Book Review: Democracy at Work – A Cure for Capitalism

Author: Richard D. Wolff
Published: May 2012
Publisher: Haymarket Books
207 pages

“In fact, we must question the very possibility of genuine democracy in a society in which capitalism is the basic economic system. A functioning democracy would require that all people be provided with the time, information, counsel, and other supports needed to participate effectively in decision-making in the workplace and at the local, regional and national levels of their residential communities. The economic realities of capitalism preclude that for the overwhelming majority of workers, in stark contrast to corporate directors, top managers, their professional staff, and all those with significant incomes from property.”

Richard Wolff, Democracy at Work: A Cure for Capitalism
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Richard Wolff has been catapulted to minor celebrity status, at least amongst the left, since the 2007 economic crash. A Marxian economic analyst, Wolff produced a video lecture in 2010 entitled Capitalism Hits the Fan, an accessible and captivating speech in which he lays out the long-view causes of the drawn-out Great Recession. The lecture is the condensed version of his book of the same name.

In one of his more recent books, Democracy at Work: A Cure for Capitalism, Wolff again reviews root causes of the Great Recession, looks at past reforms and attempts at economic alternatives to capitalism, and also provides an outline of what he believes to be a viable solution to our multi-faceted global economic woes. A relatively short book considering the subject matter, he nonetheless makes a fairly convincing case for fundamental structural changes.

Two forms of capitalism

While capitalist economic systems and past attempts at socialist economic systems are generally thought of as being worlds apart in organizational structure and function, Wolff argues that in at least one crucial respect, capitalism and the “actually existing socialisms” of the 20th Century were similar. That is, in both systems, the surplus value or profit that is produced by the average working person is controlled and used by someone else.

Under a primarily private capitalism, such as is practiced in the United States or Canada, any profit produced is expropriated by private business owners. In the “actually existing socialisms” (or state capitalism, as Wolff considers it) such as the USSR, the surplus was controlled by government bureaucracies. In neither case is the average person usually capable of deciding what is done with what they produce.

It is probably an understatement to say that work is an integral part of people’s lives; the average person spends half if not the majority of their waking hours on the job. If most people don’t have any real say over what is done with what they produce at work, or even how they produce it, especially considering the amount of time the average person spends on the clock, can we really say society is reflective of a genuine democracy? Wolff notes how the general lack of democratic decision-making in most workplaces in the US has an effect on people’s expectations and interest levels when it comes to other aspects of democratic participation.

The folly of just (more) regulation (again)

By definition, the neoliberal economic period of the past 40-odd years has in large part been marked by mass deregulation of government economic controls in private capitalist countries throughout the world. This reduction in regulation has been a result of pressure from business to loosen laws that constrain profit-making, and predictably the reduced level of economic regulation has made it easier for businesses and the financial industry to get away with dubious activity, including the risky banking activity that triggered the Great Recession.

Understandably, there is a call to once again institute economic safeguards and regulations, and to roll-back the roll-backs of the neoliberal period. But this is, according to Wolff, a futile strategy.

However well-intentioned the social democratic post-WWII New Deal reforms and regulations were in the US specifically, they were with some patience and determination of industry relatively easily overturned. And supposing reforms could somehow be reinstituted, Wolff argues, they would be overturned again in due course. The problem is we might change the rules of the game he says, but unless we challenge the actual structure of business itself, it will, as before, be left with every means and incentive to ensure the destruction of any well-intentioned economic regulation.

To find a tolerable form of economic organization, the author argues, a different take on the structure of business is needed.

Democracy at work

What really needs to change, in his view? The fundamental point, says Wolff, is that those who work at a business must also be the ones who control their surplus production. Workers need to be their own “board of directors”; in effect, there should be no separation between ownership and work. What is needed, he argues, are worker self-directed enterprises. Wolff isn’t against the idea of private property per se, contrary to some of the traditional left, or even the idea of producing a surplus “profit”. What is of more consequence, he thinks, is how the business is structured.

Wolff goes into some detail of how worker self-directed enterprises could be structured. Is it a viable vision? If the economy was one in which the primary units of production were as described, it isn’t hard at least to imagine how a multitude of things might be much different. With “employees” in the driver’s seat, not an absentee management team beholden to shareholders, or a government bureaucracy, one can only assume working conditions would be given much more consideration, for one thing.

Would there still be economic downturns? Likely, but the effects would no doubt be much less severe. Would there still be income inequality? Yes, but probably nowhere near as pronounced as exists today. What about ecological impact? If an economy based upon worker self-directed enterprises could produce a less money-driven society, surely our footprints would be smaller.

Are worker self-directed enterprises the cure for capitalism? The proposition seems to be on the right track at least.

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Democracy at Work: A Cure for Capitalism by Richard Wolff is available online through Novanet.