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.