A Look at the Cooperative Mode of Development

Juanny Boy: Robert – I have a question about this.

What’s the benefit of Centrally planning industries that are largely not predatory like clothing, computers, etc.?

It seems they are produced less efficiently under Marxism.

But in industries like health care, water, it is a necessity because of the potential for abuse.

One thing we could do is to have firms owned by their workers. This is called the Cooperative Mode of Development and I think this is a great model. Many say it is a non-capitalist mode of development. For instance, in this model there is no exploitation of workers, no labor theory of value, etc.

In capitalist firms, workers and management and ownership are enemies. The management and owners are always trying to abuse the workers more and more because the worse they abuse the workers, the more money they make.

But when workers own enterprises, there is no incentive to reduce worker pay and benefits, force longer work hours, skip on regulations, disallow sick and vacation time or to abuse workers at all. Why would the workers who own firm vote to lower their salaries, reduce their benefits, make their working conditions worse, deregulate the firm, disallow vacation and sick time, or raid worker pensions. There is no incentive to do any of these things.

Further in capitalism, there is a tremendous incentive to replace workers with machines. But if workers owned the company, why would workers vote to replace themselves with machines? Which workers would be so stupid as to say, “Please fire me and replace me with a machine. I will just gladly become poor, broke and unemployed?” No one will say that.

One problem is that workers cannot be counted on to run their own plants. They tried this in Yugoslavia and it did not work. The revenue from the firm could either be taken home as profit or reinvested in  the firm. Workers generally chose to give themselves large paychecks and to underinvest in the firm. This eventually caused the collapse of the enterprise because if you stop sinking money back into your firm, eventually your enterprise falls apart from lack of internal investment.

The Mondragon cooperatives in the Basque Country of Spain have solved this. All the plants are worker owned and controlled, however the workers do not have the right to decide how much of the revenue to take home as pay and how much to reinvest in the firm. These decisions are made at the highest level. All of the co-ops are ultimately owned by several large regional banks. It is here that the decisions about how to allocate revenues are made. Workers cannot be relied upon to make these decisions because they consistently choose to take home too much as pay and to not reinvest enough in the firm.

In addition, at Mondragon, the workers hire and fire their own management. You would think that workers would abuse this also as they would hire the managers that let them slack off the most and did not force them to work hard or be responsible. However, there has been no such abuse. Workers make good choices for management – firm but fair managers. The important point is if the management becomes abusive, they can be fired by the workers.

This Cooperative Mode of Development works very well in  my opinion.


Filed under Capitalism, Economics, Europe, Labor, Left, Regional, Socialism, Spain, Yugoslavia

9 responses to “A Look at the Cooperative Mode of Development

  1. The problem of workers not wanting to be replaced by machine, is that our society is based on people having to be productive to earn a living, and technical development is slowly rendering human labour slowly obsolete.

    The culture of “working for a living” made sense where human labour was required en masse, usually at higher levels than were in the population itself (hence slavery), but this multi-millenial trend is coming to a close.

    So a major change is needed, where income becomes something that is partially guaranteed and is less and less predicated on production or owning capital. At the moment, as the means of production are privately owned, the people who own the robots keep the productive output. If the means were publicly owned, the profits would be distributed as a UBI. Perhaps a public/worker joint ownership.

    • Cannibalism is the other choice. Populations will get unruly anyhow without enough beer and drugs to distract them which I don’t know how the government would provide.

      Doctors, lawyers, plumbers and robot mechanics will stick around.

      Me, a former print journalist and later advertising copywriter, I am already obsolete.

    • My feeling is that you will have a two-tier economy like Third World countries.

      Goodbye middle-class. Hello the owners of the robots and those employed to repair them.

      • Thats what my fear is, a regression to this state of existence. Inequality has been the norm throughout history, and this state of civilisation, where there is a strong middle class is somewhat unique.

        Most of what motives me politically, is keeping this gain. Conservatives want it gone, preferring to be kings amongst serfs, and the activist Left has lost sight of this, preferring to engage in moral decadence by fighting against ideas and moral notions instead of material wellbeing.

        The Alt-Right, although they recognise this precarious state of affairs, seem to be willing to regress to an earlier social state, in the false belief that this is preferable.

        • AVATAR sums it up. No unions, labor strikes and the rich able to literally hover above the squalor.

          What would they care?

          They look at it and say…its a bunch of apes.

        • Look at the aboriginal Australian for clues: a government handout and enough money to drink, drug and live places like Alice Springs.

          Now I’ve known some aboriginal pilots and lawyers (In America) but in general, nobody cares about them. Or wants to think about them.

          So this is the technological future.


          Look at how middle-class people ignore the problems of Bogans.

          “I’m 20 years old and have a kid and my step-dad molested me and I had a drug problem and now I cannot get a job and the government pays to little”.

          Middle-class whites roll their eyes. These stupid morons they think.

          That is how the rich will feel about the grandchildren of the middle-class living in complete squalor in tents.

        • Yee

          I don’t think Australians has to worry about economics.

          Mining, tourism and agriculture are more than enough to support only 24 million people. Tourism and retail would be the industry to provide jobs in the future. Mining brings in govt revenues. Agriculture also have great potential. Australia doesn’t have many of the industries that can be replaced by robots.

          I’ll say Australia had a better future than Gulf State Countries, because you have a great variety of natural resources.

          Of course, if China collapses, it’d be much harder to sell raw materials, beef, lam and wool to the Americans. US and Canada have quite a lot of the same stuff.

  2. Cannot speak for Australia but remember the 90’s before the internet gutted so many jobs in the service sector.

    We might become like India where a few owners of production live in futuristic bubbles while below them in the streets people have a medieval economy.

    Oz maybe not quite to the same degree because it has always been a middle-class country.

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