A cooperative enterprise rests on a basic concept — the people who do the work earn the money. Strange, isn’t it, that this straightforward idea is considered radical.
It shouldn’t. Yet it is. The modern capitalist system is advertised as a “meritocracy” — those who work the hardest earn the most. In reality, this is a fairy tale; those who accumulate the most are those who have the most capital, often inherited. The system is called “capitalism” for a reason.
Not even the hardest-working chief executive officer works 340 times harder than his or her average employee. The financier who manipulates numbers on a computer screen, indifferent to the humanity that produces those revenues and net incomes, surely does not work hundreds of times harder. Or, likely, even as hard, particularly if the corporate raider is looting a manufacturing company with a factory floor.
If the chief executive, or any manager, is elected from the ranks of the workforce by those same co-workers due to his or her meritorious effort and/or willingness to obtain a degree in management, then indeed an enterprise can be said to operate on a meritorious basis. Such enterprises already exist; some were created as cooperatives at the start and some were taken over by their workers to forestall closure or abandonment.
If you gave the average employee the choice of working in a cooperative, in which everybody shares in the rewards if the enterprise succeeds and everybody has a vote in strategic decisions in a democratic process, as opposed to being an exploited, powerless cog in the traditional authoritarian, top-down capitalist enterprise, there would be considerable support for the former option. If the person given this choice were to be told that wages, benefits and working conditions would be better in the cooperative (as in fact is the case), the decision becomes easier.
But what do we say to a small-business owner? Mom-and-pop businesses form part of the backbone of communities and, unlike a large corporation in which ownership shares are traded among speculators far removed from the actual underlying business, the small businessperson is present, often for long days. Here we have people who do put in more hours than others, and have put their limited capital at risk.
Why should anyone have to work 14 hours a day?
Two recent conversations have gotten me to think about this particular question. One was a debate conducted on another blog in direct response to a question from a small business owner who said he works 14 hours a day, six days a week. The other was a debate with a passerby I had last weekend while staffing an Occupy Wall Street literature table who insisted she was more deserving than others because she worked 12 or more hours a day when others weren’t willing to do so.
If someone chooses to work such hours and is personally fulfilled by doing so, that is that person’s business and not mine. But if you are at your job 14 hours a day, six days a week, your family is missing all the other things you have to offer them. And no matter how nice a house you may have, you’re not there to enjoy it.
Nobody should have to work such punishing hours. There are those who choose to do so out of personal conviction, but there are many millions of people in sweatshops working such hours, or still longer hours, who earn starvation wages — and they have no choice about it. The big capitalists of the world — people who have far more than any small-business owner — earn their fabulous wealth by exploiting such people, and by exploiting relatively more privileged people in advanced capitalist countries who work lesser hours but nonetheless work long, hard days.
Capitalists become rich by paying their employees less than the value of what they produce — usually far less. That doesn’t mean that there aren’t capitalists who don’t work, but a person who runs a small family business is not in the same category as a big capitalist. The passerby with whom I debated last weekend said if the people whom she claimed were jealous of her house were to run businesses like she does, and put in as many hours, they could have what she has.
But there is only so much space for such businesses; under capitalism, most people are going to have to work for somebody else. Moreover, opportunities are vastly unequal. I grew up in a middle class household where the expectation was always that I would go to college (which I did), and we lived in a town with an excellent public-school system, so I received a better education than most students. I had advantages that many people do not have, had I wished to pursue a business career.
Yes, some folks do climb out of disadvantageous situations, but only so many can do that in a (capitalist) system that puts tremendous roadblocks in front of people. Saving is difficult when mere survival is an increasingly difficult struggle.
A small-business owner may object that s/he puts in more hours than employees do (if they have any) and has capital at risk. That may be true, but having to do so is a requirement imposed by the capitalist system; it is not something ordained by some natural order. The capital put at risk was undoubtedly lent by a bank, which collects high interest — in other words, the bank is exploiting the small businessperson. The banker did nothing but sign a piece of paper while the owner works 14 hours a day. Why should the banker earn such big money? Quite likely, the banker, who repeats this exploitative operation with others, earns far more money and works far fewer hours.
The small businessperson is exploited by capitalists, too, just in a different way than an employee is.
The proprietor works, the landlord takes
Let’s take a concrete example. For more than 30 years, including two decades at his last location, a vegan baker much loved by the community operated a bakery before being forced out of business by a landlord who continually jacked up his rent, at three times the rate of inflation. The baker always gave to the community, frequently donating goodies at public events; I was far from the only person routinely greeted with a hug and often offered a free tea when I stopped in. During those years, the Lower East Side neighborhood of New York City changed from a unique enclave of Puerto Ricans, Ukrainians, Poles, artists, squatters, community gardeners, anarchists, communists and beatniks to its present-day state of gentrification run amok.
The free-lance worker gets the short end as well. For years, I was self-employed, and had to, for tax purposes, operate as my own small business and fill out tax forms the same way an actual small business would. But I was no businessperson — I was a worker who didn’t have a regular job. I was exploited; in fact I was more exploited than I now am with a regular job because I had no health insurance and I had to pay double the usual Social Security taxes (my half and the employers’ half).
People are taught to have a 19th century, romantic notion of capitalism — a myriad of small enterprises competing in a free market. But a “free market” has never existed. Capitalism was built on pushing people off their farms and passing draconian laws to force them into the new factories; markets are expanded through force both military (World War I is one particularly bloody example) and financial (such as International Monetary Fund diktats); and the largest competitors become a handful of oligarchs whose wealth enables them to get governments to give them yet more advantages and who compete by cutting wages rather than through competition that exists only in textbooks.
Employees are exploited through this system, regardless of collar color, by being paid only a small fraction of what they produce and forced to compete for a dwindling number of jobs, but also because they, as consumers, have to pay the high prices that result when competition reduces an industry to a small number of oligopolistic behemoths who dominate a market. Small businesses are also at the mercy of larger corporate entities, including rapacious bankers, and are hurt when their customers have less money.
In a cooperative economy, no individual must assume all the risk. The cooperative can do so, taking loans at reasonable rates by making a good case to a publicly accountable bank operated as a public utility. Enterprises would relate to other enterprises in a cooperative, not competitive manner, eliminating much of the anxiety inherent in a capitalist system in which humans serve markets instead of the other way around.
Hard workers such as the small businesspeople under discussion would be valuable to a cooperative enterprise. Someone possessing such drive would likely wind up being elected to an administrative or management post by their collective. Talents and hard work would still be recognized; such a driven person would still have the personal satisfaction of a job well done; and s/he could work fewer hours, allowing more time to be spent with family and friends.
Others, too, will contribute talent and work to the cooperative enterprise while sharing the burden. Everybody who works should have a say in what is produced, how it is produced and how it is distributed, with community input — after all, it is the community that would be supporting the enterprise, and the enterprise in turn would be operated by people from the community. Production should be for human need, not for a minuscule elite’s private profit with no regard to the greater good. Benefiting the community and earning a comfortable living while working a humanistic workday shouldn’t be oxymoronic.