EconoMinute: Democratic Economic System

EconoMinute: Democratic Economic System

This is Richard Wolff with another EconoMinute. I want to talk to you briefly about economics, democracy, and the way we do business. I want to make a simple point. If you believe in democracy – as, I suspect, most of us do – then you know it means basically that if you are affected by a decision you have the right to participate in it. You know that’s the idea about our political system. Since we are affected by the decisions made by mayors and senators and governors and presidents, well we participate in their decisions by having the authority to hire and fire them. To vote for them or to vote against them. At least we have some participation in the decisions. But it is not that way in capitalist enterprises. In those, here’s the typical story. A tiny group of people at the top – the owner, management that the owner chooses – or in a modern corporation the major shareholders , usually a dozen or so institutions or people, who decide who is on the board of directors. That’s usually 15 or 20 people. And they make all the key decisions. They decide what to produce, how and where, and what to do with the products of the labor of all the people. And what about all the people who work in an enterprise? They have no participation at all. They are excluded from deciding what to produce, how to produce, where to produce, and what to do with the profits and the net revenue. That’s not a democratic system. But there is a democratic way of organizing an economy and it’s not capitalism. It’s called worker cooperatives. And it’s an old idea whose time has come. Here’s how it works. All the people who work in an enterprise – all of them, one-person-one vote – They make the decisions democratically. What do produce, how to produce, where to produce, and what to do with the profits that, after all, they have all helped to produce. It would change our economic system. It would democratize not just the enterprises, but the system as a whole. It is long overdue. It’s what democracy means when you bring it to the economy which we should have done long ago. This is Richard Wolff for EconoMinute.

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31 thoughts on “EconoMinute: Democratic Economic System

  1. How would this work in larger enterprises, say auto companies, where you may have tens of thousands of participants? Is there not a practical limit to the model?

  2. Capitalism abhors democracy. My corporate sister, famous for her venture capital prowess and hard-on for the Wall Street Journal, stated that her position as CEO was a "dictatorship" and the subject was not open for discussion! So, for those of you so-called free-market people, accept the fact that your "free-market" is a bunch of narcissistic tyrants running around like Hitlers and Mussolinis. This is anything but "free". Dr. Wolff is correct. Putting democracy into the workplace is the fix.

  3. I'm really attracted to this idea, since it potentially offers a whole new framework for human motivation in a complex system of production. However, I'm a little skeptical of the feasibility of implementing such a system on a broad level. I'm sure that an economist would have more pointed questions to bring to this issue, but a few that come to mind are the following. First, different tasks within a business–especially a complex one–would involve different interest groups, asymmetries of knowledge, and power dynamics within the business itself, potentially creating the same problems that we see in the capitalist system globally on the micro-level (Imagine what management/accounting alliance conspire to do in a business, for example). Second, democracy is by nature a slow and "inefficient" process, which could cripple any cooperatively run business, which tries to function in the broader ecosystem of authoritarian production. So, beyond certain economic niches, could the cooperative system work if it isn't enforced by local if not even global political structures in some way? I'm sure that Prof. Wolff and others have thought about these questions. I'd love to watch an hour-long version of this idea.

  4. I support you, and worker owned enterprises, Professor Wolff. The rigged Republican system of American voting "decided" (through hacked voting machines) they want continued repressive capitalism to rule their lives. It would have been the same with #CorruptHillary.

  5. Did you know in a free market system people would be free to organise businesses into worker cooperatives? I suspect that the reason many people dislike capitalism is because they think that the way the US economy runs today is capitalism. The current US economy is a mixed bad of cronieism and socialism. The government interferes in almost every level of our economy. If the government was no longer allowed to medal in much if the economies then we would have a much more prosperous economy.

  6. What Richard doesn't realize is that technology is suppose to relieve human beings of labour and monotonous task. This allows people to be more creative, and contribute more production to arts, sciences, morality, culture, etc.. It's always boo hoo the proletariat. Hey proletariat, read a book and learn a real skill or science and stop listening to charlatans like Mr Wolff; who does nothing but benefit from capitalism. There's a reason Richard is a professor and public speaker and not a politician; as a politician he could actually do something and then be held accountable but as a professor he can to do less work, can take on less responsibility and make more money by teaching silly Marxist ideals. I would take Mr Wolff more seriously if he wasn't a wealthy capitalist preaching propaganda to the proletariat filling their ears with honey but never letting them know the fact that millions die every time the system he preaches about is adopted. How many millions of people have to die, and countries have to enslave their people to prove Marxism is a bad idea in practice.

  7. Why CEO's want factory workers making decisions on revenue. There is a reason people go to school for years for these special positions. Plus the Government is suppose to be run in a Democracy, not businesses.

  8. Worker Cooperatives, Consumer Cooperatives and Mixed-shareholder cooperatives working together is the key. The simple Worker Coop model is not enough to transform all aspects of the classical Authoritarian Economic Model.

  9. I'm not sure that I would trust human nature enough. Perhaps, after a very painful transition, people would realize that they can't just pocket everything if they want to survive.

  10. Just watched your interview at the Michael Brooks Show channel

    That channel is toxic and elitist, they are splitting the left and I really don't think it's a good idea to support them.

  11. I don't believe we should be taxed, I don't believe any public monies should go to schools, I want PBS shut down. You don't have to work for the owner. The reality is the owner gives you opportunity. Many applicants are turned down, you should be thankful if they get you a job. The labor is not of the people, it was traded for a paycheck. As soon as the employee is offered more somewhere else he leaves. The reality is unions, minimum wage and all the things you think help you are the ones making you poor. That is why there are so many homeless in Los Angeles, all the money is wasted on schools instead of vouchers. You are welcome to create a business where everyone is paid the same, but you have no right to force the employers and wonderful shareholders to do so. Worthless communists wait until the factories are built then the come in and try and steal the capitalist money, why? Because they are taught cheating, rape, prison, illegal immigration is ok. Fine make your coop, but just don't force you to steal from the wonderful capitalists.

  12. I work in a tech company and it really is like this already. We get monthly briefings about how well the company is doing and what directions we are going in. We can ask questions, give criticisms, and suggestions, but usually we don't because most of us are programmers and our expertise is in programming technologies, not business strategy. That's why we are given the opportunity to select the technologies we work with. That's where we want to have our voice and power. We also get bonuses as a way profit sharing, although I feel these bonuses should be higher.

  13. Employees do have some decision making in companies, but it is limited often to their scope. As companies get bigger they are too far removed to be able to make reasonable decisions. The board of directors acts as a centralized decision making body that oversees the whole company. It is their job to look after the well being of the company. If they fail at this role the company can go out of business or suffer. So usually they recruit talented people for these roles. They make the tough decisions that employees would either not understand or would have no clue how to decide. Often when employees have been given too much authority to decide the fate of a company the company will experience hardship. A good example of this is unions which drove business out of the US. The employees instead of focusing on what was best for the company focused on benefits and increased salaries. As a result they made once profitable companies fail.

  14. If the workers decide the faith of the company, then you no longer have your own company. Everything you dreamt of achieving is now irrelevant to what you do. Every phone in the world is now an Iphone just because most people in your company likes Iphones over androids. And thus you succesfully mislead people into removing the electoral college. I'm curious how this feelings vs. logic war is going to turn out

  15. This is the biggest stupidity yet by "professor" Wolff who thinks worker coops can compete with Samsung …. just because they sound good. LOL!!!!!!!! Now he wants to introduce the circus we see in American politics, and the clowns, inside American companies and destroy all of them before the year end. And his lemmings applaud him!!! LOL!!!!!!!!!!!!!!!!!!!!!!!

  16. In a Democratic Society, individual rights are paramount. One right is private ownership. The owner has the right to structure his business as a top down organization, workers co-op, or whatever. That is an individual's right.
    I have no problem with worker co-ops so long as it is not forced upon the business owner. Force will destroy Democracy and create an Totalitarian Society.

  17. Who is stopping workers from creating co-ops and competing with tyrannical companies now? If this is an effective form of economic activity they will produce cheaper better goods and get a good market share. So I'm wondering how is that going, are there major successes or setbacks?

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