Food for Thought #4: Worker Cooperatives

Worker Cooperatives With the concept of inequality returning to economic and political discourse, people have been exploring both new and old ideas to deal with this age-old economic dilemma. However, much of the debate is focused on redistribution – Thomas Piketty’s main suggestions were to increases taxes, especially wealth taxes – and as such there has been little discussion of the sources of inequality and how we might solve the problem of inequality at a fundamental level. Worker cooperatives could be one such solution. To see why worker cooperatives might reduce inequality, at least in theory, one must remind themselves of Marx’s theory of surplus value. Regardless of whether you subscribe yourself to the labour theory of value or subjective theory of value, it’s reasonable to suggest that the amount of value created during production is often a lot greater than the amount those workers actually receive. This ‘surplus value’ is retained by those who own the enterprise, often in the form of profits. There is also a lack of incentive for the workers employed to work any more efficiently than they need to be to remain employed. Although many firms now offer some form of commission or bonus to more productive workers, this still does not represent the total amount of value, nor does it deal with the lack of incentive for others within the business. Worker cooperatives can potentially resolve this. Worker cooperatives are firms which are owned and managed by their workers, those who have an internal relationship with the firm, unlike investors, customers or the state all of which hold an external relationship with the inner dealings of the firm. As owners of the...

Classical economists: Engels on Malthus

Known chiefly as Karl Marx’ sidekick, Friedrich Engels was the other pioneer of post-Enlightenment communist philosophy. Engels and Marx worked together on nearly everything either of them produced – history had room to give only one of them the luxury of an ideological ‘-ism’, however. A work Engels did research and publish entirely on his own is The Condition of the Working Class in England in 1844. The Condition is a truly extraordinary text in its historical scope, detail and theoretical grounding. For Engels trawled and traversed through the city of Manchester, trying to understanding and grasp a sense of how the industrial revolution had crystalised capitalism into a specific type of modern society. He analysed factories, districts and living conditions in which factory workers lived, the wages paid out by the factory-owners or as Engels called them, the bourgeoisie, and fundamentally, the relationship between these owners and the workers employed by them. One chapter, ‘Competition’, from the book deserves particular attention in light of the previous blogpost on Malthus’ conception of excess population. Engels (p. 87) firstly describes how competition created industrial capitalism. The productive powers of industrial factories rendered the economies of agriculture obsolete, centralising capital in the hands of factory-owners and fostering innumerable ranks of inner-city factory workers, the proletariat, vying alongside each other for jobs inside the factories. Higher wages and higher profits ushered both worker and owner away from the farms in unison, towards the inner-city. We get a sense of capitalism’s revolutionary mobility here: the capacity to dissolve entire worlds into sands, forging new ones apace and without hesitation. Under capitalism, as Marshall Berman once described: all that is solid...