Tuition battles, debt and union-busting: The many faces of neoliberalism

The eleven students who barricaded themselves inside Cooper Union’s tower have ended their occupation, but their struggle resonates well beyond the New York City university. Inextricably bound up in the movement to save Cooper Union’s tradition of free tuition and enable meaningful student and faculty participation in the affairs of the university is a struggle against neoliberalism.

The victorious students who endured police violence and heavy-handed legal tactics during the months of the Québec student strike earlier this year; the unsustainable student debt burying students across the United States; the union-busting offensives in Wisconsin; and the latest anti-union effort in Michigan — to name only some of the struggles from 2012 alone — should not be looked at in isolation but rather are part of a continuum of which Cooper Union is one manifestation.

Workers’ struggles and students’ struggles are linked, and not simply because today’s students are tomorrow’s workers. Education is now treated as a commodity — professors are increasingly part-time adjuncts and students are expected to hand over ever larger sums of money for tuition, and students are encouraged to think of higher education in mercenary terms, as nothing more than technical training for a job rather than (or in addition to) an opportunity to improve oneself through study. Being an employee in a capitalist enterprise is indistinguishable from oneself being reduced to a commodity — we have no choice but to sell our labor if we intend to eat and keep a roof over our heads.

All this requires atomization of society: set off at each other’s throats, fiercely competing over scraps. It is solidarity that breaks this pattern. Thus it was not surprising when a Cooper Union spokesman, presumably speaking for the president, Jamshed Bharucha, issued a statement claiming that the occupiers “do not reflect the views of a student population of approximately 1,000 architects, artists and engineers.” Did they do a survey? One suspects not.

The suggestion here seems to be that the strikers are unreasonably “spoiled,” an intimation made during recent student occupations at nearby New York University and the New School. Note that the student strikers in Québec were similarly denounced when they took to the streets in massive numbers to block an increase in tuition although Québec already had the lowest tuition of any Canadian province.

This is a favorite neoliberal tactic — attempt to engender jealousy that somebody has something you don’t have, and loudly proclaim that something should be taken away from them. This tactic was on ample display during Wisconsin Governor Scott Walker’s unilateral attempt to eliminate collective bargaining for Wisconsin state-government employees and impose draconian cuts to education and social programs. Government workers and unions were the designated scapegoats, making their pensions easy targets; Republican Party operatives went to rural counties and made sure to play up the fact that most people no longer have pensions, while government workers do.

Although a similar effort was defeated in Ohio, by forcing a referendum that was won, Michigan legislators this week approved legislation banning automatic payroll deductions of union dues. In states with such laws, unions are required to represent all workers despite receiving dues from only a portion of them, leaving unions with less resources and therefore weaker, and fueling the neoliberal ideology of hyper-individualism because “free riders” gain the benefits of collective bargaining by the union, funded by members, while not contributing dues.

Using the force of the state to break unions on behalf of capitalists to force reductions in wages is simply neoliberal austerity in legislative clothing.

Continued free tuition would be a victory for all students

Similar to higher union wages setting a higher bar for everybody’s wages, continued free tuition at Cooper Union should be defended as a gain for all students. Once lost, it is unlikely to be regained. The public City University of New York system had free tuition until 1975; tuition has risen fivefold since it was first instituted, well above the rate of inflation and a pattern replicated by public and private universities.

With that in mind, the demands of the Cooper Union student occupiers and their supporters, which have not been rescinded, are straightforward:

• The administration must publicly affirm the university’s commitment to free education.
• The Board of Trustees must immediately implement structural changes to create open flows of information and democratic decision-making, including making board minutes publicly available and the appointment of a student and faculty members.
• President Bharucha steps down.

The students say Cooper Union’s weakened finances are a result of mismanagement. The university has been on a building spree of late, leveling two of its three main buildings and replacing them with expensive new buildings. In ending their occupation but vowing to continue to struggle, the students said:

“The problems at Cooper Union strike a nerve with millions of others struggling with student debt, administrative bloat, and expansionist agendas. We live in a world where massive student debt and the rising costs of higher education remain unchecked, where students are treated as customers and faculty as contracts. Cooper Union’s mission of free education affords equality and excellence and offers an alternative for a better future of higher education.

For over a century, the Cooper Union has sustained the mission of providing free education to all admitted students. After decades of financial mismanagement, the administration now seeks to implement tuition-based programs. Rather than dedicating themselves to the difficult task of maintaining the promise of free education — Jamshed Bharucha’s administration and the Board of Trustees have chosen to pass the consequences of financial and institutional mismanagement on to the shoulders of the college’s students, faculty, staff, alumni, and future generations. They’ve taken the easy way out.”

Not dissimilar to how working people are expected to bear the burden of an economic crisis caused by financiers while the financiers’ institutions are bailed out. Those same financiers are hungrily circling Social Security, falsely blaming one of the few remaining strands of the social safety net so that they can get their hands on it and plunder it for their personal profit.

Solidarity achieves tuition freeze in Québec

The struggle for a sane higher-education system is one that must be fought everywhere. The struggle to maintain free tuition at Cooper Union is not separable from the struggle to rein in out-of-control tuition increases elsewhere. The successful student strike in Québec, although centered on Francophone students in Montréal, nonetheless was a province-wide struggle that drew enormous support from working people. It was so successful, in fact, that it caused the provincial government to fall.

It also helped that students were already organized in three student province-wide associations. The Québec government, then controlled by the Liberal Party, intended to raise tuition by 75 percent over three years. Protests and strikes quickly blossomed, shutting down universities and leading to street battles as police repeatedly attacked near daily demonstrations that sometimes numbered more than 100,000. The Liberal government dug in its heels, not only refusing to negotiate seriously but passing a law making the demonstrations illegal.

That move backfired, as the demonstrations over what become known as the “Maple Spring” in a nod to last year’s “Arab Spring” only grew bigger. After months of struggle, the government called an early election, which it lost, ushering in a Parti Québecois government that promptly rescinded the tuition increases, canceled the anti-demonstration laws and, in an environmental gesture, reversed the Liberal support for fracking. That victory did not come easily (the process is called “struggle” for a reason). A supporter of the strike who is long past being a student himself wrote on the Waging Nonviolence web site:

“The revolting students paid a heavy price. They put their academic year in jeopardy and many were beat up by the cops. Over 200,000 students maintained a strike for five months, 3,387 were arrested and hundreds injured — some seriously by plastic bullets and batons.”

Moreover, students estimate that the provincial government spent C$200 million, citing police and related costs, the value of canceled classes, the costs of personnel maintaining empty buildings and the cost of making up a lost semester. Martine Desjardins, president of the Fédération étudiante universitaire du Québec, the largest of the province’s student associations with 125,000 members, said to The Montreal Gazette that those costs exceeded what would have been collected from the tuition increases:

“The tuition for seven years was supposed to bring in about $170 million. So you can see it’s not about economics, but about ideology. It just doesn’t make sense.”

Explosion of student debt

College tuition in the United States is far higher than it is in Canada and has risen to the point that student debt is estimated to be more than US$1 trillion. A Center for American Progress report said U.S. tuition has increased more than 1,000 percent during the past three decades. (That is more than three times the official rate of inflation.) The report notes:

“One of the major self-inflicted causes is the consistent decline in state funding for higher education, which had helped colleges keep tuition affordable. The steadily and rapidly increasing cost of college nationwide prompted a dramatic rise in student borrowing—a natural result as families could no longer rely on scholarships, grants, and personal savings, which cannot keep up with the rapidly increasing tuition costs.”

Similar to governments running deficits because they borrow from the wealthy rather than tax them, financiers profit from the explosion of student debt. A major contributor to this mounting debt are for-profit private colleges, many of which enroll huge numbers of students, many unprepared for college, by virtue of government-guaranteed loans given with no oversight.

Just as corporate initiatives attempt to replace public primary and secondary school systems with “charter schools” run by corporations for the profit of executives, the neoliberal model of higher education is to saddle students with heavy debt. Not only is this profitable in the short term, but it also makes the students, once they enter the workforce, more pliable employees due to the massive loans hanging over their heads.

Corporate executives want students drilled for business needs, but refuse to pay taxes needed to support education. And they want students to shoulder the burden of tuition although they, and society as a whole, benefit from an educated workforce.

The idea that anyone achieves success all on their own is preposterous — all of us rely on institutions (including schools) and build on those who came before us. Least of all can capitalists who accumulate fortunes on the backs of students, employees and freelancers, and benefit from government-funded infrastructure, claim to be free of society. The neoliberal cult of individualism is a means to foster jealousy and atomization — and to keep the 99 percent subordinate.

Self-directed workers as a “cure for capitalism”

The economy of the future will not be a tabula rasa. Today’s bricks will form part of tomorrow’s edifice and, assuming that humanity’s zig-zagging and often circular course toward greater freedom continues, pieces of a better world exist scattered around us.

Cooperative enterprises are surely part of that (hoped for) better tomorrow. If tomorrow’s better world is one of economic democracy, environmental sensitivity, rationality in production and distribution, equality and meaningful community involvement, than cooperatives will form some of the backbone. Some of these bricks are already here: Successful cooperatives exist today, although they are as yet small islands of democracy in the vast sea of authoritarian capitalist enterprises.

No one model could ever be universal. Differentiated internal operations and cultures are bound to develop. But certain bedrock principals can, and should, be in place for cooperative enterprises operating in an economy that increasingly includes them. The economist Richard Wolff, in his latest book, Democracy at Work: A Cure for Capitalism,* argues that the ability of the workers of an enterprise to be involved in all its strategic decisions is the most important principal to bring about economic democracy, without which political democracy is a formal, empty shell. He introduces the term “workers’ self-directed enterprises” to encompass such enterprises.

During the last structural crisis of capitalism, the Great Depression of the 1930s, massive movements from the Left, including unions, socialist parties and communist parties, forced widespread reforms to be instituted. Eventually, however, Keynesianism and social democratic programs developed new sets of instability and capitalists were able to at first slowly and then more vigorously roll back one reform after another. Professor Wolff argues that even if a suite of reforms could be enacted, the fix would be temporary — capitalists would intervene to take back the reforms, plunging us back into crisis.

But the problem is not simply that the wealthy, through their concentration of accumulated capital, can so readily bend political systems to their ends. The problem is the instability of capitalism itself — capitalists are induced to do everything they can to increase profits due to the relentless nature of competition. That can be achieved through taking a larger share of a market or through cutting costs — the latter can include the introduction of machinery or moving facilities to somewhere else where the workers can be paid far less. These decisions are made by a small number of people at the top of the company, ultimately by the board of directors, a body that almost always includes top executives.

A similar process of alienation happened in countries that used the system of the former Soviet Union, in which the government owned all enterprises. Professor Wolff uses the term “state capitalism” to describe that model because, in place of a private board of directors, state officials made all the decisions, again excluding workers. Those officials controlled all the production of the workers, appropriating the surplus by paying the workers a small fraction of the value of what they produced, the same as in a traditional private capitalist enterprise. A many-sided argument among Bolsheviks and others on how to organize production raged after the October Revolution, but, within a year of assuming power, the Bolsheviks nationalized large enterprises under the impact of the multiple deep crises of World War I and the threat of the advancing German army.

Such a system became synonymous with “socialism.” Along with many others, Professor Wolff argues that “socialism” has to be a much different system, one in which the workers themselves make the decisions of their enterprises, in conjunction with the community of which they are a part. A central part of the ongoing furious campaign against “socialism” is the supposed efficiency of capitalism in comparison to anything else. The inherent instability of capitalism (euphemistically called “business cycles” in orthodox economics) is itself inefficient, nor is it possible to measure all the wins and losses across a society.

“In short, the notion of measuring the efficiency of economic events or processes or of an economic system is a mirage. It is not possible to identify or measure all of the effects of any social factor, nor is it possible to separate and weigh all the influences that combine to produce each effect. The very concept of efficiency would have been banished from discourse, let alone science, long ago had it not proven so ideologically useful. Efficiency discourses resemble capitalist notions of efficiency, which in turn resemble the medieval doctrines and debates concerning how many angels can dance on the head of a pin: they too will one day strike people looking back as bizarre and absurd.” [pages 29-30]

Moreover, Professor Wolff continues:

“The efficiency argument for capitalism rings hollow in the face of high and enduring unemployment affecting jobless millions and their relatives, friends, and neighbors. Watching the growing absurdity of foreclosures creating both homeless people and empty homes throws into serious question the standard defense of capitalist efficiency. … Socialists and communists during the Cold War often simply inverted the standard argument by insisting that is was [their version of] socialism or communism that was efficient (or more efficient than capitalism) and thus represented progress. They, too, often ignored the impossibilities of identifying and measuring all costs and benefits and of separating and evaluating each of the myriad influences that produced them.” [pages 30-31]

Having set the stage, Democracy at Work provides a concise summary of the lead-up to the present crisis, from the Great Depression through the explosion of debt incurred as a result of stagnant or declining wages, and summarizes in clear, accessible language the basic problems of advanced capitalist and Soviet-style systems. The book then gets to its heart, sketching out the concept of “workers’ self-directed enterprises.” WSDEs are a distinct form of cooperative enterprise — this is an enterprise in which the workers themselves are the directors, making all decisions on what to produce, where to produce, how to distribute, determining wages and other compensation, and hiring management.

The surpluses produced would never be appropriated and distributed by anybody else. In a capitalist corporation, the board of directors are legally required to maximize the profits of the corporation going to the shareholders, regardless of the cost to the workers or the local community, and only the shareholders vote on who the directors are. The profits of the company, the bloated pay of the top executives and the huge piles of cash diverted into speculation are the product of the surpluses produced by the workers — and the competitive pressures of capitalism ensure that this process continually deepens.

WSDEs would operate in a far more humane manner. The workers themselves will make the decisions on technological innovation, which is only proper since they, and the surrounding community of which they are a part, will have to live with such decisions. (This is unlike a capitalist enterprise, in which those who bear the cost have no say in the decision.) The self-directed workers can consider a far wider set of issues and concerns about adopting new technology, or any other strategic decision, thereby fully weighing the effects on themselves, their families and their communities.

Professor Wolff proposes that a specialized agency be created that would monitor technological innovations, what enterprises need more workers, which enterprises have registered a desire to commence new production, and other social needs, to be funded with enterprise profits.

“Rather like a matchmaking service, this agency’s task would be to match employees willing to change jobs with job availability and to arrange for appropriate training and inducements to facilitate the reallocation of personnel. No loss of income would attend the transition period for workers who left one job for another. To run this agency would cost a small portion of all the surpluses distributed by WSDEs to sustain its staff and activities. This agency’s reports and services would form one basis for the decision by all workers about whether to make the technical change in question.” [page 132]

Jobs can be rotated (easing boredom), pay differentials minimized (drastically reducing inequality), environmental concerns would be taken seriously (otherwise you’d be polluting your own home) and communities would be stabilized (who would move their jobs to another country for a cut in pay?). And by being involved in your workplace’s decisions — and rewarded for your efforts in making the enterprise a success — alienation is drastically reduced. Without the need to work a crushing number of hours to compensate for low pay, you would have the time to be more of a participant in your community.

Professor Wolff’s concept of WSDEs rests on the workers being their own directors; that is, making all the strategic business decisions themselves. He stresses this aspect, and sees ownership of the enterprise as less important, arguing that different ownership models can co-exist with WSDEs. Local, regional and national governments could own them but allow them to be run by the workers; the workers themselves could own the enterprise individually or collectively; or ownership could take the form of shares traded on a market. The author also prefers not to pre-judge whether a system based on WSDEs would take place under market conditions or in which planning predominates; he believes that they can be compatible with either.

“How WSDEs will come to exist with private versus socialized productive property and to coexist with markets versus planning will not be determined by spurious claims about their comparative efficiencies. It will be determined through the construction of particular, specific postcapitalist economic systems as they emerge in transitions from both private and state capitalist systems.” [page 144]

Fair enough. But here I believe caution is warranted. Leaving a full market system in place would inevitably re-introduce some of the problems of capitalism, albeit in different and milder forms. As I have previously discussed, if collective enterprises, no matter how democratically they are run internally, compete with each other in unfettered markets, market forces would require the collectives to ruthlessly reduce costs (including their own wages) and aggressively expand the market for their products. Failure to do so would mean not surviving in competition with the enterprises who do adapt themselves to market conditions. Because all materials and finished products would remain commodities subject to price volatility in this scenario, the cooperative workers’ own labor would also become a commodity — in essence, they would “become their own capitalists.”

Some amount of planning — democratic, bottom-up planning based on aggregate demand as a guide and not top-down planning imposed as an order — would seem to have a significant role in an economy dominated by cooperatives; moreover, the cooperatives would have to have some cooperation with each other, particularly in negotiating prices up and down the supply chain. Ultimately, these are questions that won’t begin to be solved until there is more practice, although a “matchmaking” agency of the type proposed above implies some amount of planning.

Much more immediate is the question of how WSDEs would co-exist with capitalist enterprises. WSDEs would handle competitive problems and grapple with issues of size and other issues differently than a capitalist enterprise. For instance, Professor Wolff argues, if WSDEs organized mutual support and pooled political strength, or prove to be more productive, they could prevail against capitalist enterprises. Not extracting large amounts of money for bloated executive pay could free extra funds for developing innovations, or differentiating their products as made under democratic conditions could be a marketing advantage.

Early on, WSDEs would need state assistance. Professor Wolff advocates adapting the model of Italy’s “Marcora Law,” which enabled workers to take over troubled enterprises. The author suggests offering the unemployed a choice: Either the traditional weekly benefits, or taking it as a lump sum, pooling their resources with others taking the lump sum, and forming a WSDE. These new enterprises would likely need to rely on technical assistance, subsidized credit, tax breaks and other assistance; such aid can be looked upon as an extension of existing programs to assist small businesses or for women- or minority-owned businesses.

Social solidarity with and by existing cooperatives, unions and activist groups would be another form of support. A strong cooperative movement would provide an alternative to traditional authoritarian capitalist employment, eroding capitalists’ ability to impose harsher working conditions.

Democracy at Work does formulate one difference from traditional concepts of cooperative enterprises that will likely be seen as controversial: A differentiation between “surplus-producing” workers and “enabling” workers. The first group are those who directly produce the outputs that are sold. The second group include accountants, managers, secretaries, clerks and many other job functions that provide the conditions that enable the “surplus-producing” workers to do their work. Professor Wolff is careful to stress that both categories are equally crucial to the success of an enterprise.

Nonetheless, he advocates that only the “surplus producers” be allowed to make the decisions regarding the appropriation and distribution of the surplus. All other decisions would be voted on collectively by all workers. The rationale is that such an arrangement “secures the absence of any exploitation within the WSDE” [page 166]. But leaving such major decisions to only a portion of the workforce risks engendering a division within the workforce, the opposite of the goal, and arguably applies too narrowly the laudable goal of ending exploitation.

Moreover, this formulation presupposes that management will form a group distinct from line workers. But there should not be such a distinction: Managers should be elected by the workers a whole, to specific terms and be recallable. There is no reason why management and supervisory positions should not be rotated — workers can become managers, and then go back to being workers. More people would become familiar with more roles, be able to assume greater responsibility and be better equipped to participate in strategic decision-making.

Nor is there any reason why people can’t change roles from a direct production job to a support job, which, to be fair, is tacitly acknowledged in the author’s stress on the ability of workers to change job functions within WSDEs. Having two categories of jobs with a crucial decision-making function reserved for one category would seem to defeat the purpose of cooperation — equality. If everybody is necessary to the enterprise, then everybody should be eligible to vote on everything.

Decision-making, however, will not be confined to the walls of the enterprise. Residents and workers should participate in each other’s decisions to the extent that they are affected, Professor Wolff writes. Community representatives should participate in WSDE decision-making, and vice versa, as WSDE members are part of the community.

“In societies where WSDEs are the prevailing organization of production, capitalists will no longer occupy a crucial political position. Capitalists’ use of the surpluses they appropriate will no longer dominate politics. We will no longer have capitalists making political use of the resources typically at their disposal — the surpluses they appropriate. Instead, the community of workers who direct WSDEs will be the prevailing political partner of residence-based governing bodies. …They might finally realize democracy, which under capitalism was never allowed to go beyond very limited electoral functions.” [pages 167-168]

A much higher level of democracy does not mean that a society with an economy based on WSDEs would be a utopia. Professor Wolff is forthright in noting that there will be new problems and contradictions. But with vastly less inequality distorting all areas of society, problems would be more easily tackled. And just as the transcending of earlier systems eliminated many but not all social ills, transcending capitalism will put many problems behind us.

“The slave and feudal systems that proceeded capitalism fostered forms of crime rooted in their mixes of economic risks and rewards. But those systems never displayed the recurring boom-and-bust cycles common to all forms of capitalism. These cycles are the products of capitalism — not of this or that group (the state, criminals, others) functioning within that system and in response to its upswings and downswings. … Overcoming the systemic roots and nature of capitalist crises requires a change in the economic system.” [pages 51-52]

Professor Wolff’s Democracy at Work offers us a well-written practical guide to alternatives to capitalism, one that we can begin to build today with the tools at our disposal. Whatever disagreements a reader may have with this or that detail, Democracy at Work is recommended to anyone seeking a concise study of why we need to bring a better world into being and how we might get there.

* Richard Wolff, Democracy at Work: A Cure for Capitalism [Haymarket Books, Chicago, 2012]

The formation of cooperatives doesn’t by itself eliminate competition

More people are becoming interested in cooperative enterprises as an alternative to the capitalist top-down corporation. In reading about and discussing the topic, I have found an interesting pattern: An assumption that competition will continue but that it will become benign.

It would be unrealistic to forecast that a cooperative economy would be without competition. But competition in what, and in what form? When we think of competition, often the visualization is of two or more companies competing to make a better consumer product. That is visible — the company that produces a shoddy product when another company produces a quality product puts itself at risk of going out of business (at least in theory).

Less visible, because it is abstract unless it is your job that is shipped overseas or eliminated, are the marco-economic results of competition. Among these are increasing downward pressure on wages; the creation of rust belts as industrialists move production to locations with ever cheaper wages; the relentless pressure (most often applied by the financial industry) to reduce costs, often by workforce reductions; the drive to produce ever higher profits, regardless of human cost; and environmental destruction. All these developments arise not because of this or that greedy banker or the personality of this or that industrialist. They arise because they are the inevitable product of market forces.

Market forces are not a “natural” phenomenon, they are the aggregate interests of the most powerful capitalists. The concentration of production in most industries into a handful of giant corporations — an oligopoly — is also the result of capitalist competition. Expand or die is the inexorable law a capitalist lives by: If you don’t get bigger and stronger, your competitor will and put you out of business. As the winners from this ruthless competition grow bigger and more powerful, they have more weight to throw around the political arena, and can (and do) exert decisive influence over the political process. It is in their interest for them to do so — and we shouldn’t expect them to act otherwise.

I have often been struck by a belief I often encounter that presumes that we need only convert business enterprises into cooperatives and capitalist competition will cease. Underlying that assumption, in my opinion, is locating the cause of greed, injustice, inequality and other social ills in the authoritarian, hierarchical structure of the capitalist enterprise. That structure is surely a significant contributing factor. But that shouldn’t obscure the cut-throat nature of unfettered, market-driven competition: The relentless pressure to increase profits, maximize market shares and eliminate competition — on pain of enterprise death for those who don’t do this sufficiently — makes unethical or anti-social business decisions inevitable.

It is not only the direct competition that compels such behavior, it is also the financial industry: Billionaire speculators, institutional investors, hedge funds, investment banks and other financiers are ever ready to apply the whip if profits falter — and can move gigantic sums of money through stock, bond and foreign-exchange markets at the click of a button to punish those who don’t deliver. During periods of economic upswing, wages may rise for a time as unemployment falls. But wage increases eventually eat into profits; falling profits are intolerable and will be punished by financiers. Cuts to wages, whether in givebacks or in the form of layoffs, and the destruction of productive capacity ensues.

Wages — and thus the human beings who work for the wages — are commodities in capitalism, or any system in which distribution is monopolized or largely controlled by capitalist-style market relations. If all enterprises were converted into cooperatives, collectively owned and managed by the full workforce, but capitalist market relations were left intact, the same competitive pressures would exist. There would be much less inequality because, presumably, all workers within a given enterprise would receive the same wage or would have small differentials, and the workers would be sharing in the profits they create rather than have them confiscated by top executives and financiers.

But their own wages would remain a commodity if everything else is a commodity priced by markets. The collective workers would face market pressure to reduce their own wages in order to compete better against their competitors. Some enterprises would become much bigger than others; smaller enterprises would be compelled to sell themselves to larger competitors, consolidating production until an oligarchal situation arose. Some industries would be much bigger than others. As market competition intensified, survival would require more ruthless behavior. In somewhat different form and with somewhat less intensity, the instability and social ills of capitalism would be reproduced.

A cooperative economy, therefore, has to not only be based on enterprises run on cooperative lines, but the cooperatives must cooperate with each other as well. An economy would have to be based on democratic control, with commodity prices negotiated in fair and open talks, and with a rational system of distribution that would be supple enough to respond to changes in consumer demand while not over-producing.

Part of the waste of capitalist production lies in its chaotic, unplanned nature: Production is increased until too much product is produced that can’t be sold; productive capacity is then destroyed (such as shuttering factories) until a shortage arises and a new cycle begins. This is done through uncoordinated, individual decisions based on guesswork. The pressure of competition compels decision-making to be done in secrecy and, additionally, no mechanism exists to judge composite demand. The result is alternating booms and busts, with accompanying human costs.

Democratic planning, from the bottom up, would be necessary to determine need and enable proper distribution. Ideally, there would be many enterprises for most products. Enterprises might work best as small or midsized production units. Here is where competition would still exist and provide a positive, rather than a destructive, role. If there are dozens of cooperatives producing shoes, the consumer would have many choices, and the enterprise that made a poor-quality shoe would have to do better — a producer that makes a product that people don’t want to buy won’t stay in business.

If one cooperative makes an innovation that gives it a higher-quality product, then other cooperatives would naturally copy the innovation. If democratic planning, to throw out a hypothetical example, determines that 1.2 million shoes need to be made because 1.1 million shoes were produced last year and the supply fell a bit short, and there are several shoe makers who make a quality shoe, that increased target can be distributed among them. If limits to capacity are being approached, one or more cooperatives can go to the local community-run and -controlled bank for a loan to expand capacity by making a case that more shoes should be made.

Production in unfettered markets will become production for private profit, not social need, even if that private profit is collective rather than concentrated at the top. Production needs to be oriented toward human need — that is the other half of the equation of cooperative enterprises.

Chicago pushes back against the war on teachers — and neoliberalism

The Chicago teachers returning to work today earned a victory — not for themselves, but for two important ideas. The first is that dignity and security are not unreasonable for those of us who have to go to work every day. The second is that the job of schools is to build the citizens of tomorrow, not line the pockets of corporate executives and investors.

We can’t understand the reasons behind the “war on teachers” without examining both of these ideas.

An additional message from the Chicago Public Schools teachers’ strike is that democracy and community involvement are indispensable. At almost every demonstration the chant “the people united will never be defeated” is heard, and here we have an example where a significant majority at least were united. The corporate executives salivating over their potential profits, the funders of the charter-school movement seeking more takeovers and, most of all, the willful mayor who expected to steamroll over the teachers each had their agenda stalled.

Not that those powerful people were defeated, nor that the teachers won a total victory. The new contract is a negotiated settlement, with both sides getting something. That is what a “negotiation” is — a compromise by two parties. A “negotiation” is not a dictation imposed by the more powerful party, which seems to be a point of confusion for Chicago Mayor Rahm Emanuel. But the very concept of democracy seems to be not well understood by Mayor Emanuel.

Undoubtedly, there was much disappointment on the part of parents that teachers did not call off their strike and return to work on September 17, as was widely anticipated. There was considerable disappointment on the part of the teachers. The principal of democracy was deemed too important to dispense with, and the Chicago teachers’ union deserves praise on this point. The union delegates entrusted with ending the strike believed they should actually read the proposed contract before voting, and that they should discuss the contract with the rank-and-file teachers who will have to live with it. Quelle horreur!

A Chicago teacher, Rita Stephanie, who has contributed daily strike updates to the Kasama Project web site, stressed the democracy of the union:

“In a televised news conference at 6:05 p.m. [union leader Karen] Lewis said that the House of Delegates wanted to exercise their right to review the contract. She said that the union is a democratic organization and that she supported the right of members to review the language of the contract. Schools will not open Monday and members have overwhelmingly decided to continue the strike. When questioned by reporters she said that a key issue was TRUST. Union members do not trust the school board or the mayor to have their interests at heart. This would be an understatement! Union delegates say that their strength lies in the strike.”

The teachers’ union would not have been able to exercise this democratic process if they had not worked with the community ahead of time to explain the stakes, and to prepare parents for the possibility that they would be forced to go on strike. When the inevitable attacks came in the predictable form — “the teachers are greedy” “the teachers only care about getting more of your tax money” — they did not have the usual impact. Mayor Emanuel had clearly expected the community to be on his side; instead the people have been with the teachers. The mayor’s response? Stamp his feet, attack, go to court to force an end to the strike. His reaction says much about the mayor and his complete adoption of corporate ideology. When you give an order, it is to be obeyed!

It wasn’t obeyed — schools are not corporations. Professional educators believe they should have a hand in shaping the education system. Imagine that. Teachers just might know something about education that the hedge-fund managers running television commercials in Chicago don’t. What if people in other professions start getting the idea that they, too, should have a hand in decision-making in the workplace?

Let’s back up here a moment. What do hedge-fund managers have to do with schools? Two hedge-fund managers (who have way more money than the teachers, or you, but likely pay a lower tax rate) run an outfit called “Education Reform Now.” This group, an advocate for charter schools, paid for a series of automated telephone calls to parents during the three-day period in June when the teachers were voting to authorize a strike, and for television commercials attacking the teachers.

Charter schools are the key here. An increasingly stressed component of the neoliberal agenda is privatization of public schools. Public schools are shuttered, and replaced by private charter schools. Sometimes the charter schools are given part of the facilities of a still-existing public school, which is given second-class treatment in its own building. Unionized teachers are fired, and nonunion teachers paid much less are hired in the charter schools. The charter schools are given money diverted from the public schools but without the accountability or requirement to follow existing contracts. Some of the money goes to pay huge salaries to the executives of the charter-school companies and for profits.

The movement for charter schools is not a movement for reforming education, as promoters claim, but rather is naked union-busting. It is a bold attempt to force down wages, parallel with the decline of wages in the private sector.

The hedge-fund managers attacking Chicago teachers used the standard neoliberal line of attack: Those people have something you don’t! That’s unfair! Let’s take it away from them! Chicago teachers are mostly African-American and mostly women. Perhaps Mayor Emanuel and his millionaire backers thought they would be likely to fold. Surely the mayor and his backers, believing their own propaganda, believed they would be easy targets. Down to the similarity of the tactics, their agenda is a straight continuation of the Wisconsin Governor Scott Walker’s offensive to take away collective-bargaining rights from government workers and to demonize them.

If some workers earn a good wage and can look forward to a reasonable pension, shouldn’t the question to be asked be “Why shouldn’t I have that, too?” Shouldn’t the answer be to organize to gain it rather than seek to take something away from somebody else?

The charter-school movement has its eyes set on many cities other than Chicago. In New York, where a billionaire from the financial industry stepped directly into the mayor’s office thanks to his lavish spending, charter schools are heavily promoted. These are promoted as alternatives that spend less and get better results, but that is not so.

Brooke Parker, writing in the Brooklyn community newspaper WG, reports:

“While charter schools receive slightly less per pupil from the city than public schools, the city’s Independent Budget Office concluded that when you factor in that they don’t pay for their use of space, utilities, janitorial services, or school safety agents, charter schools generally spend over $700 more per pupil in public funds each year, and that’s not including the substantial private money they receive. And all those public dollars are spent while charter schools, in general, don’t perform any better than public schools. So much for the idea that charter schools are less wasteful.”

Kicking out experienced teachers and replacing them with freshly minted teachers also doesn’t seem the best strategy for improving classroom performance. But often this is what charter schools do — because they can pay new teachers less than experienced teachers. This is one of the “innovations” adopted from the private sector.

Three sets of billionaires are the primary forces behind charter schools: Microsoft founder Bill Gates, businessman Eli Broad and Wal-Mart heirs the Walton family. Gates become fabulously wealthy through exploiting something he had no hand in creating, the computer, which took off thanks to the government invention of the Internet. Broad first became rich building suburban houses, taking advantage of the many government subsidies that enabled the suburbs. The Waltons benefit from Wal-Mart’s leading role in forcing manufacturers to re-locate to China to meet the company’s standards for low costs.

A Dissent article by Joanne Barkan explained who funds the charter-school movement, then exploded the myth that they perform better:

“Stanford University’s 2009 study of charter schools—the most comprehensive ever done—concluded that 83 percent of them perform either worse or no better than traditional public schools; a 2010 Vanderbilt University study showed definitively that merit pay for teachers does not produce higher test scores for students; a National Research Council report confirmed multiple studies that show standardized test scores do not measure student learning adequately. Gates and Broad helped to shape and fund two of the nation’s most extensive and aggressive school reform programs—in Chicago and New York City—but neither has produced credible improvement in student performance after years of experimentation.”

The rate of poverty, as numerous studies have shown, is the leading indicator of student performance. Gaps in social development and cognitive functions begin before children are old enough to go to school. But to confront the vast inequalities of capitalist societies is verboten — better to blame everything on teachers. And so we come to another component of the corporate charter-school agenda: Judging teachers almost exclusively on standardized tests. Doing so deflects attention from underlying social issues (issues that are much bigger than schools by themselves) and enforces a specific agenda in education: To mold children to be proficient in narrow technical skills without the ability to think originally.

A world of corporate drones. Such a world might be fine for corporate elites wishing for a compliant future workforce, but is no benefit to the students themselves. Teachers in Chicago and elsewhere who push back against heavy reliance on test scores are reasonably protecting themselves against a rigid system that takes no account of social and other issues that are intertwined with student performance, but they are also striking a blow for a more complete, more rounded education — one in which the liberal arts and other topics are employed to teach students how to think rather than imposing a narrow education in which pre-selected answers are simply regurgitated.

It is unconscionable to claim that teachers, or teacher unions, don’t care about students or education. Surely there are scattered individuals who should not be in the classroom — but there is no profession or human endeavor without some people who are poor performers. Such people can be weeded out without tarring entire groups. As Rita Stephanie, the Chicago teacher quoted above, wrote:

“The interests are complex and if the problems of education were easily solved it would have been done already. All morning on the picket line we talked about the problems of poverty. The teachers on my picket line wanted to talk about the big problem of poverty. We still need to teach our babies, but society needs to take responsibility for the problem of poverty.”

Chicago teachers were on the front lines this month: Holding the line against the attacks on public education and the need for a holistic approach on the one hand, and holding the line against the attacks on working people and their ability to earn a good wage and pension on the other hand. A strike, particularly one that is defensive as this one, can’t succeed without significant community support. Even then the odds are often long: industrialists, financiers and the governments over which they have decisive influence possess huge power and a willingness to use it.

There is no choice but to struggle, for there is no other route to a better world. Wars on teachers, wars on women or wars on working people promoted by elite interests should no longer be tolerated. Instead, let’s learn from the experience of the Chicago teachers’ strike to build communities. Democracy is hard work but it is better than bowing and scraping.

Cooperation is not only a good idea, it already works in practice

Cooperation is a fundamental human trait. You may find it bizarre to read a post that begins with such a sentence, but sometimes we do have to point out the obvious.

Competition, we are continually lectured, is the primary driving force animating human beings. It is rarely, if ever, put quite so explicitly, but the prevailing ideology does tell us exactly that. Competition is the fuel of economic growth and progress in a system based on never-ending life-and-death fights to gain dominance at pain of going out of business — so we are told. Competition, conveniently, can be won by only a few heroic figures, who must be given control over other peoples’ lives and rewarded with stratospheric pay.

We lowly employees, who can not comprehend the divine will of the market (which is governed by an invisible hand that only the chosen few of the business elite can see because they possess the magic glasses that see what is otherwise invisible), must sit in awe and gratitude of our capitalist masters. In fact, we should turn over the workings of our entire government to them, and be grateful for their selfless attitude in leaving the business world behind so that they can change the laws to benefit the businesses to which they will return.

Yes, I am going to commit sacrilege here. The world of the preceding two paragraphs, despite their continual propagation, does not have to be so. Places where they aren’t so already exist. Human beings can cooperate with one another (and routinely do — how would a product or service exist if employees did not work together?). The following is by no means a comprehensive list of successful cooperative enterprises, but represent building blocks toward a different way of organization.

Cooperative enterprises, in which all employees share in all the decision-making and manage themselves, are not pie in the sky. They already exist. Cooperatives are distinguished by higher pay than received by employees in traditional businesses, and studies have shown greater levels of job satisfaction — neither is a surprise when large sums of money are not funneled upward and workers have control and decision-making power over their jobs.

The recovered factories of Argentina

Practical experience in Argentina, where cooperatives have existed in a variety of industries since 2001, has provided a demonstration of worker-run enterprises forging strong links with their communities, with mutual benefit to the enterprise and the community that supports the enterprise.*

Solidarity and community instincts have not disappeared under the stress of competition from the capitalism surrounding Argentine cooperatives. A high level of idealism was necessary to initiate the process and in turn the experience has raised consciousness to new levels. After an upsurge in new occupations in 2009 (the latest year for which I can find a reliable figure), the Argentine movement of worker recovery of factories encompassed about 250 enterprises with more than 13,000 workers. The factory takeovers came in the wake of economic collapse a decade ago.

Néstor Kirchner, upon taking office as president early in 2002, suspended Argentina’s foreign-debt payments before agreeing to pay only 30 percent of the crippling debt, an unusual example of a country standing up to the capitalist world’s multi-national financial institutions. But Kirchner and his wife and successor as president, Cristina Fernández, did almost nothing internally to disturb the workings of capitalism — Argentina’s worker-run factories have contended with hostility from domestic political authorities and from corporate power inside and outside the country.

Most of the cooperatives formed in the worker-run factories began with similar stories — owners failing to pay employees, owners stripping the enterprises of assets, owners shutting down plants with no notice and of police using force to expel workers who had occupied plants for the purpose of getting some of the back pay owed to them after production was halted. The cooperatives were formed when workers maintaining their occupations realized that their factory owner did not intend to restart production, and decided to restart production themselves. The employees doing so first had to overcome their own doubts about themselves, but were able to draw on the experience of those who went first and created national organizations to represent the cooperatives and enable coordination among them.

The president of the national coordinating body National Movement of Reclaimed Companies, Eduardo Murúa, explained this process in an interview published in the book Sin Patrón:

“Since the restoration of democracy [after the 1976-1983 military dictatorship], all the laws that have been passed are against workers’ rights. The laws, enacted first by the dictatorship and then by the formal democracy, served to consolidate a global economic model organized according to the [existing capitalist] international division of labor. The changes to the bankruptcy law, for example, had left us without the possibility of severance pay. The reformed law also requires the judge to liquidate a bankrupt company’s assets in 120 days. The only way to reclaim the company is to occupy it and show, first the judge, and then the political class, that we’re not going to leave the factory. … Certainly, if there weren’t so many doubts and fears among the entire working class, there would be many more reclaimed factories. Because of these uncertainties, this process only works in places where there is some level of organization and capable leadership.” [pages 214-215]

The largest of these reclaimed factories is the Zanón factory producing ceramic tiles, which is now known as FaSinPat, a contraction of the Spanish-language words meaning “Factory Without a Boss.” The process started when the original owner, Luis Zanón, stopped paying his employees, who went on strike in response. Zanón received loans from the provincial government to pay back wages, but pocketed the money instead. Finally, the employees went back in, occupied the silent factory, sought and received community support, and decided to restart production themselves in March 2002.

Despite legal obstacles and police harassment, the collective works. In the first four years of worker self-management, the number of employees increased from 300 to 470, wages and factory output increased, and without the speedups and insensitivity to safety imposed by bosses, accident rates were reduced 90 percent. New workers are not hired hands, but become part of the collective. The collective allies itself with the struggle of local Indigenous peoples, who have donated clay from their lands to the factory. The collective also donates tiles to community centers and hospitals and, in return, the nurses’ union donates the services of a nurse during each shift.

The path of the FaSinPat collective was not an easy one — the workers had to physically defend their occupation, with community assistance, more than once and they had to wait eight years before the provincial government passed a law granting the collective legal control of the factory in August 2009. The government also paid off part of the debt incurred by Luis Zanón — much of it owed to the World Bank, which gave a loan of 20 million dollars to Zanón for the construction of the plant, a loan he never paid back. Zanón’s creditors had pushed for the eviction of the collective and foreclosure of the plant during the months leading up to the legislative vote.

The cooperatives operate in a myriad of Argentine industries, including “white collar” businesses. One example is a speciality newspaper covering economic and judicial issues in Córdoba. The newspaper, Comercio y Justcia, was sold by its long-time family owners to a conglomerate during the 1990s wave of corporate consolidation of Argentine media. The new corporate owners hired managers at enormous salaries, stopped paying employee salaries and staged a fake robbery that emptied the office of most of its equipment. The workers brought in their own computers so the newspaper could continue to publish, then went on strike when the new owners failed to pay them for five months.

Finally, the workers went back in to restart the newspaper themselves, making it a going concern after a great struggle. In contrast to other media outlets cutting staff and quality, the Comercio y Justcia collective maintained the size of its staff and its quality, more than doubling circulation in its first year.

In almost all of the Argentine cooperatives everybody earns the same amount, and none hires outside managers — the cooperatives are governed by assemblies of the entire workforce with their decisions carried out by managers who are elected from their own ranks and who serve limited, specified terms. In a separate interview in Sin Patrón, one of the Comercio y Justcia collective members said of the new way of working:

“Inside, we have a setup that goes against the logic of capitalism. A humanized work régime, a production arrangement decided by workers themselves. In relationships outside the institution, we can’t detach ourselves from the economy’s logic, but we give ourselves the luxury of doing work for free and doing what we decide as workers. On the inside the revolution has already happened. And looking externally, our biggest contribution is demonstrating that workers can efficiently run an enterprise.” [page 208]

Not all the Argentines who recovered their abandoned companies initially wanted to form cooperatives — there were those who wished for nationalization. There was no interest on the part of the federal or provincial governments to take over factories, so those workforces that initially sought nationalization had no choice but to adopt the cooperative form. Proponents of nationalization argued that cooperatives would be at the mercy of an intact capitalist system and that the cooperatives would eventually be forced to pay the old owner for the recovered factory, an expense they would be unable to meet. Proponents of cooperatives argued that direct worker takeovers would be faster and more practical — the jobs would be saved faster this way, the aim of the takeovers.

The cooperatives — although many successfully bought their factories from the old owners at discounted prices thanks to strong community support and their perseverance through long legal battles and repeated attempts at physical expulsion — remain small islands in a vast sea of capitalism. They are merely tolerated by an Argentine establishment loath to appear too openly to challenge continuing community support, and they represent an example that capitalists everywhere wish to stamp out. These cooperatives must survive in an economic environment that operates on a very different basis than they do and are at the mercy of the powerful forces unleashed by that environment, including boom/bust economic cycles. But they have survived.

Mondragon, the world’s biggest cooperative

Based in the Basque Country of northern Spain, Mondragon has more than 83,000 jobs among its many businesses. Mondragon produces industrial components and consumer goods, provides construction services, and operates a supermarket chain, a bank and a university. These are not small operations — the cooperative reports annual revenue of nearly 15 billion euros.

New workers become full members after a trial period of six to twelve months. All ownership is in the hands of Mondragon workers; each buys one non-transferable share upon become a member and sells it back to the collective upon leaving or retiring. In addition to the regular wage, members also share in the profits, with a dividend being paid to each out of the surplus the members’ business earns. Thirty to seventy percent of the profits are distributed as dividends, depending on the health of a given business. Profits are also distributed among the individual businesses, set aside for investment and to replenish reserves, and distributed into the overall organization’s internal support fund.

Mondragon’s English-language web site explains the basis of its workers’ renumeration, which are on a very different principle than a capitalist corporation:

“Labour is granted full sovereignty in the organisation of the co-operative enterprise, the wealth created is distributed in terms of the labour provided and there is a firm commitment to the creation of new jobs. As far as the wealth generated by the co-operative is concerned, this is distributed among the members in proportion to their labour and not on the basis of their holding in Share Capital. The pay policy of Mondragon’s co-operatives takes its inspiration from principles of Solidarity, which are expressed through sufficient remuneration for labour on the basis of solidarity.”

All decisions on working hours, pay, allowable pay differentials, strategic decisions and management are made by a collective vote off all members. The supreme body of Mondragon is the general assembly, in which all members participate and vote on the basis of “one member, one vote.” The general assembly elects the governing council, which represents and governs the cooperative — and is accountable to the general assembly. The governing council in turn appoints the executive management team. Management does not act independently, however — a separate cooperative congress, consisting of 650 members delegated by individual businesses, is tasked with “establish[ing] the strategic criteria by which the Corporation is to be administered.”

Members are also represented in all internal bodies by the social council, and an elected monitoring commission ensures compliance with accounting principles.

Decision-making power, however, resides with the full membership. According to Mondragon:

“The first and foremost body of participation is the General Assembly, in which rests the full sovereignty of the co-operative. Its most important powers include: appointing and revoking members of the Governing Council and Accounts Auditors by means of a secret vote; examining company management, approving the annual accounts and the distribution of surplus and apportioning of losses; approving the general policies and strategies of the co-operative; approving increases in share capital, the rate of interest to be accrued by capital contributions and the joining fees for new members; modifying the Company Statutes and approving everything implied by a substantial modification in the economic, organisational or functional structure of the co-operative.”

Management comes from within; it is not hired from outside. And there are no layoffs — if a business experiences a slowdown, some of its members are transferred to another business that has need of more workers. Mondragon, however egalitarian its internal structure, does have to compete in a capitalist environment against capitalist enterprises, and so continues to expand into new ventures and to, outside of Spain, buy companies. The latter are bought with an eye toward converting them into cooperatives and making the bought companies’ personnel worker/owners equal to those in established businesses, but has not succeeded in converting all.

Nonetheless, Mondragon’s workers don’t face the continual prospect of being laid off every time there is a slight dip in profits. Georgia Kelly and Shaula Massena, writing in Yes magazine, reported on what happened when one of the Mondragon businesses experienced difficult times:

“The worker/owners and the managers met to review their options. After three days of meetings, the worker/owners agreed that 20 percent of the workforce would leave their jobs for a year, during which they would continue to receive 80 percent of their pay and, if they wished, free training for other work. This group would be chosen by lottery, and if the company was still in trouble a year later, the first group would return to work and a second would take a year off. The result? The solution worked and the company thrives to this day.”

Nobody votes to send their jobs to a low-wage haven in another country.

The “Cleveland model” starts with anchors

The Evergreen Cooperative Initiative — often referred to as the “Cleveland model” — seeks to strengthen a local community from the ground up through the creation of cooperative enterprises anchored to large institutions. Based on the east side of Cleveland, Ohio – a city that has lost half of its population since 1960 — Evergreen creates worker-owned small businesses that provide products and services to established “anchor” institutions in the immediate area (such as hospitals and universities) and other customers.

The Evergreen Cooperative Corporation, which describes itself as a holding company “leading this initiative,” says on its web site:

“The Evergreen Cooperative Initiative is based on a vision of ‘community wealth building.’ Community wealth strategies aim at improving the ability of communities and individuals to increase asset ownership, anchor jobs locally, strengthen the municipal tax base, prevent financial resources from ‘leaking out’ of the area, and ensure local economic stability.

The strategic pillars on which the Initiative is built are: (1) leveraging a portion of the multi-billion dollar annual business expenditures of anchor institutions into the surrounding neighborhoods; (2) establishing a robust network of Evergreen Cooperative enterprises based on community wealth building and ownership models designed to service these institutional needs; (3) building on the growing momentum to create environmentally sustainable energy and green collar jobs (and, concurrently, support area anchor institutions in achieving their own environmental goals to shrink their carbon footprints); (4) linking the entire effort to expanding sectors of the economy (e.g., health care, our aging population, local food, and sustainable energy), many of which are recipients of large-scale public investment; and (5) developing the financing and management capacities that can take this effort to scale (that is, to move beyond a few boutique projects or models to have significant municipal impact).”

Evergreen hopes to create as many as ten more cooperatives in the next three to five years, and ultimately create 5,000 cooperative jobs during the next decade. In a city the size of Cleveland, that is a small number, but it represents a model that others can replicate. Success in this initiative would also demonstrate a different, more humane model than that of modern-day capitalism, with its authoritarian top-down structures and vastly unequal levels of compensation and power.

Successful local businesses such as these would also stabilize neighborhoods that suffer when jobs in manufacturing and older industries are moved away.

Cooperative businesses include Evergreen Laundry, which provides industrial-scale laundry services; Evergreen Energy Solutions, which designs and installs solar panels and provides energy-efficiency services; and Green City Growers Cooperative, which operates a hydroponic food-producing greenhouse covering more than three acres (more than one hectare). Local institutions that contract for services from the cooperatives include Case Western Reserve University, the University Hospitals system and the Cleveland Clinic (a local medical center and research facility).

By using local institutions that will not be moving as anchors, the Cleveland model seeks to create worker-owned enterprises that will also stay in the community:

“Rather than a trickle down strategy, it focuses on economic inclusion and building a local economy from the ground up; rather than offering public subsidy to induce corporations to bring what are often low-wage jobs into the city, the Evergreen strategy is catalyzing new businesses that are owned by their employees; rather than concentrate on workforce training for employment opportunities that are largely unavailable to low-skill and low-income workers, the Evergreen Initiative first creates the jobs, and then recruits and trains local residents to take them.”

The Cleveland Foundation, a local funding organization, provided capital, guaranteed a bank loan and conducted talks with executives of the anchor institutions to start the initiative. Each individual business received a loan that was subsidized with federal tax credits, and low-interest funding was also provided by the U.S. Department of Housing and Urban Development. Using its seed capital, Evergreen provides long-term financing to start cooperative businesses and to provide them with technical support and training.

Similar to Mondragon, on which Evergreen is modeled, employees work a six-month probationary period, then begin to buy into the company through payroll deductions over three years. Evergreen estimates that its worker-owners will build an equity stake of $65,000 after eight years of working at an Evergreen cooperative in a section of Cleveland in which the median annual income is $18,500. When worker-owners retire or leave the company, they relinquish their ownership share and the value of their capital account is returned to them, as their equity stake in the company. Workers also share in the profits generated.

Cooperatives as yet are too small to represent anything other than the smallest crack in the edifice of capitalism. But the bricks of today will be used to build the world of tomorrow. These models could spark similar enterprises or cooperatives on different models — and demonstrate that cooperation can become the standard in a better world.

* This discussion of Argentina is based on an excerpt from my forthcoming book It’s Not Over: Lessons from the Socialist Experiment. Among the sources used here are lavaca collective, Sin Patrón [Haymarket, 2007]; Peter Elliot, “Zanon Workers in Argentina Still Waiting for Security,” posted June 27, 2006, on the Upside Down World web site, upsidedownworld.org; Ginger S. Gentile, “Argentine Lessons,” posted March 8, 2004, on the ZNet web site, http://www.zmag.org; Marie Trigona, “Argentine Factory Wins Legal Battle: FaSinPat Zanon Belongs to the People,” posted August 14, 2009, on the Upside Down World web site

There is no democracy without economic democracy

By Pete Dolack

When we talk about “democracy,” inevitably, it seems, the discussion is about political democracy. Rarely is there discussion about economic democracy. Democracy stops at the entrance to the workplace.

At the workplace, you have no say in what is produced, how it is produced or much of anything beyond what you will be eating for lunch. You surely did not get a vote when the corporation decided to drop a large sum of money on a candidate for public office whose positions you detest even though that donation came out of the profits created by the work you and your co-workers performed. As large businesses become ever larger and accumulate ever more money — and fewer survive as competition causes some of the previous winners in competition to go under or merge — their power grows ever stronger.

That power enables decisive influence over the political process. So we have formal democracy — political office-holders submit to elections and abide by the results. But choosing between two bad candidates, and selecting the one not quite as bad as the other — both completely beholden to corporate interests and unable to compete without truckloads of their money — could qualify as a living democratic system only under the most sterile and narrowly formulaic definition.

Inseparable from a vigorous and real political democracy is economic democracy. Economic democracy is impossible without production being oriented toward human, community and social need rather than private accumulation of capital. And economic democracy, in turn, requires an economy that is based on, and rewards, cooperation rather than competition. An economy in which enterprises are cooperative ventures rather than top-down authoritarian institutions.

Economic democracy means that everybody who contributes to production earns a share of the proceeds — in wages and whatever other form is appropriate — and everybody is entitled to have a say in what is produced, how it is produced and how it is distributed, and that these collective decisions are made in the context of the broader community and in quantities sufficient to meet needs, and that pricing and other decisions are not made outside the community or without input from suppliers, distributors and buyers.

Nobody is entitled to take disproportionately large shares off the top because they are in a power position. Every person who reaches retirement age is entitled to a pension that can be lived on in dignity. Disabled people who are unable to work are treated with dignity and supported with state assistance; disabled people who are able to work can do so. Quality health care, food, shelter and education are human rights. Artistic expression and all other human endeavors are encouraged, and — because nobody will have to work excessive hours except those who freely volunteer for the extra pay — everybody will have sufficient time and rest to pursue their interests and hobbies.

In such a world, there would not be extreme wealth and the power that wealth concentrates — political opinion-making would not be dominated by numerically tiny but dominant capitalists perpetrating their rule. Without extreme wealth, there would be no widespread poverty — large groups of people would not have their living standard driven as low as possible to support the accumulation of a few.

A critical component of the capitalist ideology that is so pervasive is that only a tiny handful of entrepreneurial geniuses can master business, and so must make all decisions and therefore reap massively disproportionate rewards. That is heavily stressed because it contradicts our everyday experience at the workplace.

In the modern capitalist enterprise, most of us complain about management, who so often have no experience in the lower levels and don’t really understand the nuts and bolts of how the business works. Top managers collect salaries tens or hundreds or thousands of times larger than yours while making decisions that make no sense and without consulting the employees who actually do the work and who could provide insight if only they were asked. Most of us have been in at least one job like this; for many of us it might even be the norm.

Why wouldn’t we want to take some responsibility for making decisions? Line workers could develop into managers, or perhaps different people would rotate in management positions for set periods, enabling many people to gain administrative experience. Management could be promoted from within, elected from the ranks of the full workforce by the workforce. The cooperative enterprise’s workforce would retain the right to remove managers who deviate from carrying out decisions made by the collective. (Just as managers today are answerable to owners and boards of directors.) Different enterprises would surely develop different cultures.

With no more rigid hierarchy, no more capitalists to rake in massive amounts of money, a business enterprise can be run on a democratic basis, without internal exploitation of any of its staff. Yet this is not the whole story: In what sort of economic system would such enterprises operate?

In a cooperative model, all strategic enterprise decisions would be made by a vote of all the workers. Meetings to discuss, and vote on, the enterprise’s business would be a part of the regular workweek. All ownership would stay within the workforce — each would own one share and relinquish it upon leaving or retiring. Shares could not be transferred or sold, except to the collective.

Without stratospheric executive pay or financiers getting fat by skimming off a large share of the pie, less profits would be necessary, leading to reduced work hours, higher pay and more left over for investment and taxes paid to the community to support schools and social services.

The internal workings of capitalism inevitably result in the cut-throat competition and inequalities that are so familiar. If collective enterprises, no matter how democratically they are run internally, compete with each other in unfettered markets, market forces would require the collectives to become more “efficient” — they would have to ruthlessly reduce costs (including their own wages) and aggressively expand the market for their products.*

Failure to do so would mean not surviving in competition with the enterprises who do adapt themselves to market conditions. The accumulation of capital becomes paramount under unfettered market forces due to the need to expand — failing to expand risks being driven out of business. Because all materials and finished products would remain commodities subject to price volatility in this scenario, the cooperative workers’ own labor would also become a commodity — in essence, they would “become their own capitalists.”

Cooperation and self-management within an enterprise — without owners, executives or speculators grabbing the profits for themselves — would mean that material gains would be distributed fairly among the workforce, certainly a far better result and itself a harbinger of a much more rational societal distribution of income. Although the hypothetical example of cooperatives competing fiercely against one another would be an odd hybrid because it would be based simultaneously on cooperation and competition, the distortions of capitalism would nonetheless be reproduced, albeit less severely.

Uncontrolled competition would lead to large disparities of income and power. An aggressive collectively run enterprise theoretically could gain control of the market for a particular product in high demand, resulting in the enterprise wresting for itself a commanding position. Perhaps several aggressive enterprises would do this, and we would once again find ourselves in a society with a power imbalance — not nearly the towering imbalance of present-day capitalism, but nonetheless the goal of creating a fully democratic society with no permanent sources of power would have been thwarted. In this hypothetical society, there would still be a market that operated on a capitalist basis and therefore capital would tip the balance of power to those who accumulated it.

In any country in which a model of worker cooperation or self-management (in which enterprises are run collectively and with an eye on benefitting the community) is the predominant model, there would need to be regulations to augment good will. Constitutional guarantees would be necessary as well. Some industries are simply much larger than others. In a complex, industrialized society, some enterprises are going to be much larger than others. Minimizing the problems that would derive from size imbalances would be a constant concern.

Furthermore, if enterprises are run on a cooperative basis, then it is only logical that relations among enterprises should also be run on a cooperative basis. An alternative to capitalist markets would have to be devised — such an alternative would have to be based on local input with all interested parties involved. Such an alternative would have to be able to determine demand, ensure sufficient supply, allow for fair pricing throughout the supply chain and be flexible enough to enable changes in the conditions of any factor, or multiple factors, to be accounted for in a reasonably timely and appropriate fashion.

Central planning in a hierarchal command structure with little or no local input proved to not be a long-term viable alternative system. Nor is tight regulation a solution on its own. Regulators, similar to central planners, can never possess sufficient knowledge to adequately perform their job and local enterprises can use their special knowledge to give themselves an advantage rather than share that knowledge with regulators.

Responsibility, then, would have to be tied to overall society. Negotiations among suppliers and buyers to determine prices, to determine distribution and a host of other issues would be necessary. Such negotiations are already common in certain industries; for example in the chemical industry, where companies negotiate commodity prices on a monthly or quarterly basis. Those are competitive negotiations in which the dominant position oscillates between buyer and supplier, resulting in dramatic price changes.

In a cooperative economy, negotiations would be done in a far more cooperative manner, with a wider group participating in the discussions. In this model, prices of raw materials, component parts, semifinished goods, finished goods, consumer products and producer products such as machinery would be negotiated up and down the supply chain, leading to an rationalization of prices — markups to create artificially high profits or pricing below cost to undercut competitors would be unsustainable in a system where prices are negotiated, pricing information is widely available and all enterprise financial information is public.

These would have to be fair negotiations — prices throughout the supply chain would have to be set with an eye on rational economics. Industry facilitators to assist negotiations and/or a government arbitration board to make decisions when parties are unable to agree to terms might be necessary. Community input would also be desirable, in the industries in which a given community is directly involved and for retail prices of consumer goods. It may be desirable to include these community interests in pricing negotiations directly.

As more people take on more responsibility, more will gain the experience of fair negotiations, enabling more to peer over the shoulders of those involved in these decisions. In turn, more experience means more people within the community who can shoulder responsibility.

Although regulation, as noted above, is not in itself a solution, that is not a suggestion that regulation should be done away with. One method of using regulation to ensure socially positive economic activity might be a system of certification. Enterprises would be responsible for investment, production and financial decisions, but might be required to demonstrate full compliance with a range of standards on issues such as equal opportunity, workers’ rights, health and safety, environmental protection and consumer protection. Enterprises could be required to be certified on all relevant issues before conducting business, and perhaps be re-certified at specified intervals.**

In a cooperative economy, it is possible — and perhaps likely — that certain critical industries and services would remain in state hands (but fully subject to public accountability). Public transportation systems and water supply might be two examples of these types. Employees in large enterprises of these types would have the same dual role of managing the enterprise collectively at the same time they remain workers. It is not impossible that biases or favoritism could slowly arise in such enterprises; a union would provide another source of protection that could defend a worker as an individual when necessary.

Workers in enterprises that are collectively owned, since they would be owners and not simply managers, might find less ambiguity between their two roles, as long as strategic decisions are made collectively. Still, it may be that there remains a place for trade unions even in these types of enterprises, or it could be that unionization is simply a social value and all members of the enterprise join or form a union for reasons of social solidarity or to provide another check against any centralizing tendencies emerging within the enterprise or within government.

A system of democratic control and social accountability would require open information. Records and accounts of all enterprises and major production units of enterprises would have to be made available to all other parties to negotiations in order for the fairest deals to be reached and to prevent attempts to unfairly benefit at the expense of suppliers or customers. Social-justice organizations — such as those upholding civil rights, consumer rights or the environment — should also have a role, perhaps in enterprise negotiations when appropriate, but more likely in helping to set social goals, in monitoring compliance with standards and possibly being the bodies that issue certifications.***

Some amount of planning and coordination would be necessary as part of the process of determining raw materials needs and ensuring that those needs are met. Any planning committee would have to be democratically controlled and have wide social representation to oversee production and to assist in the determination of investment needs. Planning would be bottom-up and democratic, based on the best estimates of aggregate demand, and not top-down and authoritarian. Planning would provide a guide, not a hard numerical total.

Investment would need to go to where it is needed, a determination made with as many inputs as possible, but because of its importance finance and banking is one area that would have to be in state (or local community) hands (subject to full public accountability) and not in collectives. Financial speculation must be definitively ended. Enterprises seeking loans to finance expansions or other projects will have to prove their case, but should have access to investment funds if a body of decision-makers, which like all other bodies would be as inclusive as possible, agrees that the project is socially useful or necessary.

Government infrastructure projects should be subject to the same parameters as enterprises, with the added proviso that the people in the affected area have the right to make their voices heard in meaningful ways on local political bodies and on any other appropriate public committees. No private developer wielding power through vast accumulations of money will be able to destroy forests or neighborhoods to build a project designed for the developer to reap profits while the community is degraded. Development would be controlled through democratic processes at local levels, and regional or national infrastructure projects should require input from local bodies representing all affected areas.

An unprecedented level of democracy would be possible in a cooperative economy because the power of capital would be ­broken. Social constraints ensuring responsibility to the larger community would be required to prevent the accumulation of capital that translates into power, although such tendencies would be countered by a system that rewards cooperation rather than greed.

The society that has been sketched out in these very broad strokes is a society in which working people — the overwhelming majority of society — have taken control over their lives. The (ex-)capitalists are just as free to go to work as everybody else. Surely some, those with expertise and an ability to work well with others, would be among those cooperative members elected into administrative positions; regardless, they would have to become regular cooperative workers, contributing to the production of a quality product or service and having their say equal to all others who do the work.

Society as a whole benefits when everybody is entitled to contribute, and the more who do so the more likely it is that the right solution to a problem will be found. Someone who would not have been able to make a social or artistic contribution will be able to do so, enriching society. That does not mean that all ideas are equal, or good, or that all ideas are entitled to equal time. It does mean that ideas intended to better society or to advance the greater social good can receive a hearing, rather than the privileged so permeating society with an ideology that benefits themselves that other ideas are dismissed at the start.

These are not steps that capitalists would willingly take. Bringing about such a world would mean an enormous amount of organization and struggle, regardless of the methodology used to bringing a end to capitalist rule. It would be necessary to write new constitutions codifying the new society’s changes, locking advances and rights into formal law while preventing centralization of power; nonetheless, without the assumption of responsibility and participation, democracy will inevitably erode.

Freedom and democracy are not gifts handed down from above, and never have been — they are goals that are won through struggle and determination, through a synthesis of theory and practice.

* This and the following paragraph draws upon David McNally, Against the Market [Verso, 1993]; Bertell Ollman, “Market Mystification in Capitalist and Market Socialist Societies,” Socialism and Democracy, Fall 1997
** This paragraph draws upon Diane Elson, “Socializing Markets, Not Market Socialism,” The Socialist Register, 2000
*** This and the following paragraph draws upon “Socializing Markets, Not Market Socialism”; Pat Devine, “Self-Governing Socialism,” anthologized in William K. Tabb (ed.), The Future of Socialism: Perspectives from the Left [Monthly Review Press, 1990]

• Next week, an examination of the workings of real-life cooperative enterprises.

Wisconsin’s recall election proves no substitute for a social movement

By Pete Dolack

Walking home on election night in 2008, my partner and I waded into a street celebration. Young people, primarily, had taken over an entire block to joyously celebrate Barack Obama’s trouncing of John McCain. Veteran activists that we are, we talked to many of the celebrants, cautioning them that the work of progressive change had only begun: If there is no strong pressure from President Obama’s supporters, he would be taken off the hook and feel himself free to not do what he said he would do.

Neither of us believed the president-elect would follow through on most of his campaign platform, and the fact that the strong anti-war movement that mushroomed during the Bush II administration had been silenced by United for Peace and Justice’s deft channeling of it into the John Kerry presidential campaign and its unwillingness to work with any coalitions to its Left should not have been far from activist minds. The hopes of Obama voters for an end to wars waged for imperialist plunder and for meaningful “change” soon met the traditional graveyard of U.S. social movements, the Democratic Party.

And so it was in Wisconsin last week. Yet again, an energetic, grassroots movement, motivated by a sense of urgency, was diluted, rendered “respectable” and converted by political and union leaders into an election campaign. And thereby lost their biggest battle. Are they to lose the war, too?

Before we tackle that question, let’s analyze the battle. Given the legitimate questioning of electronic voting machines that do not print records that can confirm the results, it is understandable that some question who really won the Wisconsin recall vote. But it is necessary to point out that the 53 to 47 percent victory of Scott Walker over Tom Barrett, although wider than expected, does fall within the margin of error of the many polls that consistently had Walker ahead. We should accept the result as legitimate, and analyze seriously a bitter defeat for all working people.

Union leaders’ fear of Madison’s energetic resistance

One of the groups critical to the uprising in Madison, the Wisconsin state capital, were graduate students organized into the Teachers Assistants’ Association. The TAA is centered on the University of Wisconsin’s main campus, located blocks from the Wisconsin capitol building. Already anticipating cuts to the university system, the TAA had begun mobilizing for a February 2011 protest. When details of Governor Walker’s draconian program of deep cuts to education and social programs coupled with union-busting measures became known, the sense of urgency increased.

Mike Ludwig, writing in Truthout, has described the birth of a movement that quickly had the world’s eyes on it:

“A public hearing on the legislation was scheduled the next day and the TAA organized a massive turnout. At such hearings, each member of the public is given up to two minutes to speak, and thanks to the tireless TAA and allied groups, a continuous stream of testimonies prevented the bill from going up to a vote. It was the birth of an occupation that would take over the Capitol and stall Walker’s union-busting bill for more than three weeks.”

Teaching assistants and teachers came to that first legislative hearing prepared to stay overnight. An early attempt to evict the Capitol occupiers backfired, solidifying their public support. Demonstrations in numbers that sometimes exceeded 100,000 outside the capitol building were regular occurrences. Support for the capitol occupiers was exemplified in a continual stream of well-wishers from outside Madison phoning in pizza orders to be delivered to the occupiers. Crowds lined the streets of Madison when a procession of farmers riding tractors drove down one of the city’s main streets to the capitol. African-American and Hispanic high school students from Wisconsin’s biggest city, Milwaukee, and people from small towns across the state were on board.

Sadly — but not surprisingly — union leaders saw this inspiring solidarity as a threat to be contained.

Talk of a general strike was in the air — something that has not happened in the United States since the 1930s. Although some organizers believed that there was too little infrastructure in place for a general strike to be realistic at the time, there were other steps that could have been taken to ratchet up the pressure on Governor Walker and his Big Business funders.

Matthew Rothschild of the Madison-based monthly magazine The Progressive, who participated in many of these events, said the co-optation of the movement began early:

“Actually, it began to disintegrate the moment the leaders (and who were they, exactly?) decided to pour everything into the Democratic Party channels rather than explore the full potential of the power that was latent but present in the streets back in February and March of 2011. … Procedurally, decisions were made (again, who made them?) in a very undemocratic way. Here we had 100,000 people storming the square but there was no effort to include them in any meaningful — or even symbolic — decision-making process. … We gathered at noon every day, we gathered every night, and we massed on the weekends, but then the decision was made (by whom?) to stop marching and essentially to go back to our home districts and throw all our energies into recalling state senators. I remember being at a protest and being told to do so from the podium.”

Local activist Allen Ruff, quoted in a Truthout analysis written by Arun Gupta and Steve Horn, confirmed that state-level Democrats actively demobilized the movement:

“One got up in the middle of the [capitol building’s] Rotunda when there were a few thousand people present and asked them to walk out to show we are willing to compromise and around 1,200 people left the Capitol with him. At the last big rally in March, with more than 200,000 people present, Democratic [state] Senator Jon Erpenbach, said ‘I don’t want to see you people back here. Go back to your home communities and work on the recall.’ ”

Briefly, the intensity of the movement had driven Wisconsin Democrats to take their lead from the masses of people in the streets; the party’s state senators fled the state in an ultimately failed attempt to block a vote on Governor Walker’s bills. But soon enough, Democratic Party and union leaders asserted leadership, and steered the movement’s energy into the usual directions. People deferred to those party and union leaders, who were afraid of the power of people on display, afraid of a movement that had blossomed out of their control and afraid that they would not look “respectable” in the eyes of establishment power brokers and the corporate mass media. Union leaders, once again, mobilized their memberships to elect Democrats without asking for anything ahead of time.

That channeling involved not only tactics, but message. The early message of linking fightbacks against the entire panoply of neoliberal attacks became narrowed into messages tailored to appear “safe” to Wisconsin’s suburban middle class.

Bruce A. Dixon, writing for the Black Agenda Report, wrote:

“When would-be movements sideline the youthful risk-taking initiative and egalitarian core values that might have sustained them to become political campaigns, they generally don’t even run good campaigns. The crowds on the sidewalks and parking lots in Madison were conducting anti-racism seminars and study groups. But the electoral campaign the whole thing was turned into, even though they had a whole year to plan, neglected to do the labor-intensive ground game of massive voter registration in poor and minority communities. They spent their relatively scarce dollars on media instead, and pursued the easy consultant-class strategy of pursuing the “frequent voters” alone. They didn’t talk about the poor and renters, of which there are many in Milwaukee. They only talked about the middle class. They didn’t talk much about mass incarceration either, even though Wisconsin and Milwaukee consistently have the highest rates of Black imprisonment in the U.S. … They came up with a black candidate for lieutenant governor. But mostly they went from hundreds of thousands of people shivering in the cold, standing outside the people-proof, democracy-proof cages of elite consensus and two-party politics and beginning to feel their own power to decide what to do next to folks campaigning for the candidate and the slate that sucked less.”

The slate that “sucked less” and its union backers may have been eager to “compromise,” but the billionaire funders opposed to them were not.

A money deficit, yes, but an uninspired recall campaign

As a matter of strategy, organizers of the signature-gathering campaign to get the recall vote on to the ballot intentionally avoided naming a candidate. Brendan Fischer, writing in AlterNet a month before the election, reported:

“Their strategy was to make it clear that signing a petition was a choice to recall the governor, rather than a vote in favor of any particular challenger. But that move left Walker opponents without a candidate when signatures were handed in on January 16.”

That decision gave Governor Walker a huge head start. The unions’ preferred candidate lost in a primary to Milwaukee Mayor Tom Barrett, whom the governor defeated in 2010. By the time Mayor Barrett began raising money, Governor Walker had already spent 20 million dollars, according to Mr. Fischer. The challenger had only a month to make his case, but although the recall election inevitably was based on the personality of the governor, Mayor Barrett had not only already been defeated a year and a half earlier, he stood for “austerity lite” instead of providing a clean alternative.

During his 2010 gubernatorial campaign, the centerpiece of Mayor Barrett’s campaign was a 67-page document called “Put Madison on a Diet.” He advocated layoffs, cuts to benefits and cuts to wages as the main routes to trimming more than one billion dollars in state spending per year. This time around, he avoided drawing attention to such plans, but also avoided saying anything of substance. In a June 2, 2012, commentary published in the Milwaukee Journal-Sentinel, he offered platitudes but no concrete programs. Instead he offered a general critique of Governor Walker and issued bland declarations such as “My priority is Wisconsin.” Had somebody though his priority Saskatchewan?

He did, however, offer a hint of his previous program in a debate when he said, “The real test of leadership is whether you can say no to your friends.” That, perhaps, was less than inspiring to those whom he needed to get to the voting booth.

Whatever else can be said of the Republican Party, it does not boast of “standing up” against its base. But nor does the Democratic Party wish to offend its corporate benefactors, without whom it could not survive. We square the circle here: Mass movements are the only possible alternative to corporate power and money (especially as that money and power holds a tight grip on both major parties), but such movements are precisely what Democrats fear most. Union leaderships have become so removed from their rank-and-file members and so entangled with party politics that they are unable to critique the dead end of giving support to Democrats with no demands, hoping that some crumbs will fall their way.

When you guarantee unconditional support, when you keep your mouth shut when you are forgotten after the election, when you desperately suppress any independent mass movement, when you are so comfortable in your bubble that you can’t conceive of doing anything different, when you are unable to differentiate between a crumb and a loaf, you will lose. And you will keep losing.

Union households who voted for attacks on themselves

An analysis of the recall vote is not complete without examining the eyebrow-raising exit-poll finding that 38 percent of union-household members voted for Governor Walker. In 2010, he earned 37 percent of that vote — no substantial change.

More than one-third endorsed a direct assault on their ability to maintain their standard of living. How do we account for that?

In part, answering that question is partly dependent on knowing the breakdown of those voters between public-sector and private-sector union households, a breakdown that does not appear in the results of the exit poll conducted by Edison Research. Governor Walker generally directed his anti-union rhetoric at government workers, although the fierce attack on public-sector unions are an opening gambit — corporate antipathy toward unions does not differentiate. Such attacks are the tip of a well-honed spear aimed at breaking down solidarity among working people.

Capitalist ideology furiously promotes individuality in an effort to atomize society and to justify extraordinary disparities in wealth. We are constantly bombarded with messages that declare you, too, could be rich if only you worked as hard as the chief executive officer does. Many CEOs undoubtedly work hard, but 340 times harder than the average worker? The reality is that only a handful can be rich, because being rich means accumulating money and capital through paying employees much less than the value of what they produce. Therefore, most people are going to struggle economically. How can that be if you work hard every day?

Scapegoats are provided as the answer — not that the is system stacked against you and always will be, nor is the answer that the capitalism system is undergoing a serious structural crisis that is the logical outcome of its highly competitive nature and need for ever more accumulation. A favorite scapegoat are always a society’s minorities or immigrants, and when that line loses effectiveness, the scapegoat becomes public-sector workers. Thus we have the sad spectacle of the current Big Business-led war on teachers, waged across the United States. Government workers in general are demonized as lazy and the recipients of unwarranted largesse.

Another critical strand of capitalist ideology is to foster jealousy. This is a crucial piece of ideological campaigns, in part to create atomization of society (crucial to blocking ideas of solidarity and common economic interests from taking root) but also to facilitate the scapegoating. Carefully targeted, the jealousy is never against the executive or speculator who makes millions of dollars off other people’s hard work, but rather the jealousy is carefully fanned against other working people who have something somebody else does not.

Because government workers — and unions — were the designated scapegoats, their pensions became easy targets. Republican Party operatives went to rural counties and made sure to play up the fact that most people no longer have pensions, while government workers do. Mike McCabe, the executive director of the watchdog group Wisconsin Democracy Campaign, argues that Wisconsin Republicans have forged a “rich-poor alliance” of suburban and rural areas:

“Republicans ask people in places like [rural] Clark County if they have pensions, and the answer is invariably no. ‘Well, you are paying for theirs,’ they tell them. ‘Do you have health insurance? No. Well, you are paying for theirs. Are you getting pay raises? No. Well, you are paying for theirs.’ For years now Democrats have not plausibly made the case that they will deliver better health or retirement security or higher pay to all. Only the state’s few government workers have so benefited from the Democrats’ toil.”

Exit polling seems to back up these claims. Residents of cities with at least 50,000 people voted by a close to 2-to-1 margin in favor of Mayor Barrett, but all other areas voted by wide margins for Governor Walker.

Notice, however, how the question is framed by conservatives: “Why does someone have something you don’t have” (a pension), instead of “Why do you not have something that you should be entitled to but don’t have.” Once the question is framed that way, and anti-government rhetoric is wrapped around it, then it is a short path to making pensions indistinguishable from excessive government spending.

An analysis in the Wisconsin State Journal newspaper contained a noteworthy quotation from the district attorney and Republican Party chairman (the same person holds both posts) of another rural county, Green County. This official had his district-attorney pay cut but, considering his other post, not surprisingly backed Governor Walker. “I was also able to see the other side of the equation. Taxpayers, businesspeople and retired citizens had just as strong feelings about the necessity to control state spending and require state employees to ‘pay their fair share,’ ” the official said.

Once again: Why do those people have something I don’t when I work hard? Nor can such sentiments simply be waved off by virtue of party — one-sixth of Governor Walker’s voters intend to vote for President Obama, according to the exit poll.

Capitalist ideology permeates every every institution. Not simply the corporate mass media, but churches, schools, think tanks, militaries and a host of others incessantly carry similar messages: We “deserve” what we get. The generally unspoken but nonetheless inferred coda to that message is that if what we “deserve”  is not as much as we need in a time of scarcity and cutbacks, then then someone else must not be deserving, either, so we should take away from them. Take it away from them, not have it for ourselves and our neighbors, too.

If you’ve heard this before, you are not hallucinating

There is nothing unique about Wisconsin. Or about the United States. Government workers are the brunt of attacks in Greece. If it is true (I don’t know myself) that the Greek government is over-staffed, government workers there nonetheless have to pay their taxes because their employer certainly isn’t going to fail to collect them, while it is Greek corporations, the wealthy and even some middle class private-sector workers who don’t pay taxes, a significant factor in Greece’s financial crisis.

Voters in two California cities, San Diego and San Jose, one a conservative military town and the other a liberal Silicon Valley town, voted last week by 2-to-1 margins to cut the pensions of public workers despite the fact that those pensions are subject to collective bargaining. In New York, there has been the odd revelation that leaders of a group of construction-worker unions donated half a million dollars to the “Committee to Save New York.” That is odd, because the committee has been bankrolled by millions of dollars by corporate donors and is the leading ally of Governor Andrew Cuomo’s drive to impose layoffs, pay cuts and pension reductions on government workers. That drive continues despite the government workers already agreeing to cuts.

The capitalists pushing the anti-union agenda must be delighted to have unions of private-sector workers joining their attacks on public-sector workers. Talk about short-sighted: Private-sector unions will become targets if public-sector unions are disabled, and construction unions are already routinely scapegoated as responsible for high construction costs. Never mind that real estate is a fantastically profitable business for developers and landlords in and around New York City, where most of the population of New York state resides. Non-union labor has become a more common sight on city construction jobs, but you should not hold your breath waiting for rents or sale prices to be reduced on account of resulting lower labor costs.

All these agendas do not fall from the sky. A handful of billionaires bankrolled Governor Walker’s victories in Wisconsin, and there are plenty of other capitalists who are happy to free-ride on their largesse. Austerity may come in several flavors, but, ultimately, from one source. If so-called leadership offers only austerity-lite “me, too,” the alternative is to become our own leaders.