this post was submitted on 15 Oct 2023
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The reality clearly demonstrates that investors don't bother investing in coops. You've obviously never actually tried to get investors to invest in a coop.
No I haven't.
But I expect that the search for people who want to participate in an expanding cooperative is the bigger problem.
Do you know of a cooperative that wants to issue bonds?
I recommend learning a bit about the subject before arguing about it. Cooperatives don't issue bonds because nobody is going to buy these bonds.
Or cooperatives don't issue bonds because they believe that nobody will buy them.
It's the perfect investment for people who don't want to participate in the usual capitalism.
If you ever try starting a coop you'll find out how hard it is to get investment in practice. It's kind of hilarious that you think nobody thought of these obvious things to try before you.
It's not new but also not tried in a convincing way.
I believe that it is possible and that it's worth trying until a working combination is found.
What do you base your claim that this has not been tried in a convincing way on?
Ok, you were convinced. I mean the search for how to finance cooperatives should only be done when investors don't hesitate to buy cooperative bonds.
The reality is that it's much more difficult to get the initial funding for a coop than a traditional company, and it's not that lots of people haven't been trying different approaches including the hare brained schemes you floated many times. The fact that you just keep repeating something that's demonstrably false means that there's no point continuing this discussion. Have a good day.
We simply talk about different things. Initial funding comes with different risks.
I think established cooperatives should issue bonds for expansion.
New cooperatives cannot issue bonds because nobody can judge the risk. They have to do a startup and sell shares in a company that owns the assets. But why should the founders limit themselves and do the opposite of Zuckerberg and give their influence away by just owning one vote in the participating cooperative?
Again, you're not the first person to think of this. In practice, it turns out that it's much easier for traditional companies to secure funding under the financial capitalist system. That's the world we live in. Lots of people are trying to run cooperatives in all kinds of different ways. In some cases, like Mondragon, they do manage to grow big, but in general systemic pressures favor capitalist structure.
Does difficulty matter? Any communist revolution will be more difficult than establishing a network of cooperatives. I believe that if there is a desire for Socialism, people will spend the time to establish cooperatives.
A communist revolution would fundamentally restructure the way society operates which is a far more valuable goal than establishing a network of cooperatives which simply allows people lucky enough to work in these cooperatives to cope better with capitalist repression. These two things aren't even remotely comparable, and abandoning freedom for all workers because it's just too darn difficult is a cowardly position to take.
What can you do with a communist revolution that you cannot do with cooperatives, apart from using violence?
A communist revolution will abolish capitalist relations and allow creation of a government by the working class for its own benefit. If communist relations could be established via cooperatives without using violence then that would've happened already. People have tried doing this for over a century now with nothing to show for it. Meanwhile, communist revolutions have actually allowed workers to seize the means of production and turn them towards the benefit of the working masses. At this point I honestly can't tell if you're just trolling here.
You can't tell because I am arguing.for a position that communists somehow want to ignore.
For a communist revolution today the means of production are already necessary. Russia and China were possible because they were not industrialized.
Are there capitalist relations within a cooperative? If not then why do you need a revolution when everything is already there?
Communist revolution has nothing to do with the level of industrialization. Cooperatives would not be taking over as the dominant form of labour organization as long as a country is ruled by the capital owning class because that wouldn't be in the interest of the capital owning class. If capitalists were willing to give up their wealth and power without a struggle than revolutions wouldn't be needed in the first place. It's kind amazing that you don't understand this basic fact.
What I meant with the lack of industrialization is that those revolutions could be fought with rifles. Today you need tanks and drones. Any revolution is interrupted by cutting global supply lines.
Cooperatives don't have to be dominant. It could be that people prefer to work in classical hierarchies. There should just be so many cooperatives that whoever wants to live a socialist life can find a place to do so.
I indeed believe that revolution is not needed. There is no unified capital owning class. If you don't change the political system and let them have their power, why should they waste resources on fighting cooperatives?
That's complete and utter nonsense. First of all, revolutions happen when significant parts of the military choose to side with the populous against the ruling class. Second, modern military runs on logistics. If the workers do not support the regime then fuel won't be delivered for the tanks, food won't be delivered to the troops, and so on. Fighting a civil war is completely different from invading other countries.
Meanwhile, this notion that cooperatives don't have to be dominant is also nonsensical. As I've repeatedly explained to you here, the whole system is designed to make large scale cooperative movements a nonstarter. What you're proposing here is a fantasy that's based on your lack of understanding of how businesses actually work under capitalist system. You have this romanticized notion that's completely divorced from the real world. I highly encourage you to educate yourself on the subject instead of arguing out of ignorance based on your made up idea of how things work.
There very much is a unified capital owning class, but it's not unified in the simplistic way you seem to imagine it to be. The capital owning class is unified by their shared class interest. It's not bunch of people in a room doing a conspiracy. It's a bunch of individual actors acting in their own interest, and they all favor certain types of policies because it provides a common benefit for the capital owning class.
The relationship between a capitalist and a labourer is that the labourer sells their labour to the capitalist in return for a wage. The capitalist wishes to maximize their profit which means paying as low wage as they can while the worker wants to maximize their wage and get as much value out of their work as they can. This is the fundamental contradiction between the interests of the worker and the capitalist.
Under capitalist rule, it's the capital owning class that holds power in society. This is precisely what analysis of many decades of policy in US shows:
If the cooperative structure does not threaten class interests of the oligarchs then it's not achieving anything of value. And if cooperatives actually started cutting into the profits of the capitalists then it would be in the shared class interests of the capitalists to fight cooperatives.
You continue to argue a subject that you have superficial understanding of. Perhaps spend a bit of time actually learning about how political economy works before trying to form ideas on how to improve it.
It's interesting that 3 people seem to disagree with you without telling you why. I also would like to know why they reject your detailed comment.
Unfortunately I cannot agree with you about my lack of knowledge. I believe in cooperatives despite the valid problems that you have mentioned.
If the capital class turns full fascism to destroy cooperatives then you have your revolution. But for capitalism, cooperatives are just another member of the capital owning class. Everybody wants a monopoly but not everybody gets it.
The key problem is the reserve army of labor. If cooperatives show some restraint and don't destroy labor market rates by cornering markets themselves and distributing that surplus, then capitalism can continue uninterrupted. Not everybody wants to participate in discussions as much as cooperatives require.
If everybody wants to be a socialist then cooperatives should even create incentives to maintain capitalism. That's where I lack knowledge. I don't see how value can be determined without competition. Do we want a society without value?
Let the capitalists have their boats. You need people who dedicate their lives to business processes. There is enough value created when there is a choice to work in a socialist cooperative. Communism is not only prevented by capitalists but also by the people themselves who don't vote differently. Capitalists work with those weaknesses while communists hope that they are not a problem.
Simply believing in something doesn't make it viable. You have to look at the history of cooperatives, how they operate under capitalism, and how they fare against capitalist companies. People have been trying to achieve what you're proposing for many decades with little to show for it. You need to address why that is and why you're so convinced that it can be different given all the evidence to the contrary.
The other aspect you need to consider is that capitalist companies will always have an advantage over cooperatives because they are much more willing to exploit the workers. The willingness to exploit allows the company to increase profit and market share, so competition fundamentally favors such companies. While you could argue that workers would prefer to join cooperatives, reserve army of labour ensures that there are always enough workers to go around. And of course, traditional companies can always temporarily improve their working conditions to run a cooperative out of business. We even see this dynamic with traditional companies competing.
Meanwhile, competition is perfectly possible under the communist model. For example, USSR had plenty of different design bureaus that would compete with each other. The difference was that it was friendly competition, and results were shared. The system was more efficient than capitalist competition as evidenced by USSR leading the space race.
Communism is prevented by people buying into the current capitalist model. Traditionally this has been the case because the standard of living in the west was relatively high due to the fact that most brutal exploitation was done in the countries the west subjugates. However, we are now reaching the stage of capitalism where exploitation is turning inward and people in the core of the empire are seeing their living standards deteriorate. As this process continues going forward, more and more people will reject the system.
Communists understand the inherent self destructive dynamic of capitalism and that you can't just paper over these problems with cooperatives.
Cooperatives don't have to pay owners nor a management layer. Workers also shouldn't slack. These advantages should overcome the benefits of exploitation.
Ussr won space race and lost the microchip race. The availability of cad systems created a big advantage.
Capitalism is not inherently self destructive. Exponential growth is only needed if all investors should succeed. That's not necessary.
Capitalism will thrive when times get tough because the majority will choose to compete instead of cooperate. Cooperatives could create space for those who want to cooperate.
Cooperatives still need a management layer just like any other large organization. Meanwhile, the reason that cooperatives don't have to pay owners is also the reason cooperatives are unable to get the initial investment.
You keep repeating here that the advantages of coops should overcome exploitation, but the reality is that they don't. We have over a century of history showing this. You just keep ignoring the elephant in the room here and repeating over and over how you think this shouldn't be the case, while it demonstrably is.
I'm not sure what this has to do with the point regarding competition and innovation under a communist system. USSR could demonstrably innovate, and was doing so better than the west in many areas.
Yes, it actually is and many books have been written on this subject over the years. It's not just the exponential growth that's the problem, it's the whole capitalist competition which leads to capital concentration and monopolies. Capitalism isn't a stable system. Winners of competition grow, and they become harder to compete with because it takes increasingly more initial capital to do so. A scrappy startup isn't going to take on Amazon for example. And even in cases where new companies do better, the established ones can simply buy them out.
Based on the actual history of capitalism it does not thrive in tough times. Once again, I implore you to learn some actual history instead of just making things up. Spend some time to educate yourself.
Since the sovjet union was not fully communist, there hasn't been a successful communist revolution. That doesn't stop you from trying. Why are you convinced that there is no way to establish cooperatives. Right, it's not easy but it's easier than a communist revolution. Unless you believe that capitalism breaks down on its own because it is not suited for tough times.
Instead of reading literature, socialists could develop and show their political competence by running cooperatives.
That's a nonsensical argument. You don't flip a switch and transition from a capitalist model to a communist one. The revolution puts the working class in charge of society, and then it's a process of figuring out how to build a communist system. The transitional period is called socialism. Again, I encourage you to read this explanation https://www.versobooks.com/blogs/3228-lenin-s-three-theoretical-arguments-about-the-dictatorship-of-the-proletariat
I'm simply pointing out to you, that this has been tried in many different ways for over a century with little to show for it. Since you're the one claiming this is a viable approach despite over a century of failure, it's on you to demonstrate why people should continue trying this when it's not working.
Lots of successful communist revolutions happened, no successful examples of what you're proposing exist.
Capitalism breaking down is a big aspect of what leads to revolutions. And the tough times are directly caused by late stage capitalism as we're seeing happening today in the west. If the ruling capitalist class was capable of changing course then revolutions wouldn't happen.
People who don't understand the value of learning from prior experiences can be safely dismissed because they will never accomplish anything.
Thanks for the high quality references.
The article here nicely stresses that there is only one way to communism and that there can even ony be one party. That's true in theory, but a single party can make a mistake in implementing communism so that it would be a valid option to have various parties each representing one approach to communism among which the population has to choose.
Likewise I think that requiring the destruction of state to establish the dictatorship of the proletariat is a nice theory but in reality, everybody in the state administration is proletarian, if we identify everybody but the billionaires as proletarian. Otherwise, the state would collapse because nobody with an education would be able to participate in the administration.
You argue that there were successful communist revolutions. But those were only starting to implement communism since there hasn't been a place with communism yet.
My point of view is that there is no need for the dictatorship of the proletariat to create a place for communist relations. A cooperative can be such a place. Instead of having to wait for a revolution, communist and socialists could live in the reality of their preferred relations right now.
Thus it doesn't matter how many times people failed. People constantly start small businesses. Communists must have the resources to do that, too. Run a restaurant as a cooperative and expand it. This creates the resources to create more advanced cooperatives. Without going full oppressive, the capitalist class cannot do much to prevent such a cooperative.
The problems that will arise will show the real problems of communism. Without an army to suppress dissidents, a cooperative has to deal with those problems. To me, that's a better way to figure out communism than to wait for a revolution.
Having a single party simply means that society has decided on a political system they want which is communism. Plenty of debate and change can happen within that scope. In fact, we can see this in practice with China where the political system proved to be far more flexible and adaptable than the multiparty systems seen in the west.
What actually happens with multi party systems is that they favor homeostasis. Since you have elections every few years, that becomes the horizon for doing large scale projects. Once a new party is voted in, they can abandon the project and change course. This makes it very difficult to make large scale changes and long term planning. This is why stuff like large scale infrastructure projects is effectively impossible to do in western countries.
A proletarian is any person whose primary source of income is their labour, so all skilled workers and administrators belong to the proletarian class. This is also not a hypothetical as you can look at how this works in practice in Cuba, Vietnam, or even China.
What there have been as a result of revolutions is tangible improvement in the living conditions for the majority. Everywhere communist revolutions happened we've seen people get education, food, housing, jobs, and healthcare.
And frankly, communism isn't going to be possible until capitalism is abolished as the dominant global system. It's not as if these societies are allowed to develop peacefully towards communism. They are constantly under siege from the capitalist empire headed by the US. The blockade on Cuba is a perfect example of this.
You keep saying this, and the elephant in the room continues to be that no evidence of this has been seen in over a century of people trying. So, unless you have something dramatically new to add here that hasn't been tried before, there is no reason to think that this approach will work going forward based on prior experience.
It does matter how many times people failed, because doing the same thing over and over produces same results over and over. There are very clearly limits on how far cooperatives can expand, and we see what those limits are in practice. And if this model somehow did threaten the capitalist class then they will go full oppressive, as they have done in the past. You can look at how worker organization was violently put down in US in the 30s as an example.
And I simply don't expect this to achieve much of anything based on looking at prior experience. I also don't think people should wait for a revolution. What people should do is educate others and explain the fundamental problems with the capitalist system, why it's heading into a crisis now, and what sort of system should replace it.
As I've mentioned before, people don't try to make violent revolutions happen as their first choice of finding a resolution, it's the last resort measure that people end up arriving at because the class that holds power does not allow for any peaceful resolution.
We end up with revolutions, as class contradictions sharpen within society. More and more people start demanding change as they see their standards of living erode, and the ruling class inevitably resorts to increased repression. At that point, the revolution becomes the only path towards resolution of these contradictions.
The standard of living erodes in the West because resources are starting to be shared globally. A communist revolution would have even less resources unless there is a willingness to continue exploitation.
Even if the revolution comes and currently big cooperatives are bound to be destroyed, why not start a small cooperative restaurant now?
US is a huge country with a ton of natural resources. This isn't an actual problem. The reason there is a problem is because the capital owning class would rather do production outside of US in cheaper markets, and the mechanics of that are explained here in great detail. A communist revolution would result in people in US using their own resources for the benefit of the workers. No exploitation is necessary here.
Nobody is stopping you from starting a coop restaurant now, it's just not going to address the fundamental problems in the capitalist system that are continuously pushing the entire system towards the inevitable collapse. The very mechanics of capitalism are unsustainable. The only possible paths are either a revolution or descent into full on fascism.
The text is interesting but the author doesn't seem to know that Smith's invisible hand was invented to explain away the risk of outsourcing that was already known back then.
But outsourcing is not bad. It spreads wealth globally. It's interesting that you argue for isolation when communism usually is a global approach. That's the exploitation I was hinting at. You want to keep 'your' resources instead of sharing them with the world. But even if you do, look at China's history to know the problems that will come with that strategy.
Do you remember the end of the text? That virtualization will make any revolution unnecessary. If you want communist relations, you better come up with something new if you don't want to find a new way to have working cooperatives.
No, outsourcing does not spread wealth globally. In fact, the very opposite of that is happening in practice.
I'm not arguing for isolationism at all. I'm arguing for the country to leverage its own resources and labour to meet its needs without relying on exploitation of other countries. In fact, this has to be the foundation for any sort of public ownership where the workers own the means of production.
That's not what exploitation is.
The problems of having constant and consistent improvement of standard of living for its population without suffering economic crashes every decade as seen under capitalism?
The text simply explains the mechanics of financial capitalism which led to deindustrialization of the west. I do not have to agree with every single conclusion it makes. I don't have t come up with anything new because I'm perfectly happy with the kinds of relations USSR, Cuba, or China managed to achieve. I see these as a real and tangible improvement on relations in western societies under capitalism.
Nobody is stopping you from implementing your cooperativist utopia, but I'm simply explaining to you that it's an unlikely outcome in practice. You can do what you want with that.
If native Americans claim every land taken by capitalists, how much is left for communism?
For China, you have to know that they burned their blue water navy before European traders arrived. Their choice of isolation is the origin of their past losses. That was the context of my argument about the problems of isolation.
You cannot expect to have a communist revolution in America with the world just watching.
I don't get your argument about communist relations in China. If China hasn't increased extreme poverty headcount, how is that good enough?
I have no idea what that's supposed to mean to be honest. Why would Native Americans taking back the land be somehow at odds with communism. have you ever talked to a Native American person, their ideas are very much aligned with what communists want.
Nobody is talking about any isolation here except you.
Again, nowhere did I say anything of the sort. However, it's up to the people of each country to figure out how to make their system work for the majority. Nobody is going to solve America's problems for it.
I don't understand what this sentence means. China is the only place in the world where any meaningful poverty reduction is happening and they have lifted over 800 million people out of poverty.
There is implicit isolation when resources should remain the same for American workers. When you have global communism, resources would be shared which means there is significantly less available.
But when capitalism collapses, will there be communism or will there be wars redistributing resources? That's what I meant with the expectation that the world will not just watch.
The Chinese reduction of poverty, I got that wrong. I thought China kept their number of people in extreme poverty. But since they reduced that number, how is that article an argument against the spread of wealth by outsourcing? China receives most of the outsourcing and thus received most of the wealth. Other countries just increased their population which keeps the number of people in powerty the same.
From my point of view you are stuck in a desire to keep capitalism as bad as possible so that the communist revolution happens as soon as possible. But capitalism isn't the single source of evil and actually has positive outcomes.
Take that outsourcing text. It tells you that capitalists don't want to invest into capital intensive businesses, which is funny by itself. We started with cooperatives that should issue bonds. Don't you see the opportunity that capitalist could support cooperatives to run those businesses?
I know, I should do it myself. But I am more the capital relations kind of person which makes it very difficult for me to run a cooperative. All I can do is tell you that there is an opportunity.
No, there's no implicit isolation here. What's being said is that local industry should be preferred. You don't seem to understand even the very basic concept of what communism is or how it works. Communism is when people living on the land share their labour and resources for common benefit. Global communism simply means that majority of the world follows the same model.
The reason production should be local is because people doing the work are working in their own interest and for their own benefit by virtue of owning the means of production.
As, I've repeatedly explained above, communism isn't a necessary outcome of capitalism collapsing. The other obvious alternative is fascism as it happened when there was a capitalist collapse in Germany in 1930s.
China increased its wealth by focusing on productive activity in China. This has little to do with outsourcing. If outsourcing was the main reason standard of living in China is improving then we'd see that happening in every other country the west outsources to, yet the opposite is happening.
I've repeatedly explained to you above that the very mechanics of capitalist relations are what leads to poor conditions under capitalism. You can read this book from Ray Dalio, who is a very successful capitalist discussing this if you don't trust the communist perspective.
The mechanic is not complex, and it's well illustrated by the game of monopoly. Everybody starts with equal opportunity, and as the game progresses through capitalist competition a single player ends up with all the resources. This is precisely what we see happening in the real world. Successful capitalist enterprises grow by outcompeting the rest, and this results in capital concentration.
On top of that, capitalism produces crashes roughly once a decade as we saw with Y2K crash, then 2008 crash, and now the current crash. During each of these crashes there's a rapid wealth transfer to the top as well. People lose savings, homes, and property because they can't make ends meet, and those people who own significant capital end up buying up the assets people are forced to forfeit. So, when a crash happens majority becomes more poor and in a worse position to weather the next crash. Eventually things get to the point where people simply don't have much to lose and violence starts.
I don't think you understood what the article was actually saying which is that financial capitalists want to minimize their risk and maximize their profits. Investing in real productive industry is both risky and expensive. You have to build factories, buy machinery, hire workers to operate it, and so on. This is a big initial investment, and if it doesn't work out you're stuck with a big loss. On the other hand, investing in ephemeral industries like software development is a very low initial cost, you just hire a few guys with laptops. You can invest in a whole bunch of these startups, and if one of them makes it big then you get a huge return. This is the silicon valley model. Not only that, but the company doesn't even have to have a viable business model. It's a pyramid scheme in practice because you just need the company to have a high valuation when the IPO happens and cash out. This is how we end up with companies like Uber that aren't actually profitable and have no path towards being profitable, but are valuated at billions of dollars.
So that you're saying is that you don't actually believe in what you're saying enough to put your money where your mouth is.
Why do cooperatives need a management layer? Does communism need management?
Every large organization needs management. When large groups of people organize to do complex tasks, then the work needs to be coordinated in some way. Highly recommend reading this short explanation of why management is needed https://www.marxists.org/archive/marx/works/1872/10/authority.htm
The other text mentioned the state machine. Do communists distinguish between the necessities of that state machine and the capitalist class' dictatorship? The repressive capitalist state, how much is it just a consequence of the authority of the state machine?
Yes, communists distinguish between the state machine and the class who holds power. The problem communists have with the capitalist state is that it's built by the capital owning class in its own interests. Communists think that the working class has to build its own state machine that serves the interests of the workers.
Once again, if you actually study history, you will see that state style organization arises regardless of the political system, and societies that use this sort of organization outcompete those that don't. Communists aren't uptopians, we want tangible and practical improvements in the realm of the possible.
The difference to regular businesses is that management as a class doesn't require higher compensation. Similarly, the owners of the cooperative don't want to be compensated when they don't want to be part of the capitalist class.
This, together with the members being motivated workers, gives cooperatives room to compete with regular businesses.
I understand how cooperatives work, the point you continue to ignore is that none of what you say is seen working in practice despite over a century of people trying to compete with traditional business model under capitalism. Cooperative organization would work perfectly fine after the capitalist system is overthrown however.