- Capitalism and Alternatives -

A footnote on worker-owned businesses

Posted by: Samuel Day Fassbinder ( Citizens for Mustard Greens, USA ) on November 27, 1999 at 21:01:47:

In Reply to: Exploitation of whom by whom posted by Gee on November 26, 1999 at 22:32:05:

: B. The 100 workers own the factory. They cannot exploit themselves as they control their income. We add the (dubious) assumption that theyre all happy with their agreements for setting aside resources to invest, their agreements as to what ach takes home etc. No worker is unwillingly exploited here.

SDF: Worker-owned businesses still have to participate in crises of overproduction, otherwise they lose market share to those other businesses who can produce at a lower cost, and thus undercut the market for a product by selling more cheaply. Thus businesses competing for market share end up producing more than the market can bear, because some businesses have accumulated more capital than others, and can thus afford to produce at a loss while waiting for other businesses to fold so that market domination is theirs.

A worker-owned business is less likely to automate-out jobs and downsize during a crisis of overproduction, & thus is more likely to lose market share during the same.

Being a competitive business also means accumulating capital for such crises of overproduction, which is more likely to happen through the exploitation of workers who do not own by other owners (as the formal equivalence of exchange is not itself going to guarantee anyone a profit...) in order to have flexible capital for the crisis of overproduction...

Losing market share while producing at the same rate as before usually means bankruptcy, as the income shortfall has to be made up by borrowing to maintain production, and if the loans can't be paid back, the worker-owners are no longer owners. Either that, or production must slow down, and worker-owners must starve...

Real-life examples of this phenomenon exist aplenty -- witness for instance the near-disappearence of the American family farm amidst record-low grain prices in the 1980s...

The solution, of course, is to annul the market entirely & create a co-operative of co-operatives giving freely to each other w/out using money. See David McNally's Against the Market.

Follow Ups:

The Debating Room Post a Followup