If labor would get the value of their production, but we still live in this capitalist hellscape, wouldn’t the logical conclusion be that the owning class should take out rent for the tools and premises?
Or how would qualified tradespeople get access to tools and facilities to make factories?
And how would you price marketing, lobbying, procurement, and other supporting roles? If they should also be entitled to their labor, do they get some kind of profit share?
And how does intellectual property work? Are ideas worthless and only execution matter? Or does the architect, the project manager, the engineer, the scientist, get some kind of royalties?
I’ve seen the propaganda for so long I just never reflected upon it against today’s knowledge based and networked economy, and now I find I don’t even know how it would apply.
It’s not that each individual person needs to directly get the monetary value of their production in pay. The point is that instead of an owning class getting the profits and the workers a nominal pay, it is the workers who own their place of work, and the profits are divided among everybody.
Thank you, I can at least understand worker cooperatives, as well as family businesses, homesteads, communes like convents and the like, from a maintenance perspective.
It might be that I’m too poisoned by capitalist thinking, and presupposing capitalist solutions to capitalist problems, but I welcome perspectives, even of my own blindness.
But say we want to create a new electric car manufacturer. This requires a wide range of specialties, tools and coordination.
Would the worker co-op need to buy all the things needed to even get started? Or how does investment happen?
Or is it that risk capitalists should exit not by selling to the stock market, but the laborers?
Ah, duh, that’s how bank loans work, I see now.
I still don’t understand how this applies to intellectual property though, the person who designed the car, do they only get paid for the design as long as they co-own the company? How does it work for the pilot project engineer, are they not entitled to part of the profits from the subsequent production runs that are arguably the fruit of their labor?
And how do we compensate the scientists discovering the fundamental principles that require decades of work to implement, but then transform society?
I’m thinking Babbage/Lovelace creating the computer, whoever discovered concrete, quantum physicists, but also those who provide support for work like road layers, city planners, and teachers.
I still don’t understand how this applies to intellectual property though, the person who designed the car, do they only get paid for the design as long as they co-own the company? How does it work for the pilot project engineer, are they not entitled to part of the profits from the subsequent production runs that are arguably the fruit of their labor?
And how do we compensate the scientists discovering the fundamental principles that require decades of work to implement, but then transform society?
I’m thinking Babbage/Lovelace creating the computer, whoever discovered concrete, quantum physicists, but also those who provide support for work like road layers, city planners, and teachers.
Millions of human beings have laboured to create this civilization on which we pride ourselves to-day. Other millions, scattered through the globe, labour to maintain it. Without them nothing would be left in fifty years but ruins.
There is not even a thought, or an invention, which is not common property, born of the past and the present. Thousands of inventors, known and unknown, who have died in poverty, have co-operated in the invention of each of these machines which embody the genius of man.
Thousands of writers, of poets, of scholars, have laboured to increase knowledge, to dissipate error, and to create that atmosphere of scientific thought, without which the marvels of our century could never have appeared. And these thousands of philosophers, of poets, of scholars, of inventors, have themselves been supported by the labour of past centuries. They have been upheld and nourished through life, both physically and mentally, by legions of workers and craftsmen of all sorts. They have drawn their motive force from the environment.
The genius of a Séguin, a Mayer, a Grove, has certainly done more to launch industry in new directions than all the capitalists in the world. But men of genius are themselves the children of industry as well as of science. Not until thousands of steam-engines had been working for years before all eyes, constantly transforming heat into dynamic force, and this force into sound, light, and electricity, could the insight of genius proclaim the mechanical origin and the unity of the physical forces. And if we, children of the nineteenth century, have at last grasped this idea, if we know now how to apply it, it is again because daily experience has prepared the way. The thinkers of the eighteenth century saw and declared it, but the idea remained undeveloped, because the eighteenth century had not grown up like ours, side by side with the steam-engine. Imagine the decades that might have passed while we remained in ignorance of this law, which has revolutionized modern industry, had Watt not found at Soho skilled workmen to embody his ideas in metal, bringing all the parts of his engine to perfection, so that steam, pent in a complete mechanism, and rendered more docile than a horse, more manageable than water, became at last the very soul of modern industry.
Every machine has had the same history – a long record of sleepless nights and of poverty, of disillusions and of joys, of partial improvements discovered by several generations of nameless workers, who have added to the original invention these little nothings, without which the most fertile idea would remain fruitless. More than that: every new invention is a synthesis, the resultant of innumerable inventions which have preceded it in the vast field of mechanics and industry.
Science and industry, knowledge and application, discovery and practical realization leading to new discoveries, cunning of brain and of hand, toil of mind and muscle – all work together. Each discovery, each advance, each increase in the sum of human riches, owes its being to the physical and mental travail of the past and the present.
By what right then can any one whatever appropriate the least morsel of this immense whole and say – This is mine, not yours?
The idea with Anarchist theory, as I understand it, is that if society was structured in a way that all of your basic needs were already met by default because collectively we tried to help each other, for what reason would you need to accumulate more wealth (besides, perhaps, using currency purely for luxuries), and what would motivate you as an individual if monetary reward was no longer the main driving force?
History has shown that many scientists, engineers, artists, and architects become those things not because they want to make money, but for an intrinsic interest in the act itself. Unfortunately, due to the way society is structured with capitalism, people must ensure that whatever they do in their professions, it must first and foremost be profitable, otherwise they will starve, regardless if the non-profitable thing was a net-benefit to society as a whole. One example is how Penicillian was very nearly going to be left as an interesting footnote in history and unavailable to the public until some scientists, already interested in figuring out a way to mass produce it, were able to court some rich capitalists to grant them the money to actually do the work.
Or how the creator of Insulin released the patent for free just so it would be widely available to all (choosing altruism over profit), and yet capitalism resulted in the exploitation of the substance, with the original inventors and scientists receiving little in the way of monetary compensation for the advances of the chemical into what we have today.
If monetary gain was still a consideration for those inventors, a co-op would much more fairly compensate them for their contributions. A single inventor cannot also create a factory to produce his invention at scale, so everyone involved in getting that invention produced and profitable would be equally rewarded for their effort. A single individual would not be able to become significantly more wealthy than their co-workers, as their contributions would be distributed amongst all of them, but if the result of that is everyone being quite wealthy, instead of a few people just getting by with a few absurdly wealthy people at the top, surely that’s an improvement? I certainly wouldn’t be bothered if my efforts helped everyone who worked with me, especially seeing as vice-versa, their contributions help me.
This presupposes that either a) inventions only happen in non-scarcity environments and b) that all inventors/support workers need be motivated by the common good, neither of which are necessarily true.
The question is further not about how someone can get rich, a workers pay movement can be motivated from either more individual pay, less class division, more equality, or even other reasons.
Society needs pavers, teachers, scientists to function, regardless if they do it out of charity or not. In the principle of being entitled to the fruits of your labors, these yield a huge return over a generation, making societal progress and welfare possible by preparing communal resources, teaching cultural and practical skills, or discovering things that could fundamentally change the reality society operates in.
In a Star Trek/The Culture post-scarcity egalitarian utopia where all needs are met, regardless if anarchist or not, this is definitionally not a problem.
But currently, teachers and scientists’ basic needs are not consistently met, and pavers regularly can’t sustain their profession until retirement.
So I find that the question remains: how would a system giving them a fairer share of the fruits of their labor work?
This presupposes that either a) inventions only happen in non-scarcity environments
What led you to that conclusion?
that all inventors/support workers need be motivated by the common good
Ehh, people are motivated by a lot of things besides money. But they could still be motivated by money in an environment where basic needs are met, because they may still strive to have certain luxuries, or a life beyond just the ‘basic’ style that could be offered to everyone. I just want to remove the motivation of avoiding starvation and homelessness, those should not be considerations when entering into negotiations to sell your labor.
Society needs pavers, teachers, scientists to function, regardless if they do it out of charity or not.
Most people who do the more drudgery ridden jobs are generally underpaid and undervalued by society. But they are often in a situation where they live hand-to-mouth, and do not wish to take on the risk of forming a union to get better working conditions and pay.
In a Star Trek/The Culture post-scarcity egalitarian utopia where all needs are met, regardless if anarchist or not, this is definitionally not a problem.
Kropotkin argued back in 1892 that with the rise of industrialization, the most basic needs could be provided freely already, but that such a thing was prevented for the sake of the status quo, for the sake of capitalism.
Now with the computer revolution and the incredible gains of productivity that came with it, I believe there’s no excuse why realistically those basic needs cannot be provided.
So I find that the question remains: how would a system giving them a fairer share of the fruits of their labor work?
Co-ops are by default provide a fairer share. A significant tax incentive could encourage more co-ops to be created, like what was done with the IRA. And personally, to further encourage a proliferation of co-ops and make them more competitive (as they often struggle to get venture capital), I would advocate for increasing tax rates on traditional corporations to 1950’s levels or even beyond that, which would also help fund basic living condition programs.
Having universal access to basic living conditions would provide people the power to say no to underpaid work, which would in effect cause wages to increase to incentivize people to work those unpopular jobs.
An overhaul of the justice system to prevent consolidated corporations from suing smaller inventors into submission or bankruptcy, as well as an overhaul of patent and copyright law, would go a long way to making things fairer as well.
Before massive corporations like Walmart came into small towns and siphoned up all of the capital from it, permanently moving it into their own hoards, communities were full of locally-owned and operated businesses where the profits, and wages from such were directly invested back into the community. It’s truly difficult, if not impossible, to actually grasp the extent of what Capitalism has taken from us.
There used to be a cohesive concept of community, and they’d raise money using methods like bonds. The people of the community, and the people working at the actual place, would reap the benefits of their work.
A transition would be difficult, obviously, but take a look into Germany’s laws surrounding worker ownership of corporations, as well as large worker owned co-ops like Mondragon.
A loan would give partial ownership to the loaning party, right? Until the loan is paid off? Is the difference between that and external shareholders that the payment rate wouldn’t be tied to profits but be constant instead? Or is the difference that you can pay it off eventually? I’m having a hard time seeing how a loan is fundamentally different from shares.
I mean, I guess they could? I was just trying to bring up a solution that I haven’t seen anyone else in this thread mentioning. Bonds.
Municicpal bonds are used all of the time to raise money. What is a municipal government, if not just an organized group of people in a community?
If people want to enrich their community with a business, but don’t have the means, they could relatively easily create a non-profit, and use community bonds (and other fundraising methods) to get the money they need to start the business. If/when that local business succeeds, the people who invested (i.e. the community at large) get a piece of that. success The people who own the business, all the way down to the people who work there day to day (who likely also own a piece of the business) benefit when the business does well. Those profits are re-invested into the community, rather than being siphoned off by a massive corporation like Walmart, never to be seen again. The community as a whole owns and operates the company, usually by democratic rule of some type.
This isn’t some kind of pipe dream, it’s happening right now in communities that have still managed to remain tight knit (often people of color, and other marginalized groups who have historically had the deck stacked against them).
Only would only those in the community be able to invest in bonds? Otherwise big investors would invest in promising ideas. Who is in a community? Who is the community for a global operation?
I like the idea, but I think it’d be really hard to apply to things like tech or businesses with global infrastructure.
I suppose it depends on what is the collateral for the loan. Technically I think you could take out a business loan where the collateral isn’t the business or its assets, but practically speaking what else would be used? Is the founder going to use their own personal property as collateral? Almost certainly not if they also have to share the profits of success.
For that matter how would banks work? Anyone working at the bank would share in the profits of loaning the depositor’s money? That doesn’t seem to follow the spirit of “sharing in the fruits of labor”. The depositors are the ones laboring to earn the money, why should someone working at a bank get to profit from the interest earned on the fruits of their labor?
A solution to that would be the depositors earn the profit from loans, but then we’re just back where we started. The more you can deposit and loan, the more you earn and labor becomes less and less significant. Also, what of the banker’s labor then? Are they just paid a wage and have no share in the profits of the loans? That sounds very similar to a typical company today where the shareholders reap the profits from wage workers’ labor. Will bankers be the working class of this new society?
What is the benefit to those founders? Why take on a loan or invest your own money if the rewards are split evenly between people that didn’t take the risk? It seems like the smart thing to do would be a “non-founder” since you get all of the rewards for none of the risk. Since everyone’s individual incentives are to not take the risk on starting something new I don’t see how you would get new organizations.
Well the risk is shared among all members, as well as the rewards.
As a founding member, you have more risk at the start, but that risk scales down as the operation scales up.
You’re more likely to have worker’s cooperatives that fulfill actual needs, either in local society or the participants’ lives, than capitalist firms. Less damage.
This is partly due to how there’s little incentive for aggressive profit extraction since the workers, who control the coop, often live nearby. Would you actively choose to make things worse for yourself and your neighbours, to get some more money in your pocket?
Far from all activity in the world needs a person who wants to get rich, spearheading them.
We have organizations in civil society too, don’t we?
For simplicity let’s say I found a brand new co-op that sells ice cream. I use my personal money to buy an ice cream van, do all the legal paperwork to form the company, buy all of the initial product that I’m going to sell. The first week goes well and the business looks promising, but I need some help so I hire someone. Let’s say after 3 weeks we pay off all my initial investment, the van, the other start up costs. Now we’re purely in profit mode - do we split the profit half and half? If so, I have made a terrible decision to start a business. I placed myself at financial risk for future profits while my employee took no risk and gained the same exact reward.
On the other hand, if we split the profits unequally in any way, how would that be different from the status quo? As soon as a company can choose unequal splitting of profits wouldn’t self interest dictate the founder take the largest percentage as possible so long as it doesn’t lose employees? If they can find employees willing to take 0% profit for a steady wage we are back where we started.
So because you put in some initial effort, you’re entitled to an outsized share in perpetuity?
Also, you’re completely overlooking another key aspect of cooperatives. Democracy.
If they were so inclined, the other members could vote to give you a larger share. Or pay you back for your initial investment. But it would be different from the status quo because the workers have ownership and agency in their workplace, and can actually participate in important decisions.
The key missing piece is democratic participation. Anyone involved in the process of the generation of wealth should have a say in what to do with that wealth, so you and the “employee” (who would be a co-owner if we are talking about a worker co-op icecream business).
But then how do you determine how you get paid back for your initial investment?
There are many options, but if we accept that capital doesn’t do anything, then the idea of making a profit on your financial investment is moot. How are you paid for your idea then? Well, you have a business which you are in control of (at least in part), and are no longer alienated from your work.
One option would be to pay back everyone’s initial investment at some rate agreed upon by the workers, and then decide (democratically) what to do with the rest of the profits. This doesn’t mean every cone you sell you vote on, but perhaps once per week, month, quarter, etc., everyone involved in the process decides collectively what to do with the surplus money.
As a side note: every “employee” takes a risk when they join a company. There is no guarantee that the job is permanent, so any changes in their life (moving, giving up other opportunities, etc) are a great risk. And while those are similar for a small business owner, with the additional risk of losing some initial investment, the employee has no say over what happens to the profits or the operation of their workplace,and therefore has to hope the employer is generous and clever enough to keep them on. By running a company collectively, even without even initial investments, the risks are better distributed, and probably lower as well, as it’s easy to make a bad decision on your own, it’s much harder to do so when others are involved.
These are just some ideas about how a business may operate in this example, it is by no means prescriptive, and I am sure many others can fathom better methods.
There can be an internal capital account that keeps track of what the founder invested to buy all the initial product and ice cream van. This account would give the founder a recoupable claim on that value they invest.
The founder can charge new workers a membership fee.
There is nothing wrong with unequally dividing the profits, but that has to be a democratically accountable decision.
The moral difference in favor of the worker coop is that it is democratic
Founders can hold non-voting preferred stock and they can charge new workers membership fees. Rewards don’t have to be split evenly between people. The workers can jointly decide on an unequal distribution. The difference being the democracy rather than an alien legal party (the employer) unilaterally deciding.
Taking the risk refers to appropriating the negative fruits of labor. The idea that the employer is entitled to the fruits of labor because they took the risk is tautological
So, honest question:
If labor would get the value of their production, but we still live in this capitalist hellscape, wouldn’t the logical conclusion be that the owning class should take out rent for the tools and premises?
Or how would qualified tradespeople get access to tools and facilities to make factories?
And how would you price marketing, lobbying, procurement, and other supporting roles? If they should also be entitled to their labor, do they get some kind of profit share?
And how does intellectual property work? Are ideas worthless and only execution matter? Or does the architect, the project manager, the engineer, the scientist, get some kind of royalties?
I’ve seen the propaganda for so long I just never reflected upon it against today’s knowledge based and networked economy, and now I find I don’t even know how it would apply.
It’s not that each individual person needs to directly get the monetary value of their production in pay. The point is that instead of an owning class getting the profits and the workers a nominal pay, it is the workers who own their place of work, and the profits are divided among everybody.
This is already a thing, worker cooperative.
Thank you, I can at least understand worker cooperatives, as well as family businesses, homesteads, communes like convents and the like, from a maintenance perspective.
It might be that I’m too poisoned by capitalist thinking, and presupposing capitalist solutions to capitalist problems, but I welcome perspectives, even of my own blindness.
But say we want to create a new electric car manufacturer. This requires a wide range of specialties, tools and coordination.
Would the worker co-op need to buy all the things needed to even get started? Or how does investment happen? Or is it that risk capitalists should exit not by selling to the stock market, but the laborers?
Ah, duh, that’s how bank loans work, I see now.
I still don’t understand how this applies to intellectual property though, the person who designed the car, do they only get paid for the design as long as they co-own the company? How does it work for the pilot project engineer, are they not entitled to part of the profits from the subsequent production runs that are arguably the fruit of their labor?
And how do we compensate the scientists discovering the fundamental principles that require decades of work to implement, but then transform society?
I’m thinking Babbage/Lovelace creating the computer, whoever discovered concrete, quantum physicists, but also those who provide support for work like road layers, city planners, and teachers.
One of the classics of Anarchist thought, The Conquests of Bread by Peter Kropotkin, touches on this idea in his book, all the way from 1892:
The idea with Anarchist theory, as I understand it, is that if society was structured in a way that all of your basic needs were already met by default because collectively we tried to help each other, for what reason would you need to accumulate more wealth (besides, perhaps, using currency purely for luxuries), and what would motivate you as an individual if monetary reward was no longer the main driving force?
History has shown that many scientists, engineers, artists, and architects become those things not because they want to make money, but for an intrinsic interest in the act itself. Unfortunately, due to the way society is structured with capitalism, people must ensure that whatever they do in their professions, it must first and foremost be profitable, otherwise they will starve, regardless if the non-profitable thing was a net-benefit to society as a whole. One example is how Penicillian was very nearly going to be left as an interesting footnote in history and unavailable to the public until some scientists, already interested in figuring out a way to mass produce it, were able to court some rich capitalists to grant them the money to actually do the work.
Or how the creator of Insulin released the patent for free just so it would be widely available to all (choosing altruism over profit), and yet capitalism resulted in the exploitation of the substance, with the original inventors and scientists receiving little in the way of monetary compensation for the advances of the chemical into what we have today.
If monetary gain was still a consideration for those inventors, a co-op would much more fairly compensate them for their contributions. A single inventor cannot also create a factory to produce his invention at scale, so everyone involved in getting that invention produced and profitable would be equally rewarded for their effort. A single individual would not be able to become significantly more wealthy than their co-workers, as their contributions would be distributed amongst all of them, but if the result of that is everyone being quite wealthy, instead of a few people just getting by with a few absurdly wealthy people at the top, surely that’s an improvement? I certainly wouldn’t be bothered if my efforts helped everyone who worked with me, especially seeing as vice-versa, their contributions help me.
This presupposes that either a) inventions only happen in non-scarcity environments and b) that all inventors/support workers need be motivated by the common good, neither of which are necessarily true.
The question is further not about how someone can get rich, a workers pay movement can be motivated from either more individual pay, less class division, more equality, or even other reasons.
Society needs pavers, teachers, scientists to function, regardless if they do it out of charity or not. In the principle of being entitled to the fruits of your labors, these yield a huge return over a generation, making societal progress and welfare possible by preparing communal resources, teaching cultural and practical skills, or discovering things that could fundamentally change the reality society operates in.
In a Star Trek/The Culture post-scarcity egalitarian utopia where all needs are met, regardless if anarchist or not, this is definitionally not a problem.
But currently, teachers and scientists’ basic needs are not consistently met, and pavers regularly can’t sustain their profession until retirement.
So I find that the question remains: how would a system giving them a fairer share of the fruits of their labor work?
What led you to that conclusion?
Ehh, people are motivated by a lot of things besides money. But they could still be motivated by money in an environment where basic needs are met, because they may still strive to have certain luxuries, or a life beyond just the ‘basic’ style that could be offered to everyone. I just want to remove the motivation of avoiding starvation and homelessness, those should not be considerations when entering into negotiations to sell your labor.
Most people who do the more drudgery ridden jobs are generally underpaid and undervalued by society. But they are often in a situation where they live hand-to-mouth, and do not wish to take on the risk of forming a union to get better working conditions and pay.
Kropotkin argued back in 1892 that with the rise of industrialization, the most basic needs could be provided freely already, but that such a thing was prevented for the sake of the status quo, for the sake of capitalism.
Now with the computer revolution and the incredible gains of productivity that came with it, I believe there’s no excuse why realistically those basic needs cannot be provided.
Co-ops are by default provide a fairer share. A significant tax incentive could encourage more co-ops to be created, like what was done with the IRA. And personally, to further encourage a proliferation of co-ops and make them more competitive (as they often struggle to get venture capital), I would advocate for increasing tax rates on traditional corporations to 1950’s levels or even beyond that, which would also help fund basic living condition programs.
Having universal access to basic living conditions would provide people the power to say no to underpaid work, which would in effect cause wages to increase to incentivize people to work those unpopular jobs.
An overhaul of the justice system to prevent consolidated corporations from suing smaller inventors into submission or bankruptcy, as well as an overhaul of patent and copyright law, would go a long way to making things fairer as well.
But that’s just my two cents.
How do new cooperatives form then? Who fronts the materials to start a new endeavor?
Communities? Bonds?
Before massive corporations like Walmart came into small towns and siphoned up all of the capital from it, permanently moving it into their own hoards, communities were full of locally-owned and operated businesses where the profits, and wages from such were directly invested back into the community. It’s truly difficult, if not impossible, to actually grasp the extent of what Capitalism has taken from us.
There used to be a cohesive concept of community, and they’d raise money using methods like bonds. The people of the community, and the people working at the actual place, would reap the benefits of their work.
A transition would be difficult, obviously, but take a look into Germany’s laws surrounding worker ownership of corporations, as well as large worker owned co-ops like Mondragon.
A group of people? One person?
Like any other company. They may have to take out a loan, for example.
A loan would give partial ownership to the loaning party, right? Until the loan is paid off? Is the difference between that and external shareholders that the payment rate wouldn’t be tied to profits but be constant instead? Or is the difference that you can pay it off eventually? I’m having a hard time seeing how a loan is fundamentally different from shares.
Loans are temporary and typically involve less oversight than shareholders.
Also a key difference is that if an already established co-op decides to take out a loan/etc, that decision is made democratically.
Bonds. Look into bonds. It is often how communities raise money for big infrastructure projects.
So companies shouldn’t put up ownership or assets as collateral for loans like you would with a house loan?
I mean, I guess they could? I was just trying to bring up a solution that I haven’t seen anyone else in this thread mentioning. Bonds.
Municicpal bonds are used all of the time to raise money. What is a municipal government, if not just an organized group of people in a community?
If people want to enrich their community with a business, but don’t have the means, they could relatively easily create a non-profit, and use community bonds (and other fundraising methods) to get the money they need to start the business. If/when that local business succeeds, the people who invested (i.e. the community at large) get a piece of that. success The people who own the business, all the way down to the people who work there day to day (who likely also own a piece of the business) benefit when the business does well. Those profits are re-invested into the community, rather than being siphoned off by a massive corporation like Walmart, never to be seen again. The community as a whole owns and operates the company, usually by democratic rule of some type.
This isn’t some kind of pipe dream, it’s happening right now in communities that have still managed to remain tight knit (often people of color, and other marginalized groups who have historically had the deck stacked against them).
Only would only those in the community be able to invest in bonds? Otherwise big investors would invest in promising ideas. Who is in a community? Who is the community for a global operation?
I like the idea, but I think it’d be really hard to apply to things like tech or businesses with global infrastructure.
I suppose it depends on what is the collateral for the loan. Technically I think you could take out a business loan where the collateral isn’t the business or its assets, but practically speaking what else would be used? Is the founder going to use their own personal property as collateral? Almost certainly not if they also have to share the profits of success.
For that matter how would banks work? Anyone working at the bank would share in the profits of loaning the depositor’s money? That doesn’t seem to follow the spirit of “sharing in the fruits of labor”. The depositors are the ones laboring to earn the money, why should someone working at a bank get to profit from the interest earned on the fruits of their labor?
A solution to that would be the depositors earn the profit from loans, but then we’re just back where we started. The more you can deposit and loan, the more you earn and labor becomes less and less significant. Also, what of the banker’s labor then? Are they just paid a wage and have no share in the profits of the loans? That sounds very similar to a typical company today where the shareholders reap the profits from wage workers’ labor. Will bankers be the working class of this new society?
What is the benefit to those founders? Why take on a loan or invest your own money if the rewards are split evenly between people that didn’t take the risk? It seems like the smart thing to do would be a “non-founder” since you get all of the rewards for none of the risk. Since everyone’s individual incentives are to not take the risk on starting something new I don’t see how you would get new organizations.
Well the risk is shared among all members, as well as the rewards. As a founding member, you have more risk at the start, but that risk scales down as the operation scales up.
You’re more likely to have worker’s cooperatives that fulfill actual needs, either in local society or the participants’ lives, than capitalist firms. Less damage.
This is partly due to how there’s little incentive for aggressive profit extraction since the workers, who control the coop, often live nearby. Would you actively choose to make things worse for yourself and your neighbours, to get some more money in your pocket?
Far from all activity in the world needs a person who wants to get rich, spearheading them.
We have organizations in civil society too, don’t we?
I don’t understand your answer.
For simplicity let’s say I found a brand new co-op that sells ice cream. I use my personal money to buy an ice cream van, do all the legal paperwork to form the company, buy all of the initial product that I’m going to sell. The first week goes well and the business looks promising, but I need some help so I hire someone. Let’s say after 3 weeks we pay off all my initial investment, the van, the other start up costs. Now we’re purely in profit mode - do we split the profit half and half? If so, I have made a terrible decision to start a business. I placed myself at financial risk for future profits while my employee took no risk and gained the same exact reward.
On the other hand, if we split the profits unequally in any way, how would that be different from the status quo? As soon as a company can choose unequal splitting of profits wouldn’t self interest dictate the founder take the largest percentage as possible so long as it doesn’t lose employees? If they can find employees willing to take 0% profit for a steady wage we are back where we started.
So because you put in some initial effort, you’re entitled to an outsized share in perpetuity?
Also, you’re completely overlooking another key aspect of cooperatives. Democracy.
If they were so inclined, the other members could vote to give you a larger share. Or pay you back for your initial investment. But it would be different from the status quo because the workers have ownership and agency in their workplace, and can actually participate in important decisions.
The key missing piece is democratic participation. Anyone involved in the process of the generation of wealth should have a say in what to do with that wealth, so you and the “employee” (who would be a co-owner if we are talking about a worker co-op icecream business).
But then how do you determine how you get paid back for your initial investment?
There are many options, but if we accept that capital doesn’t do anything, then the idea of making a profit on your financial investment is moot. How are you paid for your idea then? Well, you have a business which you are in control of (at least in part), and are no longer alienated from your work.
One option would be to pay back everyone’s initial investment at some rate agreed upon by the workers, and then decide (democratically) what to do with the rest of the profits. This doesn’t mean every cone you sell you vote on, but perhaps once per week, month, quarter, etc., everyone involved in the process decides collectively what to do with the surplus money.
As a side note: every “employee” takes a risk when they join a company. There is no guarantee that the job is permanent, so any changes in their life (moving, giving up other opportunities, etc) are a great risk. And while those are similar for a small business owner, with the additional risk of losing some initial investment, the employee has no say over what happens to the profits or the operation of their workplace,and therefore has to hope the employer is generous and clever enough to keep them on. By running a company collectively, even without even initial investments, the risks are better distributed, and probably lower as well, as it’s easy to make a bad decision on your own, it’s much harder to do so when others are involved.
These are just some ideas about how a business may operate in this example, it is by no means prescriptive, and I am sure many others can fathom better methods.
There can be an internal capital account that keeps track of what the founder invested to buy all the initial product and ice cream van. This account would give the founder a recoupable claim on that value they invest.
The founder can charge new workers a membership fee.
There is nothing wrong with unequally dividing the profits, but that has to be a democratically accountable decision.
The moral difference in favor of the worker coop is that it is democratic
Understood. Thank you for clarifying.
Founders can hold non-voting preferred stock and they can charge new workers membership fees. Rewards don’t have to be split evenly between people. The workers can jointly decide on an unequal distribution. The difference being the democracy rather than an alien legal party (the employer) unilaterally deciding.
Taking the risk refers to appropriating the negative fruits of labor. The idea that the employer is entitled to the fruits of labor because they took the risk is tautological
Labor getting all that it creates (positive and negative) would mean that all firms would be structured as democratic worker coops