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Democracy at Work: A Cure for Capitalism Paperback – October 2, 2012

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"Richard Wolff is the leading socialist economist in the country. This book is required reading for anyone concerned about a fundamental transformation of the ailing capitalist economy."Cornel West

Richard Wolff’s constructive and innovative ideas suggest new and promising foundations for a much more authentic democracy and sustainable and equitable development, ideas that can be implemented directly and carried forward. A very valuable contribution in troubled times.”Noam Chomsky

"Probably America's most prominent Marxist economist."The New York Times

Capitalism as a system has spawned deepening economic crisis alongside its bought-and-paid-for political establishment. Neither serves the needs of our society. Whether it is secure, well-paid, and meaningful jobs or a sustainable relationship with the natural environment that we depend on, our society is not delivering the results people need and deserve.

One key cause for this intolerable state of affairs is the lack of genuine democracy in our economy as well as in our politics. The solution requires the institution of genuine economic democracy, starting with workers directing their own workplaces, as the basis for a genuine political democracy.

Here Richard D. Wolff lays out a hopeful and concrete vision of how to make that possible, addressing the many people who have concluded economic inequality and politics as usual can no longer be tolerated and are looking for a concrete program of action.

Richard D. Wolff is professor of economics emeritus at the University of Massachusetts, Amherst. He is currently a visiting professor at the New School for Social Research in New York. Wolff is the author of many books, including Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. He hosts the weekly hour-long radio program Economic Update on WBAI (Pacifica Radio) and writes regularly for The Guardian, Truthout.org, and MRZine.

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220
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English
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Haymarket Books
Publication date

2012
October 2
Dimensions

5.2 x 0.7 x 7.4
inches
ISBN-10

1608462471
ISBN-13

978-1608462476
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Editorial Reviews

Review

“Probably America’s most prominent Marxist economist.”
―New York Times Magazine

“Imagine a country where the majority of the population reaps the majority of the benefits for their hard work, creative ingenuity, and collaborative efforts. Imagine a country where corporate losses aren't socialized, while gains are captured by an exclusive minority. Imagine a country run as a democracy, from the bottom up, not a plutocracy from the top down. Richard Wolff not only imagines it, but in his compelling, captivating and stunningly reasoned new book, Democracy at Work, he details how we get there from here ― and why we absolutely must.”
―Nomi Prins, Author of It Takes a Pillage and Black Tuesday

"Richard Wolff is the leading socialist economist in the country. This book is required reading for anyone concerned about a fundamental transformation of the ailing capitalist economy!" - Cornel West

"Ideas of economic democracy are very much in the air, as they should be,
with increasing urgency in the midst of today's serious crises. Richard Wolff's
constructive and innovative ideas suggest new and promising foundations for
much more authentic democracy and sustainable and equitable development,
ideas that can be implemented directly and carried forward. A very valuable
contribution in troubled times." ―Noam Chomsky

“Bold, thoughtful, transformative―a powerful and challenging vision of that takes us beyond both corporate capitalism and state socialism. Richard Wolff at his best!”
―Gar Alperovitz, author of America Beyond Capitalism; Lionel R. Bauman Professor of Political Economy, University of Maryland

Praise for Capitalism Hits the Fan (book and DVD)

“With unerring coherence and unequaled breadth of knowledge, Rick Wolff offers a rich and much needed corrective to the views of mainstream economists and pundits. It would be difficult to come away from this... with anything but an acute appreciation of what is needed to get us out of this mess.”
―Stanley Aronowitz, Distinguished Professor of Sociology and Urban Education, City University of New York

Probably America’s most prominent Marxist economist.”
New York Times Magazine

Imagine a country where the majority of the population reaps the majority of the benefits for their hard work, creative ingenuity, and collaborative efforts. Imagine a country where corporate losses aren't socialized, while gains are captured by an exclusive minority. Imagine a country run as a democracy, from the bottom up, not a plutocracy from the top down. Richard Wolff not only imagines it, but in his compelling, captivating and stunningly reasoned new book, Democracy at Work, he details how we get there from here and why we absolutely must.”
Nomi Prins, Author of It Takes a Pillage and Black Tuesday

"Richard Wolff is the leading socialist economist in the country. This book is required reading for anyone concerned about a fundamental transformation of the ailing capitalist economy!" - Cornel West

"Ideas of economic democracy are very much in the air, as they should be,
with increasing urgency in the midst of today's serious crises. Richard Wolff's
constructive and innovative ideas suggest new and promising foundations for
much more authentic democracy and sustainable and equitable development,
ideas that can be implemented directly and carried forward. A very valuable
contribution in troubled times." Noam Chomsky

Bold, thoughtful, transformativea powerful and challenging vision of that takes us beyond both corporate capitalism and state socialism. Richard Wolff at his best!”
Gar Alperovitz, author of America Beyond Capitalism; Lionel R. Bauman Professor of Political Economy, University of Maryland

Praise for Capitalism Hits the Fan (book and DVD)

With unerring coherence and unequaled breadth of knowledge, Rick Wolff offers a rich and much needed corrective to the views of mainstream economists and pundits. It would be difficult to come away from this... with anything but an acute appreciation of what is needed to get us out of this mess.”
Stanley Aronowitz, Distinguished Professor of Sociology and Urban Education, City University of New York

From the Inside Flap

A new historical vista is opening before us in this time of change, Wolff writes in this compelling new manifesto for a democratic alternative based on workers managing their own workplaces.

Capitalism as a system has spawned deepening economic crisis alongside its bought-and-paid for political establishment. Neither serves the needs of our society. Whether it is secure, well-paid and meaningful jobs or a sustainable relationship with the natural environment that we depend on, our society is not delivering the results people need and deserve.

One key cause for this intolerable state of affairs is the lack of genuine democracy in our economy as well as in our politics. The solution requires the institution of genuine economic democracy, starting with workers managing their own workplaces, as the basis for a genuine political democracy.

Here Wolff lays out a hopeful and concrete vision of how to make that possible, addressing the many people who have concluded economic inequality and politics as usual can no longer be tolerated and are looking for a concrete program of action.

Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst. He is currently a Visiting Professor at the New School University in New York. Wolf is the author of many books, including Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. He hosts the weekly hour-long radio program Economic Update on WBAI (Pacifica Radio) and writes regularly for The Guardian, Truthout.org, and the MRZine.

From the Back Cover

A new historical vista is opening before us in this time of change, Wolff writes in this compelling new manifesto for a democratic alternative based on workers managing their own workplaces.

Capitalism as a system has spawned deepening economic crisis alongside its bought-and-paid for political establishment. Neither serves the needs of our society. Whether it is secure, well-paid and meaningful jobs or a sustainable relationship with the natural environment that we depend on, our society is not delivering the results people need and deserve.

One key cause for this intolerable state of affairs is the lack of genuine democracy in our economy as well as in our politics. The solution requires the institution of genuine economic democracy, starting with workers managing their own workplaces, as the basis for a genuine political democracy.

Here Wolff lays out a hopeful and concrete vision of how to make that possible, addressing the many people who have concluded economic inequality and politics as usual can no longer be tolerated and are looking for a concrete program of action.

Richard D. Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst. He is currently a Visiting Professor at the New School University in New York. Wolf is the author of many books, including Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. He hosts the weekly hour-long radio program Economic Update on WBAI (Pacifica Radio) and writes regularly for The Guardian, Truthout.org, and the MRZine.

About the Author

Richard D. Wolff is a American economist, well-known for his work on Marxist economics, economic methodology and class analysis.

Wolff received his Ph.D. in economics from Yale University in 1969. Wolff taught at the City College of New York from 1969-1973, and teaches graduate seminars and undergraduate courses and direct dissertation research in economics at the University of Massachusetts Amherst.

He has authored numerous articles and books and has given many public lectures at colleges and universities (Notre Dame, University of Missouri, Washington College, Franklin and Marshall College, New York University, etc.) to community and trade union meetings, in high schools, etc. He also maintains an extensive schedule of media interviews (on many independent radio stations such as KPFA in Berkeley, KPFK in Los Angeles, WBAI in New York, National Public Radio stations, the Real News Network, the Glenn Beck Show, and so on).

Product details

Publisher ‏ : ‎ Haymarket Books (October 2, 2012)
Language ‏ : ‎ English
Paperback ‏ : ‎ 220 pages
ISBN-10 ‏ : ‎ 1608462471
ISBN-13 ‏ : ‎ 978-1608462476
Item Weight ‏ : ‎ 8.6 ounces
Dimensions ‏ : ‎ 5.2 x 0.7 x 7.4 inches

Best Sellers Rank: #394,718 in Books (See Top 100 in Books)
- #60 in Income Inequality
- #291 in Theory of Economics
- #399 in Communism & Socialism (Books)

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Richard Wolff is Professor of Economics Emeritus, University of Massachusetts, Amherst and a Visiting Professor at the New School University in New York. Wolff’s recent work has concentrated on analyzing the causes and alternative solutions to the global economic crisis. His groundbreaking book Democracy at Work: A Cure for Capitalism inspired the creation of Democracy at Work, a nonprofit organization dedicated to showing how and why to make democratic workplaces real. Wolff is also the author of Occupy the Economy: Challenging Capitalism and Capitalism Hits the Fan: The Global Economic Meltdown and What to Do About It. He hosts the weekly hour-long radio program "Economic Update," which is syndicated on public radio stations nationwide, and he writes regularly for The Guardian and Truthout.org. Wolff appears frequently on television and radio to discuss his work, with recent guest spots including "Real Time with Bill Maher," "Moyers & Company," "Charlie Rose," "Up with Chris Hayes," and "Democracy Now!." He is also a frequent lecturer at colleges and universities across the country.

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William H. DuBay

A light at the end of the tunnel

Reviewed in the United States on November 18, 2012

Verified Purchase

Simply and intelligently written, Richard Wolff plots a way out of our economic malaise by centering on Worker Self-Directed Enterprises (WSDEs).

He contends there is no denying that the world-wide recession we face demonstrates the failure of capitalism as a system of production. The New Deal attempts to "fix" and tame capitalism in the 1930s have failed. Capitalists will always have the ability to defeat any attempt to control or limit its predatory reach. It is time to look for a better alternative.

As Marx and many others have taught, work is central to our lives. Separating workers from the products of their labor is deeply alienating and vastly dysfunctional for both the individual and society.

The author shows how both capitalism and state socialism have failed by failing to observe Marx's central teaching on the surpluses created in production. Under capitalism, those surpluses are appropriated and distributed by capitalists, people who do not produce them.

The socialist experiments in USSR and China also failed for the same reason. While they nationalized industries and used central planning, they failed to engage the workers in the in the appropriation and distribution of their surpluses. It was a form of state capitalism, in which the surpluses of production were appropriated and distributed by party officials and other apparatchiks of government. This led to precisely the same dissatisfaction and inequalities experienced by workers in capitalist societies.

Wolff's solution is found in the workers' appropriating and distributing the surpluses they have created. It is a brilliant solution that salvages the best features of capitalism including private property, free enterprise, and the market. It greatly increases the workers' participation in entrepreneurship and competition by integrating them more fully in the operation of the business.

Wolff is very good at illustrating the autocratic effect of capitalism on culture and society. He relates the current ennui and the alienation of people from groups and political life with the powerlessness they feel in the workplace, where workers have little say in the direction of their own companies. While giving the workers a much greater stake in their business, it will also involve them much more deeply in the welfare and health of their community, the environment, and workers everywhere.

The book also takes us through the scenario of how WSDEs could change society by encouraging and developing more participation in public and community life. He also calls for a concerted effort by unions and modern feminist and environmental movements and their intelligentsia in promoting WSDEs.

Wolff points out that, as capitalism offered an alternative to slavery, WSDEs, by democratizing the workplace, give us an alternative to capitalism.

"Democracy at Work: A Cure for Capitalism" is at once a new Democratic Manifesto, an economic agenda, and a light at the end of the tunnel.

52 people found this helpful

Helpful

Michael Bindner

Occupy_Capitalism!

Reviewed in the United States on September 30, 2017

Wolff introduces this book with the example of FDR triangulating between a Marxist union movement and Wall Street, which allowed him to create a fair amount of social democracy, including Social Security. He contrasts this will the recent crisis, where the only solution tried was bailing out the banks while doing nothing for the borrowers, who he sees as blameless, although I must admit that no one held a gun to my head when applying for too much consumer or housing credit, almost always in a cooperative credit union or government housing program. At least government helped when it came time to wipe out that debt, plus some medical debt as well. The answer Wolff proposes to Capitalism is the Worker Self Directed Enterprise (WSDE), which would make production, distribution and governmental decisions with local communities.
Chapter 1 shows where Capitalism is failing. The key feature in capitalism is not private ownership of the means of production but the fact of the labor surplus, where workers produce more for capital than they are paid in wages. Workers are divided into productive and unproductive. As a cost analyst, I am not sure this a distinction with a difference. Distribution is not productive, but you cannot get paid without it. Capitalism itself yields inequality, cyclical downturns and environmental devastation, as did state capitalism.
Keynesian interventions and regulations helped manage the pumps from the end of the war through the 70s, including and especially labor peace, although Capitalists fought back with Taft-Hartley and the Red Scares of the new right, from the Birchers to the Moral Majority. From then, the Neo-Liberals dominated both parties if they wanted to win, through the Obama presidency. The book was written before the insanity of Trump. Automation, women working, trade and outsourcing and immigration served the interests of executives who, in my analysis were given incentives to encourage these trends (and generally control worker pay) by the tax cuts and reforms of Ronald Reagan and George W. Bush. Without wage growth that kept up with productivity, borrowing became necessary, leading us to the Great Recession, which was caused when Asset Backed Securities and speculation in the NYMEX oil market collapsed (which Wolff missed).
Chapter 2 focuses on government responses. Wolff covers the interplay between ABS default at Credit Default Swaps ruining the credit market. Sadly, there are still those right wingers who think loans to poor people from Fannie and Freddie did them in. They won’t believe Richard. He also covers TARP bailouts and stimulus. (I gave Chrysler and GM a plan for using the bailout for effective employee-ownership. Not even the UAW gave me a response) Richard thought taxing the rich, especially corporations would help. It was not tried either. Here is where Wolff brings up the role of neo-liberal tax cuts in the last 50 years, and the right-wing argument that doing so restrains government waste (which it never has). Still no mention of the incentive to cut pay or keep it at inflation. Instead, he mentions that government debt hurt the ability of government to deficit spend its way out of the Great Recession. Instead, from Greece to the UK, the world turned to austerity. aka trickle up (which in the UK probably fueled the Brexit). He then describes the U.S. socializing losses and its too big to fail monetary policies in the wake of the crisis, yet jobs programs (nor mortgage debt forgiveness never materialized.
Chapter 3 concludes Part I by reiterating that private capitalism depends on labor surpluses generated by workers and is unstable. State socialism became state capitalism, with bureaucrats rather than workers controlling the worker surplus. Crisis has made more state control an option, but no good means of doing so has been worked out (Could Dodd-Frank be strong enough, unlikely).
Wolff does not address the reason that capitalists claim a right to the labor surplus, the assumption of risk by their investors. They exercise fiduciary responsibility over the company in their names. Indeed, they have enacted laws that make this a requirement of their jobs, with all other decisions subordinate to that end. In that rationale, workers are mere factors of production, discardable at will. It seems we have not moved much beyond slavery after all. State capitalists have a responsibility only to the state, but because they were responsible to everyone, they were responsible to no one except the Party. This was effective, but not enough to guarantee success. The politically connected could fail without fear of loss of position, so they did unless someone was watching, or at least succeeded on their own schedule.
In WSDEs, workers have both a fiduciary responsibility to themselves and a moral one. They are no longer factors. Indeed, in both socialism and capitalism, they bear more risk than the capitalists admit. Most workers do not have the wealth that would stop them from having to work and even if they did, until all medical and human services are automated, solidarity demands continued labor. Workers have the most at stake. Investors only risk money and can move money into and out of various investments with a keystroke on their computer, or even let the computer do their thinking for them. Workers are giving up a day of what cannot be replaced, a day in their lives. That is more valuable than money, especially as one gets older. They also cultivate social relationships. While management considers them expendable, they and their follows have economic lives because they have jobs. Often, they cannot work for anyone else, so unless their employer provides all of the money and services they need to sustain themselves, they truly are slaves. Capitalists, on the other hand, both private and state, take all the goodies they can. Investors receive a ”normal” return, workers get as little as possible to keep them working and capitalists keep the rest, with CEOs often packing capitalist boards or party bosses with cronies who will give them all that they can steal. It is time for them to go.
Chapter 4 describes how capitalists distribute the surplus generated by employees, from sales personnel to shareholders and CEOs. In such firms, the board are the capitalists who make the decisions. The goal of decision making is profit maximization (including growth and market share), which can include automation, controlling labor markets and prices. Workers might use a union to alter decisions, but the capitalists generally call the tune and see to their own interests first, both in the company and in politics, which creates policy that hurts workers, who have less time and money to counter the bosses. Labor provided a counter-weight, which is why capitalists have-sought to decimate it. Even in 2007-09, public sector growth was resisted in favor of subsidized private sector growth. Since the book was written, Obama geeked in 2010 regarding letting taxes go up for the wealthy and the economy stayed stagnant. Indeed, further austerity actually hurt the recovery, although it did set the stage for the 2013 tax bill which let taxes on the rich go back up. Since then, the economy has been growing.
Chapter 5 deals with the problems of state capitalism. First, Wolff delineates the main differences between capitalism and socialism. Capitalism has the means of production owned privately (including, I would add, the employees), keeping the labor surplus for itself and using markets for supply and distribution. Socialism distributes labor surplus to the people and relies on central planning. There have been many socialist and communist experiments in the 20th century, from the welfare socialism of the Scandinavian countries to the Communism of Russia and China, which devolved into what Michael Harrington of DSA called Bureaucratic Authoritarianism or what Lenin called State Capitalism. Regardless, worker democracy has never been tried. Capitalists and Bureaucrats own and control the labor surplus, less taxes or social services, because of this lack of democracy. It is the difference between making lives better for the slaves and ending slavery (which is hardly ever totally successful, even in socialism - at least not so far).
Part III begins with Chapter 6 and an examination of Worker Self-Directed Enterprises. Wolff differentiates between the direct democracy of production workers in WSDEs and both capitalist and state capitalist boards of directors, who reserve all decision making to themselves. Only direct democracy has the workers control the means of production, according to Wolff. He contrasts WSDEs with ESOPs, which also have decision making boards (and in my experience, are not at all radicalized), worker-managed enterprises, which still delegate decisions to management and cooperatives, which have to do more with joint ownership than decision making by every productive worker. Coop boards function like any board of directors. Wolff is not a fan of representative democracy by workers, although if workers are self-aware enough, there are likely some things that can be done with representation and others where direct votes are required. I suspect most arrangements will not be adjusted very often, even in a WSDE.
Chapter 7 starts with a description of how decision making occurs in WSDEs. Some decisions are made by both productive workers, who make up the board and others by both productive workers and enablers. Frankly, I am not sure there needs to be a difference as direct production declines and customer contact workers, who are enablers, take on more of the creative edge responsible for profitability. Is market research not essentially the first step in production? If someone cleaning the shop floor between shifts enables production workers to not do so, are they not as essential? I suspect so. Some of this is Marxian orthodoxy showing up where it is probably no longer required. Indeed, if employees are not essential to the operation, the position should be abolished.
Wolff talks about how WSDEs may seek to make more such enterprises, but rather than reproducing by fission, I would suggest example and radicalization of other workers is the more essential goal. The question of managers is discussed. Wolff suggests rotating workers into these positions, as opposed to hiring them. I like simply electing them, from the CEO to the shop foreman, although before election, having candidates for these jobs (and there is always someone who wants to be the boss) bid for the position in open auction until the bidding gets to an agreed upon floor, with an election by the workers supervised to determine who gets the job.
Most WSDE’s will not clone themselves. Indeed, they should expand vertically along both the company supply chains from resource extraction to home delivery and the personal supply chain from education to housing to retirement (workers control the means of consumption), while avoiding horizontal integration to keep the market honest like it has not been for a long time. It will fall upon socialist consulting firms to help facilitate both new WSDEs and to convert existing companies to this technology, although such firms will have to walk the talk as well.
Wolff describes two kinds of employees in WSDEs, production employees and everyone else from cleaning crew to managers. Production employees would serve on the board and would allocate the labor surplus, while the remaining enablers would also participate in deciding on all other issues. Again, I am not sure how often issues need to be decided after setting up systems and how much can be delegated to management or to some representative body. If we are doing our jobs as socialists, the workers will be empowered to decide who decides.
Wolff compares technological change between private capitalism, state capitalism and WSDEs. Private capitalists do incorporate some technology changes, but also block innovation as well if the innovation would be expensive or hurt other products or related industries. This is why Europe and the US get different carburetors. Capitalists do the minimum. State capitalists do likewise unless it affects the state. WSDEs will have more than the Board make some of these decisions, especially about labor saving, Wolff suggests a government bureaucracy might be established to cushion the blow of innovation.
Both private capitalists and state capitalists have horrible environmental records. CEO benefit and investor profit maximization is hurt by taking up extra funds protecting the environment. Workers live closer to the environmental hazards their jobs create. They would be a more effective force in limiting pollution (although that is not universally the case if they feel their jobs are on the line because a co-worker is ratting them out). Better and cheaper pollution prevention and a strong government or industrial association to mandate their uses (and sponsor new technology) seems essential to me.
Wolff talks about how to compress minimum and maximum pay in WSDEs, suggesting rotation is the answer. I suggest an equal base wage for everyone, with additions for family size, which should be subsidized by the government in business taxes and using stock grants and dividends to reward innovation, educational attainment, longevity and management position, among other factors, would be dealt with. I have a whole essay on pay equity that does so on bindneranalytics blogger account, but let me briefly sketch some points.
Instead of setting them up in a new WSDE as Wolff suggests, innovators could be given cash bonuses for their inventions rather than higher salaries (most innovation is a riff off of existing technology that the WSDE would already own) and/or additional preferred shares based on the future profitability of the invention. Every instance may be voted on by the member directors or they could set up and vote on a system that consistently implements such decisions. They would decide which strategy they want to employ. With luck, such arrangements will both attract the best workers to these new enterprises and create better products and more profitability. This would force capitalist firms to adopt similar systems and essentially convert to WSDEs, although there are other ways to speed this up.
There is also the question of both layoffs and innovation. Should there be a fund for paying workers while they are retrained? Should it be governmental using taxes from WSDEs? I propose it could or workers could live off of the dividends from accumulated shares. Workers with enough shares could simply retire (with any mortgage held by the WSDE forgiven or paid while the worker is in transition). Indeed, if it does not make sense to retrain a worker, early retirement for whole cohorts is a good option. Should they continue to vote their shares? For that matter, should voting be warm body (with each worker having one voting share and earning a new preferred share each month, with or without dividend reinvestment) or should all shares be voting. WSDEs would make these decisions based on how much experience is important to making the right decisions for the whole. The more we need a bias for experience, the more share accumulation and retiree voting should be considered (like in the NFL). The more innovation is important, the less experience needs to be given preference. Wolff suggests that setting up new WSDEs could be a response.
Likewise, WSDEs could hire future workers while or at the beginning of either technical training or the third year of college, paying their tuition, living expenses, a stipend and maybe even some stock, at the discretion of the WSDE. This will give WSDEs the best employees, again forcing capitalists to follow suit. It also takes away any claim that members deserve higher salaries for their educations that they or their parents did not pay for. They may be given stock upon degree completion to provide a bit of extra income, as the market would for a while, but base wages would stay flat. If the work obligation incurred for this education (less any tax benefits provided by the government) does now work out, a government loan program would take the debt off of the WSDE’s hands and any stock grants would be cancelled or taken to lower the value of the debt.
Chapter 8 addresses ownership and markets. Socialism exists at the marco and micro level. Wolff suggests that one of the failures of the Soviet state was ignoring micro-level transformation. In WSDEs, the State could actually own the means of production, the WSDE members could or there could be conventional share system with some shares sold on the market. There could also be a mix. I do not favor state or outside ownership, especially if the WSDE or company offers employee-owners mortgage services, because without such ownership lending can be done at zero interest. Of course, WSDEs would decide for themselves. If there are shares, however, there will be share voting. If experience is important, then voting shares would be granted monthly (and if dividends are reinvested, additional shares would be added as well). Of course, this would make ownership top-heavy. To reduce this effect, voting shares would be granted less often, say one after the probationary period and another one every five or ten years, with preferred non-voting shares granted each month. Any outside investors would receive non-voting shares unless part of a reciprocal arrangement between WSDEs who provide services for each other (say, the local electric company). For absolute equality, everyone would get only one voting share. Again, WSDEs would decide. What should be mandatory is insurance of WSDE investments. A third of shares should be traded to an insurance fund to make members whole if the WSDE fails for whatever reason and to intervene if 18% of voting shares suggest to the insurance fund that management is failing or corrupt, so that the fund would take control of the WSDE to investigate and help members resolve the situation.
On the question of product markets, WSDEs could rely on central planning or on the commercial markets (which would likely be free for the first time with capitalism gone). On some projects, like rebuilding the transportation system, I would suggest partnerships between federal, state and local government, WSDEs, car companies and road construction companies, utility companies and any non WSDE employers to build electric cars with underground roadways, central computer control and energy from the ceiling (like electric trains) and interlocking share ownership where appropriate to govern the operation and to assure that retirees can use the system for free by cashing out preferred shares in both their WSDE and the electric company. The network would be national but ownership would be localized.
For most things, my axiom is that to secure control of the means of production, we must first give workers control over the means of consumption, not individually but collectively. If we can show that the cash and prizes are better collectively, workers will want to form WSDEs and use them to improve their lives. Currently, it is not vital because most workers think they have good or at least the best jobs they can get. This goes way beyond voting for a free cafeteria for breakfast and lunch (although it is always a good idea) or free business suits to WSDE owned home construction WSDEs and WSDE financing of them at zero interest, rather than using a credit union. This carries over into medical services, education and other governmental social services and even time shares at the beach and overseas (and airline vouchers). Implicitly, workers are given cash for these things and WSDEs could decide to continue, or we could build a cashless society and freeze out the financial sector entirely.
If there is any takeaway from this review, it should be ”Workers control the means of Consumption.”
Chapter 9 addresses Economic and Political Democracy. Capitalism does not like democracy and is designed to keep workers so busy that they really cannot if they want to. WSDEs will be smarter than that and will give workers practical experience in workplace democracy that can be extended to the political side (although I suspect some WSDEs will include representative governance, maybe through unions or professions to do the day to day decisions that management can’t do, although cash and prizes will likely be voted on directly, as well as CEO and management hiring). This is quite a difference from the forced authoritarianism of both private and state capitalism, which usually bleeds into our politics. Democracy will reverse the trend, at least to the extent that WSDEs do not absorb government services.
Even with workers in the majority, private and state capitalists kept control, as the election of Donald Trump, which happened after this book was published, as well as a long line of neo-liberals of both parties in the White House and Congress, illustrates. Economic issues, with the exception of minor changes to tax policy, are never discussed, with the Affordable Care Act being the shining exception, but even that was trapped by the Capitalists in a bill from the conservative Heritage Foundation that kept all the industries happy Usually, the parties use non-economic issues to distract the masses, especially issues like abortion where there is no real room for action by either side. That issue and raw racism is what we have now descended to, as well as the intervention by Russian Oligarchs, who the right wing now try to protect.
Wolff contrasts how FDR could use the CIO and radicalized workers to move along the recovery from the Great Depression. Obama had less luck because the capitalist hegemony gave him less room to work, especially with McConnell doing their bidding. Of course, many of FDRs innovative programs and more are now a part of the permanent government structure. His biggest problem, we now know, was in his own White House with Larry Summers counseling against mortgage forgiveness and on letting the Bush tax cuts expire in 2010. It turns out that once 2013 came around, with Summers gone, Obama was able to outmaneuver Grover Norquist and the Freedom Caucus and allow taxes on the top 2% of earners return to Clintonian levels (plus additional taxes from the Affordable Care Act). Since then, with rich people having less money to spend on shit investments, the economy has come creeping back and mortgages are finally no longer under water.
It is important to note that Capitalists with government in their back pockets have frustrated union organizing and ignored wage and hour (including peonage) and workplace safety laws, have passed ERISA to limit employee-ownership and Taft-Hartley to limit union-ownership. Reversing all of this must be a priority.
Chapter 10 talks about WSDEs in Modern Society. Capitalists engage not only monopsony in hiring workers and purchasing supplies (especially overseas), but in displacing smaller firms with larger monopolies and oligopolies. I would add franchises to the list, as these are how product distribution risk and labor organization are averted). WSDEs would collaborate and reverse this trend. Of course, I would simply try to take the larger firms over, probably splitting them up regionally and making them part of WSDEs. Their supply chains too. I would not forgo dividend payments to WSDE members, for reasons stated above, but would instead press for preferred financing at the Federal Reserve Discount Window to fund conversion costs. Wolff suggests WSDEs would be smaller (the Distributists do too). I disagree. He compares workers in capitalist firms with WSDEs in reaction to investment that might take jobs. I suspect that workers in capitalist firms will vote with their feet rather than resist in their old employments. Indeed, I suspect that Capitalists will have to start copying WSDEs, especially once WSDEs of larger size, say General Motors, are converted.
Wolff talks about differing economic flows between WSDEs and capitalist firms. On infrastructure they might be alike but different on public education (training worker board members v. drones), assuming WSDEs don’t absorb public education or send their kids to religious schools or charter schools (in either case they should demand a seat on individual school boards). Production location decisions will be different. WSDEs will work with local governments on Smart Growth. Capitalists demand concessions in order to come and to stay and may outsource or move anyway. Just look at the NFL, which, along with local governments representing the taxpayers and stadium workers, should become a WSDE (including retirees). Wolff and I agree that the WSDE can be exported to overseas firms, although I would do so by having multi-nationals become WSDEs and buy their supply chains, as well as encouraging by example (or just changing the market).
Wolff returns to differentiating production workers and enablers and stresses the need for political skill in defining limits between the two. I am still not sure they can be separated. I worry more about the Kelso model, which gives each member of the workers family capital credit to buy and then vote shares, which gives larger families more of a vote than smaller ones. Each worker should be equal. Production, however, demands less and less of the enterprise, especially when the creative work is done here and the labor is performed in Asia. In a multi-national WSDE, the Asian workers would be the entire board unless non-production workers are included. As long as the production workers have the same standard of living and voting power, I do not worry about appropriation of labor. Indeed, sales personnel are as expert as designers in what sells and why, whether you are selling pants or spacecraft. Should the community be involved in WSDE decision making? Yes, in joint ventures, especially in transportation, education, land use and fire protection (to the extent the WSDE does not absorb these functions, in which case the former government workers would be WSDE voting members as board members or enablers, although if you look at the enterprise as including the means of consumption the distinction has to vanish).
Chapter 11 addresses Program and Personnel for Increasing WSDEs. Wolff suggests a federal jobs program to provide money to form WSDEs on a New Deal model. I suspect most of the infrastructure needed to do that already exists (just like we already have DOE power plants, a Highway Administration and a General Services Administration). Starting new agencies is not required. Funding them is and electing people who will fund them is crucial. Of course, taxation on the wealthy has gotten the economy moving faster than it was when the book was written. Still, local Workforce Investment Boards, Chambers of Commerce, Community Colleges and One Stop Job Centers could take WSDEs on as a project, possibly with SBA assistance or loans. Indeed, with loans, money would not even have to be appropriated. Existing Community Colleges could be given a how-to course on WSDEs with concrete instructions and checklists of things to consider. Indeed, if the course addressed financing, SBA money could be foregone or just one option. This could be offered WIB by WIB or college by college without any obstruction from Trump, McConnell or the House Freedom Caucus and its Randian Speaker.
Other options suggested include working with Cooperative Movements, Trade Unions and I would add ESOPs. Indeed, instead of working with them to pass legislation, they could be clients in converting their enterprises to WSDEs one at time. WSDE Organic Intellectuals would be part of that first wave of consultants who learn by doing, not just by advocating and studying. This movement cannot, as yet, win at the ballot box. We must first Occupy Capitalism in growing this movement. Then we can equalize the Social Security Employer Contribution for Old Age and Survivors Insurance (every worker gets the same credit) and then using a portion of that credit to either buy Employer Voting Stock (for eventual WSDE conversion) or buy into the WSDE insurance fund, which would pay dividends to them (as well as to widowed survivors of WSDE members). We don’t have the votes yet, but we will, probably in a political party combining progressive Democrats, Libertarians and Greens. Once the racism of Trump kills the Republicans, the Neo-liberal Republicans and Democrats will join forces and the rest of us will head for the exits. Becoming a third party is lunacy. Being another major party must be the goal. To get there, however, we need economic power.
That is the second take away: Occupy Capitalism
How we do it is important. In 1992, Boris Yeltsin was using a DC consulting firm to help him convert State Capitalist firms to employee-owned ones. I was at IBM at the time and faxed them a memo on how to convert and manage these firms, including share distribution. I am not sure if they used my scheme or someone else’s, but their plan included the provision that the shares should be available for sale as opposed to being held for retirement or at least until resignation. I implied the latter and that one provision ruined Russia, because the stocks were valued at about the cost of a bottle of vodka, which they were traded for, giving rise to the Oligarchs and Vladimir Putin. Details matter, although I think making WSDEs keep all the shares in the hands of workers (and maybe retirees) and not letting them be sold outside of retirement or transfer to a new employer must be one of them.

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Retired Reader

Losing Your Chains

Reviewed in the United States on March 21, 2013

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When the Soviet Union (USSR) imploded a large number of people both in and out of the U.S. Government, who should have known better, loudly proclaimed that among other things it represented a triumph of Capitalism over "Communism" and was proof that capitalism represented the best economic system ever developed. Wolff, a dedicated Marist, claims this is nonsense.

He devotes a large portion of this book doing an excellent job of showing the systemic flaws of capitalism and provides some compelling reasons why capitalism by the very way that the system operates produces gross social equalities, devastating economic fluctuations, and irrational behaviors bordering on lunacy. In doing so he points out that the USSR economy was not a Communist System in the sense that Marx envisioned, but a socialist system that had morphed into "State Capitalism." Wolff throws a lot of economic terms around, but is careful to explain their meanings and implementations. As a true Marxist he explains his views in terms of the ownership of tools of production and disposition of surpluses (profits). For an economist he is remarkably clear.

His solution is to replace the capitalist economic system with what he refers to as Worker Self Directed Enterprises (WSDE) system in which the workers not only own the means of production, but also own the related structural functions of the enterprise. This is pure Marxism. The problem with Marxism, like Christianity, is not that it has been tried and found wanting it is that it has been found hard and never tried. So really nobody knows if a WSDE system would work let alone be a successful replacement for capitalism.

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Top reviews from other countries

Charles

Democracy in the workplace

Reviewed in the United Kingdom on August 14, 2013

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This book is about how America come to be in the current economic mess caused by capitalism, why alternatives to capitalism such as socialism and communism have failed, and how to solve the mess.

In America as business profits increased so did workers' earnings but in the 1970s this stopped, this was caused by the following
1) Computers allowing businesses to become more efficient which results in them needing less workers.
2) More women entering the job market creates more competition for jobs.
3) Globalization means that factories can be moved to cheaper locations abroad.

Business profits and pay for the upper classes continued to soar but for the above mentioned reasons the middle and working classes stopped seeing any improvement in real earnings.

With all the extra profits made by not passing the increasing profits on to workers the money got put in the banks. The banks had to figure out how to use it to make money. One way was in easy credit on credit cards. Because workers had no improvement in their wages they were forced to borrow heavily on the credit cards running up massive dept. The sub prime mortgage mess was also the result of banks desperately trying to find ways to loan out all that extra money and resulted in giving mortgages to people that could not afford the repayments.

The massive profits also allows business to corrupt politics resulting in politicians no longer serving the general public and being nothing more than puppets to corporate interests.

The end result of all this is that Americans are working longer hours for no improvement in real earnings, they have massive credit card dept and the dream of owning their own home has turned out for many to be nothing more than a scam. They cannot turn to politicians as they have all been bought by big business. In such a environment people's mental health and family life has taken a beating.

The book explains that Russia was never actually communist, communism was a goal they were working towards but never got even close to achieving. Russia was in fact state controlled capitalism. In private capitalism (what American currently has) the surplus (profit) is controlled by the directors/ share holders and the worker gets no say. In state controlled capitalism the state controls the factory and surplus and the worker still does not get any say.

What we call socialism here in Europe is again not actually socialism (because workers do not own the means of production) but a more moderate version of some aspects of socialism with capitalism.

The solution to this problem is to introduce democratic control by the workers of the business in what the author call workers' self-directed enterprises (WSDE).
Under WSDE workers own the business and control the allocation of surplus, a truly democratic solution to worker exploitation. The Spanish Mondragon shows that worker control of business actually works, it is not a pipe dream but a real democratic alternative to private/state capitalist control.

The pros and cons of WSDE vs private capitalist are addressed and how governments could help with the development of WSDE is suggested.

My only complaint is that this book is a bit lacking in detail (but it does point you towards more detailed books for specific subjects), it is a wonderful potentially revolutionary book and I am surprised it is not more well known.

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Jay

A fresh perspective

Reviewed in India on May 2, 2021

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Richard has clearly explained the failures of capitalism and why there's a pressing need to move beyond capitalism. He offers well thought of solutions which need more discussions and debates. A book one must buy to expand their horizon.

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Georg Dybek

An interesting concept with poor argumentation

Reviewed in Germany on January 3, 2020

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Since most books I have thus far read are exceedingly critical of socialism, I ordered this book to look at what a well known modern Marxists opinion on the matter is. Capatalism is undoubtedly far from perfect, yet so far trying to replace it alltogether has resulted in unspeakable suffering for the people engaged in those experiments. Therefore I was very interested in the authors claim that he has found a solution to Capatalisms flaws without repeating the mistakes that were made for example in Maoist China. I was looking forward to a well founded critique of capitalism and a resulting argument about the pros and cons of his idea. Unfortunately I was disappointed.
It is not my place to argue about the feasibility of his proposal to solve the "crisis of capitalism" by democratising the workplace with a professor in economics. I do however find his style of argumentation entirely unfit for the importance of the issue at hand. The entire text is written in a way that suggests the author has all the answers and understands perfectly what is wrong and what is to be done without seriously considering possible counter arguments. No statistics or references are used, except to other books he himself has written. For a work that claims to have found a solution to the problems of the dominating global economic system this is a terrible approach. After all, even though this work is distancing itself from the "state capitalism" of systems such as the soviet union, it is still a proposal that is positioned in the same tradition of Marxist critique of capitalism and therefore needs to convince people that this time the result won't be the loss of dozens of millions lives.
I find his idea of an economic system where enterprises are democratically governed by its workers very interesting. But simply saying that this is what should be done and then listing all the benefits this will bring without ever presenting a thorough discussion of counter arguments is far from convincing.
If it sounds to good to be true, it usually is. And this is why I can't rate this book with more than three stars.

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K.R.L. Narasimha Rao.

One of the most important books relevant to our times. An eye-opener.

Reviewed in India on August 31, 2022

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To Update knowledge

Shashank Narendra Gupta

Impractical ideas, but let these compete on their merit.

Reviewed in India on August 28, 2023

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This book was pitched as a genuine alternative to capitalism so I was truly curious. But anyone who has worked in and/or run any organization would immediately understand that the author has no experience in the practicalities of running any organization, let alone a business. This idea will not cross the barrier of even being able to clearly define "surplus producing workers".
But to the credit of the author and unlike most left leaning intellectuals, he is not recommending draconian measures to force his ideas. Instead he wants these to compete with other capitalist companies. It is a fair ask, as long as the government does not try to tax their way to fund these untested ideas at a large scale. All power to the workers (another term which is hard to define in the new age industries) to give this a shot. Am happy to reassess my conclusions once they show a self sustaining working model.

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