Democracy at Work: A Cure for Capitalism

[dblack]

OK... finally had time to sit down and listen. Not sure why the thirty minute re-telling of the New Deal was necessary, but his core idea - employee-ran businesses - is a great idea. If workers can run businesses better than capitalist owners, then they should.

 

[tooAlive]

OK... finally had time to sit down and listen. Not sure why the thirty minute re-telling of the New Deal was necessary, but his core idea - employee-ran businesses - is a great idea. If workers can run businesses better than capitalist owners, then they should.

Then why don't they?

I don't see anything stopping a group of people in a free market from starting their own businesses and sharing the profits.

The problem comes when you have statists come in and say all businesses have to be run that way because they say so.

The above only works when everyone actually wants to share the responsibility and workload as the owners do. And the truth is you have a large number of people that would like to share the profits, but would rather not deal with the responsibilities and extra work involved with owning and operating a business. So they settle for a much lower paycheck.

 

[dblack]

OK... finally had time to sit down and listen. Not sure why the thirty minute re-telling of the New Deal was necessary, but his core idea - employee-ran businesses - is a great idea. If workers can run businesses better than capitalist owners, then they should.

Then why don't they?

I don't see anything stopping a group of people in a free market from starting their own businesses and sharing the profits.

The problem comes when you have statists come in and say all businesses have to be run that way because they say so.

Some do. Some succeed. Some don't. I certainly don't see anything wrong with what he's advocating, other than his offhand appeals to socialism, which is altogether different and something I would oppose adamantly.

 

[asterism]

I think that all of the predictive criticisms I've seen so far were addressed by about 27 minutes into the video. The things he advocates are:

A taxation, regulatory and public works role for government as existed in the 30's.
A worker participation in the decision making process in companies as exists in Germany today.
Worker co-ops in which workers more equally share the profits of the company and share in the direction of its operation.

Which means these products and services would be developed elsewhere:

Cell phones
Cloud computing
Search engines
Crowdfunding
Social networking
Biometric security devices
Smartphones


Co-ops don't work on a large scale because the incentive to innovate gets lost in the collective desire for guarantees.

Not true.. Check out Mondragon, huge co-op... 120 thousand employees worldwide...

120K (actually, only 80K) is not a large scale when we're discussing global initiatives and competition. Also Mondragon is an outlier making niche products. There's a reason why they aren't on the cutting edge and never have been.

It's a perfectly fine model to have as an option, but it has never been an innovator. You just proved my point.

 

[asterism]

I think that all of the predictive criticisms I've seen so far were addressed by about 27 minutes into the video. The things he advocates are:

A taxation, regulatory and public works role for government as existed in the 30's.
A worker participation in the decision making process in companies as exists in Germany today.
Worker co-ops in which workers more equally share the profits of the company and share in the direction of its operation.

Which means these products and services would be developed elsewhere:

Cell phones
Cloud computing
Search engines
Crowdfunding
Social networking
Biometric security devices
Smartphones


Co-ops don't work on a large scale because the incentive to innovate gets lost in the collective desire for guarantees.

Not true.. Check out Mondragon, huge co-op... 120 thousand employees worldwide...

The term "co-op" doesn't even apply to Mondragon in the context of this thread since there are only 1,816 Worker-members (owners) and only 872 that are on governing bodies (voting shareholders).

That's a higher concentration than public for-profit corporations.

http://www.mondragon-corporation.com/LinkClick.aspx?fileticket=ZzxamLvmVgk=&tabid=331

 

[asterism]

In my view, the biggest problem with discussions like this is that most people really don't get what capitalists do. But anyone who's been heavily involved in trying to run a command economy gets a crash course.

I recall, back in the nineties, attending a presentation by an ex-Soviet bureaucrat discussing just this issue. He highlighted how incredibly difficult it is to efficiently allocate labor and resources across a large, diverse nation. Top-down management of such a thing just doesn't work. Adequately supplying people with the goods and services they want, requires decentralized systems that can tightly monitor consumer demand. Pursuing this goal generally points to a distributed system of individual resource 'managers', who are tasked with maximizing consumer satisfaction.

Naturally, you want the most skilled of these 'managers' to handle the bulk of the resources, so a system that allocates more resources to the 'managers' who most successfully allocate their resources makes the most sense.

i won't belabor the point further, as I'm sure you see where this is headed. In a free market, we call these managers 'capitalists'. They are in charge of allocating labor and resources in society to meet the needs and wants of consumers. We channel more of our resources to those who do this successfully, in the form of profits, and deny them to those who fail, in the form of losses.

I think a lot of people make the mistake of assigning moral value to this allocation, assuming that wealth "ought" to go to the most virtuous people, and be denied to those we find repugnant. But in reality, it's all about how efficiently they use their wealth. If they make good calls and allocate it usefully, we want them handling more of our money. It's not a question of providing them with a privileged lifestyle, it's about giving them more power to allocate more resources, because they've proven they can do it well.

According to the statistics given in the OP video, capitalism has been a gross failure at allocating resources.

On the other hand, for the average Soviet citizen, communism worked very well at allocating resources. Nobody was wealthy, but everyone had food, housing, education, employment, medical care and retirement.

What the Soviet System lacked was innovation, personal freedom and personal wealth.

In our capitalist system the vast majority do not have personal freedom or wealth. The freedoms protected from government encroachment are often taking away by the economic system.

That leaves innovation as the one benefit in a capitalist society.

So we get cell phones & Hollywood. But with those we also get joblessness, homelessness, outrageously priced education, lack of retirement, and hunger for millions of Americans.

Even greater hunger in Russia though.

Virtually nobody is starving in the USA unless they are willingly disqualifying themselves from aid. When people on food stamps are morbidly obese, they aren't starving.

 

[asterism]

According to your definition, a communist manager would be a capitalist:

"The capitalists...allocates resources and labor to efficiently and effectively satisfy consumers of its wears"

Sounds like a job for the Politburo....

I think that you have your semantics backwards.

Remember the root of the word Capitalist is "capital".

Good fuycking god. i give up. You're not cut out for this stuff. How can a communist manager be a capitalist? Arent' we missing some very key components of capitalism....yet again? Yes we are.

THE PRIVATE OWNERSHIP AND MEANS OF PRODUCTION.

Good god. i'm gonna sign off before my head explodes form all this stupidity.

You're the one that wrote:

""The capitalists...allocates resources and labor to efficiently and effectively satisfy consumers of its wears"

It's by your definition, not mine that equates communist managers with capitalists.

Maybe you should think before you type.

The key word there is "efficiently," which is something communist managers don't do.

 

[asterism]

This is your dogma...For every example supporting your dogma I can find just as many supporting mine. If you were honest you would agree this example provided by you would be a fine "absolute" example of how things work in a more perfect world, but then reality sets in for the majority and it is very contrary. You imply that every business owner is free from greed and corruption. Business owners decide daily to ship jobs offshore for these very reasons.

There is no dogma here. The problem is, we don't have a capitalist system to bounce examples off from. In my profession, I negotiated the terms of my employment and was free to decline and sign on with another firm doing what I do.

If your example is going to be "the mechine shop janitor doesn't get to negotiate the compensation of his employment", then yes. You're going to get a much different result. Or a burger flipper, or a cashier, or a greeter, or waiter, etc...and the reason has everything to do with what i indictaed. Thats how the labor market works under current conditions. Low skilled workers dont have negotiating power. Period. It's not evil or the business owners fault for not paying a ******* janitor 75K a year. Thats market forces. If sweepong the floor required skills that were beyind the scope of a coordinated monkey, then their negotiating power would increase exponentially. Let me knwo when that happens.

The flaws in your argument are:

1. Capitalists control the market-value of labor by choosing what to invest in and what not to invest in. If they refused to invest in businesses that need mechanical engineers, then your market value would drop like a rock and you'd be making as much as a janitor.

2. "Market-Value" is determined by whatever is the least that can be paid to the most desperate laborers. Wages are not determined by the actual value of the work performed. Without people flipping hamburgers there would be no McDonalds. Labor is hired because labor is needed. Unions try to force management to pay on par with the value of the work done, not the minimum that the most desperate worker will accept.

3. Most white collar workers...especially managers and executives...are not needed to run successful businesses. Labor is needed. The reason why white collars are paid so much is not due to capitalism, it's due to the financial elite maintaining the socio-economic order of their choosing. Most college grads have no productive skills whatsoever.

Go find a line worker that can effectively manage 100 people on an assembly line. There's a reason they aren't in those jobs and it's not "THE MAN" keeping them down. People who have never had such responsibility live under the luxury of thinking that it's not essential work.

The reason most college grads have no productive skills these days is because the education system has responded to the rush of easy money and government subsidies in certifying people in skills that are not needed. Most of those college grads couldn't work an assembly line either.

"Follow your passion" on a government college grant doesn't translate into skills in demand which is why too many people have degrees in literature but can't find a decent job. Plus, many new grads are too entitled. They think their History and Marketing degrees automatically qualify them to be "above" menial tasks such as sales and data entry.

 

[asterism]

This is your dogma...For every example supporting your dogma I can find just as many supporting mine. If you were honest you would agree this example provided by you would be a fine "absolute" example of how things work in a more perfect world, but then reality sets in for the majority and it is very contrary. You imply that every business owner is free from greed and corruption. Business owners decide daily to ship jobs offshore for these very reasons.

There is no dogma here. The problem is, we don't have a capitalist system to bounce examples off from. In my profession, I negotiated the terms of my employment and was free to decline and sign on with another firm doing what I do.

If your example is going to be "the machine shop janitor doesn't get to negotiate the compensation of his employment", then yes. You're going to get a much different result. Or a burger flipper, or a cashier, or a greeter, or waiter, etc...and the reason has everything to do with what i indicated. Thats how the labor market works under current conditions. Low skilled workers dont have negotiating power. Period. It's not evil or the business owners fault for not paying a ****ing janitor 75K a year. Thats market forces. If sweeping the floor required skills that were beyond the scope of a coordinated monkey, then their negotiating power would increase exponentially. Let me know when that happens.

I know medical doctors that don't have the negotiation power you are referring to. So this doesn't just apply to "low skilled" labor as you describe. I know many IT professionals, very skilled, making well into 6 figures, but unemployed because their position has been outsourced to India, China, Russia, etc., simply because it was less expensive, not because the quality of service was better. These dogmatic views of the world are what keeps changes from happening. Everyone puts on their shade of filter for any given situation, greatly skewing the ability to meet in the middle.
Hopefully you can agree that not everyone that is unemployed is unskilled.

The unemployed IT workers failed to adapt to a changing marketplace. HTML is not hard (neither is ASP, Java, C#, PHP) and maintaining a cluster of web servers is only marginally difficult. If they didn't see this coming they were just not paying attention.

There's a reason it took 10 years for Google to come into its own - they needed massive economies of scale and automation. That doesn't happen with protectionist ideology. The jobs were outsourced because there was no reason to pay $75 per hour for basic functionality and if it cost that much for every business to have a basic web site there would not be mass adoption of the technology.

 

[Locke11_21]

I can summarize the video, but definitely worth the watch!! Very sharp and insightful Harvard Economist.

He provides examples of how capitalism has failed the American people. He offers "Economic Democracy" as the alternative.
Economic democracy is a socioeconomic philosophy that proposes to shift decision-making power from corporate shareholders to a larger group of public stakeholders that includes workers, customers, suppliers, neighbors and the broader public. No single definition or approach encompasses economic democracy, but most proponents claim that modern property relations externalize costs, subordinate the general well-being to private profit, and deny the polity a democratic voice in economic policy decisions.[1] In addition to these moral concerns, economic democracy makes practical claims, such as that it can compensate for capitalism's claimedly inherent effective demand gap.

Harvard economist. John F. Kennedy told well known leftist Keynesian economist, Ken Galbraith to shut up because he lost his patience with his idiocy. Harvard economists are about as sharp as bowling balls.