pertinent even in a democratic syndicalist system, though without corporate power they may be more manageable, or maybe not?

  11. Are there any examples of countries that have run on a syndicalist economy, in the same way that countries have been socialist or capitalist? I know there have been regions like that (Mondragon comes to mind), but there may be errors which only show up when the it dominates the economy of an entire sovereign country.

    Speaking of countries, wouldn’t syndicalism have the same flaws as democratic systems? What’s to stop the employee-owners voting for their short term interests at the expense of the future, as happens in democracies today?

  12. Syndicalism sounds a lot like the coops that exist here in western Massachusetts. I think the biggest problem in advertising for syndicalism is that it requires rewiring a lot brains to overcome the thought stoppers that pervade us these days. My experience is if it can’t be explained in five minutes without having to correct the faults of the modern dictionary, adding words/revising words to older definitions, it’s a nonstarter in trying to convince someone. Each side will just slap the label of capitalism or socialism on syndicalism. If syndicalism can avoid unwanted bumper stickers I think it might have a fair chance.

    I worked for Big-Y a while ago and the first thing they said after they hired me was no unions…. We’d rather go out of business than have a union. Unions used to be a bloody business, cooperation’s would send their lackeys after union leaders, etc. For syndicalism to come into being it seems like strong unions would be required first… Hasn’t union activity been declining in the US recently?

    Modern cooperations won’t go quietly. I feel that when a system reaches its terminal phase, anyone looking to throw the wheel, should try but realize they’re probably not going to be successful because there is just to much momentum in the system. It seems the best course of action is to help a system collapse first before trying to transform it into something else. For syndicalism to work I think the modern global cooperations would have to be in their terminal years/phase. The best way to bring that about might be for people in them to make sure cooperations are taking solid doses of their own poison, synthetic CDOs, fake accounts, etc.

  13. My views of political economy are influenced by my legal training. What I especially like about syndicalism is that there are fewer masters to serve, thus fewer conflicts of interest and fewer incentives to bad behavior. Executives of a large corporation, for example, should in theory have obligations to at least four classes of person: shareholders, customers, workers, and themselves. Among those parties are many conflicting interests. Shareholders want to see their profits maximized, which in practice mean paying workers less, cutting corners, and using cheaper materials while keeping prices steady. That’s bad for workers, customers. communities and the environment. Meanwhile, the executive class is best served by playing accounting games and asset stripping, which maximize stock value long enough to pay them big bonuses, while diminishing the future prospects of the company. Good for them; not as good for employees and shareholders.

    In a syndicalist system, shareholders and employees are the same people, so that’s one conflict of interest down. In a worker managed coop, as opposed to an ESOP, boards and management are part of the workforce and are kept under relatively tight control. If the company fails, their pensions go with it, so their incentives are aligned with those of the rest of the workforce. That’s a temporal conflict of interest either diminished or avoided.

    Finally, profit is not the only, or even the most critical, goal of a syndicalist business. Part of what makes capitalist corporations behave like sociopaths, polluting, despoiling and wasting resources like there is no tomorrow, is that profit is the one and only obligation of a corporation. They are designed to subordinate all other interests to profit, which is a way of subordinating an abstraction to reality, with disastrous results. I prefer a system where incentives are aligned with good behavior. It just makes more sense.

  14. I think Tim Akey has made an important point. Bad systems can go on a lot longer if the population starts with a great deal of social cohesion, strong internalized moral principles and a willingness to be aggressively involved in their communities. On the other hand a population that is fragmented, only looking out for themselves and has no will, desire or motivation to be civically involved can have the best system known and crash it toot-sweet.

    AV

  15. JMG:

    I’ve been watching a version of this for a number of years. Oddly enough, it started out with the Society of Friends (the Quakers), went through a very innovative school in the Netherlands where the children had a voice in how the school was run, and then got formalized with a liberal dose of cybernetic theory in a marine industry manufacturing business, also in the Netherlands.

    It’s a good deal more formal. One big difference is that the workers don’t vote on a board of directors. There is a hierarchical system where the workers on one level vote for a delegate to the next level, and so forth. This eventually works all the way up to the top circle, which consists of workers who have been voted on by the next level.

    One reason this works is that one focus is on equalizing power. There is no way to impose a policy. All policies have to be discussed and consented to by the workers affected. There’s a very rigid meeting format that prevents meetings being dominated by individuals, and is quite effective at avoiding being steamrollered.

    This is called Sociocracy. The book is We the People, by Sharon Villines. Make sure to get the 2017 edition; Amazon has the ordering royally screwed up for some reason. It’s quite popular in Europe, not so much here in the US.

  16. Great essay! I’d point out that “We Build the Road as We Travel” is an excellent book about the the Mondragon Coops of northern Spain. A good read and an great explanation of Syndicalism in the real world.

  17. Thanks for writing about this. I have long found syndicalism appealing and often advocate for it. The idea always appealed to me and I took a particular liking to it after reading Chomsky (who is a strong advocate for anarchosyndicalism) and about the Spanish Civil War. Democratic syndicalism seems like the most achievable at this stage, though I just read The Dispossessed and really enjoyed it.

    I had a thought about syndicalism last week while watching It’s A Wonderful Life. The Bailey Building and Loan seems like it attempted to apply some syndicalist principles. Everyone who had a house built by the building and loan had a stake in the business. Though it seems the way the board was structured was too capitalist to really qualify; Potter got on the board.

  18. Dear JMG, hope I’m not putting the cart before the horse, but hearing more about the laws [from Mystery Teachings of the Living Earth) in relation to systems of organisation would be great… It is difficult not to conclude that human activity seems not only out of kilter with the world at large, but that a general refusal to consider (beyond hand-waving) that there might be constraints and repercussions to Humans First[TM] makes it look like we’re way beyond the stage of dealing with problems and are wading ever deeper into the realms of ‘predicament’ and attendant fallout.
    Here be dragons… quite literally!
    Looking forward to where you plan on taking the Archdruidical memescape!

    Also, you mention about things that can be considered public utilities; could you say more about this in relation to what is called ‘the commons’ and the point of view that ‘the commons’ is not just about humans?

    If ‘commons’ extends further than we think. (e.g. extends through planes) the possibility that we’re attracting attention from further up the energetic food-chain is a sobering thought!

  19. @Lathechuck

    That’s the economic system called Mercantilism: Do what you have to so you eliminate the manufacturing in your competitor country, and turn them into a resource to be drained. The Chinese have been pursuing this policy for a long time. It’s working – look at the balance of payments stats some time.

    JMG has mentioned this a time or six, as the big problem with free trade, but I think that’s a discussion for another time.

  20. I certainly feel attracted to smaller scale, worker-owned commercial enterprises like those described by E.F. Schumacher and others (including JMG), but when it comes to large scale economics on the national level, there is IMHO no more stunning and viable vision than that put forward by Edward Bellamy in “Looking Backward” and its sequel, “Equality.” Revise his detailed and prescient late 19th Century system of “national capitalism” with a central focus on environmental issues and constraints, and I submit that there is no need to reinvent the wheel but merely to summon the political will to roll with it, however incrementally. Thanks, JMG, for opening up a much-needed discussion of alternatives to soul-sucking, earth-destroying neoliberalism, because TINA it ain’t. Readers of Ecosophia might also be interested in exploring Modern Monetary Theory (which dovetails nicely with Bellamy) on various internet websites, articles, and videos.

  21. I am trying to get grounded about what range of scale and intensity syndicalism might thrive in. Even the finest brick is eventually crumbled in too hot a kiln; it seems that the unparalleled intensity of 20th century human activity was too great for syndicalism to survive against the rapaciousness of Capitalism particularly. It was prey to an apex predator hyper-adapted to a high energy environment or rapid and capacious change. That predator in turn is likely to fall the its own hunger, out side of its narrowing niche. Perhaps a few turns different in history, and the predator might have been eluded in more cases; indeed many refugia of syndicalism have thrived even in the hunting grounds, where cover could be found.

    But the case that captivates me is the opposite extreme, the context of particularly sparse intensity. I range between four Mesa’s from Western Colorado into Northern Arizona, Grand Mesa, Mesa Verdi, Red Mesa, and Black Mesa. It is a generous but poor land with a surprisingly wealthy Capitalist Colony propped over it. Yet, the way of life across that range is acutely unsustainable, the current population, the current economy, is not long for the world. Changes acting generally on the Earth are sprung to act acutely here.

    The means of production here make up a tiny portion of the economy. But, things like dry land agriculture, and herding along with salvage and wilderness could make sense even with vast degradation compared to the present state. I am involved with groups, rarely larger than a couple dozen, who are playing with these means of production, while still making the daily living off the bounty of the larger society.

    What does syndicalism have to offer to groups of herders? Or to a small town wool collective? To a gun club? To a seed cooperative? In an area where the natural means of production only support a few “workers” per mile square?

    Suppose some friends decided to share a herd of sheep and goats, herding style on vast tracks of land, such that the group had enough capable shepards the flock could consistently be tended for, and such that the regional public lands already have the legal options to range them. Allowing that each shepard have time off from herding to tend to the bothering obligations of the colony which still governs here. Also that which is produced is only monetized to the most minimal extent, instead providing the membership with flesh and leather, wool and cheese.

    It seems in that small extent a syndicate might thrive, particularly with a democratic or feudal backbone depending on how harsh a greater human environment it has to contend. Each moon with the sheep would entitle one to a degree of seniority, and as ones experience grows and one gains further degrees ones voice grows louder on how to arrange things for the herd and pasture.

    Interesting.

  22. Great post as usual, JMG! I do agree that we need a reform of our political systems, but I have just one question about your treatise on syndicalism — wouldn’t a council of longtime employees with a lot of shares (and thus say in the fate of the business) be able to get elected to the board of directors, then manipulate the company for their own personal gain, at the expense of others? Apart from that, though, I share your views on syndicalism wholeheartedly after reading this post, and I concur that we need to find political systems that are less dysfunctional.

  23. Hello, JMG. Thanks for this. I have to say that I am in favour of “systems that suck less” in several senses, including “systems that [extract] less”. I am personally both self-employed (so a proto-syndicalist) and employed in a family owned capitalist enterprise (in which I do not have a share), so I very much appreciate that keeping the power and responsibility close to where the consequences of actions and decisions may be first felt, is the safest way to organise things long-term.

    But, while I thank you for beginning to break apart the false socialist/capitalist dichotomy that has put a straitjacket on our thinking, and open up a discussion of alternatives, it may also be that there is no alternative “system” that can ever be picked as the be-all-and-end-all of all systems, but rather that there are system-correcting processes that can be applied on a regular basis to address imbalances that inevitably develop. ie – it may be that political economies, like all human realms, become bogged down with messy consequences if left too long unattended (or untended) which could fruitfully be addressed by ongoing maintenance.

    In this context, I believe the emerging scholarship* around periodic debt cancellations in the ancient world, which by returning land and people which had been turned over to creditors, led to social and economic renewals, would pay some study, as a kind of political economy “maintenance” process that might be usefully applied today (with some tweaks to make them more current).

    It may also be of interest to some that frequent this blog, to know that some of the earliest Mesopotamian iterations of the debt cancellation process placed it into a ritual and narrative context of bringing the world of people back in line with the world of nature.

    * I was not the only one in the last comments thread to link to a review of Michael Hudson’s upcoming book on debt forgiveness – due in 2018. Anyone interested can also read his paper from 1993, an earlier working out of similar material – “The lost Biblical tradition of debt forgiveness” – http://michael-hudson.com/wp-content/uploads/2010/03/HudsonLostTradition.pdf

  24. Brian, yep, that’s called Jevons’ Paradox: increased efficiency in using a resource drives down the price and therefore leads to more use of the resource. It’s been understood since the 19th century, which is why it’s so embarrassing that our current crop of technological cornucopians have never heard of it.

    Tim, exactly. A government’s domestic policy can never be better than its people; a government’s foreign policy can never be better than the worst of the countries with which it has to deal. Unfortunately, though it can’t be better than these things, it can always be worse…

    Lathechuck, I don’t worry to much about etymology; the word “black” comes from a root that originally meant “white” (cognate with French blanc). The verb “to suck” has a clearly understood pejorative meaning in present English usage, and it gets the point across.

    Prizm, good! As long as you don’t confuse evolution and progress, that’s a useful insight.

    Timothy, well, yes. Then they received more in benefits than they paid in taxes, so they were in favor of benefits; now it’s their generational turn to pay the taxes, so they’re screaming like gutshot banshees.

    Jeffrey, yep. I don’t expect significant change to arrive until we hit full-blown crisis. I think it was Winston Churchill who said, “The American people can always be counted on to do the right thing…once they have exhausted every other alternative.”

    Lathechuck, that’s why sensible tariffs and trade barriers are part of the economic policy of every nation that wants a functional industrial sector. The US built its industrial economy behind a wall of tariffs and trade barriers, and lost it once it threw the barriers down. The same has been true in every other case in economic history; it’s just that free trade is more profitable for the financial sector and the privileged classes.

    Avery, true enough. Another lesson here is that Lenin didn’t explain to the syndicalists in Russian industry that once he finished shouting “all power to the Soviets!” he was going to take all power away from the Soviets. The moral to this story? A demagogue’s promises are worth the empty wind they’re written on.

    Gerwim, and that’s something that a democratic syndicalist society could vote into place, of course.

    Dean, capitalism didn’t come into being by legislative fiat, but socialism and social democracy did, so I’m not sure your argument holds. As for the prospect of a democratic socialism, unless you break up the centralized control of the means of production, too much power concentrates in the hands of bureaucrats to allow anything like democracy to function.

    Cassandra, of course! As I noted in the post, democratic syndicalism is sure to have a range of serious flaws. There are reasons to think those flaws will be less glaring than those that socialism and capitalism have, but every system has flaws — and of course the flaws of democracy will be present in any democratic form of government. So? If you wait around for a perfect system, you’ll still be waiting when the sun turns into a white dwarf five billion years from now…

    Austin, that’s why advocacy for syndicalism has to begin with relatively lengthy pieces like this one, explaining how it differs from the other options. Down the road, once the issues around ownership of the means of production get back into common parlance, it’ll be a lot easier to talk about the subject. Unions are only one way into syndicalism, and by no means the best. As for the crisis of the capitalist economy, why, I don’t think we have to worry about helping that along; it seems to be doing just fine all by itself!

    AuntLili, excellent! Yes, those are very good points, and as I don’t have a lawyer’s training they didn’t occur to me. Thank you.

    Anthony, no question, we get the government we deserve. Even so, if we live under a system that just plain doesn’t work — and I’d argue that that’s the case here and now — trying a different system does make a certain amount of sense, wouldn’t you say? It won’t fix everything, not by a long shot, but it might make things somewhat easier.

    John, fair enough. I’ll take a look at it as circumstances allow. Exactly how to run an employee-owned business is open to a lot of wiggle room, and if sociocracy turns out to be generally effective, in a syndicalist system it would doubtless get a fair amount of attention.

    Ed, so noted and thank you.

    Greg, exactly. Potter had no business being on the board. Me, I’d prefer the bank to be a municipal utility, run the same way as the local sewer district, with an elected board and a state banking commission riding herd on it to keep it legal; still, the credit union system (which is basically syndicalist banking) is also a valid approach.

    Earthworm, those are serious and very complex issues. I’ll consider a post on them further down the road.

  25. Newtonfinn, from my perspective, the less large-scale economics on the national level there is, the better. A thousand local bookstores bringing in books from a thousand different publishers is far preferable to one Ama(cough, cough, cough) monopolizing the entire process — and the same is true of every other industry. There’s a point at which economies of scale give way to absurdities of scale, and we’re way past that in America today. That said, one of the points of this discussion is to open up the conversation to other options, and if yours gets enough support, so be it.

    Ray, a seed cooperative and a wool collective are already syndicalist, so you may have answered your own question. More broadly, though, my comments about sole proprietorships and family businesses apply here. When you don’t have cheap abundant fossil fuels to throw around, the most efficient way to run any kind of agricultural economy is the family farm, owned and operated by the family that lives there — and as I noted, that’s also a syndicalist arrangement, of a simple and robust kind.

    DaShui, well, there you are. So it’s not even unusual.

    Ethan, sure! No possible system of political economy can be immune from abuses. You can put in protections against that, but people will find ways around them; make them foolproof, and someone will invent a better fool. In a syndicalist economy, just as in every other kind of economy, there will be firms that make bad business decisions, firms that end up being looted by an inner circle of employees, firms that go bankrupt, and so on. One of the good things about syndicalism is that the impact of such things on the broader economy will tend to be smaller, because it will be much less easy for one firm to end up in a dominant position in any industry or in the economy as a whole.

    Scotlyn, do you remember my discussion of ternary logic on the old blog? When you neutralize a binary by bringing in a third factor, you expand the range of possibilities not to three but to infinity. That said, debt cancellation in the absence of structural change just means that debts will pile up again; I’m more interested in looking at ways to keep wealth from flowing uphill and debts from piling up below.

  26. Thanks for the essay, I am looking forward to the discussion!

    For my part, I will ruminate a bit, and while I am ruminating, I have two questions:

    1. You stress the real-world existence of syndicalism. Which state or national economy as a whole has ever come closest to this ideal system, in your opinion?

    2. Pardon me any lapse of memory, but did you describe a full-fledged syndicalist enterprise someplace in Retrotopia? I recall plenty of one-person shops, public utilities, religious communities and one old-fashioned capitalist.

  27. The glaring problem with democratic syndicalism within a capitalist background is that, based on historical data, it either is not competitive (and hence dies out), or degenerates into capitalism in order to compete. Mondragon is an example of the latter–you start seeing polarization of wealth, offshoring of jobs, and worker apathy. In our historically amnesic culture, not many people are aware of the former. One of the largest examples of democratic syndicalism are the 100 or so Communautes de Travail, started after WWII in France, which lasted from a few years to about 40 in the case of Boimondeau. Boimondeau was making watch cases and could not compete with pure capitalist companies that could offshore jobs, take temporary losses for long periods, have predatory practices, etc. Other examples can be found, including food coops.
    These two outcomes might be avoided if the background was also syndicalist. But how to get there? I think some protectionism is needed until a strong enough network is established, able to withstand competition from capitalism.
    Thanks for mentioning distributism, at last. It also seems to not be competitive with capitalism (unless it can be protected), as evidenced by the fall of european medieval village economies. I favor it, though I am not in total agreement with catholic moral thought. I think Gandhian economics (as promulgated by JC Kumarappa) also was distributist.

  28. Some weeks ago a commenter (I’m sorry not to remember the name) asked for JMG’s opinion about “Carbon Democracy” by Timothy Mitchell. I found the reviews of the book so interesting that I ordered it from our municipal library here in Quebec, and have read it over the last weeks. I think it is quite relevant to today’s discussion of concurrent political economies in the 20th and 21st century, and even more to the wider question of politics and ecology.

    Years ago several people on the ADR asked exactly how it was that America’s empire (and European empires before it) managed to “pump” (vulgo steal) wealth from what used to be called Third World countries to the USA and to the inner ring of clients. If anybody still has any doubts about the mechanisms, they are explained In this book, for oil, as clearly as one could wish for. You will never again hear the words “free market” the way you heard them before…

    Right at the beginning, I have to say the book is quite uneven and not entirely satisfying, though I don’t know if anybody could have written it any better. The subject matter is “the relation between carbon fuels and the forms of democracy over a period of more than one century” (~1880-2011), and as one reads the book one discovers that it would take several thousand pages to treat that in a comprehensive way, so many connections are there between the fuels and the political system. Since the books has “only” a few hundred pages and always goes deep into original sources, facts and numbers, it is inevitably a collection of spot lights on some of the aspects the author knows best, especially in Britain, Egypt and Iraq. Nevertheless, there is a huge number of statements that challenged my view of the last century, and I will briefly cite here the ones I found most interesting:

    1. The cooperative nature of coal mining and the impracticality of transporting coal over the ocean gave coal miners a huge advantage in obtaining egalitarian legislation by general strikes. General strikes were considered impractical in 1870, but were increasingly common and successful from 1890 to the 1920s. They became more and more impractical again as oil substituted coal (oil can be transported by oleoducts and tankers). Mitchell extends this hypothesis to state that the general franchise and welfare state were possible only after the economy became dependent on coal and therefore on coal workers. I think with regard to franchise he overlooks the experience of the USA in the 19th century, but he does point out the remarkable fact that Churchill changed the Royal Navy’s fuel to oil in 1913 largely because the Welsh coal miners were becoming too obnoxious for his taste. I think he should have expounded in more detail why the huge oil workers’ strikes of the 1940s (according to him, the biggest strikes in American history) do not invalidate his thesis.
    Syndicalists, like socialists, have often talked about general strikes. It seems important to consider what strategic strangle points a post-peak oil economy will have (Mitchell poses this question without trying to answer it).

    2. Cash only became widely used after WWI, and it was only then that economists thought of measuring a GDP, that is measuring the health of the economy by the quantity of money circulating. Before that, economists had (rightly) objected that one had to somehow quantify the depletion of resources, and that it made no sense to measure the same sum of money twice as it circulates between people. After GDP and the money interpretation of economy became installed, the availability of huge amounts of cheap oil eliminated the fear of resource depletion, which before 1930 had been an important subject in political economy. The “economy”, as it was only now called, became a realm of its own, unmoored from nature.
    I think money will become less relevant in the future than it now is, and local control of enterprises might be well adapted to this change.

    3. Oil was incredibly cheap to extract from 1890, and especially from 1930, until at least 1970. The big oil companies’ main interest over this entire period (from 1890 to 1970!) was to extract as little oil as possible, to hide the reserves and to impede other companies and the local governments from extracting more oil. Incredible as this may sound, he documents it in excruciating detail. This is now mostly of historical interest, but it does show (my thoughts now!) that the oil prices of the 2000s have no relationship to the oil prices of the 1960. In the 1960s, oil companies could have charged 10x, even 50x less for oil on the end markets and still made a profit! In the 2000s, they became increasingly gripped between rising production costs and what the consumers could pay, leading up to our current price oscillations.
    As I said above, you will never again hear “free market economy” just the way you heard it before.

    4. Our whole way of thinking from the 1950s onwards was based on the apparently limitless nature of oil. It was basically impossible, in the 1930s and 1940s, to quantify how much oil the huge deposits in Texas and the Gulf contained, and the production price kept sinking even though consumption went through the roof (in fact, Mitchell suggests the dollar was pegged, in the 1950s and 1960s, more to oil than to gold). Democracy in the industrialized countries relied more and more on the opinion of economist “experts” and less on strikes and other forms of popular pressure in order to spread income to the workers. That made it easier for the welfare state to be dismantled when the economics experts decided to embrace “free market” ideology in the 1970s.
    I suppose (though Mitchell doesn’t discuss this) that cheap, unlimited oil also strengthened central control of the economy).

    5. Unfortunately, the book hardly deals with oil price in the 1980s. I would have liked to understand better the “gimmicks” JMG has mentioned which led to the oil price going down and suffocating alternative energies.

    6. The conclusion (written in 2011) has a very fine discussion of what peak oil is and why it has claimed less popular attention than climate change. I think the arguments complement JMG’s psychological or mythological argument of the invincibility of Man. Mitchell dwells on the manufacture of incertitude and doubt by the fact that oil reserve estimates are secrets well kept by the companies and the oil-producing states.

    I would very much like to hear opinions about the book, especially by Oilman!

  29. JMG-

    My understanding of syndicalism comes from reading emma goldman and rudolf rocker among others, who were all the of the anarchosyndicalist variety.

    As I understand them, they favored basically no government getting in the way of the syndicate, whereas it sounds like democratic syndicalism would allow for representative democracy to regulate syndicates where necessary and run public utility type of things. Is that more or less correct?

    Could you recommend any books/authors on democratic syndicalism?

  30. Matthias, that I know of, it’s never been done on a nationwide basis. The examples are all on a smaller scale. As for Retrotopia, I didn’t bring syndicalism into that story because I wanted to focus attention on the theme of going forward by going back.

    Iuval, capitalism concentrates so much wealth in the hands of capitalists that they can bribe governments to put in legislation that benefits capitalism at the expense of other systems. That’s why syndicalism will have to be put in place via the political sphere.

    Matthias, thanks for this. I’ll probably have to give it a read sometime soon.

    Sng, exactly. I don’t know of anything currently in print; I read about democratic syndicalism in old books on political economy years ago. Does anyone else know of a book on the subject?

  31. “Scotlyn, do you remember my discussion of ternary logic on the old blog? When you neutralize a binary by bringing in a third factor, you expand the range of possibilities not to three but to infinity.”

    Yes I do. And an infinite range of possibilities gives much more scope than a binary “bind”… to the imagination, as much as to life itself! 🙂

    I guess what I was aiming at in my comment was something you hinted at when you mentioned that people often discuss their preferred system in its ideal form, and their abhorred system in its advanced and senile degraded form – that is to say, the nuance which might be evident when you add the dimension of time. Both forms of conceiving of said system (in your lovely comparison of each in both ideal and senile degraded form) are in some sense true, in that an ideal is what launches a system and some fatal and endemic flaw is what ends it, but they are true to different phases in its life cycle, and can be held in mind as one OR the other, only so long as the system is conceived of as a timeless, unchanging thing.

    “That said, debt cancellation in the absence of structural change just means that debts will pile up again; I’m more interested in looking at ways to keep wealth from flowing uphill and debts from piling up below.”

    And yes, of course we need to consider how to stop wealth from flowing “uphill” (which, if you consider the way in which money likes to gravitationally “clump”, then this is the same as saying wealth follows its gradient, just as water does, when it flows downhill), and debts from piling up “below”.

    But if it turns out that wealth flowing one way and debt piling up the other way, are “gradient-following” tendencies that can never be completely stopped without surgically altering human nature, then we still need to build active tending or maintenance processes into the life cycle of our system. These would reverse the gradient (in a way not entirely unlike evaporation in a hydrological cycle, or unlike a heart in the human vascular cycle) sufficiently to connect the flow from the “bottom” back to the “top” of the gradient (or vice versa, depending on how you conceive these) into a continuous cycle. This is what I mean by maintenance, and/or tending – that is to say, active processes that counteract the tendencies the system (all systems) might have to go bad if left unmaintained or untended.

    PS. It is true that I am also quite excited by my current reading of Michael Hudson’s ideas, but that plug was definitely not intended to derail any of the discussion here, only to add to it.

  32. IMHO continuity is a significant force in human relations. By that I mean the tendency to be emotionally bound either to maintaining longstanding favourable conditions or rejecting the unfavourable. Emotions are a much more potent driver of action than ideas and perhaps that is an unavoidable primal condition. Certainly successful politicians understand this and are able to manipulate others as a result. That may explain why climate change deniers cling so tenaciously to their beliefs in spite of the otherwise overwhelming evidence to the contrary and often subscribe to associated constellations of similarly irrational faith based ideas. Faith and belief require no proof, only to be contrary to existing realities and promising change that favours their supplicants. Maybe irrationality is the critical ingredient? I tend to believe that any form of Utopianism falls into that category, not ignoring that’s one of my beliefs. There certainly are better and worse forms of political economies as you’ve described. I’m just suggesting what I think is a critical dimension to understanding the dynamic of their formation and wondering if anyone else feels it’s merits discussion?

  33. John–

    Perhaps careening a bit sideways from the topic, but I’m most the way through _The Retro Future_ (which, yes, has led me to search out _The Glass-Bead Game_) and this week’s post made me think of the point you made about different societies valuing different cultural projects. When we talk about “production”, we are generally focused on material goods and related “economic” services. But things like art, music, education, and religious activities are no less services, are they not? The application of syndicalism to these sectors would also be possible, I’d think. Orchestras owned by the musicians comprising them, for example. Or universities by the faculty. Or religious hierarchies by their clergy. Fascinating to consider. How to implement, of course, is the trick.

  34. Everybody’s favorite regional grocery chain around here, Publix, is an employee-owned operation. It’s very successful, and everybody I’ve ever known who worked there has had good things to say about how they treat employees. I met a 70+ year-old man once in a Publix: he was bagging my groceries, and proudly showing off his company-issued Rolex, recently received for however-many decades of working for the chain.

  35. Hi JMG,

    Thanks for the essay. This has given me considerable food for thought. I have three of questions.

    First, how does syndicalism handle economic downturns? If you’re a widget manufacturer and the market for widgets is way down, in the capitalist model, you would lay off people to cut costs until the market for widgets came back, but if the workers are also owners, how does a syndicalist system operationalize such things a layoffs? Do such worker/owners receive their ownership shares back when they are laid off, thereby being paid the value of those shares? Are they held in trust for them until the market comes back and they are rehired, or what?

    Second, what is done about temporary and part-time employees? It seems unrealistic to have ownership rights for people who will be there only a few months to do a specific job Obviously, as has been mentioned here, no system is perfect and there will be some abuses, but as a general rule how are such things as temps and part-timers handled in the system?

    Third (and this is half question and half statement), it seems to me that fostering the growth of syndicalism is something that actually can be done in an existing capitalist system, and so is something that can be done on an individual and small-group basis. Yes, I know that there are increasingly limitations placed start-ups getting into the system, due to rules and laws created by governments at the behest of companies to prevent such creations, as well as just the normal way an established capitalist system is self limiting, but it seems to me that there is room to start such work and then use those companies to foster new ones and advocate for pro-syndicalist legislation. Am I right or wrong here?

    Thanks for your time and for the great content!

  36. I’m making this a separate comment so that John can delete if he deems it out-of-bounds. As this week’s post was tied to the previous one, I wanted to respond to a late comment in last week’s cycle.

    @OIlman re “renting” and ownership

    I do understand the general point you were trying to make re taxes on property. However, as just one local government official in a state where property taxes are essentially the only remaining funding source available to pay for public services (i.e. ones that cannot effectively be turned into use-based utilities), I’d point out that it is a reasonable means to allocate costs to the beneficiaries of those services based on some degree to their ability to pay. As a resident of a city, for example, we have road infrastructure, zoning and inspection services, election and poll management, legal counsel, police and fire protection, and general executive management of the municipality. All this must be paid for by some means. Personally, I have no issue paying my property tax bill, as I understand that these payments go to fund the services I receive (and in my particular case, only a portion thereof — unfortunately, my municipality is nowhere near self-sufficient with respect to local tax revenue and is highly reliant on shared revenue from the state, a situation that represents a significant risk exposure as I see it). Perhaps there are other effective mechanisms that can allocate those costs to the citizenry in a reasonable manner, but a millage rate is a pretty good one, to my mind.

  37. I came into this essay with a certain amount of apprehension. Turns out to be another solid bullseye. I am glad you are having this discussion. I frequently identify myself as broadly socialist, as a way of aligning my interests with the broader working classes, when really it is one or another form of syndicalism that I would describe to anyone who asked as my preferred system of choice. I believe that is true of a great many others. There are many of us out here struggling to find a way to bring this vision to a reality. Please keep sharing your wisdom!

  38. JMG, it seems to me that in many ways capitalism is well suited to an expanding economy, but probably unable to handle prolonged contraction. Do you see syndicalism as being better able to adapt to the conditions of the long descent including localization, diversification, alternative currency and barter, etc.?

  39. JMG,

    I agree we need to try something or something will be imposed upon us. But I also agree that is will likely take a strong shock to the system in order for the population at large to be open to an alternative and to have the will to try an alternative.

    But as much as I loathe to say it I think that “socialism” (democratic or otherwise) has the inside track. Even more terrifyingly some form of renamed “fascism” is behind socialism. You are, literally, the only person I have read who has brought up syndicalism as an option.

    But hey, the idea has to start somewhere!

    AV

  40. JMG,

    I find the most useful definition of “socialist” to be “someone whose main hobby involves arguing about the definition of the word ‘socialism.'”

    More seriously, are there any particular companies you think are good examples of syndicalism in practice that interested parties could learn about as a model?

  41. In the first half of your essay you give a pretty good critique of capitalism and socialism but you don’t critique social democracy. I would argue that here in UK we had a pretty good social democratic system during the post WW2 period until Thatcher took over and started selling off public services.

  42. Speaking of other systems which suck less, what do you think of Universal Basic Income? It doesn’t address the means of production at all, but treats people like cattle who just need feed troughs to be docile (some say even happy). And what do you think of hierarchical feudalism, with a monarch at the top? I have a friend who seriously wants to be the “Emperor of the Universe”, but he is benevolent (so far). I have seen a few others who have established some sort of fiefdom and I expect the trend will continue as things decline with our industrial civilization. Do you think feudalism sucks less than what we have now?

  43. Hello JMG,

    I’d like to second earthworm’s request for relating this discussion of social economy/economies to the Seven Laws and its implications beyond the human sphere.

    Thank you earthworm for asking!

    Bonnie

  44. JMG and sng, Richard D. Wolff, a Marxian economist, has been writing about democratic syndicalism under the heading of “democracy at work” for many years. His book “Democracy at Work, a Cure for Capitalism,” (2012) is a good place to start. There is more information at http://www.democracyatwork.info and at Professor Wolff”s personal site, http://www.rdwolff.com.

    And JMG I was running out the door when I submitted my earlier comment. I meant to say that subordinating all other interests to profit makes reality subordinate to an abstraction, only I put it the other way around. Sorry about that.

  45. As I think about this topic, it seems to me that it would be most helpful if education changed in ways that might enable people to experience the different way of thinking and functioning that such a system as syndicalism might entail. I don’t think our current educational system is capable of preparing people for the kind of self-motivating, independent thinking that would be required. One way that comes to mind is the Sudbury School movement: http://www.sudburyschool.com. In Sudbury schools, the students, from the youngest on up, participate on an equal basis with the adults in governing the school themselves, based on participatory democracy. A vote by a six-year old student has just as much weight as that by the oldest and most experienced adult. I don’t say “teacher” because in Sudbury schools, there is no predetermined curriculum. Each individual student decides what they want to learn, when and how, and the adults provide assistance, when asked for, in reaching their goals. It has been described thus: in public schools, the state determines the curriculum; in private schools, the administration determines the curriculum, in home-schooling, the parents determine the curriculum (sometimes also the state), but in Sudbury schools each child determines what, when and how they want to learn. Many graduates of Sudbury schools (from all varieties of backgrounds and social class) have gone on to fine careers, ivy league educations, entrepreneurial success, and happy engagement with life. I’m not sure how we get “there” to better systems of political economy, with out preparing more people to think, act, and feel differently. Another way might be apprenticeship, about which I am certain JMG has much to share.

  46. this essay, and many of the associated comments, address the basic flaw of both socialism and capitalism. neither system scales well. most of us grew up under small scale socialism. our parents did not, typically, expect us to pay room and board. most families are classic examples of ‘from each according to his ability and to each according to his need’. similarly, on the local scale, capitalism shines.problems with spoiled milk and meat were rarely a problem when the consumer purchased directly from the producer or from a reseller who sourced locally. with urbanization came anonymity and, ultimately, ‘the jungle’.

    as either system grows two major problems arise. first, as you note, is the bureaucracy that develops. however, the bureaucracy is actually just a subset of a larger problem. as systems grow, there are increasing opportunities for parasites to game the system. in the u.s., as financial intermediation has grown from 2 percent of gdp to upwards of 20 percent, the greatest rewards in this economy are skimmed by bankers, brokers, hedge funds and other intermediaries who produce nothing. in addition, we find vast numbers of lawyers, accountants, financial advisers etc. whose primary function is to take advantage of the complications that result from the sheer size of the system.

    syndicalism can, at least potentially, restore the benefits of small scale enterprise. however, any system that grows beyond the simple system of controls; reputation most important, imposed by close relationships among economic actors may result in the same parasitism that characterizes modern capitalism. ultimately, i believe, to function effectively and fairly, an economy must be localized. we can always rely on the people we know and have come to trust and who, in turn, rely on us.

  47. The description of a world with both capitalist and socialist countries works at least as well when they are labelled as corporate capitalist and state capitalist respectively. Two different paths to capitalism makes more sense to me, because it explains what Russia and China have become, despite aspirations of being some sort of workers’ paradise.

  48. Oh, joy!! A second Christmas present!! Bless you, Santa 🙂

    Brings so much to mind…’the share economy’, Lincoln Electric, Jack Stack’s (studied for priesthood, ala Gov Jerry Brown) books, ‘Small Is Beautiful’, Mondragon, Bernard Laetier’s writing, etc, etc….. all the stuff that gave me hope me in past decades.

    Looking forward to seeing T.I.N.A. hanging from a lamp post. (Hey, I could make a protest sign out of that… hmm)

    Now, back to the comments! ox

  49. I admit that the first time I heard the term syndicalism I dismissed it. It was being thrown around by an acquaintance of mine who calls himself an ‘anarchocommunist.’ Yes he’s serious, no he doesn’t realize why I laugh every time I hear him say it. Perhaps I may have fallen prey to the tendency of humans to declare things tainted by association and I should investigate this term further. Thank you for bringing it to my attention.

  50. Attempting to be brief: As they have been mention in your writings how do the guilds relate to economic organization?

  51. For the sake of this discussion you have focused your definitions of various economic systems very tightly according to the ownership of the means of production, but at the very end of this week’s essay you expressed some thoughts on how the public commons should be managed as well. What would you say is the overall relationship between political economies an management of the commons? You sometimes see the capitalism/socialism dichotomy represented as a difference of how public utilities are managed, with nearly everything being treated as a public utility in a fully socialist system, and nearly everything being treated as a private industry in a fully capitalist system. The disagreements over last week’s post show how important a specific operative definition is when dealing with topics as diverse and divisive as economic systems, and the definition that sticks to ownership of the means of production manages to work for this discussion. However, there does seem to be an additional factor in defining economic systems that addresses the relationship between private industry and public commons such as natural resources or public utilities. Is that relationship an answer that syndicalism itself would have a basic answer to? Or does each different form of syndicalism offer a different answer to that question? In a society such as Retrotopia, for instance, that has a strictly delineated public and private sphere, would an employee of the public sphere (such as in Retrotopia, a Banker), have any access to ownership of the means of production? Or would his investment in the economy be about the same as anyone else who pays taxes?

  52. Rabobank, one of Europe’s largest banks, was founded as a Christian worker’s co-operative and has only recently shed its co-operative legacy – it is a normal corporation now.

    So co-ops can be successful, but a successful network of co-ops needs strong social capital, small income inequality, and a sense of belonging together. The Dutch used to have those things, and they managed to found a number of successful co-ops.

    Other areas have those things as well, like Emilia-Romagna in Northern Italy, the Basque countries or Finland.

    Where those things are lacking, though, co-ops are not a viable option. People must trust each other, and in difficult times, they generally do not. There is nothing bonding us together, like religion or ideology in the past. Immigration and income inequality are shredding the social fabric everywhere.

    I would love to work in a co-op, but co-ops are not a solution to the world’s problems. Once capitalism collapses again, I bet on (extended) family businesses.

    Probably not run by traditional Europeans or white Americans, but by families of immigrants from North Africa, Asia or South America.

  53. Hello JMG, been a while since I’ve commented on here. In fact,, I haven’t even commented on your new site yet as I’m usually a month or two behind on your posts! I hope you are settling well into your new home of RI.

    No disagreement from me on these last two posts. I’m in full agreement. Given the choice we have in Britain at the moment I’ll take Jeremy Corbyn and interestingly he talks favourably of syndicalism. Given that my wife and I started a family farm 18 months ago, I suppose that is the path we are following too without realising. This will give us something to discuss for future decisions re employees should we ever have a few. At the end of the day we have a choice between a bloody redistribution of wealth or a more peaceful one – or of course many points in the middle. The Tories seem like a sinking ship from where I’m standing.

    I’ve just written a piece actually about how farming in the UK has become too dependent on subsidy payments, and is now, particularly in Wales, going bankrupt. 95% of farms in Wales make at least half their money from subsidy, and with 50% not being able to survive at all without subsidy. Perhaps socialism out of balance? In my mind within farming, public money could be used for supporting farms that provide ‘ecosystem services’ to use the fancy lingo. I don’t really like that way of talking, but the end result of it at least benefits farmers that plant trees, protect/build soil and don’t pump waste into the rivers. And perhaps we could charge those farmers that do the opposite?

    Anyway, happy solstice just passed, and merry christmas, and wishing you a happy new year ahead

    Best

    Alex

  54. As you’ve described it, I like the idea of democratic syndicalism very much. I’d like to see it happen on a large scale. I bet it would fit hand-in-glove with E.F. Schumaker’s ideas, too.

    As a self-employed artist, one topic I’d like to see addressed is another great bottleneck that controls access to economic power: the means not of production, but rather of distribution. Syndicalist artisans can produce all the widgets they like; but without access to retail outlets or a mail order setup, they’re liable to wind up with a warehouse full of unsold widgets. Under capitalism, access to such means of distribution is costly, and is controlled chiefly by capitalists. The internet may help here for a while, but you yourself have argued cogently in the past that the web is not likely to last indefinitely.

    Similarly, if I were to try to turn a few shekels by, say, setting up a small stand to sell my wares in some public spot, I might soon find myself set upon by city or state officials who will demand to see my sales license and ask why I haven’t given the required cut of my business to city hall, even if that business hasn’t yet produced a profit. Under the conditions that currently prevail, are there any ways that a sole proprietorship or other small syndicalist business can build a clientele while avoiding these kinds of pitfalls?

  55. Brief note on coal. Peak coal in Britain was 1913 nearing 300 million tons per year, of which about 100 million tons was exported. Transport for coal was critical to the industrialization process and relied on shipping and canals and then railways. British navy switch to crude oil (oil furnaces to make steam) made better military sense than coal because of the concentrated energy of oil that could improve both performance and the logistics of world depots for the maritime hegemonic power.

    best
    Phil

  56. JMG, How do you imagine that a transition to full Democratic Syndicalsim would occur. It seems that within the current realm of late stage ( crony) capitalism organic growth of worker owned business’s is difficult because they have a hard time competing against the cut throat tactics of oligarch-capitalism given things like off-shoring, undocumented labor, etc. Do the majority of investor owned companies have to burn in an economic conflagration first? Or could a powerfull popular political movement gain enough control of government to essentially outlaw investor owned companies? Or is there another way this economic system could arrive?

  57. Winco Foods is an example of such a company. No, to whomever asked above, you most definitely do not need an union. Winco’s employee-owners laughed the union reps out when they tried to get the Winco folks to join up.
    I’m friends with several workers there. They have no turnover. None. R. tells me that my husband or I should get on, even part time, because health insurance would be about $50 a month for our family of eight. J. just retired after twenty years. There’s been one opening-seafood-in the last three months. I’m watching to see if J.’s position opens up-cashier.

  58. Yes, democratic syndicalism sounds like an excellent political economy and yes, I have bought produce from owner-employer companies. However, in our current system, syndicated companies which perform well are taken over by other corporations, so legislation needs to be firmly in place to prevent that. Also, it has to be set down clearly what an employee of such a company is, i.e. how many hours of what kind of work are sufficient to call someone an employee in order to avoid “sleeping” employees. Other than that I think it could be a good way to go. I wonder how you get it onto the statute books?

  59. Richard Wolff is an advocate for employee owned businesses and is a highly entertaining critic of the current system. I highly recommend listening to his speeches via podcast or online video. That said, the one thing that always struck me about syndicalism as a solution is that it doesn’t seem to address the need for economic growth. Even the blivet manufacturing example used here takes growth as a given. But doesn’t economic growth eventually result in the destruction of the biosphere? Would we also need a different financial system as well, given that money is created through debt and debt needs growth to service the interest charges?

  60. Unfortunately had to pull the plug on my participation with a cooperative. Board members used lack of participation as an excuse to plutocratize, hired themselves as managers, and paid extravagant salaries while pushing through policies that lean more heavily on members. Members are already heading for the door and thanks to lousy customer service there aren’t enough lining up to replace them. It was already a tough road to hoe.

    What ultimately doomed us was a government grant. Before that we were quirky, dysfunctional, and barely hanging on. Free money from Uncle Sam really brought out the worst in some people. Now we are committed to an oversize (for us) business model that is unsustainable without “volunteer” effort that will never materialize because of all the bad faith. It makes perfect sense for salaried members to over-expand, but the economics don’t make sense for individual producers. Why sell and donate service hours if selling on your own gets you a better price with less effort?

    I took some heavy abuse for reminding the board of this because it didn’t fit into their rosy outlook. Too negative. At one point I tried to mobilize the membership and met with some success, but upon discovering some shady and short-sighted business practices a friend who regularly deals with government grants recommended that I should limit my exposure in case there is an investigation later on. Apparently they are cracking down pretty hard lately.

    On the plus side my grassroots work uncovered a handful of people who aren’t totally turned off by the concept of collective ownership, as well as several business opportunities that could be easily developed. The experience, although frustrating, was also very educational because now I know what to watch out for when dealing with smiling faces that hide selfish motives.

    The model you propose sounds like a great place to start. Still fuzzy on the details, but it in my experience having the extra built-in protections of member interests would have been very useful.

  61. Hello, JMG. Are you familiar with the work of William Ophuls? He’s hardly a household name these days. About 20 years ago I was listening to a radio host with a weekly show on Berkeley’s KPFA devote an entire show to Ophuls’ then current book titled “Requiem For Modern Politics:The Tragedy of the Enlightenment and the Challenge of the New Millenium.” So I went out and bought the book and I even took the trouble to read it clear through. I was impressed with his main thesis that capitalism and socialism both sprung from the same flawed enlightenment assumptions. Yes, I was quite impressed. (No mention of “syndicalism” in the index, however.) The radio host on KPFA promoting the book was none other than the former and future Governor of California, Jerry Brown. I still think the book is valuable, though I never hear the author’s name mentioned here or anywhere else. It does seem to go with your own thesis expressed here that it’s not a matter of either the one or the other – but something else entirely

  62. That’s a whole lotta common sense packed into one little ol’ essay. What’s an argumentative girl to say?
    I’m quite interested in the bit about banks being a public utility.

  63. JMG: “A government’s domestic policy can never be better than its people”

    Ronald Wright: ““Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” I believe the American Dream has always been ‘get rich quick’.. and we begrudged having to deal with reality.

    Re: ‘free trade’, a simpler presentation by HaJoon Chang “Good Smaritans”

  64. JMG, fantastic post. Thank you very much for writing it. However, you left a question hanging: what are the known flaws of syndicalism?

  65. Most of the cooperatives locally are small, although there are some larger ones like the larger credit unions and Mountain Equipment Co-op – although I’m not certain how cooperative the latter is these days. I did enjoy getting to vote down the credit union board giving themselves a bank-style raise. They felt that as bank CEOs and directors were getting very high salaries, they should too. The membership disagreed, and they had to give themselves a pay cut.

    Canada was a mixed economy for decades, though it has been becoming more and more capitalist over the past 20 years or so at least. BC still has a number of crown corporations, though some have been privatized, often with accusations of crony capitalism and unreasonably low selling prices attached. I don’t think the new NDP/Green coalition intends to renationalize anything. They’re worrying about things like increased welfare and disability payments, proposed minimum wage increases, affordable housing and what exactly to do about the housing bubble (not that they’ve actually done much, I assume they’re terrified of killing the goose that has been laying golden property tax eggs), and arguing about energy projects.

  66. Excellent post, JMG. Changes are ahead, and syndicalist models offer hope for improvement. Not only would they spread out ownership of the means of production, but a syndicalist business would address the age old problem of “makers vs. takers”, or “producers vs. parasites.” This is another downfall of socialism, where redistribution of wealth gets to a point where the makers lose motivation, and then everyone suffers.

    Question – I don’t understand how a syndicalist system would address the balance of power. Wouldn’t government, in terms of oversight and enforcement of rules/laws, still be corruptible? It seems that for the syndicalist model to be most effective, it would require a system of checks and balances outside the economic system, and including the administration side of things.

    One point you made I’d take issue with – the time period of 1932 to 1980 may have been under a classic social democracy model here in the U.S., but it was also the timeframe of peak cheap energy and natural resources. So distribution of wealth and income may have peaked, but returning to a model of classic social democracy today would need to be accompanied with lowered expectations of wealth and income…

  67. Scotlyn, the idea that systems have life cycles is important, and worth following up on. The ideal doesn’t necessarily launch the system — capitalism was well under way before its theoreticians and propagandists came up with its ideal form — but it plays a crucial role in justifying the system in its heyday, and in destroying the system when the gap between the ideal and the real becomes too vast to be bridged. As for debt jubilees et al., fair enough; I’d suggest, though, while it may be inevitable that wealth flows up the social ladder and debt flows down, some systems produce that effect much more enthusiastically than others, and systemic change that decreases that enthusiasm is thus a very good thing!

    Robert, of course! Social change happens either when people become so dissatisfied with the lives they’re living that they become willing to try something else, or when the system falls apart underneath them and they’re left scrambling in the rubble trying to put something else together. In that latter case, a minority with a convincing narrative can give a new shape to an entire society, for good or ill. That’s why I’m trying to get a humane narrative into circulation now; as we move deeper into crisis, and the current system goes to bits, it’s a good thing to have constructive options in circulation!

    Methylethyl, thank you for this! That is to say, Publix treats its employee-members the way that smart businesses used to treat their employees back in the day. No wonder it’s a successful business.

    Chronojourner, you’d want to look into how existing employee-owned businesses weather economic downturns and deal with temporary employees. My guess is that temp agencies would be just as viable in a syndicalist system — you have, say, a cooperative of workers who market themselves collectively to businesses — but that’s just a guess. Since there are plenty of employee-owned businesses out there right now, this shouldn’t be too difficult to find out. You’re certainly right that syndicalism is viable right here and now — again, the profusion of employee-owned businesses demonstrates this — but it would also help to have syndicalism as an overall political economy advocated in the political sphere.

    Taraxacum, delighted to hear it. I think a lot of people are ready to hear about this sort of thing; please help spread the word!

    Redoak, yes, because a syndicalist system doesn’t mandate growth. You can maintain a family business, a cooperative, or a worker-owned corporation indefinitely in a steady-state economy — look at Chinese family businesses in the premodern era for a good example — since you don’t have to keep piling up profits, you just have to break even. Capitalism requires the continuing buildup of capital, so — like a cancer — can only survive by growing.

    Anthony, oh, I know. My hope is that enough people realize that socialism sucks, and fascism sucks even worse, that they’ll be willing to consider syndicalism as an alternative. Since my blogging has a fairly wide distribution, there’s a chance that this and further posts may go viral and get the ideas I’m discussing into enough hands to make a difference.

    Yucca, a lot of my readers seem to have good things to say about the grocery chain Publix, so that might be a good place to start. You might also try asking around in your own community and seeing if there are any employee-owned businesses there.

    Yossi, my critique of social democracy is limited to a discussion of its fragility — as I noted in the post, it tends to fall apart once the rich forget that social democracy is what kept them from being strung up from lampposts. It was that failure of memory that put Thatcher into office and put Britain on its current trajectory. Other than its fragility, I think that social democracy is a workable system; I’d like to suggest, though, that it would work even better if the means of production were put into more hands by way of a syndicalist economics.

    Iuval, universal basic income without broader systemic change is a band-aid on a cancer; nor will it be sustainable as the limits to growth cut in and human muscles and brains become the prime movers of the economy again. As for your friend, monarchy’s eternal flaw is that there’s no easy way to get rid of a moron or a monster once he’s crowned — and no easy way to be sure the person you’re crowning is neither and will become neither once power goes to his or her head.

    Bonnie, so noted.

    AuntLili, thanks for this!

    Lydia, that’s a huge issue. Here in the US, certainly, our public schools have gone from some of the best in the world to some of the worst; I don’t know a great deal about the Sudbury system, but almost anything would be better than the mess we have now. I’ve been brooding over a series of posts on education for some time now, and made some tentative suggestions in Retrotopia; it may be time for a more detailed discussion soon.

    Jay, granted, but we don’t have a lot of control over the scale of economics — that’s set ultimately by the availability of transportation. That being the case, finding a system that corrects for the problems of scale is a good idea.

    Art, I don’t use that turn of phrase, because I don’t want to give the promoters of socialism the chance to say “But it’s different this time!”

    Nancy, you’re most welcome. I think hanging T.I.N.A. from a lamppost is a great idea!

    Imbrium, you’re most welcome. Anarchosyndicalists have unfortunately tainted the whole concept with the giddy unreality of anarchism, and it needs to be extracted from that context and put back in the setting of systems that actually work.

    Stephen, you’re welcome. Please help spread the word!

    Frederick, guilds are a way of organizing productive economic activity. A guild is distinct from a strictly syndicalist system, as apprentices and fellows don’t have voting rights — only master craftspersons do. A revival of guilds was one of the options discussed in the late nineteenth and early twentieth centuries, and though it’s not the option I favor, it’s probably worth a look.

    Eric, good. The relationship between public and private spheres is a separate issue, but it’s an important one. In Retrotopia, the ownership of the means of production wasn’t an issue I was trying to discuss — like any good utopia, it focused on a specific set of themes and developed them to the hilt — but yes, if you work in the public sector you don’t own the means of production, the community does. If you want to own the means of production in a syndicalist society, you go into the private economic sphere, not the public sphere. This is an example of the sort of compromise that’s necessary when you fit an abstract concept into the complexities of the real world.

    Discwrites, that’s why I didn’t stress cooperatives in my discussion. Employee-owned corporations are much less dependent on social capital and a sense of belonging, which is why they’re thriving here and now.

    Blaidd, I’d suggest that the reason that farms in Britain depend on subsidies is that you’ve got free trade policies in place that force local farmers to compete with third world farms that pay their employees a few pence a day in wages. That’s obviously unfair, and if Britain adopted reasonable tariffs to give British farmers a level playing field, the subsidies wouldn’t be needed. Of course well-to-do families in Essex would have to pay more for their courgettes, but I think they can be asked to be the ones who make the sacrifice for a change!

    Kevin, those are issues that can be dealt with easily from a syndicalist standpoint. First of all, the reason small producers can’t get distribution is that the distributors are part of the capitalist economy and favor the big boys, right? In a syndicalist system your distributors would also be employee-owned, and could very well be owned and operated by the small producers. You and a hundred other artists, let’s say, form a distribution cooperative, and work together to get your products in the hands of local shops.As for the barriers placed in the way of productive activity by local governments, that’s another set of stealth subsidies for big corporations, of course, and can be changed by action in the political sphere.

    Phil, okay, fair enough. Can you tie that to the current topic of discussion?

    Clay, I’d expect to see it happen via political action in the wake of another collapse of capitalism. Yes, a popular political movement that gets into power on a platform of systemic change could do it.

    BoysMom, I bet the company provides fantastic customer service and is highly profitable, too.

    Reloaded, that’s why it’s going to take action in the political sphere to do the thing. If you want to make it happen, start by getting the word out (and supporting employee-owned businesses with your dollars), help build a movement to bring the changes about, and when the movement reaches critical mass, vote for it.

    Thor, the blivet example I used includes growth, because that’s what justifies hiring new employees; if the blivet company was never more than one guy and his blivet press, the problem doesn’t arise. Because syndicalism doesn’t require building up an ever-expanding mass of capital, it also doesn’t require growth, and could coexist just fine with (say) an economy in which money doesn’t earn interest.

    Aloysius, yep. Cooperatives and worker-owned businesses can also make bad decisions, become dysfunctional, and go under, just like other kinds of businesses. I’m glad the experience hasn’t soured you on the system as a whole.

    Phutatorius, I’ve read one book by Ophuls, and it was decent but not particularly striking. I’ll put him on the check-this-out list.

    Onething, thank you. I’ll expand on that in a future post!

    Nancy, sure! One of the advantages of syndicalism is that it offers Americans a more believable route to becoming financially comfortable. 😉

    Bruno, they’re the flaws of any democratic system: there’s no guarantee that the majority will have the brains the gods gave geese, and so syndicalist enterprises can make just as many stupid mistakes as any other democratically run institution.

    Corydalidae, good for you. That’s one of the good things about spreading the ownership!

  68. Bonnie, so noted! 🙂

    Drhooves, in both cases, granted. A syndicalist society will tend to have less political corruption, because the immense concentration of wealth in the hands of the few that capitalism generates puts corruption on steroids, but there’ll still be problems — as there are in every democratic society — and those will need to be addressed. As for the other reasons why the period from 1932 to 1980 was so prosperous, I ain’t arguing — but the propagandists of unrestricted capitalism like to insist that prosperity is impossible under social democracy, and it’s nice to be able to cite a massive counterexample.

  69. A few things struck my mind.

    First, an economic system which distributes wealth downwards can be combined with any political system (in theory, atl east. The stability of the political system would be dependent on many other things,I suppose). Representative democracies, dictatorships, monarchies, aristocratic republics and theocracies – all of them have a shot at survival, as long as they ensure that the bottom of the economic pyramid is taken care of reasonably well. For instance, Gaddafi, Hosni Mubarak, Bismarck and Clement Attlee created distributive economic systems in widely different political systems.

    Second, what the working class really wants is just a decent job and middle class life, nothing more (not all of them, but most). Not the huge SUVs, big mansions, expensive yachts, foreign vacations and other toys of the rich. I had always thought they wanted this stuff. You have said that before in The Archdruid Report, but till this moment it never fully registered in my mind, so I was a little surprised when I realized it.

    Then I found why: one of the main enticements capitalism uses to lure people is the promise of a lavish, rich life; as opposed to a dull, dreary working class one. Like you said, ‘In theory, equally, capitalism is a wonderful system in which anyone willing to work hard can get ahead’. This has been programmed into our minds so well that we think that capitalism is the only, default option and everyone wants an upper middle class life. Because no other economic system promises that anyone can become rich, but capitalism does, right? So capitalism is the best! Every other system will just keep the poor where they are, but only capitalism will make everyone rich!!

    Third, majority of ordinary people aren’t really concerned much about what political system they live under, and the behavior of the elite class. Their chief concern is about their economic welfare. A case in point: An interesting feature of many third world democracies is that people keep returning corrupt politicians to power, as long as they deliver basic needs:keep prices of basic needs under control, provide public goods and utilities etc; it doesn’t matter if you have pocketed millions from political funds. On the other hand, many ‘honest’ politicians lost power because they swallowed the Washington consensus whole and tried to ‘develop’ the economy with western advice by privatizing public services, selling national resources at throwaway prices to multinational corporations and removing social security and labor protection laws. Capitalists recommend this and decry ‘populism’ and ‘welfare state’, but that is just a smokescreen for profiting at the public expense.

    Finally, I think I understand why you favor democratic syndicalism: It distributes power as widely as possible in both economic and political spheres. So no single person or group can have disproportionate power. Its complex, messy and not perfect, but that’s true of anything in human life.

    Also this post obliquely answered my question on October’s open post: “What can the minority at the top do to retain the loyalty of the masses?”. Thank you!

    Thanks for the post. Bringing these things back into public discourse really helps. The future is bleak in the present system, but it is good to know that there is something we can do to make our lives better, even if it is just a little.

  70. Dear Mr. Greer, thank you for your explanation of syndicalism.

    Dear Yucca Glauca, two successful employee owned companies are Johnny’s Select Seeds and King Arthur Flour. Both offer excellent products. KA is my default flour if I can’t afford the local artisan product, which mostly I can’t. Johnny’s mostly sells to farmers, and the more affluent part of the gardening market, especially in the cold zone states.

    Dear Luval Clejan, unless and until effective rent controls are put in place and vigorously enforced, UBI is merely a transfer payment from taxpayers to property owners, and would mostly serve to prop up rentier incomes. It would have the merit of encouraging social workers, who are mostly incompetent social science graduates,–my opinion and I do not apologize for it–to find something useful to do with themselves.

    Dear discwrites, ” Once capitalism collapses again, I bet on (extended) family businesses.

    Probably not run by traditional Europeans or white Americans, but by families of immigrants from North Africa, Asia or South America.”

    Many in those groups are receiving protection and start-up funding from their tribe’s (for want of a better word) incipient war bands. There is a reason why one sees so many small businesses in immigrant neighborhoods, and it is not because any one group is more diligent than any other. A neighborhood into which cops fear to go will never see a health inspector. I have lately been wondering if one wants to live a productive life, it would not be a good idea to move to an inner city or similar neighborhood, for the cheap rents and property prices, and simply make a deal with whomever is the local alternative government to be left in peace in return for a specified payment and suitably respectful demeanor.

    Dear Blaidd, best wishes to you and your wife for the success of your farming venture.

  71. Sorry to nit-pick definitions, but can you clarify how you define communism?

    You defined socialism as “the system of political economy in which the means of production are owned by the national government.” I always thought that was the exact definition of communism, not socialism. When someone asked you to clarify the difference between socialism and communism in last week’s post, you said that communism is “a fantasy — a form of political economy that does not exist and cannot exist.” But given that you are defining the word socialism to mean what I thought the word communism meant, then what does the word “communism” mean?

    And, if it’s relevant to the discussion, why does it seem like my particular confusion (thinking “communism” was the word that exactly describes what you define as “socialism”) seem to be so widespread? I may be confused, but I’m pretty sure I’m not uniquely so.

  72. “partly as a reminder that syndicalism isn’t necessarily associated with the political left—you’d have a hard time convincing anyone who knows the first thing about Pius IX or G.K. Chesterton that either man was a leftist.”

    Just as one can find systems of state ownership (socialism, by your definition) under right-wing governments. It’s almost as though ends matter, rather than means. 🙂

    With reference to your current post, would you describe Tito’s Yugoslavia as syndicalist or socialist?

  73. I remember filing my first tax return, and my father explaining the difference between earned income and unearned income. That was the foundation for spheres of thought that brought me eventually to the (I though novel) idea that business profits should belong to the people who created them, the people who worked at the company. I put housing rentals in this category too. Unless the owner actually lives and manages the property on-site, multi-family properties should be occupant owned.

    Almost everyone I have discussed this economic model with thinks it’s a great idea, but “it’s never going to happen”.

    I believe you have said before, we don’t need to waste energy tearing down the present system, like rotten fruit it will fall and splatter without any help from us. Instead, gain as much experience as possible with alternatives and be poised to offer them as viable when the status quo stops quo-ing.

    Thank you for the thought, energy and spirit you share so unstintingly.

  74. Ramaraj, exactly. It’s not actually that difficult to provide the great majority of people what they want — steady employment at a living wage, a government that doesn’t intrude too much in their personal lives, and at least some hope of redress for grievances. Most political systems can do that. It does not speak well of the current political situation here in the US that neither party is even willing to try to provide these simple and universally acceptable things.

    Nastarana, you’re welcome — and thank you for letting me know that King Arthur Flour is employee-owned; my wife and I use their gluten-free products pretty consistently these days (my wife has celiac disease), and it’s good to know that we’re supporting a better form of political economy by doing so.

    El, I take my definition of communism from Karl Marx, who used it as a label for the utopian form of society that would come into being after socialism. Since that never happens, we can dismiss it as a fantasy.

    Strda221, I’m insufficiently familiar with the system in Yugoslavia under Tito.

    Sue, you’re welcome and thank you!

  75. Question – does capitalism intrinsically require continual growth? … or is growth just desired by the capitalists?

    Or is growth necessary to our current debt-money monetary system.. i.e, the debt is created and loaned out (which is our money), and paid back, but the amount needed to pay the interest on this debt is not created… hence the treadmill of growth. Or am I totally upside down on this?

  76. I didn’t get around to commenting on last week’s post but if I had it would have been to ask why you had not featured cooperatives (as we call them in the UK), so thank you for yesterday’s post!

    Capitalism and socialism were once described to me as two sides of the same coin. A coin that had at its core the need to increase GDP. Whether one side did this through maximising corporate turnover and shareholder greed or the other by a state driven desire to extract as many resources from the Earth as possible, the goal is the same.

    The rub is that I’m not sure that cooperatives / syndicates are any more likely to have a different goal. Sure they are better for workers, often have better ethics, tend to be a bit smaller and more agile etc. but in my experience they remain in desire of economic expansion at a point in history where we need economic contraction.

  77. The biggest scale of practical syndicalism I’ve seen is trade unions- the carpenters, ironworkers, sheet metal workers, electricians and such. Our host takes an interest in the Freemasons, descended from, well.

  78. Greetings all

    I won’t argue about syndicalism or employee owned businesses as examples abound that they do work.

    My query is as follows: let us assume that a given country manages to get syndicalism up and going and it is getting traction in the country.

    What happens to existing conventionally owned businesses that are not syndicates? Would they be forced to hand over shares to their employees whether they liked it or not? Can both types of ownership co-exist in a given country or is one destined to die off?

    Let us remind ourselves that conventionally owned small and medium businesses are the economic back bone of most countries. How would sindicalism view them: convert or die?
    Suddenly as an owner of small businesses I feel targeted and potentially in the line of fire! Yikes!!!!

  79. John,

    First off, great post this week! I could imagine syndicalism working within an systemic architecture where no nation-state (or political economic entity for that matter) is “too big to fail”. The fragility of the current world order is being tested, and now is as great a time as ever to discuss alternatives like syndicalism.

    Maybe you will dedicate a post to answering this question. I would like to understand: which political economic pre-conditions you see for syndicalist systems to grow strong enough roots and stems able to withstand external pressures?

  80. Mondragon aside, it’s always occurred to me that syndicalism, in any of its flavours, can’t support enterprises like Lockheed Martin, Rio Tinto or Royal Dutch Shell. Given the world we are building for ourselves at the moment, this is not a drawback…
    The main impediment to the wider uptake of such systems is their uncompetitveness with outsourced slave (ish) labour.
    Going by my own experience of sitting by the side of the road selling home grown pork chops to the great unwashed, it’s going to be a while before the wider public see the value of a local economy and the returns this brings to the local community.
    I suspect that it won’t be too much longer before the economy starts misfiring enough for the masses to start seeing the advantages of a smaller, local and syndicated system.
    Or so I keep telling myself…
    Cheers,
    Les

  81. I remember the first time I heard about workers cooperatives. It would have been in 1993 or 94, driving back from Bradford at night. I thought YES THIS IS THE ANSWER. Unfortunately on there own they are still subject to all the forces of competative international capitalism and cannot escape its logic, even if they would like to. Long hours and low wages may be necessary to remain competetive, so they are essentially exploiting their own labour. And protecting the environment is no more profitable for them than it is for a big corporation and in some cases it may be even worse as a smaller organisation can’t afford the capital investment of an environmental solution, even if it would be cheaper/more profitable in the long term. After the pit closures, two mines were taken over by their workers, Tower Colliery in Wales and Monktonhall in Scotland. Both had all these sorts of problems and both closed with coal still in the ground. That may have been a better outcome for the climate but not for the communities dependant on those pits.

    Avery, the soviets weren’t worker controled industries. They were composed of delegates from factories, army units, etc, and were the driving force of the revolution, but did not try to run industry directly. the organisations that attempted that were the Factory Committees. Pretty much every political organisation in Russia, even the ones that hated each other in every other way, united to denounce (as anarchists and syndicalists) and destroy the Factory Committees. Maurice Brinton’s The Bolsheviks and Workers Control is a depressing chronicle of the Bolsheviks’ war against independant working class organisation. Lenin and the Mensheviks, written by Vera Broido, daughter of a prominent Menshevik, describes almost every evil thing the Bolsheviks did, but makes no mention of repressing the committees because the Mensheviks united with the Bolsheviks to do it. The anarchists were about the only ones to support the Factory Committees. The rot set in in Russia very early, but this wasn’t just because of personality flaws or a lust for power. They believed Fordism and Taylorism were state of the art organisational methods and they were being professional and doing the right thing by implementing them.

    JMG, in response to my previous post you said if the Socialist Workers Party had taken power it would likely have devolved into the usual nightmare, and I think you are very likely right. This is reinforced by what ultimately happened to the SWP (the short version involves the phrase ‘Stalinist rape apologists’), but more generally any attempt at change that has no replacement for authoritarian and bureacratic methods of organisation and leadership (both within the political movement itself and for the wider society they take over) is bound to recreate the same mess. That’s why I have a lot of hope for using Vanguard Method at organisational level and crew resourse management and humanistic psychotherapy methods like motivational interviewing at the interpersonal level. They are rigorous enough to make sure what needs to get done gets done while treating individuals with respect and leaving few crevices where bullies and bureaucrats can dig in and fester. Although I think about them in terms of revolutionary change, they would probably help workers cooperatives and syndicalism be all they could be as well.

    With the ‘small is beautiful’ attitude of syndicalism, how does it plan to run things that by their nature have thousands of employees and have to be run on a national or international scale, like power grids and transport networks?

  82. I tend, myself, to gravitate toward Mutualism, which is largely the same as Syndicalism but not weighted down by the dominance of Revolutionary Syndicalism at this point, with all of its reliance on a General Strike to create its new institutions. Mutualism, in my understanding of it, has the advantage of currently existing in a framework of theory that doesn’t rely on revolutionary action, but instead looks to a program of institutional reform (and has a history of success, being the origin of credit unions and other mutual societies; though, to be fair, there have also been failures like savings and loans and the issue of demutualization). Kevin Carson has some good works on the subject of Mutualism, many of them free in PDF format, and of course Proudhon, Kropotkin, and Goldman are always classics.

  83. JMG wrote:
    “Phil, okay, fair enough. Can you tie that [Britain’s Peak Coal] to the current topic of discussion?”
    Maybe.
    Matthias Gralle provided a review of a book ‘Carbon Democracy’ by Mitchell, and several comments have tied political economy and the history of democracy and other political economies to aspects of the industrialization that created modern mass societies. It seemed to me there was an oddity in Mitchell’s account of the bulk movement of coal. The bulk movement of coal was critical at increasing scale in modernizing societies, well before oil.

    The race for resources of modern kind developed in the small proto-democratic monarchies of Netherlands and Britain, alongside the creation of sophisticated ‘capital’ to prepare large scale projects. Trading and then industry trumped land-owning interests. Maritime hegemony became critical. Coal became motive power for military outreach and for obtaining bulk resources; thus resource extraction across international boundaries.

    Britain achieved political representation of conflicting interest groups within a nation state – side-lining the power of landed and farming interests by using previous institutions of parliamentary democracy (limited franchise) and alternating political platforms (‘manifestos’). Mega cities other than the original giant trading hub of London housed an almost entirely urban population – which created technical civic management issues – i.e. an acute need for ‘hands-on’ executive government. Again the conflict of interests was resolved by ‘democracy’ and forms of legislation. Wider franchise and Social Democracy began to creep in.

    Meanwhile Britain had a larger alter-ego; a decidedly non-democratic British Empire run on autocratic lines with very little political restraint – in most cases quite the opposite – on the larger ‘Business’ interests. The rise at-home of a ‘Workers Party’ and ‘Social Democracy’ was gradual and mostly when Europe and its previous institutions and associated Empires had collapsed and after Britain could no longer use the twin advantages of coal and Empire. A resource-rich hegemon with even greater outreach for global resources had taken its place during the war. And there was petroleum. The more recent reversion in the USA of the previous attempt at Social Democracy ‘New Deal’ in favor of 19th Century model of political economy – limited democracy at home coupled with Empire – now struggles with depleted resources. And we talk about global civilization. You have a job on your hands!

    best
    Phil H

  84. John–

    Perhaps this has already been brought up, but another way one might implement a syndicalist structure today would be to issue and restrict common stock ownership to active employees — as you’ve proposed — then upon retirement exchange those shares of common stock (which have voting rights) for equal shares of preferred stock (which do not, but which do pay a dividend). The pension payments would then been the dividend payments flowing from those preferred stock shares. As I consider it, however, one would have to somehow restrict ownership of the preferred shares as well — so that they cannot be sold, for example. And then there is the question of what happens to those shares when the former employee dies — are they redeemed? do they lapse? can they be passed to a once-removed beneficiary such as a surviving spouse and then lapse? I’m not sure what the legal possibilities are under today’s rules.

  85. Hi JMG,

    I can think of quite a few local social enterprises which might be examples of the alternative economic systems you described. It seems many people are being slapped in the face with the fact that the system we have at the moment pretty much sucks, as you put it. They’re not just sitting around on their hands and whining about it though, but are getting out and creating some much better alternatives. Not exactly a system that is imposed on everyone from the top down, but just people in their own communities starting to create grassroots structures that actually meet their needs. In most cases they are making use of existing legal arrangements such as the non-profit corporation to get the job done.

    http://www.farmersvilleabattoir.com/about-us/

    This abattoir is around the corner from us, and was created as a non-profit corporation to fill a huge need in the market after one of the few other local abattoirs shut down last year, leaving 1000 customers with virtually nowhere within a two-hour drive to process their animals. They are run by a board of directors and a voting membership made up largely of the farmers and individuals who make use of their services, who will likely make sure the corporation operates in a way which actually meets their needs. There’s a fair bit of info on their website about how they got the initial funds together and how they operate.

    http://thebarncoop.ca/our-vision/

    This one is a community food, creative and healing arts co-op located in Prince Edward County, Ontario. My brother-in-law, who is a chef in the area, told me about it, and it sounds like they are actually operating in a pretty healthy and functional way so far.

    https://tworiversfoodhub.com/who-we-are/

    And another local food hub up the road.

    And even my kids’ amazing independent school would likely be an example of this type of thinking. It is owned and run by a legal entity which is the association of parents and community members with kids at the school, completely independent from control by government. We have a board of directors which hires the teaching and admin staff, and the board is voted in by the membership. I basically ‘work’ there for a few hours each week to help offset the tuition fees a bit.

    http://www.hccs.ca/history.cfm

  86. @El
    Re: Communism

    Your confusion (and most other people’s) is completely understandable since the Soviet Union called what they were doing “communism,” and it was supported by “communist parties” in a lot of countries, and still is in places like Cuba and the People’s Republic of China. It’s the term that was (and still is) used in a lot of political discourse in the US for the opposite of capitalism.

    Most political scientists and economists call what the Soviet Union was doing “state capitalism,” while JMG is labeling it Socialism for the purposes of this discussion.

    Communism is a standard term in a couple of areas. Anthropologists use it to describe how many (most?) hunter-gatherer tribes are organized. Most families run as a primitive communism.

    One thing to know about Marx is that he thought that each stage would be accomplished by attempts to resolve the internal contradictions of the previous stage. The first stage of that resolution was social democracy, as already discussed. Social democracy is unstable because of a fundamental flaw that’s not restricted to capitalism. If you go back to my comments in the discussion on reincarnation a few months ago for definitions, it’s inherent in a world that’s run according to third tier principles, that is, everyone is out for the most success they can grab, and the devil take the hindmost. Once the people who have first-hand memories of the conditions that lead to social democracy age out of power, the power-grabs by the elite begin again.

    Marx tried to address this with the “dictatorship of the proletariat.” The error that Lenin, Mao and Castro made is what we discussed in the chapter of Mystery Teachings on cause and effect: you cannot get an effect without a large part of the cause being of the same type. In other words, you cannot impose the “dictatorship of the proletariat” by top-down force since it’s antithetical to the workers actually running things.

    Within the Michael Teaching, we think this is going to happen in the next century or so, because of conditions that are specific to this era, and which did not exist before.

    So this is my definition of communism: it’s what will happen after the dictatorship of the proletariat is firmly in place. How this will happen is a mystery. Attempts to create it earlier are futile. Attempts to describe it or define it are equally futile.

  87. @Phil, JMG:
    I think Phil was referring to my post on Carbon Democracy (reasons for the Royal Navy’s change from carbon to oil). Your argument is of course also correct, but Mitchell uses a lengthy section of the book to discussing the motivations of Churchill, of previous Sea Lords, of Parliament, of the Welsh miners and of Anglo-Persian until the final deal was reached. It is worth reading.

  88. In Spain,during the time of Franco, the fascist party (Falange) encouraged the creation of workers owned enterprises ( cooperativas).

    For instance, in the Basque Country, Fagor (kitchens, etc), 4000 workers. This firm eventually was integrated ,years after, in the Mondragon Group, which was only composed by workers owned firms with 70 000 workers.

    Few years before now, Fagor went to bankruptcy because she inverted too much for conquering international markets.

    And this case show us that the workers owned enterprises suffers the same problem that the privately owned enterprises; the contradiction between his capacity of production and the market’s capacity of consumption (The Accumulation of Capital, Rosa Luxembourg). And, in consequence, in a contracting economy, the workers owned companies will confront the same fate than the privately owned companies.

  89. JMG, thank you for this post. As you’re probably aware, a number of
    green/ecological economic/political theorists have tried to sketch out
    what a political economy that doesn’t depend on growth might look
    like. The proposals I’ve seen are either impractical or so incomplete
    as to be practically useless. What you’ve outlined here is a breath of
    fresh air that strikes me, as someone who has first hand experience
    with the messy craft of Realpolitik, as eminently practical and
    potentially extremely powerful. I found your emphasis on worker-owned
    corporations as opposed to cooperatives particularly attractive. By
    doing so, you don’t have to bring the fringe left fantasies of
    “radical democracy” into the mix.

    Now for my question: Has a system of political economy similar to what
    you outline here been developed in detail by anyone? (I tried
    searching the web for “democratic syndicalism”, but the results were
    disappointing) Any references would be welcome.

  90. BoysMom and JMG,

    Just want to add a “Yay Winco!” Here in the Boise area, they sure do a brisk business. Yet another store is to be built not far from where I live. A young woman where I’m employed is expecting her first child this summer, and will be able to become a full time homemaker after the birth because, you guessed it, her husband has a job with Winco.

    The fact that Winco, so far as I’ve seen, does not accept credit card payments, must save them money and hassle. Which saves me money and hassle as well. 😊

  91. Full disclosure: I consider myself a theoretical distributist. That said, the issue I have with distributism (and syndicalism more generally) is that of stability. It would seem that these systems cannot compete with those that concentrate the control of the means of production once the latter can influence government, and there will always be individuals and organizations either within or outside the system who will aggrandize sufficient resources to accomplish that end.

  92. Hello JMG- Wonderful post once again.

    The mental rut you mentioned is the rut of consumerism. People no longer imagine themselves as citizens actively forming and maintaining their Nation, but see their rights and aspirations as mere consumers. Their politics consist of a narrow set of personal goals centered around purely economic means- not a larger social functioning model. Delivering goods and services are understood not in a larger framework of proper sustainable living, but as individual purchasing opportunities. As the current capitalist manifestation crumbles before our eyes, social bonds will weaken further and need replacing. Forming social bonds is a political act.

    What I find most refreshing about your writing, besides its breadth of reference, is its clarity of thought. Narrative is the key to change- who doesn’t like a good story, especially when it is true and informative.

    There are underlying truths that resist the ebb and flow of civilizations. What narratives we as people act upon determines the outcome. Storytellers hold great power.

    Needless to say, I look forward to your stories every week. Thanks.

    What else is society other than the stories we tell each other over and over.

  93. JMG, Ray’s comment and your response to it made me think that a process of syndicalism is probably further along that many people might believe. As a sole-proprietorship selling my hand made clothing at various farmers markets and craft fairs, I see a lot of this. At the moment it is considered trendy or hobby only and people come and go especially when they figure out they aren’t going to make an income like they can with a regular job or it is a supplement to some kind of job. However, there are many, food growers mostly, that are making a reasonable living from their business and I have come to believe that as our economic situation worsens and people loose jobs (very often the reason they start a craft business) we will see more of this. I have also came to believe that if you learn to live on less, learn how the alternative economy of gift, cash only, and trade work, then you can find that you can live off of what you make from your efforts as a crafter quite reasonably if unofficially.

    I also kind of think that since the alternative economy is often below official notice, that it will grow in the shadows of the worsening economic climate as people find they have no choice until, in order for the official economy to survive, it is made illegal like the drug trade. By that time it is possible that the alternative economy will have be come as slippery as the drug trade, and perhaps will be will poised to make a foundation for the next economic system.

    Finding more ways to unplug (as much as possible) from the currant economic system doesn’t seem like a bad idea to me.

    Kay

  94. How do we get from here to there, though? Syndicalism sounds great! But in practice, syndicalist establishments (often) don’t last in the capitalist system. Easy enough to fix: tweak the tax code to favour worker-owned and sole-proprietor establishments over capitalist-owned firms. Oh, wait. Our Democratic Capitalist political economy gives capital control over the means of production AND the government (albeit indirectly). How do you convince the plutocrats to sign what amounts to the death warrant of their class?

    In the rise of Social Democracy, it was the fear of lampposts and a sense they could hold onto power and wealth that motivated the plutocrats. They were signing away some of their advantages, sure– as a class, though, they persisted, so they were willing to do that.

    If it does come to revolution and lampposts, I’m sorry, but I think the moment for syndicalism will have passed. More explicitly revolutionary credos (socialism or fascism– Systems that Suck) are the sorts of things history shows we get in those circumstances.

    So, an honest query: how do we get from here, to there? (For what it’s worth, Distributists have never been able to answer this one worth a darn, either, and they’ve been at it at least as long.)

  95. Kevin, back when I lived in a small town, there was a very long-lasting artist’s cooperative there that seemed to work well. All the artists took turns manning the place to sell the artwork. If you can get a bunch of artists together, something like that might work.

    And small artisans often have stalls at farmer’s markets or craft sales. I’ve done the former. How successful the artisan is at a farmer’s market really depends on what you’re selling. Some things just work better than others in that kind of outlet. Relatively inexpensive and practical tends to sell better than pure art. Food to be eaten there and things aimed at kids often work well too.

  96. I think syndicalism is the “good socialism” , and Communist Sovietism was the bad one. So I’m surprised that there were a Catholic version…OK, it’s good, I’m not sectarian.

  97. Links and references to worker owned co-ops below

    Hey hey JMG,

    Thank you for this. I really appreciate you doing this set of posts. On the note of unthinkable alternatives I give you this historical bit of anecdote that we have collectively forgotten:

    Leland Stanford, robber baron and senator, founded Stanford University to advance the cause of worker owned businesses. He labored in the senate to create legal structures that allowed for worker owned co-ops. This was all forgot and next to no one, especially at Stanford, knows about it because TINA (There Is No Alternative (From Wikipedia: “The phrase was used to signify Thatcher’s claim that the market economy is the only system that works, and that debate about this is over.” https://en.wikipedia.org/wiki/There_is_no_alternative)) It was ‘rediscovered’ in the archives recently and didn’t make a big splash when it was, because, obviously, it’s a silly little quaint idea from the past that has no relevance to the here and now.

    Lengthy article about Leland Stanford and his efforts to promote worker owned business and reasons for founding Stanford University:

    http://dynamics.org/~altenber/PAPERS/BCLSFV/

    First paragraph:

    “Buried in the stacks of the Stanford University Archives is a secret about Stanford’s history that has been kept for decades. It is not the kind of secret that needed anyone to keep it hidden; rather, it is a “public secret”—a piece of history that our society, by the very nature of its development over the last 100 years, was likely to erase from its transmitted memory. Even a university, that great conservator of history, can be party to this erasure when its history does not contribute to the current ‘branding’ of the institution.”

    For those interested in building worker owned co-ops in the here and now:

    Democracy at Work Institute, US Federation of Worker Cooperatives:
    http://institute.coop/
    -they have some great resources

    From Co-opLaw.org:
    http://www.co-oplaw.org/co-op-basics/types/worker-cooperatives/

    WORKER COOPERATIVE SUPPORT ORGANIZATIONS
    US Federation of Worker Cooperatives
    American Worker Co-op Startup Guides
    Cultivate coop is an online site to pool resources on cooperatives
    Cooperative curriculum wiki site
    Cooperation Texas has the goal of creating dignified jobs for the people, for the planet
    Data Commons Cooperative website

    Good Authors to read PhD Richard Wolff

    http://www.rdwolff.com/faq_worker_coops_wdes

    And his books:

    http://www.rdwolff.com/books

    Capitalism’s Crisis Deepens: Essays on the Global Economic Meltdown (2016)
    Democracy at Work: A Cure for Capitalism (2012)
    Occupy the Economy: Challenging Capitalism (2012)
    Contending Economic Theories: Neoclassical, Keynesian, and Marxian (2012)
    Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It (2009)
    New Departures in Marxian Theory (2006)
    Economics: Marxian versus Neoclassical (1987)
    Rethinking Marxism (1985)
    Economics of Colonialism: Britain and Kenya, 1870-1930 (1974)

    And PhD Gar Alperovitz:

    America Beyond Capitalism: Reclaiming our Wealth, Our Liberty, and Our Democracy (2004)

    It has some alternatives to business as usual.

    For University programs There’s Saint Mary’s University’s Cooperative Education Management program:
    http://www.smu.ca/academics/sobey/sobey-cooperative-management-education.html

    Look around the website and you will find some economists working on this stuff who would love to answer your email and point you towards some good books.

    And lastly, there are quite a few cooperatives of various stripes and colors out there right now that you could go ask to see how it really works on the ground. I believe the Mondragon Corporation has already been mentioned, and there are several books about it. I did like “We Build the Road As We Travel” (1989) but there are others. The Parma Emiliano region in Italy has a huge density of worker owned co-ops. But there are plenty closer to home here in the States. Find one and ask them about it. They’d love to talk about it. If you are having trouble finding one then stop by your local credit union to ask directions 🙂

    Gotta run. I have to go to work at the home town co-op the me and a couple hundred of friends built.

    Thanks,
    Tim

    PS The failing of the current political structure is pretty obvious to a growing body of people these days. What comes out the other side is anybody’s guess, but it’s safe to say that it will be different and a lot of things that are status quo right now will be tossed out. Will democratic syndicalism be a part of what takes it’s place? Hard to say, but the chances of that happening are going to be greatly influenced by what we do in the here and now.

    This might be the beginning of a movement that will matter:
    https://www.cincinnatiunioncoop.org/events/2017/12/1/3rd-biennial-union-co-op-symposium
    https://www.grocer.coop/articles/grassroots-movement-promotes-adoption-union-co-op-model

    Thanks again to JMG and everyone here.

  98. Re my previous comment – as I re-read the post, it occured to me that I should google “distributism” instead of “democratic syndicalism”, which yielded lots of interesting reading.

    Also, lest anyone misunderstood, I don’t consider cooperatives per se a fringe left idea; I was thinking about such things as worker-managed (as opposed to worker-owned) operations and experiments in workplace democracy that often (not always) fail as political debates take the place of productive work.

  99. @ Davidbythelake…

    Think of it this way; if I do not pay my property taxes on my farm or business, then the government seizes it and sells it to someone at a ridiculously low price.

    I have no problem with paying property taxes – however the primary reason they never go down, but up always, is that there is no carrot in the law – only the largest, knobbiest stick.

    In smaller communities, they offer a discounted tax rate for early payment of property taxes. Never in larger venues – the big knobby stick is swung without mercy. You can see roads being repaved and other things happening in smaller cities – in larger ones, they do not fix until it breaks disastrously.

    If they take my farm (my means of production), then how can I claim to own it “free and clear”, when there are ever increasing taxes due each year for the privilege of ‘ownership’? The correct term should be “ownership tax”, as the property isn’t paying the tax.

    I do not disagree with your logic – providing for the commons is required. I do disagree when I am paying an assessed value based on ridiculous proceedings, and there isn’t any infrastructure improvement or rework going on – just more hiring of people.

    Like many things, there needs to be a better way, and IMHO one that does not default to surrender of property.

  100. As I understand the matter, social democracy itself isn’t a stable system either. In the way it was implemented it targets full employment. This also means that anyone can quit a job and find a job somewhere else the next day for a slightly higher wage. Wages are therefor stuck in a slow upward spiral and rising inflation. Of course, for workers that’s the golden age.

    For company owners and investors, inflation and wages are a rising cost that will eventually erode their return on investment below the point at where they’re prepared to spend their money in setting up new businesses. Without more investment the whole system slowly grinds to a halt and sets up the stage for Reagan and Thatcher to push through their reforms. The oil shocks didn’t help either.

    Of course, that’s all just a theory. We all seem to have the wrong idea of how the (political) economy works, but we’re wrong in largely the same way so it all kinda works.

  101. Sue Kinfox said “multi-family properties should be occupant owned.”. A lot of them are. They’re called condos. I own one about a mile from where I live and rent it out to a friend, whom I have authorized to attend meetings and vote on the board in my name. The board is made up of residents. But, yes, it would be really nice to be able to do away with slumlords.

  102. Dear Nastarana,

    >Many in those groups are receiving protection and start-up funding from their tribe’s (for want of a better word) incipient war bands.

    Exactly! The alternative to bureaucracies is not the free market, nor a new owner of the burocracy. The alternative is the Mafia.

  103. Distributism was mentioned in this post as a Catholic version of Syndicalism. For those interested in promoting this idea, there is actually a political party in the U.S. that you should check out called the American Solidarity Party.

  104. What about a modern version of Huey Long’s Share the Wealth plan? Like, for example, limiting each person’s annual income to a maximum of $1 million and their total wealth to a maximum of $10 million, with any excess income or wealth being taken by the government for the benefit of the poor? I know that’s not conceptualized in terms of re-allocating the means of production, but wouldn’t it be the most direct and effective means of curbing the dramatic inequalities in wealth and power that are produced by unrestricted, piggish capitalism?

  105. @JMG,

    >Discwrites, that’s why I didn’t stress cooperatives in my discussion. Employee-owned corporations are much less dependent on social capital and a sense of belonging, which is why they’re thriving here and now.

    I did not know there was a difference between co-ops and employee-owned corporations, so I conflated the two.

    I am reading up on employee-owned corporations. According to Wikipedia, these are a prevalently US phenomenon. I was not aware of their existence.

  106. I think with regards to horticulture that is true. And whilst I’m in favour of tariffs, I’m not entirely sure it’s the reason British farming is struggling though, particularly when applied to livestock. I’d suggest that the commodification of farming is the cause of farming’s depression. The slaughterhouses and retailers have a stranglehold, and pay low prices and sell high. Sure I’d place tariffs on NZ lamb, as it makes no sense to be importing lamb from NZ, but then I’d also like to see more farmers remove themselves from the commodity racket, by direct selling, forming co-ops or partnering with butchers. Though simultaneously we need a change in attitude in farming towards systems that have lower inputs.

    Nastarana – thank you for the wishes 🙂

  107. Hi JMG, many thanks for the post serie on economics it is a very interesting discussion. Sorry for the length of my comment

    There are some recents aspects of socio-economic situation that give many advantages to the corporations and the way the control now the economy and the politics:

    a) The economy of “desires” not of “needs”

    In the Marx’s time and up to the 1920’s the economic analysis revolved around the “needs”, as the Gospels and Marx said (and you mentioned) :”from each according to their capacities, to each according to their needs”, but the human beings inhabit a simbolic world socially mediated, not a natural one, so the “needs” is a concept of difficult definition beyond avoiding pure starvation

    From Edward Bernays onwards after the big crisis of overproduction of the XIX and begining XX centuries and with the new inmense source of energy that is the oil, the equation change and then the economy revolved around the “desires”, which are infinite. We, in fact “need” too few things and the modern economy cannot “progress” based on this poor base

    In fact the people do not buy “a car” but a dream of being observed and judged by the others driving the car, what people buy, in fact, are increase in self esteem by the estemation of others (or the hegelian “recognition” = we are a desire that desire others’ desire). That is the reason the german economy is in so good shape, because they produce “prestige goods” (BMW, Mercedes, Porsche, etc….) that are sold more if they are more expensive, as a big german car is the business card of a “winner”
    People live the life (me also, of course) half dreaming and half sleeping (dreaming also)

    The soviet and marxian concept of “needs” cannot sustain the comparison with the “free world” universe of colours, lights, brands and the rest of fantasies that makes people “happy”
    This is the fertil earth for the corporations and their huge marketing capabilities, the virtual reality of wealth and happiness, or better the dream to be “there”
    This is hard for the workers co-op to imitate

    b) The isolation of man

    The techno-economic evolution destroy the human bonds and oblitarate traditions, the isoalted man (as pointed out f.e. by Spengler) is a “nomad”, empty of the old references (roots), family, clan, tribe and tradition, as Habermas said the “Sistemic” has devastated the “lebenswelt” (the world of life), so the references of the people are those suggested by the mass media and marketing, and this is a self reinforced feed.back loop. The society “builds” the men they need to maintain it, through the modification of the human conditions and myths
    This is the universe where the brands and trademarks flourish and develope, because they are more than “products” to solve “needs”, they are the peoples’ reference, in fact they are their “aspirations” after the destruction of their “lebenswelt”
    Hard for the Co-op

    c) The techonology and the stability

    As JK Galnraith said in “The New Industrial State” the new technology requieres huges amount of money and efforts to sustain the R&D required, so the corporation, and in general, the techno-society, requires “stability”, so the market must be “stabilized” (I would say cartellized) to sustain the progress, so the corporations “collaborate” with the states to “stabilize” the economy, by entry barriers, price accords, dumping to crush small competitors, etc….
    The rules are made by corporations for the corporations

    d) The globalization

    The capacity to have huge supply chains to abuse of the arbitrage of wages, safety conditions of workers, taxes and environmental rules, that is the fertile ground of corporation, ask to Mondragon Co-op here in Spain to know what happens where the market is open….

    For an economy based on co-ops you have to tackle of all them, and I am sure it will be a more human economy

    Cheers

  108. The question of “finance without interest” has come up a couple of times. One alternative that I’ve heard of is that one might borrow a sum of money to improve the productivity of a farm or factory. Eventually, the sum borrowed is returned as money (naturally), but the amount which would ordinarily be paid as interest money is paid as barter (in farm or factory products). Thus, the lender receives something of value without requiring an expanding supply of “money”. Furthermore, the lender receives (along with every other customer) the benefit of a more efficient producer: lower cost goods (assuming that the producer doesn’t simply increase his profit margin).

    However, if the “lender” is actually the owner-employees, then they might not need to negotiate a set “interest rate” for the loan, but simply share in the improved prosperity of the enterprise.

    Come to think of it, I guess I just explained why companies are able to sell stock. Modern finance has become so abstract that the connection between stock-holding and corporate ownership is for the most part infinitessimally thin. Apart from the casino atmosphere around the current stock market, I wonder why more people do not scrape together enough money to “own the means of production” (buy stock). They don’t HAVE the money? If they’ve got cash for alcohol, cigarettes, and/or lottery tickets, they do!

  109. @Kay,
    The most striking you wrote is “the alternative economy is often below official notice, (…) it will grow in the shadows of the worsening economic climate as people find they have no choice until, in order for the official economy to survive, it is made illegal like the drug trade.” Recently the local Nice Polite Republican Radio station had a long interview with an economist who promoted the coming cashless society, as a way to crack down on the drug trade and tax evasion. The government doesn’t have to make it illegal, they only have to remove all bills and any coins larger than $1.00 from circulation. It seems we will have to develop a local syndicalist currency (but not Bitcoin! As we have seen, it is too prone to speculation, plus as an electronic system, it is subject to the fragility of the electrical system and can be tracked by the grand NSA vacuum).

    How many Syndics for that beautiful shirt?

  110. Archdruid,

    Really wanted to get in on last weeks conversation, so I’m glad you kept it going this week.

    Isn’t it possible for a society to create a mixed ecosystem where some organizations are syndicates (in all its forms), some are corporate (as we currently know the word), some are guild (I would like to know why you don’t find these particularly useful), and some are whatever other systems exist out there? Wouldn’t any social system that had to deal with one kind, and only one kind, of business system have to counter the negatives of that system with it’s positives in equal and rather large portions? Whereas a social system that can find a way to successfully mix the lot will have to deal with small portions of the positive and negative aspects of each, perhaps even countering the positives of one with the negatives of another and vice-versa…Obviously the only way this is even possible is with rigorous protectionism in place.

    Right now we are dominated by a single political economy, if a transition toward another political economy is to happen then bits and pieces of other systems need to be created right now. Set up the pieces now and we can even avoid some of the pains of transition later on.

    By the way, why would you favor syndicates over guilds?

    Regards,

    Varun

  111. Wow, where do I begin? 😉

    First, my problem with syndicalism as you define it (when I was a revolutionary syndicalist, I would define your more moderate version as “Proudhonian mutualism”) is that it needs a central state power to be implemented at all – who else is going to force the plutocrats (or the Communist regime in a socialist system) to give away all their power? However, this will create a strong incentive for that centralized state power to remain centralized even after the Big Reform. I think this contradiction pops up in Chesterton´s friend Belloc, who eventually embraced a fascist-like system, where the fascist state would implement Distributism. Note also Tito´s Yugoslavia with its “workers self-management”, more liberal than other Communist states, but still a one party state centered on Tito himself. Can the contradiction be solved somehow? Perhaps, but probably only in a time of great upheaval and chaos, when everyone must think in new terms – but then, that´s what we expect will happen soon, isn´t it?

    Several people have asked about democratic socialism (as opposed to social democracy, which is really a kind of “democratic” capitalism). Perhaps Israel came close to democratic socialism? They had kibbutzim, moshavim, large companies owned by the labor union federation Histadrut, yet free elections, etc. Still, the fact that democratic state socialism is very unusual is a strong argument against socialism (as you define it), since all other examples degenerated into bureaucracy, and most weren´t even economically viable (which is why both the people and the rulers eventually abandoned it). One of the few socialist states with huge and sustained economic growth was, wait for it, Gaddafi´s Libya!

    I know you don´t like the definition game, but in the “libertarian socialist” circles of my youth, the definitions were roughly as follows: worker-owned businesses = mutualism (Proudhon), community-owned businesses = anarcho-communism (Krapotkin), union-owned businesses i.e. owned by the national unions = syndicalism (Bakunin, Spanish CNT). The Swedish syndicalists had a moderate period of mutualism from circa 1945 to circa 1975, but before and after that interlude, they were more syndicalist (in my sense). I won´t bother you with the definition-game surrounding the terms “anarcho-syndicalism” and “revolutionary syndicalism”, LOL.

    Final point: At the moment, I´m around moderate leftists and normies here in Sweden, and it seems everyone is talking about Universal Basic Income and the AI revolution, which nobody was even thinking about a year ago, so things are definitely happening, for good or for worse!

  112. Can´t resist a second comment on the definition-game. Your observation (which I believe is correct) that there are different kinds of syndicalism (including politically conservative versions) would have created pandemonium at the left-wing syndicalist meetings I frequented in my youth, LOL. Same with anarchim, btw. Anarcho-capitalism and national anarchism (a kind of decentralized or feudalized “fascism”) are not considered “real” anarchisms by the leftist anarchists, who may take un-ironic offense at the notion that anarchy can exist in different forms (isn´t that the very point of anarchy???)

    A couple of years ago, I was struck by how “syndicalist” the social encyclica “Laborem exercens” of Pope John Paul II sounds. If stripped of the more obviously Catholic rhetoric, you could probably fool leftists into thinking its a resolution from a syndicalist labor union! And indeed, many suspected at the time (1981) that John Paul was secretely expressing support for a certain independent labor union in his native country, which – surprise – combined syndicalism with Catholic leanings…

  113. OK JMG — Looks like its time for you to write another powerful work of narrative fiction, a story where Democratic Syndicalism has been implemented to the hilt!

    Best wishes to all for a new year that sucks less!

  114. I think a more basic issue goes to the nature of money. In small groups, economics is reciprocal, but as they grow, accounting becomes necessary. As such, finance functions as the circulation system of the community, much as government functions a the central nervous system.
    Consequently, as a medium, money can’t be stored. As in the body, blood is the medium and fat is the store, or with cars, roads are the medium and parking lots are the store.
    Yet we have come to view money as a commodity that can be mined or manufactured, like gold, or bitcoin. In reality it is a contract, in the the asset is backed by a debt. Which is why it is mostly backed by government debt. Which creates a circulatory feedback loop, as the government draws surplus money out of the system as debt, creating the illusion it is stored, but actually being spent in ways which do not have sufficient return for private investment, from warfare to welfare. Even FDR was borrowing up under-employed capital, to put under-employed labor to work.
    Money does not power the economy, but only lubricates it. Too much and it liquifies it, i.e. inflation. Currently investment assets, from art to housing, are being inflated by the excess of money trying to find ways to be stored.
    Meanwhile the rest of the economy is drained of money. Sort of like the head and heart telling the hands and feet they don’t need so much blood and should work harder for what they do get.
    Eventually we will have to develop finance as a public utility, but not directly controlled by politicians, because they like to inflate, as it is a shortcut to popularity.
    If the government were to threaten to tax excess money and not just borrow it, people would quickly find other ways to store wealth. Most of us save for the same general reasons, from raising children to retirement, so if we invested in these as communal efforts and not tried saving for them individually, then society would start to return to the essential reciprocity of circulating wealth throughout the community, as well as the environment on which it rests. Not only would it shrink the financial sector, but possibly lead to a less atomized society.
    We own money like we own the section of road we are on. Its functionality is in its fungibility.

  115. Hey hey all,

    First, sorry for typos and lack of credit to others for things already mentioned in my earlier post. I was in a hurry. Discwrites mentioned it first and correctly. The Emilia-Romagna in Northern Italy has a lot of worker owned co-ops. I was writing from memory and Parma Emiliano region is incorrect. AuntLili mentioned PhD Wolff first and a couple of people mentioned Mondragon before me.

    Re: Strda221 Yugoslavia,

    It’s a mixed bag. They didn’t do what JMG is talking about. They did state ownership with local employee control through workers councils but the workers did get a share of the profits. Does this count as ownership by the workers? Depends how you want to define it I guess. They did have control of the business decisions and did get a share of the profits, but they couldn’t sell the business because it belonged to the state and there were some political controls.

    Yugoslavia, like most of Europe, was destroyed in WWII. But, since they were part of the non aligned movement they didn’t get support to rebuild from the USA or the USSR. They muddled along until the 80’s when the IMF and austerity programs crippled the economy and let to social, political, and ethinic tensions getting out of hand. (no comment on present day United States, ehm… cough)

    Was this a bad idea that was doomed to fail, something crushed by the supper powers in the middle of the cold war, or a good idea that got off to a bumpy start in less than optimal circumstances? Draw your own conclusions. I was fifteen and trying to get girls to notices me when we bombed Yugoslavia into a half a dozen countries.

    Wikipedia has a decent post on it: https://en.wikipedia.org/wiki/Economy_of_the_Socialist_Federal_Republic_of_Yugoslavia

    RE: Karim,

    There are a growing number of sole proprietorships out there that are being bought out by the employees when the owner retires. It’s not exactly common, but it isn’t rare either. I understand it’s becoming more common that the kids don’t want to take over the family business but the employees woul like to. Credit unions are starting to do these loans and pricing them at the rates they charge for auto loans.

    RE: JMG,

    The reasons I like democratic syndacism, or worker owned businesses, or worker co-ops are numerous. But let’s put aside the broader distribution of income and wealth, the more equitable treatment of workers, the tendency to be better social and environmental stewards, and the fact that they are competative with other existing business structures and get right down to brass tacks. I like them for democracy.

    Worker co-ops are good for democracy for two reasons. Reason the first, they are a workable alternative to corporations, which are bad for democracy. See the 2012 film The Corporation: The Pathological Pursuit of Profit and Power where the narrators use the DSM-IV to diagnose corporations as psycopaths for their inability to adopt social norms or abide by the law, failure to learn from punishments, disregard for the well being of others, etc. (there is some dispute over wether the film handled this fairly) But regardless, corporations allow an enormous amount of power and wealth to be concentrated into a few hands and those hands have a lot of pull. That leads to a conflict in democratic societies where the interests of the many with little power are at odds with the interests of the few with lots of power. I’m sure that I need not explain further. This does bad things to democracies.

    Reason the second, worker owned co-ops are democratically organized and that, in turn, gives the workers practice using a democracy. We have a perfectly good democracy on paper, but we kinda suck at using it these days. Giving the working class a meaningful excercise in democracy that directly impacts there well being of the people involved gives them the skills and the tools they need to effectively use the democracy that we have.

    Caveaot. This isn’t a silver bullet. There are no silver bullets outside the the world of werewolves. In the real world we deal with people. And, if people are going to be involved then there are going to be problems. Full stop. Worker owned businesses do a decent job of mitigating the most egregious of those problems.

    I have some more links to share in a following post and some ideas about how to move this country toward democratic syndicalism.

    Thanks,
    Tim

  116. I find the universal basic income an appealing idea – I’m pretty crafty, I like painting and doing woodwork on the side. The problem I’ve found is you can’t build furniture at a rate quick enough to make a living, if you’re making furniture that will endure for years, and not using particle board/cheap materials, etc. People just won’t pay $150 for a well built, good looking, table…. No offense to China but come on!!!!!! I can’t compete with you. Like I’m a pretty good painter but even artwork, the Chinese have factories of slave painters copying the master’s works….

    https://www.instapainting.com/blog/company/2015/10/28/how-to-paint-10000-paintings/

    And people don’t want original pieces… it’s as true in art as it is in furniture. I’ve worked as a produce clerk, cashier, and dishwasher…. My bachelors of Environmental Science from UMass Amherst has not helped one bit…. except getting a job as a part-time produce clerk making the Massachusetts minimum wage. It’s totally kookoo out there “the growth of job opportunities in this field” right there the word growth… growth it’s part of the lie we tell today. A field is growing…. growing what hay? Or did you cut more trees down for a bigger field.

  117. Arthur: How do you do, good lady? I am Arthur, king of the Britons. Whose castle is that?

    Woman: King of the who?

    Arthur: The Britons.

    Woman: Who are the Britons?

    Arthur: Well, we all are. We’re all Britons and I am your king.

    Woman: I didn’t know we had a king. I thought we were an autonomous collective.

    Dennis: You’re fooling yourself. We’re living in a dictatorship….A self-perpetuating autocracy in which the working classes-

    Woman: Oh there you go bringing class into it…

    Dennis: Well that’s what it’s all about. If only people would-

    Arthur: Please, please, good people, I am in haste. Who lives in that castle?

    Woman: No one lives there.

    Arthur: Then who is your lord?

    Woman: We don’t have a lord.

    Arthur: What?

    Dennis: I told you, we’re an anarcho-syndicalist commune. Wr take it in turns to act as a sort of executive officer for the week.

    Arthur: Yes.

    Dennis: But all the decisions of that officer have to be ratified at a special bi-weekly meeting.

    Arthur: Yes, I see.

    Dennis: By a simple majority in the case of purely internal affairs…

    Arthur: Be quiet!

    Dennis: –but by a two-thirds majority in the case of more–

    Arthur: Be quiet!! I order you to be quiet!

    Woman: Order, eh?–who does he think he is?

    Arthur: I am your king!

    Woman: Well I didn’t vote for you.

    Arthur: You don’t vote for kings.

    Woman: Well how do you become king then?

    (Cue the lady of the lake…)

    I always wondered what exactly they were claiming to be there. It clicked when you put the “anarcho-syndicalist” label out there. I like this syndicalism business…my wife and I make up a proto-syndicate with our little herbal company. Maybe one day we can make it a real syndicate. Cheers, Loremaster. And Happy New Year!

  118. Hey hey all,

    Here are some links for local organisations that might be nearer to you and more accessible:

    https://usworker.coop/local-partners/

    Local & Regional Organizing
    Austin Cooperative Business Association (Texas)

    Cincinnati Union Coop Initiative* (Ohio)

    Cooperative Maine

    Cooperation Texas*

    Eastern Conference for Workplace Democracy* (East Coast/South) – Summer 2017

    Federation of Southern Cooperatives (Southern Region)

    Las Vegas Worker Ownership & Resource Center (Nevada)

    Los Angeles Union Coop Initiative*

    Madison Worker Cooperatives* (Madison, WI)

    Network of Bay Area Worker Cooperatives* (San Francisco Bay Area)

    New York City Network of Worker Cooperatives* (New York City)

    Ohio Employee Ownership Center

    PDXPCI, Portland Project for Cooperative Innovation (Oregon)

    Philadelphia Area Cooperative Alliance (Philadelphia, PA)

    Rocky Mountain Employee Ownership Center (Colorado)

    SLICE Northwest Cooperative Alliance (Washington State)

    Southern Grassroots Economies Project | CoopEcon

    Valley Alliance of Worker Cooperatives* (Pioneer Valley, MA & Southern VT)

    Vermont Employee Ownership Center (Burlington, VT)

    Worker Owned and Run Cooperative Network* (Boston, MA)

    Western Worker Cooperative Conference* (West Coast) – Summer 2017

    Thanks,
    Tim

  119. Hey hey JMG and everyone,

    Here are my thoughts on how replace corporations with worker owned cooperatives. Let’s start with the obvious question. If worker owned co-ops are economically viable why aren’t they more common?

    There are a couple of problems with starting new worker owned co-ops. The biggest problem with co-ops is that they are hard to start. The incentives aren’t lined up the same way they are for other businesses. Starting a worker co-op takes a lot of time money and effort from a group of people and none of them are going to get rich doing it. Which is why we tend to see patron based co-ops like credit unions, organic* food co-ops, and rural electric co-ops more than other types of businesses, because these co-ops are started to fill a need that would not be filled unless the people involved banded together to get it done themselves.

    *Organic used to be much less common, unavailable in most cases. If you wanted organic food you had to find someone to produce it for you and figure out how to get it to you, which is why a lot of food co-ops started as buying clubs (REI also started as a buying club for European climbing equipment, which the folks in Seattle wanted, but couldn’t get)

    The other problems are lesser and common to other businesses. Growing pains, going from three hippies in a garage to a fortune 500 company involves a lot of transition and not everyone handles it well. (see Apple, which started with three hippies making wooden computers in a garage and had some trouble becoming a full-fledged business business) And access to capital, most businesses have some variant of this problem, but it’s worse for co-ops because they have no stock to use as collateral.

    The solution that I’ve dreamed up is to retask existing economic development resources toward making local worker owned co-ops to fill existing business needs. Let’s take Stefania’s example from above. The local slaughter house closes down and people have livestock that they still need butchered. The local economic development body would analyse the situation, do a market study, draft up some by-laws and articles of incorporation, and probably hire back some of the old workers to run it.

    Then, the deal would be that years from now when the business is operating at a profit then it would be obligated to give a portion of its profits back to the economic development body and provide a board member for governance of the economic development body.

    Rinse and repeat a couple of times over the course of 10-20 years and the economic development body comes off of the government’s books and becomes self-funding and self-governing and continues to generate new worker owned business or buy out existing business to convert them to worker owned businesses.

    Rinse and repeat in 3-5 cities/towns and other locales will start to copy it. 30-50 years from now we might have some real movement toward democratic syndicalism. I realise that this is a bare bones plan for a complicated enterprise, but I think it gives the general flavor of the plan.

    Thanks,
    Tim

  120. @El – I hear you. I have also wondered whatever happened to communism, as they used to play the same role socialism does now in the popular mind. When I was in high school (early 80’s), we students were treated (!) to a day of listening to various political speakers. One guy defined the systems as follows: Capitalism is what we have in the US, where businesses are privately owned. Communism is what they have in the USSR, where the government owns everything. Socialism is what they have in England, where you can still have private business and jobs, but everyone pays really high taxes and gets free medical care and a lot of other government services in return. I always thought those were the correct definitions, until “socialism” suddenly became the bad guy in the last few years. Isn’t China still considered communist? I dunno. I guess what used to be called communism is now called socialism, and what used to be socialism is what our host has defined as “democratic socialism”. I’m willing to go with our host’s definition for purposes of the current discussion, however!

    @ everyone: I’m glad to hear of these examples of actual, successful, employee-owned businesses. I used to work for an allegedly employee-owned company, but the amount of stock owned by the commoners as compared to that owned by the members of the board was so miniscule, we laughed at the whole idea of employee ownership. Work your butt off and you’ll get a few more pennies on your few shares of company stock. They handled downturns like any other big business: layoffs. And you have one month to sell your stock or they’ll sell if for you. Seems in a true employee-owned business, the way to deal with downturns would be everyone would agree to take any necessary paycuts evenly distributed, so nobody has to completely lose their job. That takes actual good faith and good management by the original founders, however. Seems the most important thing is don’t let it get too big.

  121. Nancy, I’m going to put some serious thought into this. Certainly the financial system we have now requires growth, since that’s necessary for money to make money — but capitalism as such? I think so, but I’m going to have to do some reading and thinking to be sure one way or the other.

    Stuart, I don’t think that’s hardwired into the syndicalist system so much as it is hardwired into our culture. I know of no reason why a syndicalist economy can’t thrive in a steady state, or even in a state of controlled contraction.

    Engleberg, all of those — yes, including the Masons — are useful sources of examples for the sort of project I’m envisioning.

    Karim, if syndicalism were to be established in your country you’d be expected to begin a process by which your employees would become part owners of your company. As I envision it, there would be a transition period of several years, and you’d be compensated for the transfer, but the whole point of the transition to syndicalism is that at the end of the process every employee would have at least some ownership of the company for which he or she works. I’d encourage you to look into the way that employee-owned corporations have thrived; you might find that it’s actually something you might consider doing anyway.

    Gottfried, I see a threefold process. First, the existing capitalist system needs to run to the end of its leash and become completely dysfunctional — that’s already happening. Second, the idea of syndicalism has to get out there in a big way, starting with discussions like this one and spreading from there; campaigns encouraging people to patronize employee-owned businesses would also be a part of this, and so would lobbying to provide benefits to employers that make the transition to some form of employee ownership. Third would be the political movement, running candidates for office and pushing legislation, with the goal of launching a political transition to syndicalism in which the entire economy would become employee owned. Is it guaranteed to work? No, but such things have worked often enough in the past that it’s worth a try.

    LesLes, that’s where organized advocacy for syndicalism could make a big difference. You’re right that huge enterprises aren’t appropriate for a syndicalist society, but they’re not really appropriate for any purpose other than making a few people rich and everyone else poor, so I figure it’ll be a net gain for everyone if we simply break them up.

    Yorkshire, power grids are better operated as public utilities than as private businesses. Transport grids — depends on your technology. Here in the US, we used to have plenty of independent railroads, which were well within the size that a syndicalist system can handle, and canals are even easier to operate that way; roads — well, there you’re in public utility country again.

    Faoladh, and that’s also a useful ingredient in the mix. Fortunately the only people who know about revolutionary syndicalism these days are on the radical fringes, so advocating for democratic syndicalism and a peaceful, extended, democratic transition in which business owners are compensated for the loss of sole ownership is a much easier thing.

    Phil, thank you! Fair enough — and sure, it’s a tough job, but someone has to do it. 😉

    David, that’s a perfectly viable system. I’d say, though, the best thing to do is find out how existing worker-owned corporations do things — it’s always easier to start with a system that already works, and build on that.

    Stefania, exactly! We’re talking about taking something that already exists and extending it to the rest of the economy, not trying something that’s never been done before. Examples like the ones you’ve named show that it can be done, and how it can be done, and how well it works; effective advocacy for syndicalism would start with those and others like them, and get people asking, “So why can’t I work for a company like that?”

    Matthias, thank you.

    Anselmo, come on. One bad example doesn’t prove anything more than that there’s one bad example,

    January1, I don’t know of anything along those lines. The various people who’ve been trying to come up with “green economics” have, as you’ve pointed out, either dabbled heavily in utopian fantasy or done so sketchy a job that it’s impossible to say exactly what they have in mind. If you have the skills and the time, why not consider giving it a shot yourself? I don’t own the idea of democratic syndicalism, and it’s old enough that the copyright expired a long time ago… 😉

    Ottergirl, you make me wish there was a Winco here in East Providence!

    RPC, I disagree. The growth economy that made capitalist domination of the political sphere so easy is ending around us, and in the years ahead, attempts to concentrate capital will be increasingly self-defeating. That’s one of the things that opens a window of possibility for political economies that suck less.

    John, thanks for this!

  122. “Capitalism, as we discussed last week, has a self-destruct button wired into it: as the distribution of wealth becomes more and more imbalanced, the production of goods and services stops being profitable, speculative booms and busts replace investment in productive activity, and sooner or later the economy hits a crash devastating enough that the voters turn to somebody who promises to replace unrestricted capitalism with something else. We’re arguably not that many crises away from such a moment here in America right now.”
    Sigh, it’s just not happening soon enough, IMHO…

  123. Scott, consumerism is an important part of it. The rest? That’s raw material for a different post, or more likely a series of posts.

    Kay, yes, I’ve seen several examples of the same sort of thing. One of the reasons I’m talking about this now is that it may inspire people to look into the long and impressive history of worker-owned enterprises, and get more of them launched now.

    Dusk Shine, distributism hasn’t gone anywhere because it’s conceptualized as a moral philosophy, and the role of moral philosophy in today’s world consists of reminding you of all the things you should be doing while you go do something else. To make syndicalism a viable option will take an organized political movement combined with extensive outreach and advocacy — basically, the same sort of action that abolished slavery and got the vote for women. I don’t think that’s at all out of the question.

    Fly, there are other versions too!

    Tim, thanks for this! The one point I’d like to stress, though, is that cooperatives aren’t the only game in town, and they may not even be the best option. Employee-owned corporations are also an option, and they’re a lot easier to found and run in today’s business environment.

    January1, exactly — direct democracy is not always a good idea. Having a business owned by its employees, who then elect a board of directors, who then hire management gets the work done with less rhetoric.

    JC, that’s a problem of detail, which could be fixed by reworking the system to allow downward mobility.

    Roy, thanks for this.

    Jim, no, because you’re dealing with effects rather than causes. Change the system so that wealth no longer automatically accumulates in the fewest possible hands, and you don’t have to engage in redistribution, with all the problems that inevitably come from such schemes.

    Discwrites, hmm! I wasn’t aware that they’re mostly a US thing. Interesting.

    Blaidd, fair enough, and organizing producer cooperatives for distribution would be another very logical (and syndicalist) step toward more successful farming.

    DFC, yes, all of those are issues, and huge ones. If I was writing a book rather than a post, I’d need to address them, too.

    Lathechuck, as the economy of growth comes to an end, so will lending at interest. That’s one of the reasons that the money economy shuts down as decline sets in!

    Varun, the problem is that both capitalism and socialism concentrate too much power in too few hands, and the people who get that power will inevitably use it to accelerate the concentration of power and squeeze out competing political economies. As for guilds, I don’t favor them because they don’t spread the ownership of the means of production widely enough.

    Robert, thanks for this.

    Tidlosa, of course democratic syndicalism is going to need a state to bring it about and maintain it — as noted in my post, a constitutional representative democracy is the kind of state I have in mind, and I see no reason to think that such a state wouldn’t be up to the job. As for people talking about AIs and universal basic income, all that means is that the latest forms of technofetishism, the opiate of the chattering classes, have gotten to Sweden. These same discussions were already happening back in the 1950s — when I was a very small child I read a comic book that was set in a future where all the work was done by robots and people all got a salary for existing. You’ll notice it hasn’t happened…

    Oh, and I’m delighted to hear that my definitions would have caused pandemonium among your leftist friends. I’m sure they’d cause just as much pandemonium on the right, so what’s not to like? 😉

    Artinnature, hmm. I’ll consider it, but just at the moment I’m up to my eyeballs in shoggoths!

    Brody, okay, now explain how this relates to the subject of this week’s post.

    Tim, er, did you notice that I’m not just talking about worker co-ops? I’m far from convinced, in fact, that worker co-ops are the best option in every case, or even in most cases. Employee-owned corporations are also a valid approach, and may be more successful in many situations. I suspect you wouldn’t consider them quite so democratic, but they definitely have their good points.

    Austin, fair enough, but that could also be fixed with sensible tariffs, you know!

    Tripp, too funny. Thank you, and may you avoid nasty sharp teeth in the year to come.

    SMJ, not until and unless we have another means in place to manage the distribution of the abstract tokens we call “money.”

    Tim, see my previous comment. I’d rather replace stockholder-owned corporations with employee-owned corporations!

    Shane, history never happens as fast as you want. Deal.

  124. Hey hey JMG,

    I get it. I really do. It’s just that the language is cumbersome. Worker owned businesses are what I’m interested in achieving and cooperatives is the language that I’m used to using.

    I work at a patron based co-op, like a credit union. But what I want to spend my time building is a worker owned economy. The framework that I’m working with is worker owned cooperatives like the Mondragon Corporation, but that is not the only option. ESOPs have a lot of merit and there are other options. I also like partnerships, like one sees in law practices. But, quite frankly, the worker owned cooperative is the frame work that I’ve been using. Probably because I spent the last 15 years working for patron based co-ops.

    I’m only to happy to incorporate other worker owned options into my democratic syndicalism plans to take over the world. Any advise on where to learn more about the other options?

    Thanks,
    Tim

  125. Re: Finance without interest

    As I understand it, it’s forbidden in the Koran to loan money at interest. Muslim banking goes through major contortions to accommodate this. That could be a fertile subject to investigate.

  126. Sorry, just want to make sure that we aren’t talking past each other. When I say worker owned co-op I mean a business where each employee has a share and those shares allow them to vote for the board of directors, and the board hires and fires managers. Is that the same thing that you mean when you say employee owned corporation? Are we using different terms for the same thing or is there a meaningful difference that I’m not picking up on?

  127. Are you aware of the book “Companies We Keep: Employee Ownership and the Business of Community and Place” by John Abrams?

    I found it really compelling, and bought a bunch of copies for my organization’s senior management team circa 2013. A fair bit of time, effort, and money went into an analysis, but it turned out that becoming an ESOP would not be particularly favorable for tax purposes. It was an interesting process though.

    To everyone asking how we’d ever get there from here… at one point FEMA offered a course in triage, and to my mind the most important lesson was the first one; start where you are. In order to handle being shocked and overwhelmed, you just start where you are and do what you can do.

  128. A bouquet of thanks, John Michael Greer, for another excellent and thought-provoking essay. (This brings to mind my local credit union, the Seminary Coop Bookstore on the University of Chicago campus, and many more examples… )

  129. Dear discwrites, Our host has been pointing out from time to time that there comes a tipping point when it makes more sense to pay one’s taxes to the equivalent of the Mafia than to the official and predatory government. I believe there are neighborhoods in Latin American where something like that has already happened.

    Dear Tidlosa, there was nothing secret about Laborum exercens and its’ intended effect. John Paul II dedicated his papacy to bringing down Communism. In the USA that had the unfortunate unintended consequence of bringing about a political alliance between Catholic voters and the Republican party, in which Catholics voted for Republicans in exchange for empty promises about support for traditional families and repealing Roe vs. Wade. We all know how that worked out.

  130. For a contemporary exposition of Distributism by a political economist, see “Toward a Truly Free Market” by John C. Medaille.

  131. @JMG: Thanks, I’ll definitely have a go at trying to plant this seed in the Norwegian ecologist circles I frequent.

    Re social democracy. Mainstream political science in the Scandinavian countries notes that the social democratic system is built on a “growth compromise”. Capitalists are still allowed to make profits, workers leave their revolutionary ambitions behind and get a decent share of those profits in return. The expectation that real wages should increase annually fosters close cooperation between the Labor party and the Conservative party to create the conditions for growth, even as they try to pretend that their policies are very different. This makes our flavor of social democracy unstable to the extent that the need for continuous growth creates instability. I’m not sure if it has to be like this, but if our yardstick should be social democracy in practice, as opposed to in theory, then the Scandinavian countries constitute a useful case study.

    I think social democracy’s major achilles heel is that it, as inevitably as socialism and capitalism, produces a massive bureaucracy; in this case to administer the welfare system (the means of non-production?). People end up feeling entitled to all sorts of benefits that come out of the “nowhere” that is the state. As the system expands, the feeling of entitlement increases correspondingly, as does the class of people whose income comes from the public sector. This makes a fertile ground for populism, because populists can keep promising increasing public expenditure even when the state hasn’t got income to match. Thus there is a strong drive towards overspending and bloating the public sector in ways that don’t actually increase the well being of anyone (possibly except those who get publicly employed). Eventually, to quote JMG, this leads to the collapse of the system and its replacement by some other system of political economy…

  132. In my understanding, the moment existing business owners are faced with the obligation to share ownership with employees, there will be immense resistance.

    A good idea (syndicalism) might generate more harm than good.

    Don’t you think that both systems of ownership should be allowed to co-exist such that if syndicalism is far better than shareholder ownership, then given time the former might become dominant and the latter wither away?

    As very often in human affairs, a splendid idea that works well on a small scale, can turn out to be dysfunctional when applied to everyone, whole scale.

    After all syndicalism has (as far as I know) never been applied to the whole economic sphere of a country. I am thus very wary of schemes that anyone would want to see applied wholescale nation wide to everyone. Even if those schemes come from our esteemed druid! After all, should dissensus not also apply to the forms of organisations that occupy the economic sphere of a given country?

    Incidentally, nationwide application of new ideas on the socio-economic front is one of the main reasons I have turned wary of left wing organisations in my own country. Whatever good they do (and they do contribute positively to society) tend to unravel once they are in power.

    I fear that syndicalism, which works well when on a small scale compared to the economy of a country and when applied voluntarily, could turn out to be a malignant force if applied via force and legal coercion.

  133. @team10tim: You’re right that it’s hard to get cooperative enterprises started. But it can be facilitated with the right sort of institutions. In my country, cooperative housing became the preferred way of organizing urban housing over just a few years. An example from Oslo: a “housing and savings cooperative” was founded in 1929, initiated by the local builder’s union. In 1935, the city of Oslo decided that the cooperative, not the city itself, should build and organize new publicly planned housing. (Note that this wasn’t a worker-owned cooperative, but a consumer cooperative with highly elitistic management — in practice, the city’s urban planning office had more than one hand on its steering wheel.)

    Now here’s the interesting part: the new buildings were themselves organized as small-scale cooperatives (“borettslag”, condominiums), to be run by its owners, with formal assistance from the “mother” cooperative. This made cooperative ownership available on a large scale, without requiring normal people to go through the messy work of getting the cooperatives off the ground.

    Following WW2, the national government kicked the development into high gear by creating a national housing bank, mandated (among other things) to finance new cooperative housing in the cities. So the housing bank would provide the financing, the city government would provide the land, and the housing cooperative would build and organize the new small-scale cooperatives.

    I wonder if a similar model might work to facilitate worker-owned businesses — large scale cooperatives (perhaps necessarily quite elitist in practice) tasked with creating new businesses, a public banking utility that can provide necessary capital (either to start a new business or buy out the owners of an existing one), in a framework of general political support for the idea.

  134. Hi John Michael,

    Bureaucrats and plutocrats look the same to me. It was one of the reasons I chose to work exclusively with small business. They’re more nimble and more agile for a start, and the owners are always involved directly in the day to day running of the business.

    On a recent historical note, there was once a time when people could own a small business and have other people run it and they could make money. Those days are in the past as are higher interest rates, and I have suspected for quite a while now that these data points reflects the real wealth that underlies what many refer to as the economy. What do you reckon about that?

    And small business is the closest form of syndicalism that I could find – and it works.

    Interestingly, the laws down here do not appear to favour providing compensation for employees in the form of shares. Options, yes – and boards appear to me to spend an inordinate amount of time concerning themselves with remuneration for themselves.

    I would personally disallow tax deductions for offshoring work to Third World Countries, and possibly even put penalties in place. Of course local people would then have to pay higher prices, and this conflicts with one of the core economic policies in place which is to keep prices down at any cost. It is a self-defeating policy from my perspective and can only end in tears. Do you reckon that is a good policy?

    The problem I see it in correcting the current mess and attempting to produce a social democracy such as seen after the Great Depression is that the people who control the largest slice of the pie are basically clueless and from what I’ve seen, they feel hard done by – which seemed surreal to me. The real problem that they face too is that they do not share common goals as their individual goals of increasing wealth are in conflict with members of their own social class.

    Cheers

    Chris

  135. Hi John Michael,

    I had to laugh about your comment above about Ama (cough) (cough) (cough). From what I read they have operated for years without apparently paying much tax, whilst also supporting one of the wealthiest folks on the planet, and they keep expanding. How this is possible is beyond me…

    On that note I spotted this article in the paper today: IKEA’s flatpacked tax bill shows it’s time to put screws on beancounters . Now apparently $1.16bn in sales and that Swedish behemoth paid $289,000 in what I believe is Federal income tax. What kind of story is that?

    The thing is local suppliers and manufacturers that may find it more difficult to possibly offshore profits to low tax havens aren’t operating on a level playing field – and they are getting wiped out as a consequence.

    Interestingly too, a major property holder down here may be looking into their crystal ball and appears to have cashed out: Westfield: Lowy family sells shopping centre empire to French property giant for $32 billion.

    I suspect that at some point in the future, they may purchase that stake at much reduced prices and have cash to splash. I took that as not a good sign for the property bubble down here. What you may not be aware of is that I believe that such large shopping centre owners get all – and I mean all – of the financials for the shops. They can see it all, month by month as it happens.

    Interestingly too, I read that one of the major retailers is seeking lease reductions (as a combined group).

    Hold onto your hats folks!

    Cheers

    Chris

  136. As usual, a brilliant post and fascinating comments from folk much more knowledgeable than I. This time, it being holiday, I had time to read them. One thing struck me: neither you, JMG, nor your many commentators, see any need to define what “ownership” is. I’m not sure myself how much it’s necessary to do so – but…

    The Queen in a sense “owns” Windsor Castle, but I bet she can’t just do what she likes with it!

    And likewise in many less extreme cases I should think “ownership” is not the same as “control” – it’s more likely a case of being embedded at the focus of something which controls or restricts the titular “owner” who has become a prisoner of the structure of the thing.

    Perhaps – answering my own question – perhaps it doesn’t matter, because either way (i.e. whether or not ownership means control) the situation needs to be remedied in the same way, i.e. by breaking up a stultifying economic structure and replacing it with something more human.

    But for what it’s worth, I sometimes feel, in pessimistic mood, that it’s almost as misleading to talk about who “owns” the means of production in human societies, as it would be to talk that way about an ant colony… Almost. Here’s to free will in 2018!

  137. “Certainly the financial system we have now requires growth, since that’s necessary for money to make money — but capitalism as such?”

    JMG (if I may), on the topic of economic growth (or, more precisely, the possible patterns of growth) and alternatives to it, a very interesting writer whose works you may be interested to have a look at is the late Margrit Kennedy, who brought an ecological perspective to bear on the subject.

    Particularly relevant to your purposes here are the regional exchange economy/LET system examples given in her magnum opus “Interest and Inflation Free Money” (accessible online, see the link below).

    Of course, you may well have heard of or already read all of this, but if you haven’t, I think there is much to recommend it.

    https://issuu.com/margritkennedy/docs/bue_eng_interest/2

  138. Mr. Archdruid:
    I’m inclined to agree with what Héctor Germán Oesterheld said in his graphic novel biography of Che Guevara, that revolution to free the people is not, and never was, about economy – it’s about human heart.
    I’d add to that what Milena said in “W.R.: Mysteries of the Organism”: October revolution failed on the matter of free love.
    But, back to political economy:
    I’d be interested to hear how do you imagine the effect that 3D printer technology can have in this matter. In few decades, after this technology develops and matures, it might bring the means of production (which are so central in political economy) into the hands of every individual, which would enable her to produce at will, what, probably more than half of objects that she needs in everyday life (possibly even food).
    I hope that you won’t just wave this away as “technofetishism”; 3D printers are not flying cars, they’re real, existing technology. You might say that the society will collapse (because of global warming, resource depletion, failure of capitalism, etc.) before this technology develops to the point when it gets on everybody’s desk. Or that plutocrats in power will prevent it from spreading. And that might be true. But it would be only half of an answer, the other half being, well, what if?

  139. I don’t think any political system can survive without a backbone of spirituality embedded in society. Ideologically, the left wants to hijack the wealth of the ‘haves’ for redistribution. The right wants to raise the tide of wealth to reach more people. Neither seem to work. I believe if society lived biblically regarding finances, most societal ills would be solved if not helped greatly. A base tithe of 10% given to church or charity goes a long way. Add another 10% and now we’re making headway. Add a heart for service and give your time–even closer to the mark. The redistribution of wealth is a privilege, not a burden, and the true giants of society get that. However the bulk of the narcissistic herd probably don’t have much of a chance.

  140. After ruminating for some time, and reading with great pleasure and interest the other comments, I have one main question, which others have formulated similarly. The advantages of cooperative enterprises are undeniable, I use them myself almost every day here in Quebec, and they are admirably explained in the Leland Stanford link given above. However, we all know cooperative ownership has been delegated to the sidelines by various forms of centralized ownership, and legislation would have to change in order to allow cooperative ownership to flourish.

    What legal changes would be necessary for this to occur? Those outlined in Retrotopia would be enough, or others in addition to those?

  141. I don’t know how people keep up with all the content here. I don’t know how JMG gets any books written if he reads everything here and responds so much.

    I just want to point out that I think the worst problem with monarchy is not bad kings or good kings going bad, but good (or even tolerable) kings handing off power to dumb kids. Throughout history, a requirement for almost any kind of functioning state is getting past inheritance – of both money and power. Wise leaders rarely have wise kids and the kind of wealthy people who may have earned at least some semblance of their wealth are doing their kids no favor if they give them all their money. Democracy is one way of doing this. The recent repeal of the last vestige of the estate tax in the US is just one more weary sign of our decline. Just imagine if Fred Trump had not been able to give lots of money to his kid, where would he be now?

    As to using the political process to get to whatever comes after capitalism, should I be contacting my Congress Critter to ask him to support the Syndicalist Act of 2018? If regenerating social democracy via politics is not feasible due to the means of production, why would it be any easier for democratic syndicalism? My sense is that we need to revive some semblance of democratic socialism as a bridge to keep things from completely falling apart while we build syndicalist institutions under the radar.

    Lastly, sorry to most of you in the rest of the US, but visiting my family here in southern California, I am somehow managing to deal with the 80+ degree heat (upper 20s for those of you using degrees C) in December. It’s tough, and many in my family are complaining. But somehow we are managing. 😉

  142. I was ruminating on Rumi statement, You sit here for days saying. It is strange business. You are the strange business. You have the energy of the infinite but you keep wasting it in the realm of the finite As one of the commentator said it is not a question of economy but a question of the heart, Please tolerate the opposite views for in them we might find our needed recipe. It is not a question of the carriage or its structures but it is the humans who are guiding the carriage. Even bad carriages can be fixed and run well by the good driver. As I said in my previous comment which you omitted which i meant to be a positive contributions in the way of the alternatives we are seeking to address the mess. Walls are crumbling among the different species of consciousness heading to ward the integral consciousness that incorporates all species to open the new human window toward the bird view that see better than the caged visions we are living in. Thank you for your patient and efforts which are the envy of those who appreciate. The spirits of the earth are in full communication with all other spirits that fill our cosmos. Everything is moving toward extinction and nothing stay but the first. Modesty is the first wing of wisdom and gratitude the second. thank you.

  143. @Dave Troxel: I disagree that society-wide tithing to a Church has any inherent benefit to society. All that accomplishes is the creation of another wealthy (and therefore powerful) institution, and one that (in the historical model) lacks any direct mechanisms for ordinary people to influence its behavior and check potential abuses of its power. Once again, you’re reduced to hoping that the holders of wealth that wealth wield it benevolently. It’s all very well to say that their proper spiritual outlook will ensure they act in the public interest, but the actual history of religious institutions doesn’t bear that out.

    By contrast, in the system JMG has outlined, a broader distribution of wealth through society is assured by means both direct (stock dividends are paid back directly to employees at all levels of a company rather than investor-class absentee owners) and indirect (immense wage imbalances between high-level and low-level employees are reined in by employees’ exercise of their control over the board of directors). JMG has already discussed how this benefits the overall economy by ensuring that more money remains in the hands of those who will spend it on goods and services rather than on financial instruments. In addition, as team10tim points out this model ensures that pretty much every working person (barring one-person or family businesses) has direct lived experience with representative democracy. That would mean the average person is better equipped to participate within the larger politics of the nation and advocate for their own interests.

    Of course, one could imagine a church that operated on a similar principal and offered similar benefits, electing clergy from within the ranks of the congregation. I don’t know if there are historical examples of this model, but I could see possible advantages to having church politics be formalized and out in the open rather than conducted strictly in the shadows behind the veil of the temple…

  144. “If you work in the public sector you don’t own the means of production, the community does. If you want to own the means of production in a syndicalist society, you go into the private economic sphere, not the public sphere.”

    What motivation would public employees have to remain public employees? What economic reasons would there be to work as a fireman or a police officer, or in your example a banker? Would banker’s unions (and other equivalents) be motivated to fight to privatize those professions? Or would they have some other way of accessing some of the more important benefits of private employment such as retirement pensions? Would it make sense to handle state funds themselves as a sort of cooperative, with state employees being given government bonds instead of stock shares?

  145. Re.: Communism

    The communism was the default utopia of the Catholic Church from the first christians at least up to the end of the Middle Age, because was the way of life of the first christians as it is described in the Acts of Apostles (Gospel of Luke) Act 2:44-45:

    “Now all the believers were together and held all things in common. They sold their possessions and property and distributed the proceeds to all, as anyone had a need,”

    Or in Act 4:32-35:

    “Now the large group of those who believed were of one heart and mind, and no one said that any of his possessions was his own, but instead they held everything in common. And the apostles were giving testimony with great power to the resurrection of the Lord Jesus, and great grace was on all of them. For there was not a needy person among them, because all those who owned lands or houses sold them, brought the proceeds of the things that were sold, and laid them at the apostles’ feet. This was then distributed for each person’s basic needs.”

    The theological controversy around private property last all the Middle Age, and there was not doubt the the way the apostles and first christian lived was the right one, as in fact was replicated by the monks, but if some private property should be or not considered according to the christian doctrine
    One of the more influential theologian of this time was Gratian and in his “Decretum” he said:

    “Communis enim usus omnium quae sunt in hoc mundo, omnibus hominibus ese debuit” = “for the common use of all men of this world should be all the things of this world”.
    That fell short of the “Omnia sunt Communia” of Thomas Müntzer

    There are thousands of text and quotes around the injustice of private property (or property rights), for example San Ambrosius in the IV century said:
    “The Lord God in a particular way desired that the earth be common possession of all, and produce fruit for all; but greed produced property rights”

    In fact this hostility of the church to the private property, sustained by the franciscans (led for example by Duns Scoto and William of Occam) , was oposed by the scholastics, with Thomas Aquinas using the argument using by Aristotle in the “Politics”:
    “What is common to a very large number of people gets minimal care. For all are especially concerned with their own things, and less with the common ones, or only to the extent that they concern one”

    It seems to me that Mr. Garrett Hardin attributed to himself the “Tragedy of the Commons” but this is a very old argument in societies where the market forces has detroyed the real communities, and the view of the world is that of individual people grabbing as much as possible of the common pie, as was the case in the ancient Greece

    For me Marx is the last of a long list of catholic milenarist prophets proclaiming the advent of the New Jerusalem

    Quite communistic was the way the middle age peasants lived, because they have open fields and open tools in common, even the lords cannot sell their properties, because their rights was only stewardship in a web of obligations with their peasants and their lords, but the money&markets change all (in the frist place the myths)
    But the world is very different now

    Cheers

  146. I like the idea of syndicalism a fair amount, but there is one question that bothers me: how would you go about introducing it on a national level? By legislating that all businesses have to be employee-owned and forcefully confiscating and redistributing the ones that aren’t? Through some softer and more moderate variation on the same (a gradual transition, with compensation to the old owners, or just penalising “regular” corporations while encouraging co-ops)? Or is there something that escapes me here?

  147. Dear Nastarana,

    >I believe there are neighborhoods in Latin American where something like that has already happened.

    I consider myself fortunate to have seen this unfold in my own country, Italy. Southern Italy, formerly known as the Kingdom of the two Sicilies, has been collapsing since 1861 in a manner very much similar to what JMG has described on the ADR blog.

    Which, by the way, seems to prove JMG’s point that the decadence of the West will be a long affair, and not a one-off, movie-like event.

    The relatively well-oiled state machine of the Bourbons fell apart after the illegal invasion of 1861. The South never recovered. The Mafia has been making deals with the central government ever since, from positions of ever-escalating strength.

    The government of Rome has essentially forsaken control of large parts of the country to the different Mafias. Sicily is essentially independent.

    As the Italian economy slowly collapses and society crumbles, the Mafia is expanding in the Northern areas.

    I am no apologist of the mafioso culture. But it works! When you can trust no one (government, businesses, politicians…), when everything slowly grinds to a halt, you can still count on family bonds and violent threats.

  148. Re: Outlawing lending at interest

    Does that mean you are in favour of a drastic reconfiguration of the money distribution system that includes abolishing lending at interest? Will you be setting out your ideas for this reconfiguration on this blog?

    SMJ

  149. Just a tad bit disappointed this week is not the New Year’s Predictions–I thought this week would be New Years predictions and next week would be the political economy continuation. Still enjoy the topic, though.

  150. Dear JMG, dear Germans in the commentariat or any other persons who knows Germany well enough to answer my question,
    I wonder what examples of employee-owned cooperations, worker co-ops or other somehow syndicalist systems we have in Germany. Google didn´t come up with much.
    Does anyone know?
    Best
    Ilona

  151. Tim, fair enough — I misunderstood based on the words you were using. There are various ways to organize an employee-owned business, and the standard cooperative model is only one of them. The employee-owned cooperatives I’ve encountered directly all had workers making quite a range of policy decisions directly through regular meetings of the whole membership, and that sounds good on paper but doesn’t always work well in practice. Was this not something you had in mind?

    WRW, thank you for this; no, I hadn’t encountered that book before. I’ll put it on the get-to list.

    Millicently, you’re welcome and thank you.

    DesertDoc, thanks for this.

    January1, an excellent point. Since I haven’t lived in Scandinavia I don’t have the lived experience of the way that works, so I appreciate hearing about it.

    Karim, so long as you allow some people to amass capital by having exclusive ownership of a business, those people will tend to build up enough private wealth to exercise undue influence on the political and economic system, and then you’ve got all the problems of capitalism discussed in my post. I quite understand that business owners want to keep the status quo in place — it’s unquestionably more profitable for them than a syndicalist system is — but if we’re going to have the benefits of a broad ownership of the means of production, their private interests are going to have to take a back seat to the interests of the nation and the community.

    I think of this as being along the same lines as the end of slavery. Unquestionably it was a source of economic advantage for slaveowners to be able to keep owning slaves, and they resisted attempts to abolish slavery at least as fiercely as business owners are likely to oppose syndicalism. Even so, laws got passed, slavery went away, and in most countries — the US was of course an exception — it happened without violence and without undue turmoil, the slaveowners were generally compensated for the value of their slaves, and before long everybody figured out how to function under the new system.

    Chris, you’re on to something very important. One of the massive forces that comes into play when a society goes into decline is that in a declining economy, on average, all businesses lose money. When you’ve got an economy set up to run on profits, that’s lethal, and it leads to the collapse of all economic activity outside of pure subsistence. More on this in an upcoming post!

    The struggle to keep prices down at all costs, and the gimmicking of the tax laws so that big corporations don’t have to pay their fair share, is all part of the same thing — the increasingly frantic attempt to make an economy dependent on growth keep functioning when growth is over. We’ll see a lot more of that in the years ahead.

    Robert, fair enough. “Ownership” is of course a social construct, a set of habits, customs, and expectations surrounding who gets to do what with which things; and there’s a lot of complexity and contradiction surrounding that particular construct just now.

    DrQwerty, thank you. No, I hadn’t encountered Kennedy before.

    Goran, what I’ve seen of 3-D printer technology so far has not impressed me; a good craftsperson with hand tools can do an equally good job without having to program a computer, buy an expensive piece of hardware, and get the very finicky raw materials. I’m open to the possibility that it will turn into something more useful, but at my age I’ve seen so many so-called technological waves of the future break and roll back out to sea that I want to see some evidence that it’s more than a gimmick.

    Dave, the right’s just as fixated on redistribution as the left — the right just wants to redistribute wealth from the poor to the rich, while the left prefers to do things the other way around. That’s why I think that a mechanism to allow employees to earn ownership of the means of production is a better way.

    Matthias, I’ll leave that to the legal wonks. Certainly there would have to be a range of new legislation.

    Bsfritz and Millicently, thanks for the links.

    Dean, don’t contact your congressperson yet. To get anywhere, a syndicalist movement would have to be built from the ground up, beginning with discussions of the basic ideas like this one, and gradually spreading to the realm of grassroots politics.

    Abdulmunem, but sometimes the carriage really is the problem, and taking the time to repair it will make life easier and better for everybody on board.

    Eric, why do people go into the public sector now, when salaries are by and large lower than in private industry? Back in the early 20th century, public employees paid no income tax on their income from public jobs — why tax them on money that came out of the public treasury in the first place? — and that might also be an effective incentive.

    DFC, good. I tend to think of Marx as being more of a Protestant prophet — and there were no shortage of millenarian prophecies in the Protestant movement, of course — but other than that, I won’t argue at all.

    Daniil, there are any number of ways to do it. As I’ve noted above, I’d prefer a gradual transition in which business owners transfer stock to their employees, and are compensated for their loss by some equitable mechanism. Nobody would be expropriated, in the sense that nobody would be forced to hand over their wealth and get nothing in return; it would simply be required by law that they transfer their wealth out of ownership of the means of production. It would be wise to have incentives, substantial ones, for those who voluntarily became early adopters, and it would also be wise for the political movement to try to get as many businesses as possible to adopt syndicalism before it became written into law, so it’s not an unfamiliar thing for anybody.

    Sandy, true enough!

    SMJ, no, I see no reason to try to force something that’s going to happen anyway, as the economic growth necessary to make interest make any kind of sense goes away for the long haul. More on this in a future blog post.

    Shane, that’s next week’s theme!

    SMJ, that’s one of the many options, yes.

    Ilona, I’d be interested to hear about that too. Do any of my German readers know about examples?

  152. JMG, thanks for the clarification of how you (via Marx) are defining communism.

    @ John Roth and @ The Other Michelle: Thanks for one, explaining where this confusion comes from (at least in part), and two, confirming what I remember being told as well. I had a similar experience in high school in the 1980s as TOM did, insofar that I recall being told essentially the exact same thing – not by a speaker, but by teachers.

  153. Good evening John,

    In your example of a blivet factory, you describe how the shares become the basis of a pension of a retired owner:

    “By the time she’s put in thirty years, she owns half the original value of the company, but of course by then you’ve retired, and your shares are the basis of your pension. (Your shares revert to the company when you retire, remember—they can only be owned by employees—but your pension makes up for the income.)”

    But I am not sure how this would work. I think this was a simplified description focusing on mechanisms preventing a takeover of the company by new employees, so it is missing a few bits not relevant in that context. In particular, there is no memory in the system: once you stop working for the company for any reason you lose your shares, which are then vacant until they are recycled to newer employees. Am I right thinking that to generate a pension, there would need to be some record of past ownership of shares, perhaps a separate class of shares which remain with an employee for the rest of his life but which do not generate any dividends until he retires – somewhat similar to how an employer may set up a pension plan in your name and contribute to it as long as you remain with them, but you cannot access the money while you are of working age? If so, then this would provide a pension not only for the original owner but also for the employees.

    Also, by getting this first employee it becomes inevitable for the original owner to eventually lose control of the company, by eventually retiring or by having his shares distributed to the employees with the passage of time (unless the company loses all the employees). I understand that this is by design?

    Lastly, what happens to the shares as the company’s value changes? Say, it halves from 30 thousand to 15 thousand dollars. Will there still be 60 shares but only worth 250 dollars each, or will each share still be worth 500 dollars but there will be only 30 of them?

    Regards,
    Migrant Worker

  154. @ Eric and @ JMG

    Re public sector employees

    I can only speak for myself, of course, but as one who left the private sector (an investor-owned utility) to go to the public sector (a municipally-owned utility) and taking a pay-cut in the process, I can say that there are those who see things like organizational culture and purpose as things of importance. Being able to work for the public good of the ratepayer, rather than for the private gain of the shareholders and corporate officers (at the expense of that public good, I’d add) was worth a certain amount of money.

  155. About public lighting–a lot of this is crime driven–one of the biggest pushes to deal w/crime @ night is too carpet bomb the area with outdoor lighting.

  156. Very thought-provoking post and comments – thank you JMG and commenters!

    I was active in the worker co-op scene in Britain twenty years ago. The main argument I saw used against worker co-ops (and, by implication, other forms of employee ownership) was that they tend to be undercapitalised, which puts them at a disadvantage compared to shareholder-owned businesses. Shareholders want a say in the business they invest their money in, and this conflicts with the principle that workers control capital rather than the other way round. Worker co-ops can issue shares without voting rights, but these have limited appeal, mainly to idealists with money to spare, which in turn can lead to paternalistic forms of control – I have seen this happen.

    Do the employee owned businesses you describe find a way round this? Or is it just one of those things that won’t be such a problem in a post-growth, contracting economy in which capitalism-as-we-have-known it loses its advantages?

  157. Re Germany. World Council of Credit Unions website has some information
    http://www.woccu.org/about/history

    Re: My previous comment.

    In a previous comment I mentioned the Seminary Co-op Bookstore in Chicago. It is not, as my comment suggested, part of the University of Chicago itself but nestled within the campus / neighborhood. Shareholders are the customers. The Seminary Co-op has made some changes recently, for example, anyone can join online or in person (but voting shares are a different matter, seems you actually have to vote). It is interesting to see they have an Advocacy Tools page on their website https://www.semcoop.com/advocacy-tools

    Another thing worthy of mention is that, as has been the case for decades, the inventory in the Seminary Co-op Bookstore is of a far higher literary and intellectual caliber than what you would find at a Barnes & Noble or even any other independent bookstore I have ever seen (and I’ve seen a lot). In short, the Seminary Co-op is a standout case as far as bookstores go. That said, alas, their online search engine could be improved. Amazon has them beat hand-down on that.

    John Michael Greer, your post has prompted me to rejoin the Seminary Co-op and order a book.

  158. “Eric, why do people go into the public sector now, when salaries are by and large lower than in private industry? Back in the early 20th century, public employees paid no income tax on their income from public jobs — why tax them on money that came out of the public treasury in the first place? — and that might also be an effective incentive.”

    Well, the devil is in the details. From where I sit, a blue collar guy like me with moderate skills in several areas -and mostly old fashioned manual skills (there is no “app” for what I do) wages are considerably lower in the private sector. We privatized about half our staff several years ago. The private workers make $9/hr and no benefits. Health Ins. is available to them for roughly the amount of their paycheck. (most qualify for substantial subsidies under the ACA so they can/must buy health insurance) I make double the wage and a traditional pension -Where I pay nothing in and recieve X amount per month for the rest of my life; a better deal than a 401K, even with matching. My health insurance is $150/mo for the whole family. (It used to be free) Sick days are cumulative so I can now take about 6 months off due to illness and not loose a penny of income. 3 weeks paid vacation. Plus the work environment is more pleasant than any private sector job I’ve ever had -and I’ve had a lot. It might be that at the executive/administrative level salaries are higher in the private sector. For wage earners it’s generally the other way around. There are exceptions, such as working for General Motors (but even there the two tier system now in place pays less, to start, than I make) My advice to blue collar folks who think the grass is greener in the private sector is this – look before you leap. 20 years ago, when it was easier to find jobs, more than 50 people applied for my job. I never had it this good when I was in the private sector and had no reasonable chance at having it this good. A catabolically collapsing private sector is no place to be for a working class person. Of course the collapse of the private sector will eventually mean the collapse of the public sector -it’s already happening with privatization. For now the public sector is the best refuge for working people. Sorry to ramble but I couldn’t let this pass. There is presently a very very strong incentive, at least for working class people, to seek work in the public sector.

  159. Hey hey JMG,

    I don’t have all of the details worked out because I’ve never been involved with a worker owned business. I’ve read a lot about the Mondragon Corporation (cooperative) and they elect boards that manage the managers, but they also have worker councils. The workers councils have a couple of roles, they are somewhere between a union and an HR department if I understand correctly.

    I like the Mondragon Corporation because it worked, very, very well. It was started by a Catholic priest in the town of Mondragon and he put out collection plates to start a technical vocation school. After 10 years his graduates had skills that were being under utilised in the work place and together he and 5 of his top students bought out a failing company that made paraffin cooking ovens with a patent that they stole from France. Today they have 260+ cooperatives, a university, a technical vocational school and a bank.

    I imagine that the specifics would vary considerably based on the size. With three hippies in a garage it is important that they are all on the same page and work through things together. With 500+ employees it would be necessary to have bylaws, policies, and a well defined hierarchy.

    I’m in the process of learning more about the specifics. I’m trying to start a worker owned business (co-op?) of high school kids to do gardening and landscaping for seniors who still want to garden, but can’t do the double digging, weeding, shovelling snow, cleaning out the rain gutters, etc. any more. There has been a good deal of community interest and support for the project. I’m working with the co-ops, credit unions, master gardeners, landscaping companies, and the economic development adviser for our town.

    I’m hoping that it results in a handful of things. Kids that have some professional business experience, meaningful interaction with the natural world, practice working with their peers and practice training the younger generation as the seniors age out, and exposure to alternative economic systems. Additionally, they would be paying jobs and it would look good on a resume.

    It seems like its going to work, but the devil is in the details. It also seems like good practice for launching a bigger grown up worker owned business to serve other needs that our town has that are not presently being met.

    Thanks,
    Tim

    PS any advise would be welcome.

    PPS I’ve seen a patron based co-op that was collectively managed (consensus minus one) and they take forever to make decisions, so I do know what you’re talking about.

  160. Hey hey January1,

    RE: “You’re right that it’s hard to get cooperative enterprises started. But it can be facilitated with the right sort of institutions.”

    The USA doesn’t have those institutions. That’s what I’m hoping to accomplish. I’m hoping to demonstrate the value of creating worker owned businesses in a bid to entice local governments to create those institutions. I’m hoping to create that 1929 cooperative and show that it works so that the local government responds the way Oslo did in 1935. And I’m hoping that other cities copy the model and we end up with a worker owned economy.

    Thanks,
    Tim

  161. We have at least two “100% Employee Owned” grocery store chains under the names “Big Star” and “Food Giant,” here in Mississippi. They are all part of the national-scale IGA network, which I started to tell everybody is also employee owned, but Wikipedia tells me it is basically an umbrella organization of independent franchises. My middling-sized town in the Delta has an independent employee-owned store called “Marketplace” and two Big Stars. It is clear that they share some resources and carry the same store brands. They carry a significant portion of the grocery business of this city of about 25,000, and manage to compete fairly enough with a Walmart supercenter on the edge of town and various and sundry Dollar General type stores, Big Lots, etc..

    To perhaps shed some light on several people’s questions about how these things might to come to be, I believe here it probably had to do with the impact that Walmart had when it moved to town. We lost our Jitney Jungle, and the store that occupied the center where Marketplace is now located also went under. But somehow, employee-owned stores filled in the breach. I think perhaps conventional corporate businesses with their bloated overhead were unable to compete, but the alternative model, so far, has.

    The only other thing I would like to add to the discussion is that I think some people in this discussion are confusing employee-owned businesses with worker- or artisan- owned cooperatives. Not sure if the same forces apply.

  162. ” … Perhaps the most important element … is that it explains how living in a market society shapes our thoughts to conform with the commercialization it creates. Creating radical changes requires the first step of liberating our selves from these blinders, to be able to imagine radical alternatives….”

    From this WEA post –
    https://rwer.wordpress.com/2017/12/30/resources-for-study-of-polanyis-great-transformation/

    Important to remember that changing our economic system might happily result in changing our ‘culture’. And JM is midwifing’ ‘the imagination of radical alternatives’ 🙂

  163. JMG wrote: “I think of this as being along the same lines as the end of slavery”
    LOL!!!! Just before I read your reply, I was wondering whether a parallel doesn’t exist between the end of slavery and the rise of syndicalism, and there you go!
    Harsh parallel it is indeed to be ranked amongst slave owners!

    A few years back when I was thinking about the decline of industrial civilisation and my own businesses, it was getting clear that any decline in industrial civilisation also meant economic decline and thus a reduction in the profitability of businesses. And thus the question was how to respond to that.

    It is obvious that the first thing to do was to get out of debt (done that to a large degree), use efficiently existing ressources (getting there!), maintain the productive physical assets in good working order (on going),
    maintain market share via good service, reduce the burden of overheads (fixed costs) as much as possible. Above all keep your employees content.

    And now I may have a nice exit strategy: sell out to my unsuspecting employees (who don’t read this blog, I am sure of that!) before things really spin out of control.

    Thank you Mr Greer!

    Please note that I am being a little bit facetious there but the medium to long term sustainability of businesses is a very serious issue. And as far as I can tell, most businesses will probably decline and collapse as things get harsher. But in Mauritius we are not there yet. The going is still good…Still time to plan.

  164. Hi JMG and Ilona Evers,
    I think the closest to employee owned businesses you get in Germany are the ´´Genossenschaften´´ (which is the literal translation of ´´cooperatives´´ ). As I understand it (legalese is a foreign language for me, so I´m glad to be corrected), one of the German version´s preconditions is that a member has to be a customer at the same time (for example people can own their local power station or the the house(s) their flat is in, and it is also possible to have something like an artists´s co-op to sell artworks or agrarian co-ops to sell farmers products); I think to make them truly employee owned businesses as JMG envisions them this rule would have to be abolished. Nevertheless, for the time being they might be the best alternative to ordinary corporations, so here is a link to a list of some of the registered cooperatives in Germany (unfortunately in German only) :
    https://www.genossenschaften.de/wir-sind-ein-gewinn-f-r-deutschland
    greetings
    Frank from Germany

  165. John Roth wrote: “Muslim banking goes through major contortions to accommodate this”

    Hi John, not exactly, think of islamic banking as a profit sharing arrangement between a finance house (the islamic bank) and a business. If the business makes a profit, the finance house has its share, if the business loses money, so does the finance house.

    I do think that this type of financing has its uses in our world. Not perfect but functional and it probably dampens the urge to speculate, a major force of destruction throughout the capitalist system.

    Regards

  166. Political Economy has a particular interest for me. After all, though the Soviet Communists and the Red Chinese have, arguably, carried out many of the very same types of military atrocities and crimes against Humanity usually associated with the German Nazis; if there is one thing that Hitler did, that neither Stalin nor Mao would have ever dared was to preside over the air raid of London, England. Indeed, the Blitz, as it has been called since, is the most significant battle, not only in The Second World War, but perhaps in the entire 20th Century, in my view.

    Indeed, America is, after all, an Anglo Saxon Nation! In this respect, it is much like Canada and Australia and New Zealand, and like The United Kingdom itself (or, to be more precise England). As such, Americans consider the lives of their fellow Anglo Saxons, in this case the English, to be more precious and of more value than say, those of the Ukrainians and the Tibetans, the favorite victims of the Stalinists and the Maoists respectively. So, Anglo Saxon Race Prejudice could indeed, be a factor, as to why Communists sins are somewhat more glossed over than Nazi ones.

    What is also interesting, though, is that the Soviet Communists and Red Chinese gave lip service to Egalitarianism. Yes, they claimed to do all they did, in the name of egalitarianism. Whereas with the German Nazis and the Italian Fascists; we were basically dealing with Ancient Peoples living in Modern Times. This could, indeed, be why it is so much easier to hate and dread Fascism, including Nazism, than it is to hate and dread World Communism. Of course, the Nazis, and the rest of the Fascists, did not even pretend to believe in such Liberal sounding stuff like egalitarianism or equality. No, the Totalitarians of the Far Fight, went out of their way to claim to desire to bring about a Hierarchical Caste System, and rather than project their Imperialists mentality upon their enemies, like the Soviet Communists and the Red Chinese, were self admittedly expansionist.

    And speaking of Anglo Saxon Race Prejudice, I have also read a bit about the Eugenics movement, in THE UNITED STATES OF AMERICA. Ironies of ironies and absurdity of absurdities, some, during that time, thought that Germany, of all countries, was not into Eugenics enough. And besides, I used to desire to write Science Fiction, of the Dystopian variety in particular, and that is precisely why I got into all of this.

  167. My interest is in forms of economic and social arrangements that would enable humanity to “live in harmony with Nature”. Syndicalism and coops would be part of that picture.
    JMG, you write that AIs and universal basic income are the latest form of technofetichism.
    I feel a universal basic income would be a good transitory solution given that most jobs are anyway just other forms of destructive consumption of “natural resources”. Even without more AIs, we’re already in gross overproduction mode anyway. In this line of thought, NJ Hagens & DJ White, throw an interesting light on the nature of jobs in today’s world:
    ““Jobs” per se aren’t intrinsically useful at all: In a society in which we’re all basically idle royalty being catered to by fossil slaves, why do we place such a value on “jobs”? …[There] exists considerable resentment against those who don’t work…The fact is, that most of us are freeloaders when it comes down to it, but if we endure 40 hours of inconvenience per week, we meet the social criteria of having earned our banana pellets even if what we’re doing is stupid and useless”…and I’ll add is bad for the biosphere.
    GDP, Jobs and Fossil Largesse by NJ Hagens & DJ White, EarthTrust
    http://cassandralegacy.blogspot.com.eg/2017/11/why-do-we-need-jobs-if-we-can-have.html
    Best wishes for 2018
    Dominique

  168. Regarding 3d printing technology, I think it’s just about at its peak. High end spray/UV systems ($10-100k) can produce production quality (actually better than injection molded in many ways) parts very fast, but they use expensive and unstable photosensitive chemicals ($100+/kg) which turn into plastic when UV cured. I don’t see this technology going anywhere, it is in most applications, cheaper to use a CNC machine to cut plastic stock into whatever you need.

    Hobby style fused-deposition-fabrication printers are pretty good now, you can get an Asian-made printer for well under $500 that actually works. We use a middle-range fused-deposition printer at work, and often make runs of 10 – 50 parts with it. The feedstock is a shelf-stable material that costs $30/kg, and the parts are strong enough for most applications.

    In my mind the technology, on the low-end, has already arrived: You can buy a machine for under $1000, and produce relatively functional parts for a real cost (including replacement of the machine) for under $60/kg. It’s great for small things with complex geometry, not so great for larger things with simpler geometry (compared to more traditional manufacturing).

    Of course a good craftsman can make something better, even with only $1000 worth of tools at his or her disposal, but even at minimum wage, the parts are going to turn out costing quite a lot more to produce – especially if the parts have lots of features that need to be relatively accurate. It’s the normal logic of industrial economics – buy the machine and feed it energy and refined materials instead of paying the skilled labor.

    3d printers won’t change the world, and are of course eventually going to be too expensive to operate, so of course, short-run manufacturing and prototyping will eventually revert to the older methods.

  169. @Scotlyn:
    I have downloaded Michael Hudson’s 1993 book. It certainly contains a lot of very interesting facts, but also quite a number of unreferenced generalizations, probably his personal opinions.

  170. RE: Germany,

    I understand that the German constitution enshrines a reciprocal responsibility to society upon ownership, especially of large businesses. In addition to the rights of stock holders, stake holders are given a say in how things are run. I’m light on the details because I don’t speak German but my understanding is that social responsibility is tied to the concept of ownership. Any Germans out there that would like to expound on this?

    German constitution:

    https://www.gesetze-im-internet.de/englisch_gg/englisch_gg.html

    Article 14
    [Property – Inheritance – Expropriation]

    (2) Property entails obligations. Its use shall also serve the public good.

    https://www.washingtonpost.com/news/wonk/wp/2012/10/07/in-germany-workers-help-run-their-companies-and-its-going-great/?utm_term=.400ec712ac82

    Quote:

    “Think workers don’t have enough of a say in U.S. companies? Look to Germany, Boston College professor Kent Greenfield argues in the latest issue of Democracy.

    Through a process called “codetermination,” large German companies are required to elect half their board of directors by a vote of their employees, rather than of their shareholders. And it’s “now the economic powerhouse of Europe,” Greenfield contends.”

    Thanks,
    Tim

  171. @Matthias Gralle
    You may well be correct as to the number of generalisations and personal opinions. But it is always interesting to receive factual information (which he, together with his colleagues studying the origninal sources from the Ancient Near East, does indeed provide) about other ways that humans have invented for arranging their social, political and economic lives – it is the biggest antidote I know of against T.I.N.A. In fact there are thousands of alternatives, some of them very imaginatively able to confront the tensions and contradictions which we sometimes feel we cannot.

    In a more personal vein, as a person reared with an extraordinary intimacy with the Bible from an evangelical Christian point of view, I find I am really excited by the portion of Hudson’s work which opens up economic relations as the biblical moral arena I personally always found it to be, despite the lack of interest I found in my co-religionists. I have long ceased to consider myself a Christian, but I have never stopped thinking that the general moral tenor of a society can be “read” by its treatment of its weakest members. A different reading of the Bible – one focussed on forgiveness of debt, rather than of sin – is strangely moving, and touches a deep seam in me that must be already “pre-tuned” and rendered receptive by my very earliest days of Bible learning.

    To bring this concept of the debt jubilee back into the current topic – who owns the means of production – I would just say that, as Hudson points out, the threat that foreclosure following inability to pay interest-bearing debt might have been seen to pose primarily, would have been the loss of ownership by the many of such common “means of production” as land, tools, and the labour of family members. The jubilee system would then have functioned as the method invented and applied back then to restore ownership of the means of production back to the many, just as JMG’s proposals regarding syndicalism may well do under our different conditions now.

  172. Going off on Eric’s comment about the private/public sector. If public utilities are paid for by tax payers, then shouldn’t the municipal, government, state positions only make up 7% of the economy or whatever percent the tax rate is? That’s how I look at it. If I pay income tax, I look at it as that revenue going to pay a school teacher. If I buy a computer, the sales tax goes toward the government’s office supplies. The thing is the public sector is the only part of the economy paying anything near a livable wage right now……

  173. Hello JMG. I couldn’t think of a better way to get this link to you.
    The electric car fantasy from an auto magazine’s viewpoint. Of course, though I agree with you about it’s fantasy, I have to wonder how much oil money went into these studies of electric infrastructure build out. The oil industry still dragging out their waning influence, while electric car advocates spin their tales of a glorious future.
    http://driving.ca/auto-news/news/312756
    Cheers and Happy New Year to you and yours.

  174. Syndicalism/cooperativism is a very good idea–indeed, it’s the best idea we have. However, as Rob O’Grady points out in 150 Strong, cooperatives–like all other systems–break down at large scale. Technology is the enabling force for scale which is, I think, at the root of our current challenges. Democracy fails, as do adaptability and accountability. Externalities exist at all scales, as you have pointed out brilliantly in past posts, but these can be devastating at large scale.

    Theories of comparative advantage underlie the appeal of scale and serve as a rationale for those who would control the means of production (i.e., the data and analytic tools) to extract monopoly rents that benefit a very few. Economic and political power have now become hugely self-reinforcing. As a small business person who is eager to scale by empowering my employees–I am not holding my breath. It is exhausting work, as the regulatory roadblocks erected by large firms are daunting, while the entrepreneurial spirit among the younger generations is all but dead. The data mandarins and bureaucrats–all who get high on controlling others–will not go down without a fight. It’s an admission of defeat if our best hope is that we run out of the energy that powers our machines before our culture and habitat are destroyed…

  175. Migrantworker, there are various ways of handling each of these issues. One thing about syndicalism that I think may not be coming across is that it’s not a narrowly defined, one-size-fits-all scheme. It’s a basic principle — that business enterprises should be owned by the people who work at them — which can be put to work in a variety of ways.

    David, many thanks for this.

    Daddy, it’s not surprising that in a capitalist system, enterprises that aren’t capitalist don’t get much capital! In a syndicalist system, since there would be no stock market, there would be a market for other modes of investing in business that don’t involve ownership. I imagine, for example, an investment cooperative, in which investors pool their funds and loan them to businesses in exchange for some kind of return.

    Millicently, delighted to hear it. If I lived in the area I’d join too.

    Daddy, another good example! Thanks for this.

    Christopher, interesting. Many thanks for the report from the trenches!

    Tim, excellent! In that case the only advice I can think of is to listen to those who’ve actually done it, and learn from your mistakes. You already know to avoid consensus systems like the plague, so have at it.

    Hal, exactly. If you don’t have to worry about making a big enough profit to satisfy shareholders, you can function very well in an economic environment that a capitalist business can’t handle. You’ve made a good point, too, about the difference between employee-owned businesses and consumer and artisan co-ops. Not the same thing at all!

    Nancy, an excellent point.

    Karim, I suppose that was kind of an edgy comparison, wasn’t it? My apologies. Aside from the moral issues surrounding slavery, though, there’s another issue — what a society does when it decides that some form of ownership that used to be acceptable needs to be given up for valid reasons. That’s the situation we’re in now, as I see it. As for potential benefits on the way down, well, yes, that’s also one of the advantages…

    Frank, thanks for this!

    Twin Ruler, er, I’m trying to figure out what any of your comment has to do with the subject of this post. Perhaps you can enlighten me.

    Dominique, fair enough. A lot depends, though, on what you mean by “living in harmony with nature;” that’s a far more complex and polymorphous concept than a lot of people seem to think these days.

    Justin, thanks for the technology update!

    Tim, it makes a great deal of sense to me that having workers elect part of the board of directors would be extremely good business practice; the workers, after all, know what’s actually going on down on the shop floor, and thus can rein in management from doing the kind of stupid things that US corporations do so often due to their total ignorance of the realities of the business they manage.

    Austin, sure, if the government is only spending as much as it takes in. Here in the US, our government basically finances itself by running the printing press night and day. Down the road, that’s going to result in a massive economic crisis and, in all probability, the complete collapse of the dollar and the issuing of a new currency to replace it — read up sometime on the history of the “rentenmark,” the currency Germany issued in the 1920s to extract itself from its hyperinflationary spiral — but for the time being, the US government spends like there’s no tomorrow.

    Hapigreenman, thanks for this, and best wishes for a new year that sucks less!

    Karen, of course scale is an issue, but there are some very successful employee-owned businesses that are relatively large. I suspect, in fact, that employee-owned firms will scale up at least as well as stockholder-owned companies do. Nor am I admitting defeat — why on Earth do you think I’m talking about syndicalism here, and sketching out the steps that would be involved in making it happen by political means?

  176. Great discussion, learning a lot. My temperament is such that I lean towards smaller, dispersed and varied solutions. I’m not a great centralizer or consolidator of power. Most people are not in my experience, most prefer cooperation or to be left alone. Trouble is, there is always that minority of people who want more and more control, and who seem to gravitate towards those points in any system where control and consolidation is possible. Lots of obvious examples at a national level, from any point in history, but you see it happening locally as well – people that my Dad used to refer as town hall hitlers, somewhat meanly but it makes the point.

    So how in this system of political economy do you deal with that tendency, that will to power, among the few? Because that seems to be a key force that could drive any system out of balance.

  177. JMG wrote: “I suppose that was kind of an edgy comparison, wasn’t it? My apologies.”

    Please no need of any apologies! I thought the parallel was not without merit and probably would deserve some scrutiny.

    Just for the record, Mauritius is one of these places where French slave owners were compensated by the British in 1835 after abolition and they used the money to set up successful businesses which are still up and running nowadays. Indeed the largest bank in Mauritius (The Mauritius Commercial Bank) was set up with such funds.

    And you are quite right, the issues about future forms of ownership of the means of production are paramount and could well be one of the factors that either make or break a less chaotic transition from of our current mess.

  178. Karim, I think your points are quite valid. Underestimating the difficulty in getting existing shareholders to hand over their shares, even if compensated, may well backfire. I don’t think it’s necessary, either. Simply reducing or eliminating taxes on worker-owned shares (including dividends thereof) could make businesses more competitive, as part of the workers’ compensation could be shifted from heavily taxed salaries to lightly taxed dividends. This alone could have a massive impact on the corporate landscape, especially in countries which maintain generally high tax rates. Stronger medicine may be needed in the USA, I suppose, but experience shows that exploiting tax exemptions is a popular activity even when the gains are marginal. If it doesn’t make lots of existing companies restructure their ownership, it would at least facilitate new companies outcompeting them.

    One reason I think this could work is that similar arrangements got Norway to have the highest rate of personal home ownership in the Western world. In this country, a $500,000 dwelling has an effective tax value of around $125,000. The personal wealth tax rate is 0.7% and applies only if the tax value exceeds about $150,000 (any mortgages fully deducted, of course). Local governments can require you to pay property tax, but the max rate is 0.7%, often with a generous basic allowance to boot. Interest payments are deductible from income taxes. Not at least, rent income from rooms for rent in your private home is tax free.

    The result: a housing sector that’s almost entirely syndicalist in JMG’s sense of the word, with most free-standing homes in simple personal or family ownership, urban apartments mostly in cooperative ownership. Of the less than 20% who rent, most do so from a landlord in one of the mentioned categories, not from professional property owners (which are perfectly legal, just not competitive in most cases). This system is far from perfect — for one thing, it’s prone to housing bubbles when combined with free credit — but it shows how the powers of investment capital can be effectively excluded from a large part of the economy when the tax code is designed to do so.

    JMG, if you’d like to read up on the rise and fall of social democracy in Scandinavia from an authoritative source, you could do worse than to get a copy of the late Francis Sejersted’s “The Age of Social Democracy – Norway and Sweden in the Twentieth Century”. Sejersted was an economic historian writing from a moderate Burkean conservative perspective, sympathetic to the achievements of the welfare state without glorifying it.

  179. Hi JMG,

    Tim ( team10tim) has already mentioned Gar Alperovitz above and I agree with him that his work is definitely worth checking out. I have read a number of Alperovitz’s articles and interviews on Resilience.org over the years and he explicitly mentions the Mondragon experiment as one of the inspirations for his ‘Pluralist Commonwealth’ model.

    http://www.pluralistcommonwealth.org/
    https://thenextsystem.org/principles

    Tim, have you checked also https://community-wealth.org/about? Their website seems full of useful information, links. etc.

  180. JMG,

    I agree with you that 3d printing is indeed a gimmick. But not just a technological one. It seems to me that the reasons why its idea has been propelled so high by the high tech corporations (and unwittingly embraced by the hapless techno-fetishists) is that it allows those who control the intellectual property to externalise large chunks of the production costs and the associated risks.

    Why should a company worry about making products, which it then must distribute, when it can force its customers to essentially take on the the production of those parts and still reap the profits? It’s the same logic behind Uber: why owning the taxis when just owning the IT infrastructure lets you profit without sharing the risks of car breakdowns, insurance, etc.?

    From a peak oil perspective, high tech 3d printers and the finicky materials will not be available for very long, at least in quantities (and at prices) that make of them anything more than a niche technology. Certainly not the revolution touted by the believers.

    The constant threats for the industry are the open source and p2p movements. They are currently kept at bay by the legal systems protecting IP in most countries, but as we continue along our descent and those restrictions become impossible to be enforced some of the ideas behind the 3d printing fad will probably live on. Related to this, have you ever come across Open Source Ecology? (http://opensourceecology.org/) It’s an interesting project: https://www.ted.com/talks/marcin_jakubowski?language=en)

  181. @team10tim, December 30, 2017 at 3:21 pm :
    I wouldn´t take what´s wriitten in the German constitution too literal; there´s a rather big gap between the ideals and real life. For example, it says in Article 3:
    (1) All persons shall be equal before the law.
    (2) Men and women shall have equal rights.
    That seems to be quite clear, doesn´t it? And yet , until the 1970ies, a married German woman was required by law to get her husband´s permission if she wanted to work a paid job. I don´t know how that was legally justified, but lawyers always seem to find a way. Unfortunately it´s often a rather similar story when it comes to worker´s representation: Again, I don´t know what exactly the workarounds are, but the outcome is that most companies here are being run just like everywhere else in Europe,
    except for relatively minor differences. Things used to be a bit different, and some of the older workers still have old contracts with conditions far better than what´s available now, which leads to a kind of two class system among workers. One employer´s scheme that I´ve heard of is to slightly redefine a worker´s tasks and then persuade her that a new contract is needed because the job has changed; that way the worker loses her right to an extended notice period that she is entitled to after working many years for the company. Much like everywhere else in the industrialized world, things have been going downhill for the working class here since the 1980ies: there has been a slow erosion in wages, benefits like paid holidays and yearly extra payments as well as in working conditions. By 2015 or so the level of wages here has been depressed to the point that they were among the lowest in Europe: while there have been pay rises in other European countries, wages here have been stagnating or falling. Since then this trend has apparently been broken and wages are rising again, but there´s a lot of catching up to do. Of course there is still a lot of wealth in Germany, but it´s mostly from better times and very unevenly distributed and the gap between rich and poor is widening. The German economy maybe doing well, but German workers, especially younger ones, are not (that´s one reason why immigration is such a huge issue among workers here) and the need for a change of political eonomy here is as big as anywhere else.
    Greetings
    Frank from Germany

  182. We have a couple of those employee-owned businesses around here, and I prefer to shop there whenever I can. One started as employee-owned and has quite a number of stores, so it must be doing well. The other was run by a very good employer (everyone said) who treated his employees very well and when he retired – he GAVE the company to the employees! It’s Bob’s Red Mill, which has flour & other baking products on a lot of store shelves these days. Wonderful place to get grains from.

  183. @Frank from Germany:
    here in France we also have both cooperative businesses and businesses where you have to work to be entitled to be a client…

    The legal status for cooperative businesses is called SCOP. Here is a website with a directory for listing a good 300 of them: http://www.industrie.coop/annuaire
    There is even a café run like that, in Lille : http://cafecitoyen.org/le-projet/ and there are probably others like it across the whole country.

    There is also a supermarket project called La Louve, which is legally the simultaneous operation of an association for collecting state subsidies and staging monthly/yearly general meetings, and of a cooperative, for running its daily business and employing between 5 and 10 salaried workers.
    It is located in the north of Paris, one of the most economically inclusive areas of the capital’s inner territory. It sells a lot of organic products, but also non-organic articles in some cases, always at a very competitive price/quality ratio, all of this in order to be both civic and economically inclusive.
    I am a member, like between 4000 and 5000 others. You can only buy if you are a member, AND if you put in 3 hours of work once every 4 weeks. I do it mostly because it is very convivial and educating, even when I just do cleaning work, and of course because I believe the succesful (and popular, ie not slaughtered by angry mobs) businesses in the future are gonna be those with an angle on social missions and employment preservation, as opposed to those wanting to cut employment at all costs.

    https://cooplalouve.fr/

    It is based on a much more aged initiative from the USA in Brooklyn called Park Slope Food Coop : https://www.foodcoop.com/ and they have provided a lot of advice to La Louve.

    PS: I don’t really do it for getting access to better price tags, but more for the social aspect and for the knowledge I can glean on operating machines, running and organizing a small business.
    I’d happily give 1 hour of work a week if I knew that work somehow helped keep other people employed (as long as those are not the ones paid 20 times as much as I am… that’s when I feel a place is awaiting me among the angry mobs). Or even if it could help create more employment instead of just participating in more automation. When you treat the world like it ought to be all automatic, including its people, then the world starts behaving towards you like the automatic machine you take it to be, and its people will do that as well. Usually the automatism in people does involve some of the most basic and least likeable instincts… Dangerous things follow, generally with dangerous leaders helping along.

  184. @Petervanerp

    Well, I suppose an alternative script could evolve right along with the unofficial economy. I know people who would like to start that. A cashless economy could make things harder, but I suspect that barter and trade in goods or favors will fill the need and stay below the radar.

  185. Well, folks, it seems that the “Good Whites” (you know, the ones who are so angelically virtuous because “We Care (TM)”), have just declared war on syndicalism. Did you know that farmers’ markets are racist and instruments of “white supremacy?” No?

    Well, guess what! Now you do! After all two “Good White” professors (Pascale Joassart-Marcelli and Fernando J Bosco) said so, so it must be true!

    https://www.campusreform.org/?ID=10306

    (face-palm!)

    It seems that the kleptocratic ruling elites will use every dishonest tactic in the book to prevent syndicalism from taking hold, including trumped-up, phoney-baloney “civil rights” charges. Back in my boyhood (the early 1960’s) race and civil rights were valid political issues. Now, they are just two more dishonest, money-grubbing, blood-sucking rackets, along with education, medical care, agriculture and all the rest.

    So, if you pursue syndicalist ventures, get ready to have the “Big Square Moustache” painted on your face. Either that, or stay as far under the radar as you can manage.

  186. JMG & Nancy: I believe one major way that capitalism, in its current form here in the US, requires constant economic growth & expansion is regarding the laws of publicly traded entities. Such entities are prohibited from doing anything except maximizing quarterly profit. If they do anything else, the entity itself & responsible execs can face liability in shareholder lawsuits. I’m curious if anyone else finds this arrangement to be not working well just now?

  187. 3 thoughts on Syndicalism: earliest worker owned cooperative, scaling, another example.

    The earliest know examples of syndicalism of a sort, that is worker owned cooperatives, would have to be pre-agricultural, foraging, human communities, i.e. hunter-gatherers. The form was perfected over hundreds of thousands, perhaps millions of years, of genetic and cultural evolution. Of course it was more than a job or a business, it was a full way of life.

    As Karen says its flaw is an inability to scale up above about 150 members, Dunbar’s number, the effective limit beyond which the group is unable to informally enforce accountability much like has been described for modern worker owned coops. But below that limit they can function incredibly well, so well that it would be a real shame not to find ways to include 150 groups in larger organizations. Perhaps this could be done by overlapping groups with members in multiple groups.

    Perhaps it has already been done. John Roth mentioned Sociocracy in Europe which may achieve that with its “circles” and there is also an offshoot of that called Holacracy used in some corporations in the USA.

  188. Mark, that’s one of the reasons for distributing the means of production as widely as possible, If no one person can own or control more than a very small part of any industry, their capacity to exploit that industry for self-aggrandizement faces built-in limits.

    Karim, thank you. I didn’t know that about Mauritius; generally, though, the way the British government dealt with ending slavery was a lot more successful than the way we did it here in the US, and bears study.

    January1, thanks for the book recommendation. I’ll check it out.

    Twin Ruler, this week’s post isn’t about political economy in general, it’s about democratic syndicalism.

    Gigoachef, so noted and thank you. Thank you also for your comments about 3D printing — that’s a very good point, and one that fits in well with the broader analysis I’ve been developing.

    Cathy, so noted and glad to hear it!

    Michael, nah, that’s excellent news. At this point the political correctness brigade hasn’t simply jumped the shark, it’s jumped the orca, the giant squid, the blue whale, and the Carcharodon megalodon, and is speeding up preparatory for a jump over the top of old Levlathan himself. It’s gotten to the point that even people on the left are starting to back away from the sort of rhetoric these two clowns are using — and once that’s happening, anything they denounce is sure to thrive. Having the right enemies is an extraordinarily effective source of good publicity, one from which my career has benefited repeatedly, and I’m delighted to see that syndicalism is going to get the same sort of boost.

    Of course it helps that anybody who’s been to a farmer’s market knows that these two clowns are either clueless or lying. I have yet to attend a farmer’s market that wasn’t full of vendors and customers of every color human beings have; the local one here in East Providence, for example, draws vendors and customers alike from every corner of an extremely ethnically diverse community, and it’s a source of local pride that everybody gets along and shares enjoyably in the process of getting cash to small farmers and fresh produce to local residents.

    Mateo, a very good point.

    Truethomas, and again, that’s why I resist the attempt to restrict syndicalism to the cooperative model. Worker-owned corporations can be much larger than 150 people and thrive, because they don’t have to depend on informal ways of enforcing accountability — you can establish formal mechanisms for doing that, which aren’t as easily gamed and give everyone an equal voice.

  189. @JMG: Your answer: “A lot depends, though, on what you mean by “living in harmony with nature;” that’s a far more complex and polymorphous concept than a lot of people seem to think these days.”

    Having a scientific background, I’m aware that “living in harmony with nature” is rather vague concept. I use it as shorthand to describe cultures that would be eco- rather than anthropocentric.

  190. RE: Gigoachef,

    I read Gar’s book years ago, but I was impressed with the diversity of alternative models that worked. Not theoretical ideas that look good on paper, but case studies of real systems that delivered real results. But, I haven’t followed him since ~2006 and I quit reading resilience.org around the time The Oil Drum shut down. Thank you very much for the links. It looks like I’ve got some catching up to do.

    RE: Frank Thamm,

    I don’t speak German (although, I do read the English version of Der Spiegel) so I’m not as well versed as I would like to be. I have seen references to the German constitution and to including stake holders in corporate boards. Again, as a foreigner without access to locals or the language I admit that I know less about it than I would like to. Also, I’ve heard of the wage troubles since the 80’s. I don’t know the German word, but I believe it translates to ratcheting down. Sadly, I think we are all in store for more ratcheting down for the rest of our lives. But, in the spirit of this post, it behoves us all to find ways to make that suck less.

    Thanks,
    Tim

  191. Hi January1

    I think too that enforced syndicalism might back fire especially given the proportion of small businesses in any given economy. Tax incentives in favour of syndicated businesses might be one way to get such types of organisations up and running without upsetting the apple cart too much too quickly!

    I also think that access to finance might also be significant constraint for syndicalism. A few years back, in Mauritius, a leftist workers party wanted to invest in renewable energy as electric power generation was being opened up to small operators. And they wanted to do it via co-operatives.

    It never got off. One of the main reason is that it never managed to raise enough finance to get going. Right from the word go, I told them it would fail as what they wanted to do was way beyond what modest workers could afford to invest. Needless to say nobody listened and the project is dead as the famed (mauritian) Dodo. What a waste of time it was…

    As for JMG’s comment that capitalism favours concentration of capital and hence disproportionate political influence. It is certainly what has happenned and is happening all the time. One way to limit that would be to get large corporations to open up their shareholdings to their employees so that they can appoint some managers and directors to oversee the inner doings of the corporation. It might help in reigning in some corporate abuses.

  192. Hi John Michael,

    I look forward to your upcoming post on the issue of: “in a declining economy, on average, all businesses lose money”. That certainly seems to be how things are playing out. Mind you, I am also up to my eyeballs in the matter of subsistence and that is a very complex learning experience. What interests me about that is that a fruit tree can often take up to a decade before it becomes as productive as people expect them to be in a low water organic situation! One can but do ones best!

    Best wishes for yourself and Sara for the New Years. And I hope you celebrate the evening in fine style!

    I’m planing to spend New Years Eve writing and then it is off to bed early as there is work to be done early tomorrow in the summer’s heat!

    Cheers

    Chris

    Hi Phil Harris,

    Thanks for the shout out last week! I have always enjoyed our discussions.

    Chris

  193. I just wanted to say that I am finding this post and the comments incredibly timely and useful. For the past two months or so I have been working on getting a co-op going where I live. I’m watching a group of people from very different backgrounds who, under other circumstances, would never have associated with each other, slowly feeling each other out, trying to get a clear vision of what we want to accomplish, discovering the skills and talents others have that would help with all the little tasks that need doing, and appreciating them. It’s quite a switch to go from “what’s in it for me?” to “how can I help make this work?”

    We are also very lucky to have a great resource in the Ontario Cooperative Association (http://www.ontario.coop/) who have been advising us, and will come and sit with us as we work out the articles and bylaws of the coop. Their experience with their own co-ops, as well as I think over 30 years of advising other co-ops is invaluable.

  194. Reading “Debt: The First 5,000 Years” by David Graeber right now.
    https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years

    I feel like this post (and the last one) makes alot of connections to what I read in the book.
    Especially that it goes into depth discussing the shortcommings of both capitalism and naive socialism.
    I have only 20 pages left or so, but still no solutions have been suggested. Just the way I like my books!

    If you haven’t yet read it, I do recommend to add it to the ever growing list! 🙂

  195. @JMG, re:
    “I have yet to attend a farmer’s market that wasn’t full of vendors and customers of every color human beings have; the local one here in East Providence, for example, draws vendors and customers alike from every corner of an extremely ethnically diverse community, and it’s a source of local pride that everybody gets along and shares enjoyably in the process of getting cash to small farmers and fresh produce to local residents.”

    Indeed! I am reminded that Marine Corps General Smedley Butler wrote a famous essay, War is a Racket in 1935. He defined a “racket” as follows:

    “A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small ‘inside’ group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many.”

    By that definition, I will borrow Butler’s rhetoric, and say that, in the U.S.A., Race is a Racket. You notice that, every time there is something that the racketeers don’t want to talk about (e.g., class issues or syndicalism), the kleptocrats and racketeers start hooting about “race” and jumping up and down, “waving the bloody shirt” of Jim Crow in everyone’s face, to distract attention from subjects they don’t want discussed.

    Thus, you may know, that when people start stirring up race hatred in response to a completely unrelated point you are making, that you have hit “pay dirt.”

  196. Michael Martin – there is a very easy way around that for farmer’s markets. Have them accept WIC coupons or whatever food stamps are being called these days. The Nob Hill Grower’s Market does, and so the produce gets into the hands of those who need it as well as us yuppie scum. Moreover, one of the vendors is Tres Hermanas Farms, whose farmers are Somalian refugees.

    https://abqstew.com/2017/04/15/transplanting-roots/

    So your professors may be right about San Diego, but that’s easily corrected by urging that great city to do what little old Albuquerque has been doing for several years.

  197. About that Dunbar Number: 150 souls, or perhaps a few more, would have been about the size of a parish in medieval Europe. From the wiki article on medieval parish churches in York, England

    York had around forty-five parish churches in 1300

    That would be in addition to the famous York Minster. Consider that each of these parish churches would have been financed, and probably partly built, and maintained, by parishioners themselves.

    Dear CathyM, thank you for the report about ownership of Bobs Mill. Bobs is another go to company for baking supplies for me. Their non-gluten flour makes excellent cream sauces. Bobs sells its’ overstock through Big Lots. I think we might be seeing a trend here, that the worker owned companies have better products than their competitors–more value for money for their customers.

    Dear Michael Martin, this same theme turns up with predictable regularity in various garden fora. All of us organic backyard gardeners and farmer’s market shoppers are, the complaint goes, taking money out of the pickets of, take your pick, the poors, immigrants, inner city residents. Please note what is not being addressed in the complaints. Legally guaranteed right of renters to maintain their own gardens, backed up by legal liability for property owners who allow their properties to become contaminated is one idea around which the accusers carefully skate. Non farmer, including foreign, ownership of farm land, which of course drives up the price of farmland, is another. Prof. Joassart-Marcelli was educated in Belgium and likely grew up there. I think it can reasonably be hypothesized that she is someone’s client. The co-author is a Hispanic guy from Ohio, and I am going to make a wild guess that he might be angling for a USDA post in the next Democratic Administration.

  198. JMG / Gigoachef / Govan Kon – Re: 3D printing. I see it described as a way of “making stuff” (“even food!”), when it would more precisely be described as “reshaping stuff”. The consumer-grade machines start with a spool of plastic fiber, and finish with a plastic object presumably of greater usefulness than the original plastic fiber, but most of what I’ve seen are novelty items. As for making “food”, what do they propose to make it out of? The synthetic beef that made headlines a few months ago wasn’t made by extruding chopped grass into a meat-like shape. (In fact, it used various biochemicals found in slaugherhouse byproducts. Without the existing meat industry, there would be no feedstocks for synthetic meat.) 3-D printing may be a “means of production”, but it doesn’t yet produce anything that I’m likely to consume.

  199. Dominique, fair enough, but “ecocentric” also covers a lot of ground. I should probably talk about that at length in an upcoming post.

    Chris, so noted! To my mind, that’s the unwelcome guest at everyone’s dinner party these days: the idea that businesses should on average make a profit every year presupposes growth, since in a zero-sum economy the exchange of goods and services would on average break even, and in a negative-sum economy — one in which contraction is the normal state of affairs — every business and every person would on average end each year with less wealth than when the year started. More on this as we proceed!

    Myriam, delighted to hear it. Having people who know how the system works, and can help you through the rough spots, is very valuable indeed.

    Alnus, I haven’t read it yet, though of course I’ve heard about it. Another for the get-to list…

    Michael, that’s a bit of an overgeneralization, but only a bit. I’ve noticed — and commented on — the fact that the left these days constantly uses race as a way to avoid talking about class issues, just as the right constantly uses morality as a way to avoid talking about class issues. One of the great things about addressing class issues is that you get to annoy two ends of the political spectrum for the price of one! 😉

    Nastarana, it’s a very common thing in human social organization, thus the need for special arrangements when an institution needs to be larger than that.

    Phil K., thanks for this.

    Lathechuck, that’s my take on it: you buy expensive feedstocks and run them through an overly complex bit of technogimmickry to make trinkets. No doubt there are some profitable niche markets for it, but beyond that? Show me.

  200. Our farmer’s markets have a booth for Farmer’s Food Share that provides fresh foods free or cheap to those in need. It also accepts the produce our community garden (situated on church property) harvests and distributes it to soup kitchens, food banks, and school meal programs. I know from personal experience that if you politely ask the vendors to help you stay within your food budget, many of them will let you rummage through the buckets they keep in the back that hold compostable items of bruised, broken, unshapely, or unsightly produce and let you pick out edible bits for free to make stone soup with. So to make out that farmer’s markets are a product of white privilege is the most arrant nonsense as ever was writ, should anyone ask me.

  201. “Truethomas, and again, that’s why I resist the attempt to restrict syndicalism to the cooperative model. Worker-owned corporations can be much larger than 150 people and thrive, because they don’t have to depend on informal ways of enforcing accountability — you can establish formal mechanisms for doing that, which aren’t as easily gamed and give everyone an equal voice.”

    Agree completely that we need to look at many alternatives and invent new ones and test them to see which ones might work. For example, both Holacracy and Sociocracy have formal rules for ensuring accountability. There are books and online materials about each. But we need to consider incorporating informal methods too.

    Accountability, I think, however it is maintained, is KEY. Lose it and inequality, unfairness and coercion soon follow. Everyone is born able both to cooperate and to cheat. Accountability tips the scale toward cooperation.

    The basic problem is simply stated: those with power or their successors inevitably use it to escape accountability, which then helps them maintain their power. A vicious circle, i.e. a feedback loop. That is how status hierarchy “works”. But in theory, with accountability even kings and plutocrats can be restrained. In theory. In practice they always seem to figure out how to “game the system”. Here’s hoping this time will be different.

    Happy New Year Everyone!

  202. “Does anyone know of a recent book on the subject?” “The Dispossessed,” by Ursula LeGuin. Annares is an anarcho-syndicalist system.

    That said: Excellent presentation. I do appreciate your attitude to semantics. I have to say that i’ve long understood “socialism” to include syndicalism, and government ownership to be “communism.” But we can let that lie, for now. I want to add a further consideration: How is the economy co-ordinated, especially in syndicalism? Let me go back to the beginning:

    We’ve been propagandized to consider “markets” and “capitalism” to be the same thing, but they aren’t even the same KIND of thing. Markets are a mode of exchange, based on negative feedback regulation (positive feedback is bad, unless you’re playing rock music). When they operate properly, use regulates production via price. But they’re neither “invisible” nor automatic: they have specific requirements, which have to be provided by a government or equivalent social structure. Capitalism on the other hand, as JMG has made clear, is a mode of OWNERSHIP. It describes the entities doing business. Broadly defined, capitalism separates ownership and control from actual use of the means of production. Historically, it’s an extension of feudalism.

    By this definition, communism, state ownership, is state capitalism. The bureaucrats are not the workers operating the machines. Further, it concentrates power all in the same hands, leading directly to autocracy. As the Soviets discovered. (History, again: it didn’t help that the Russians had no tradition or experience of democracy.) But if the capitalist units are kept fairly small, they can operate in a market that moderates their problems. Unfortunately, capitalism tends to concentration, as do markets. Preventing monopoly becomes a constant, losing battle.

    So what co-ordinates a syndical economy? Assuming, again, that the units are kept fairly small (a requirement for functioning markets), they can be co-ordinated by a market system. It isn’t ideal, because it causes considerable inequity, but then nothing is. Alternatively, they could operate in a command economy, co-ordinated by the government. In fact, if I recall correctly, the Bolsheviks originally set up worker and farmer co-ops (the “Soviets”), then later nationalized them. I think a command economy would have the same problems as a socialist (perJMG) one, partly because worker ownership would be quite compromised, and because it concentrates too much power.

    Which is probably why JMG calls for syndicalism within a democratic governance. But I didn’t see any discussion of coordinating the economy.

    In case it isn’t obvious: I’ve been thinking about this for a long time, and I’m very glad to see it brought up.

  203. Good morning 2018, Loremaster and dear commentariat!

    I am about 80 pages into one of my Solstice presents, “The Retro Future” (purchased directly from the publisher) – would be farther but I think I’ve gone back and read about every other paragraph out loud to my wife.

    It’s been an absolute riot! We can identify with every example you toss out there, and in fact the margins are full of my scribbled notes about specific people who have told me I just had to go get a TV so I could watch this or that awesome program on PBS…or how I don’t get to have the, er, privilege of buying insurance on my house or plugging into the grid (ostensibly to power that TV!) because I didnt kowtow sufficiently to the concrete industry or the plastics or romex industries.

    After sitting through the Johnny Depp version of “The Lone Ranger,” my own father said “see? If you hadn’t watched that show as a child that wouldn’t have been nearly as entertaining, now would it?”

    Um, yeah, Pops, I can’t imagine how we would entertain ourselves for 3 whole days on your 260 acre farm in the Ozarks with a pool table by the fireplace, a giant creek to explore, a 4-wheeler and a dozen horses, without the boob toob!?

    Love my Dad, but wow. The lack of a TV doesn’t bother me at my 480 s.f. cabin on 2.3 acres in North Georgia! I guess if you’re gonna have everything, by definition that has to include a TV!

    Hope you’ll forgive the off-topic nature of this comment? Just wanted to give your new book a shout out.

    Cheers, y’all.
    Tripp out.

  204. Great pair of blog posts John. They gives some vital clues on how to go forward as the economy contracts in offering alternatives to what we do now. And we do need an alternative.

    “The Amazon Economy”

    Here’s a good look at the damage that Amazon and its business practices are doing to the US small business economy. It looks bad and I expect it will only get worse.

  205. @Phil Knight: this article is interesting, and I intend to read the PDF report presented therein. I however find the thinking behind it deeply weakened by its taking growth for granted.

    Any publication practically thinking about the future would work much more effectively within the framework of contraction – or statu-quo maybe, and even that is not entirely realistic.

  206. Happy New Year! You did a good job putting things in a simple way. But simplifications also has dangers. I would argue is that it is the dominance of markets that makes the real difference between your feudal
    society and capitalism.

    I certainly agree that there are other options than capitalism and socialism. As per syndicalism and workers cooperative. I am all for it. But in the same way as capitalists need a state and a society for running their scheme a syndicalist/cooperative mode of production need to be embedded in fitting a societal structure.

    Cooperatives operating within a capitalist system tend to lose out unless they adapt theirselves to the prevailing market imperatives of competition which favours those that externalise costs. Which means also a cooperatively owned factory will (be forced to) outsource to sweatshops or self exploit in order to compete. This can of course best be seen in sole proprietory business like farms etc. The curse for them is the unlimited competition in commodities or commodity-like services.

    This means that that the “free” market is as much of a problem as the ownership of means of production. Which is the reason for why markets were meticulously regulated in most pre-capitalist societies.

  207. John—

    I’ve been seeing more and more discussion of MMT (Modern Monetary Theory) which, near as I can tell, makes the argument that as a currency-isssuing polity (fiat currency with demand created by taxation in that currency), neither deficits nor public debt matter for the US. (Federal spending is not constrained by federal revenues.) This violates TANSTAAFL (and common sense) and I’m trying to understand how serious people could take a proposition like this seriously.

    In the long run, something has to give — one cannot perpetually spend more than one takes in without repercussions. And the various hand-waving exercises that accompany the theory, when stripped of there rhetorical garb, look like old-fashioned devaluation and default to me. Am I missing something, or is this just wishful thinking posing as economic theory?

  208. Umm, regarding farmer’s markets, in KY, most accept SNAP (modern-day food stamps) and WIC, and I think they double the $ value, and most vendors are eager to do so. We’re also just a tad bit red on the whole faux blue/red spectrum, so…

  209. Gkb, nicely put. I may need to talk about this in a post.

    Truethomas, no argument there. For what it’s worth, I don’t think syndicalism is foolproof, either — it just avoids certain problems that constantly beset both capitalism and socialism.

    Oregoncharles, good. Yes, the problem of who or what coordinates the economy is distinct from the problem of who owns the means of production; here I’m addressing the latter question. The former — well, problematic as it is to leave that to market forces, it seems to me that that’s less problematic than putting it under the control of human beings, who will inevitably abuse that control to give themselves power. As with democracy, we’re talking about the least bad system.

    Tripp, thank you and delighted to hear you’re enjoying it.

    David, thanks for this! If only we had antitrust laws in this country… 😉

    Gunnar, I’ve already addressed that in response to previous comments. First of all, to make a syndicalist system work you need sensible tariffs and other trade policies that prevent your country from being stripmined (figuratively or literally) by predatory international capitalism. Second, the point in having democratic syndicalism rather than one of the other kinds is that you have a constitutional representative democracy in the political sphere, which can pass laws to establish basic standards for working conditions and the like. Of course that involves transferring some power away from the market, but if you’re going to eliminate capitalist modes of ownership, that’s a given.

    David, no, you’re not missing anything. I’ll need to take a hard look very soon at MMT, no question, because that sounds very much like the kind of delusional thinking you see not long before the bottom falls out.

    Shane, thanks for the data point! I’ve never seen a farmers market that didn’t welcome SNAP and WIC customers, and there are always plenty of people using those means to buy their produce and help keep small farmers in business.

  210. Hi JMG – this made me thoughtful: “well, problematic as it is to leave that to market forces, it seems to me that that’s less problematic than putting it under the control of human beings, who will inevitably abuse that control to give themselves power.”

    There probably is a whole other post here, but I wonder can you say what “market forces” actually means to you, since to me, “market forces” DOES mean “the control of human beings.” It is only the concurrence of other factors that would answer the further question of *which* human beings, and *how* do they assert “market force”?

    I do not have answers to this myself, though I have given it much consideration over the years. I do think opening the question up a bit might repay further study and discussion.

  211. @Jean-Vivien – thanks for your comment, but I’m not an advocate of what that article is proposing, I just posted it here because I thought it was pertinent to the discussion.

    One of the big hopes of the radical left in the UK right now is “Fully Automated Luxury Communism”, which is the idea that everyone can live off a universal income thanks to the benefits of automation. I consider this to be exactly the kind of concept that you would expect to emerge from London-dwelling humanities graduates that have no experience with engineering or technology whatsoever.

    Therefore any economic ideas that are generated by the British left should be treated with the utmost suspicion, as the left nowadays is overwhelmingly populated by theoreticians rather than people with any useful practical experience.

  212. I think a lot of the whole “white privilege farmers market” thing is that “people of color don’t eat fresh produce, they prefer highly processed food of the kind you find at Save a Lot/99 Cent Store/Family Dollar, etc.”, which kinda begs the question: I mean, it’s the same as saying that people of color are not non-smokers b/c they prefer to smoke menthol cigarettes. How much of this is exploitation of a vulnerable community instead of actual community preferences? Certainly, here in KY, people of color were most definitely eating freshly grown, homemade food in the early 20th century before they were exploited by the USDA/public assistance system…

  213. John,

    The folks at Naked Capitalism seem to be big on MMT. Which is jarring, since other than that they pretty much do excellent work.

  214. JMG re MMM
    I find Steve Keen useful https://www.patreon.com/posts/principles-of-15759811
    I like his understanding of work/energy and the relationship with thermodynamics.

    My understanding seems to be (so far!) that ‘money’ is not simply a quantity. Rather it has a ‘velocity’ as ‘it’ exchanges hands, and is both created and extinguished by the system of borrowing and repayment. There is much more going on of course.

    best
    Phil H

  215. JMG: Bravo! You stuck a stake right to the heart of the monster, I think. I’ve often said that the problem is C corporations which have grown monstrously from their unassuming and constrained roots. In the US they originally had to stick to a defined charter deemed to be in the public interest, and had limited life and no ability to take over other corporations nor change their charter for opportunism. Supposedly they escaped their tight restraints when a judge ruled that C corps were “people” and used the recent amendment freeing the slaves to free the corporations.

    I’m traveling in a poor internet area right now and about to lose my hot-spot so I don’t have time to post more nor read the follow on comments but I wanted to praise you, again, for hitting an apparent home run…knocking the ball out of nearly everyone’s park…including mine.

    I do have a small quibble, however. It seems the problem isn’t so much about owning means of production as about owning means of enforcement. The medical sham in place in the US *should* be easy enough to call on existing racketeering and monopoly laws. If only the judges, media, and politicians weren’t all in on the criminal collusion. As another example, I’d think Monsanto could be — and would be — sued out of existence for violating property boundaries with their GMO seeds. But the court systems are under their control. So it isn’t really about owning means of production as about owning means of enforcement, maybe?

    Can you comment more on this distinction?

  216. Thank you very much for this post. I “reverted” to the Catholicism of my youth about a decade ago, and soon thereafter found myself reading the Social encyclicals. They are real gems among the Magisterial doctrine, and was quite gobsmacked to discover that they exist! I feel like I’ve been had; eight years of Catholic school and I’ve never encountered a single substantive lesson on the social doctrine. Partisans on both sides have been engaged in decades of culture war over the sex and marriage doctrines, while seemingly ignoring the social teaching altogether. It’s like they don’t actually want us to find out about it.

    Anyway, I digress. Last year, the relatively small (200 employees worldwide), privately held company I was working for was bought out by a major services and consultancy company (half a million employees!). I quite liked working for the small firm; we were programmers working in an interesting and in-demand niche, my colleagues were trustworthy and competent, and the culture was family-like and engineer-centric. The downsides were the pay and benefits wasn’t that good (but good enough), and there weren’t many projects coming our way since we didn’t have a dedicated sales team in our location.

    Getting acquired solved the downsides, but I got reminded very quickly why I moved out of the big coporate world. Almost instantly, the transition process put me in touch with a bunch of incompetent bureaucrats, and the first few weeks I found myself working *around* the bureaucracy just to get any work done. That’s kind of okay, considering that I actually managed to deliver a project while I didn’t have an assigned office or even any company-issued equipment (which I managed to get ahold of… eventually). It’s a pain, but it’s relatively tolerable, and I knew how to navigate away around it from my previous corporate life.

    What I am dreading now is that I found myself back in the rat race. The only way up here is to go into management, and everyone is going after the coveted and prestigious Director positions. I don’t care for that, as long as I work in interesting projects together with colleagues who I trust and respect. The managers around here take online conference calls in airports, while waiting to board flights to locations where they go to more client meetings. My industry contemporaries are now in management positions, and many lament how much they miss doing technical work. Thanks to the acquisition, I somehow found my way into a role that’s just below management.

    Also last year, me and a friend had a long discussion around a wild idea: establishing a coop (or employee-owned corporation). We got sidetracked by our existing corporate jobs, but the increasingly hectic pace of our work lives is redirecting our attention back to the potential syndicalist venture. Hopefully we can get it up and running; I’d like to exit the corporate world by the time I get promoted to management.

  217. A correction: ” the credit union system (which is basically syndicalist banking)”
    CUs are customer owned, NOT worker-owned ( a combination might make sense). Consequently, they’re more like public utilities than worker-owned enterprises – the public being the member/depositors.

  218. @JMG, thanks for your response. Re: ” problematic as it is to leave that to market forces, it seems to me that that’s less problematic than putting it under the control of human beings, who will inevitably abuse that control to give themselves power. As with democracy, we’re talking about the least bad system.” Yes. It’s important that people treat, say, markets, as a tool with advantages and problems, not a magic formula. A useful servant and a bad master. Market failure is quite common, hence utilities, and requirements are fairly stringent, hence my emphasis on small units. Medicine, for one, is an example of complete market failure, besides the ethical considerations.

  219. Scotlyn, I beg to differ. When the economy is governed by market forces, no human being exercises control over it — each exchange influences the whole system of the market, but the market (like any whole system) has emergent properties that can’t be reduced to the acts of individuals. Yes, there’s probably another post in this.

    Dominique, duly noted!

    Shane, and that’s also a very dubious ethnic stereotype. Here in East Providence, when the farmers market’s in season, every week there’s a local African-American urban garden co-op that sells collard greens, along with a good many other fresh vegetables that were part of traditional African-American cuisine. Their clientele isn’t limited to people of African descent, to be sure — when I stand in line there I can count on seeing most of the skin colors found in our species lined up with me — but there’s certainly no shortage of African-Americans shopping there, and at all the other vendors. I’ve seen the same thing in every other farmers market I’ve attended. So I find myself wondering who exactly has the racial prejudices here…

    John, so noted. Hmm. Given that the US government is currently funding itself via Enron finance, this probably needs a very close look.

    Phil H., thanks for this.

    Gnat, that’s also an issue, but it’s a different issue. Replacing capitalism with syndicalism will help, since the huge concentrations of wealth that make graft a constant feature of our society will be much less common in a syndicalist country, but that’s only a partial fix — and that’s an important thing to remember: no reform will solve every problem.

    Carlos, I wish you luck with the co-op! I hope that you’ll put some effort into getting the social doctrine into wider circulation among Catholics, though — I’m sure there are many other people of your faith who would like to know about it.

    Oregoncharles, exactly. One of the things that makes our medical system in the US such a total failure is that the market is not allowed to function in a medical setting. Physicians who compete by lowering prices face stiff penalties from state medical associations, for example, a vast array of anticompetitive practices are constantly practiced — and don’t even get me started on the way that mainstream doctors constantly try to force alternative health care out of the market, to preserve their own market share! A healthy dollop of the discipline of the market, backed up with antitrust actions and a few federal conspiracy charges, would do wonders for health care here in the US.

  220. Gnat, there was no original ‘ruling by a judge’ re: corporate personhood. (Hope this isn’t too OT)

    From this website — https://pando.com/2015/08/31/awkward-arguments-corporate-personhood-rely-same-amendment-gives-birthright-citizenship/ — (citing Thom Hartman’s ‘Unequal Protection’), referring to the Santa Clara vs Southern Pacific SCOTUS decision:

    “….Headnotes by court reporters are not law; but the headnote, alleging to quote the Chief Justice stating, ‘The defendant Corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws.’

    That’s from Davis’ court reporter headnote to the decision—but …. the decision itself explicitly avoids ruling on the case on any but technical grounds, that Santa Clara County assessed the railroads fences as property to be taxed, which the court ruled was not fair. The actual SCOTUS decision rests solely on that point, and makes zero mention of corporate personhood or the Fourteenth Amendment.

    But American law, like British law, follows common law precedent, and once it became possible for other courts to cite the court reporter’s headnote to the Santa Clara County decision, CORPORATIONS ATTAINED PERSONHOOD BY PRECEDENCE, rather than by ruling. …. ”

    I think very few of us understand the ridiculous origins of this give-away of democracy …. but precedents have been overturned… Taney’s Dred Scott decision, et al. as JM has pointed out. (Sorry this is so long… someone else may have a link to a more concise history.)

  221. Thank you. To point, one of the goals of the venture is apostolic in nature: show people that it works, that there are alternatives to Big Government and Big Business (as Chesterton put it), and implement it themselves. Most people simply cannot wrap their heads around any third option, which is the biggest challenge when “preaching” the social doctrine. In fact, when I shared this idea with the aforementioned friend, he thought I was insane. Then, I showed him examples, whether Catholic “flavoured” (Mondragon) or otherwise. He went away and studied it for a couple of weeks, and he became convinced. Now he says, “I hate you, I’m losing a lot of sleep over this idea and can’t get it out of my head.” 🙂

  222. JMG “When the economy is governed by market forces, no human being exercises control over it — each exchange influences the whole system of the market, but the market (like any whole system) has emergent properties that can’t be reduced to the acts of individuals.”

    Yes, this seems to be the definition most people hold in their heads of the abstraction called “market” and I would really like it to be true.

    But first there is the fact that we are talking about a “force” which is real, and which, ironically, is capable of putting some people completely outside the market, from where they are excluded from entering into exchanges with others, and their potential for work, for creativity, and for making a contribution to the economy goes untapped, for no reason but their lack of the permits required for entry to said “market” (ie money – and who controls that and by what means?),

    Such people eventually fall out of the economy altogether (were they pushed by “market forces”?) and become homeless and foodless, and the projects they, and others, conceive to provide them with homes and/or food, are either excoriated or made illegal because feeding the hungry and/or housing the poor directly is not in accord with “market forces” (an argument that was equally strong in British/Irish governance during the famine, and in Irish governance today during our ballooning homelessness crisis).

    The nature of the “market” which appears to exercise such a forceful restraint on the ability of most to engage in any exchange whatsoever, despite their perfectly sound ability to so engage, is what leads me to think that (at least under present circumstances) the term “market” functions more as an abstraction we use to figleaf over some deeply unpleasant habits that we do not want to examine. That these are experienced as “forces” make them particularly worrying.

    I would welcome a post on this. As you can see I have many more questions than answers.

  223. Umm, credit unions are not w/out their downsides–the credit union I worked for was heavily into subprime auto loans, and pushed those loans very hard. A lot of people were still paying on auto loans when the car had long past stopped running…

  224. I got some way into my adulthood before I really pondered the question ‘Why have state socialist societies gone so wrong?’. Why do they ‘suck’? Why so many ‘bloodbaths’ ?

    I guess that there are a lot of answers to those questions. There is one though, that only came my way when I started to read about the history that was not taught at my school, and that rarely features in the media. This short extract from the introduction to William Blum’s Killing Hope neatly sums up that idea, and I wonder if it also partly explains why socialist experiments have felt the need to concentrate power in the state rather than roll out syndicalist models (?) :

    ‘…every socialist experiment of any significance in the twentieth century- without exception – has been either crushed, overthrown, or invaded, or corrupted, perverted, subverted, or destabilised, or otherwise has had life made impossible for it, by the United States. Not one socialist government or movement- from the Russian Revolution to the Sandinistas in Nicaragua, from Communist China to the FLMN in Salvaor – not one was allowed to rise or fall solely on its own merits; not one was left secure enough to drop its guard against the all powerful enemy abroad and freely and fully relax its guard at home.
    It’s as if the Wright brothers’ first experiments with flying machines all failed because the automobile interests sabotaged each test flight. And then the good and god fearing folk of the world looked upon this, took notice of the consequences, nodded their collective heads wisely, and intoned solemnly : Man shall never fly.’

  225. Some people having jobs where they control a significant part of a system or economy doesn’t necessarily give them a great deal of power over it. Air traffic controllers don’t own or run the airlines (or as far as I know extort money or favours from their positions) even though they spend all day ordering planes around.

  226. Syndicalsim was developed in France around 1895. It’s typical iterations thus far have been subsumed into unions, which is just socialist centralization, as opposed to capitalist centralization.
    But…
    When the owner gives up a share to his new worker, he is giving up the capital he risked, and also the rewards which accrue to that risk. The new worker has risked nothing, has no skin in the game.
    Why would the business owner risk his own capital for the benefit of others?
    It just doesn’t seem to fly.

  227. re: Germany
    Dear all,
    thank you everybody who replied to my request for information about possible syndicalist systems in Germany with your knowledge, your thoughts and helpful links.
    With best wishes
    Ilona
    P.S. Frank, I agree with your assessment of the German situation.

  228. I’m with you on the banks. We do most of our banking through a credit union.

    I wonder what effect syndicalism would have on the work culture of the public sector. When I worked at Brooklyn public library, staff had very little say in any matters. Most decisions were handled by those working in the central library, some who had no training as librarians. Consultants and contractors siphoned money out of our budget, doing things the staff who was already getting paid could have done. Or the consultants did things that seemed of little value at all.

    I also wonder what kind of electronic communication networks a syndicalist system would produce. Not ones like the advertiser and data trading ones we have now.

  229. The problem is the money. When the medium of exchange itself is corrupted, by usury, money printing, and so on, every exchange made with that currency ends up seeing much or even most of its profitability get sucked up into the gaping maw of currency devaluation. Bitcoin isn’t in a bubble; the real bubble is the value of the dollar. Everyone is desperately trying to trade their dollars for something that isn’t as broken. Abandoning the dollar is a method of trying to detach the blood funnels of the usurers and moneychangers (a story as old as civilization innit?) and I expect the Bitcoin price to just keep going up and up and up because the world certainly isn’t going to run out of freshly printed dollars any time soon, the current Bitcoin valuation is just Bush’s TARP working its way through the system, wait until you see the “Obama stimulus” start to hit. Bitcoin is worthless, it’s a financial fiction, and that’s all very well and good. But the USD is worth negative two quadrillion of itself. Being worth nothing starts to look awfully good when compared to a currency that has negative two quadrillion of itself in financial liabilities.

  230. @ Matthias Gralle…

    First, I don’t have time to read the book just now – too much work at hand.

    Second, to the points you outlined; there is no doubt as to the trans-portability of oil being the reason it knocked coal out as the primary industrial heat source. I drew some timeline curves years back of some ‘ages’ of man for an article. One of them was supposed to be the ‘coal age’, but the bubble was eclipsed by the ‘oil age’ bell curve pretty rapidly.

    My family own royalty interests in the big East Texas field, the one that powered both world wars and Korea in terms of fuel. I still get a royalty check, even though the wells my family has were drilling in the 1930’s. It was a prolific field, and until recently, Exxon had held on to the property. It was sold to a smaller and more nimble operating company a few years back – Exxon had too much financial overhead to operate it at a profit. The oil majors are each in similar shape at this point.

    As my family had stock in Standard many other oil companies, I can attest to something my grandfather (my banker grandfather, not my oilfield grandfather) told me, which was that all the majors were sitting on much more than they issued in their stock reports, and they used this as leverage to set their stock price really often. They used the reserves to initiate controlled price waves, and then they BTFD’ed at will.

    There was also no standardized reporting of reserves required by government until the 1950’s, if I remember correctly. They reported it to leverage their price, but it was not a requirement and there was no set format for the reporting. (my dates could be wrong, but the SEC wasn’t founded until ’34, so…)

    Churchill? Well, that may be what the author intuits. Myself, the simple fact that fuel oil can be metered more effectively, pumped instead of shoveled, stores more compactly and in irregular spaces, used for dynamic ballasting and provided more BTU/ton than coal would have made the switch inevitable – at least from an engineering standpoint. Shipbuilders would have latched onto that quickly, regardless of Churchill’s pontificating.

    Your second point, that oil removed the restraints of natural resource, is also debatable. But my gut says that the “miracle” of oil was played by every band in the world, simply due to the way it transformed the entire planet. You can still hear these bands playing today, even if shale oil is a retirement party. Speculators (gamblers) both play and listen to these tunes, in a sort of “Dance of the Fireflies”. It plays in a long-built echo chamber that runs from London to Wall Street – and that echo chamber is why Peak Oil was never going to be allowed to be taken seriously. Mother Natures cares not what humans say or do – she operates the same way she always has. There is “X” amount of oil. We are past the halfway point of “X”, so there will be less in future. In addition, the EROEI is getting really poor – and prices will rise due to this. It happens in fits and starts, burps and staggers, until it happens all at once.

    The oil markets got seriously rigged in the years following the Arab Oil Embargo. This is what got the majors “caught out” sandbagging” reserve numbers, and some things got changed. However, it was also at this same time that oil began trading fiercely as a commodity worldwide. About the time that we caught up to the lagging domestic production (brought about by cheaper imports), OPEC decided to pump more. In 1984, we had price collapse. It took almost a decade for the price to re-stabilize enough to allow exploration here in the USA to move forward again. During that time, we were importing most of what we used, except for Prudhoe Bay oil, and we depleted a LOT of our Gulf of Mexico oil.

    At that time, there was also very little conventional oil left in big fields. Alaska was dying fast, offshore was picked fairly clean of big fields and the exploration money was all overseas looking for the next “big find”. Horizontal drilling let us do more with fewer wells, turned the US around somewhat by improved tech, and then on to fracking and today.

    The only places where you can get remotely accurate reserve numbers are the US and Canada – the rest of the world, especially KSA and Africa – is a SWAG at best. Even the numbers in the US and Canada are obfuscated and ‘qualified’ and include ‘forward looking’ statements – which means they aren’t going to disclose the real numbers they are banking on.

    This all sort of fits in with oil and every other commodity being traded in “futures’, and the failure of any mechanism for true price discovery. EVERYTHING that can be monetized has become a financial bubble at this point, including coal and oil.

    So I will give you some personal price discovery. In 1986 I went to KSA. I drove the pipeline road from Ghawar, where there were over 30 flowlines carrying crude, each of them about 20” in diameter. Their combined diameter was enough to easily drive an 18-wheeler through, and the heat coming off the flowlines shimmered in the 120 degree desert. All the flowlines were running.

    I went back in 1999. There was no heat shimmering off the flowlines. Stopping by the roadside, I chunked a rock at the pipelines, and it made a “tink” sound. A “thunk” was what I expected, meaning there was oil flowing, filling the pipe. I chunked many more rocks, as did the engineer with me. There were mostly “tinks’ but a few “thunks”.

    That’s 13-14 years difference. And if you think ARAMCO wanting to IPO their company is about anything other than massive depletion, you are just not thinking critically. We are now almost 20 years from my last field trip to KSA…

    When the 55 MPH speed limit is re-introduced in legislation, you will finally see Peak Oil be taken seriously. But the price spike for that to happen will be crippling to the status quo, so until then, the can is eternally kicked down the road, until it sticks in road tar and the kicker gets a broken toe…

  231. Living in very rural Appalachia, 25 miles from the nearest small town, we nonetheless have a wonderful Farmers Market, all organic growers, hot food and a home schoolers meetup. If I didn’t know better, I would swear there are no black people within 3 counties. Nonetheless, they show up at the farmers’ market and indeed are sometimes vendors. We all really like each other and get along. And yes, they take snap and I think 2 other kinds of tokens.

  232. @Karalan – you say ” new worker has risked nothing, has no skin in the game.” I wonder on whatt this idea is based.

    Could there be anything more risky than to entrust the whole of your wellbeing and your ability to keep yourself and to rear a family, to an employer’s good will? especially if that employer takes advantage, as they surely can, of the combination of laws and incentives that allow them to make full use of your body and soul’s effort for less than the cost of the upkeep of said body and soul? Is there a risk greater than to become sick, or old, and quickly discarded as useless having spent your body and soul’s best abilities supporting the employer’s intents and purposes?

    The companies I’ve seen go to the wall around here during the past few years (a large number of them), have taken everything from their workers, while former employers have not lost nearly so much, having built exit strategies for themselves. There are risks for the employer indeed. As you say, they risk their capital. But employees risk so very much, too, and it is measurable in the life of body and soul. I do not understand how their risks and their losses could be so easily disregarded.

  233. From “The Retro Future” p. 77:

    “The arguments that generally get used by technobullies and technoshamers, in their attempts to argue against this expression of personal freedom, involve a decidedly odd use of logic. One of my favorites, which I’ve encountered repeatedly, is the insistence that any lack of enthusiasm for a fashionable technology obviously means that the heretic is conspiring to deprive everyone else of that technology. It’s hard to see how that makes any kind of sense, but there it is; when it comes to television, in particular, you can count on being told that if you don’t have one, obviously you must be trying to deny it to everyone.”

    Apparently anti-vaxxers are just as threatening! The fashionable technology is vaccination. I am part of a growing number of fairly bright people who are not enthusiastic about it, for what I feel are very solid reasons. When brought into the open the most popular reaction to that bit of news is that our actions are compromising the efficacy of the entire technology. That’s tantamount to accusing us of “depriv[ing] everyone else of that technology.”

    Even one of the brightest, most thoughtful people I know has gone out of his way twice, that I know of – once in the same book I just quoted and once at the ADR – to heap shame on us heretics bold enough to “shrug and go do something more interesting.” Even lumped us in with young Earth creationists and climate change deniers. If that isn’t an attempt to shame I’m at a loss for what it is instead.

    Does vaccination work, or doesn’t it? Why are my personal technological choices so threatening?

  234. If that’s too off-topic, even this late in the piece, just delete it and I can put it in my pocket for another day.
    Thanks, JMG.

  235. As I stood in the local market Saturday to buy flour, I had to choose between King Arthur brand and several other brands of “organic bread flour”. KA was significantly more expensive than the other. “Is it because the owner-employees are greedy, and insist on a higher shelf price so they can be paid more?” was one thought that occured to me. But as I turned the packages around in my hands, I realized that only KA was labeled as “100% American grown wheat”, and I recalled recent stories about foreign food products becoming “organic” only as the ship was unloaded (e.g., label fraud).

    As usual, I’m happy to pay a 50% premium for an American-made product, and so I did. “Market forces” do not compell individual decisions. Conscientious buyers can take into account the intangible value of keeping money circulating locally, even if “local” in this context means “somewhere in America”. (And I wouldn’t feel cheated if I learned that “America” included Canada or Mexico; we’re all Americans.)

  236. Hi JMG,

    I’m a bit confused that you say downward mobility and stability is just a detail. As I look at the data from that time, downward mobility (of the top part of society) was indeed part of the system and functioning, if not in absolute terms certainly in relative terms. So it looks like that downward mobility there is not a guarantee for stability. Of course, the ‘rebelling of the rich’ made the system flip into another system with an expiry date of a few decades. So that makes me wonder if a system based on worker-owned enterprises is going to be just a temporary fix and we eventually have a sort of anacyclosis for the economic system we use. Or are you saying that everybody just needs to downgrade, forced of voluntary (not counting energy shortage)? But I don’t really see that working out as a stable system.

  237. Just found this article about “The Invention of Capitalism” by Michael Perelmen that fits with our current discussion:

    http://www.filmsforaction.org/news/recovered-economic-history-everyone-but-an-idiot-knows-that-the-lower-classes-must-be-kept-poor-or-they-will-never-be-industrious/

    From the article:

    “The brutal acts associated with the process of stripping the majority of the people of the means of producing for themselves might seem far removed from the laissez-faire reputation of classical political economy,” writes Perelman. “In reality, the dispossession of the majority of small-scale producers and the construction of laissez-faire are closely connected, so much so that Marx, or at least his translators, labeled this expropriation of the masses as ‘‘primitive accumulation.’’

    and,

    “Poverty is therefore a most necessary and indispensable ingredient in society…It is the source of wealth, since without poverty, there could be no labour; there could be no riches, no refinement, no comfort, and no benefit to those who may be possessed of wealth.”

    Looks like the book would be a good read.

    Larry K

  238. @Scotlyn
    The worker is trusting his family and future to the company.
    Let’s grant that.
    And so is the owner. In addition, the owner put up his own money, but both his salary and his future depend on that investment, as well as on doing the work necessary to gain success.
    The worker has not made any investment, but gains the rewards of investment, for doing work only.
    Trust is not a financially viable commodity, unfortunately.
    Money talks…

  239. @Scotlyn
    As well, when there is critical work to be done and no money to pay for the labor, who will do it?
    The owner will, free of charge. It’s called sweat equity. Been there, done that.
    I’m all in favor of worker-owned businesses. I believe JMG is right about this, although not about the mechanism. The obligations of ownership must come with the rewards.

  240. @jmg I’m really curious to know why you think young evangelicals are going to become socially responsible to the poor again as they were a couple generations back. I ask because this is how I have seen the generations play out in my own evangelical extended family background; old grandma and great-grandma dyed-in-the-wool Roosevelt democrats; younger grandma and older mom virulent Republicans; materialistic parents and kids with hardly any true feeling of religion at all.

    If there was any social liberal Jesus movement brewing, I would be so happy to point my own parents towards it; they are lonely and churchless evangelicals who have been searching for a community for years. My dad calls the church Ichabod – the glory has left.

  241. P.S. As I understand it, most of the world outside of the USA uses the term “communism” for what you’re calling “socialism” and “socialism” for what you’re calling “social democracy.” No biggie, just a clarification 😉

    -Adrynian

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