Capitalism: the cause of and solution to all life's problems

[Ares Land]

A useful word here is "stakeholder". There was a lot of talk about this in around the 1970s: that companies should be run by a combination of management, workers, customers, and the local community. What the balance should be is a can of worms!

In Germany, large companies must have workers as 1/3 or 1/2 the corporate board, depending on the industry and the size of the firm. My understanding is that this helps, but the owners have ways around it. It may not be coincidental that Germany has retained a robust manufacturing sector when other countries have outsourced most of it.

Yeah, I'm pretty fond of the stakeholder model.
It's hard to figure out what makes Germany more robust economically in general; it doesn't come out to a single killer feature but to a fairly extensive set of well thought out policies. (Just to give an example, the Kurzarbeit or short-time policy helped a lot back in 2008-2009)

I know I harp on the US a lot as an example of what can go wrong in Capitalism, and there seems to be a general attitude in this thread of "Oh, who cares? Look at Belgium. They're doing all right!" I think the US is sort of the canary in the coal mine of Capitalism. Whatever goes wrong there, should be at the top of the crisis report for any other capitalist country.

Not at all. I'm very much aware of goes wrong in the US generally worried about any trend that may bring us closer to American-style plutocracy, and I don't think I'm going too far in saying this worry is very much shared in Western Europe.
(Though, to be fair, we should also take into account these areas where the US actually does better than the rest of the world.)

My main objection is why should I throw out entirely a sytem that, with warts and all, and plenty of hidden ugliness of course, kind of works and has been brought into some kind of control? Yes, the system could degenerate into plutocracy... But any political/social system is under constant threat and risks degenerating into something worse.

The other problem is that annoying question of the alternative. The one option available is socialism... which has problems. Let's take the most favorable option: it has never been tested in its pure form(*) Worse, the plan is sort of unclear on the details. It seems to amount to:
0) Capitalism sucks
1) Eat the rich, the workers own the means of production.
2) ???
3) Fully automated luxury communism.

I think some work on what exactly happens in step 2) is in order.
Another objection that I think isn't as well adressed as it should is that parts of capitalism actually work and I'd really love to know how these'd work in the socialist utopia.

(*) All capitalist countries actually implemented socialist institutions. Some still work well, some were unfairly shot down, other were uninteresting or just didn't work. In all cases much depended on the actual implementation.

[mèþru]

I've talked at length with various people on systems ranging from computer-managed global anarchist networks to Bordigists to democratic socialists on what they think should happen in step 2. I've seen a lot of fleshed out proposals but ultimately all the systems that reject markets reject growth outside of immediate increase in output of goods and services. Democratic socialism on the other hand seems to me to not really be any different from capitalism except that you get to prefix everything with the words "socialist" and "worker's".

In Germany, large companies must have workers as 1/3 or 1/2 the corporate board, depending on the industry and the size of the firm.

I always wory that this model is only sustainable by Germany's specific worker culture, and that in the general case putting worker's representatives in companies and having cooperative relationships between companies and unions provide more incentive for corruption among union leaders and deals that help themselves rather than the union. I prefer the adversarial model of unions and companies.

[zompist]

In Germany, large companies must have workers as 1/3 or 1/2 the corporate board, depending on the industry and the size of the firm.

I always wory that this model is only sustainable by Germany's specific worker culture, and that in the general case putting worker's representatives in companies and having cooperative relationships between companies and unions provide more incentive for corruption among union leaders and deals that help themselves rather than the union. I prefer the adversarial model of unions and companies.

You could put it the other way: having only investors control corporations provides an incentive for corruption among business leaders that help themselves rather than the company. And I'm not just being snarky, that's a real thing-- e.g. investors buying successful businesses and destroying them because they can make profits for themselves by doing so.

I don't think any enterprise runs well on an adversarial model. Would you run a spaceship that way? A university? A soccer team? A conlang project? A marriage? When these things become adversarial, it generally means the enterprise is over.

That doesn't mean that that model never works. Sometimes it's needed, but abstractly, I'd say that's when paradigms are changing, people have not learned cooperative methods, and one party is used to an authoritarian model. Unions have had to be adversarial because they are a challenge and a change from the boss being in charge. Feminism is adversarial to the extent that men insist on staying in sole control.

Politics is the obvious exception. But republics are a carefully set up alternative to what came before, which was usually a revolution. It's far less adversarial than people trying to get their own way using guns.

This doesn't mean that I think (say) a stakeholder council would be lovey-dovey or low-conflict. There are always conflicts, hard choices, hurt feelings. A successful enterprise is one that has a structure for working things out.

I'd agree with you, though, that the system must be adversarial when it needs to be. E.g. if workers on a stakeholder council can't realistically pursue their own interests, then the cooperation is a sham. But this will probably only be the case if the design is insufficiently democratic.

[Ares Land]

I work in the public sector, and workers are represented in the various boards that run the institution. (Far from equally, though!) That's also the case of several people I know closely.

Generally my feedback on unions would be 'can't leave with them, can't live without them.'
Unions are mostly inefficient and cartoonish. They certainly put their own interest above fairness, and they harm the workers in many ways.

And yet... Workplaces with powerful labor unions are a great deal nicer than non-unionized companies.
Sometimes just having a counter-power in place is enough to improve matters.

A nice thing is that it enforces a consensus culture and keeps the middle management in check. They know they can be called out if there's any abuse.

Can the system be improved? Yes. A first point would be to give more power to the unions.
That's counter intuitive, but hear me out. With the limited power they have now, the unions can be a pain in the ass -- and they make a point of it -- but they never have to live with the consequences.
A second issue is that many people don't buy into the system. People see themselves as middle-class, now, and everybody knows middle class qualified workers don't need unions. (I certainly though I didn't when I started working!)
The unions are fairly political, and they support very radical policies that most people don't agree with.
This means that everyone but the far left is alienated, which in turns means only the far left votes, which means only far left unions get elected, and so on. It's a vicious circle.
(And when I say far left, I mean it. Remember, I'm talking about civil servants in France. The managers they paint as villain capitalists would make Bernie Sanders look like Rand Paul.)
That vicious circle wouldn't be that hard to break out of. First step, make voting compulsory.

[mèþru]

I very much disagree with compulsory voting and compulsory union membership, compulsory union dues of non-members or only allowing one union in a single workspace. That violates the right of consenting adults to freely associate. Also, many times an employee would then be forced to pay for political activities they don't approve of, or stick to the union that protects or is ran by bullies in their workplace. But when you don't put a limit on how many unions can be in a workplace, then representing them all would be pretty much impossible. I suppose it can be done that workers representation is simultaneously done within the business through internal elections AND by unions working without being part of the company, with internal worker's rep and their pay being payed for by the company in a manner mandated by the government, but that would favour big companies and shut down small ones that can't afford to run a worker's council.

[Moose-tache]

Can the system be improved? Yes. A first point would be to give more power to the unions.
That's counter intuitive, but hear me out. With the limited power they have now, the unions can be a pain in the ass -- and they make a point of it -- but they never have to live with the consequences.

More power, and more kinds of power. One of the things that doomed unions in the US was that they only had one good hammer: agitation for better conditions, higher wages, and worker benefits. That had worked for decades, until the 1970s. Once the economy turned sour and businesses started looking to greener pastures in Latin America and Asia, workers were in a dire situation. But the only thing the union could do, and the only way they could prove to their members that they were trying to help, was to agitate for better wages, conditions, etc., i.e. make American workers even more expensive to hire. Unions had no power to lay hands on the mechanisms of capital migration, and ultimately may have even sped up the process. They certainly met their match once the Neo-Liberals came to power.

[Rounin Ryuuji]

More power, and more kinds of power. One of the things that doomed unions in the US was that they only had one good hammer: agitation for better conditions, higher wages, and worker benefits. That had worked for decades, until the 1970s. Once the economy turned sour and businesses started looking to greener pastures in Latin America and Asia, workers were in a dire situation. But the only thing the union could do, and the only way they could prove to their members that they were trying to help, was to agitate for better wages, conditions, etc., i.e. make American workers even more expensive to hire. Unions had no power to lay hands on the mechanisms of capital migration, and ultimately may have even sped up the process. They certainly met their match once the Neo-Liberals came to power.

Capital flight seems to me one of the greatest sources of potential harm labour — the argument that presumably led to "right-to-work" (the name's a cruel lie) and "at-will employment" laws (the reason it's cheaper to hire people in the Southern as opposed to the Northern United States — labour protections there are often very weak to non-existent, and often the only union jobs are in the public sector), but it hasn't led to much economic improvement in the area that has improved the lives of ordinary people.

Do you have a more exact idea of how unions might be given power to prevent capital flight? Simply giving them enough representation on the board of whatever company to prevent offshoring, or something else?

[communistplot]

More power, and more kinds of power. One of the things that doomed unions in the US was that they only had one good hammer: agitation for better conditions, higher wages, and worker benefits. That had worked for decades, until the 1970s. Once the economy turned sour and businesses started looking to greener pastures in Latin America and Asia, workers were in a dire situation. But the only thing the union could do, and the only way they could prove to their members that they were trying to help, was to agitate for better wages, conditions, etc., i.e. make American workers even more expensive to hire. Unions had no power to lay hands on the mechanisms of capital migration, and ultimately may have even sped up the process. They certainly met their match once the Neo-Liberals came to power.

Capital flight seems to me one of the greatest sources of potential harm labour — the argument that presumably led to "right-to-work" (the name's a cruel lie) and "at-will employment" laws (the reason it's cheaper to hire people in the Southern as opposed to the Northern United States — labour protections there are often very weak to non-existent, and often the only union jobs are in the public sector), but it hasn't led to much economic improvement in the area that has improved the lives of ordinary people.

Do you have a more exact idea of how unions might be given power to prevent capital flight? Simply giving them enough representation on the board of whatever company to prevent offshoring, or something else?

If the capitalists threaten to leave, we just take their toys. If they're willing to cause harm to people because they aren't allowed to exploit freely then they have no right to exist. I don't know how people can see stuff like this and still think capitalism is viable. This is a system prone to crisis, we've had 2 crashes the size of the great depression in 10 years.

[Travis B.]

These sorts of things are why unions are not a solution and why we need direct worker ownership and control of capital, whether solely by themselves or in a stakeholder model. An adversarial model between management and unionized workers is highly non-ideal. Rather, what we need is for the workers to collectively manage themselves, aside from input from consumers and the community.

[mèþru]

I don't see capital flight as a bad thing. It empirically has raised living standards and wages in the third world. The problem is a lack of social safety net from those who lose as a result.

I believe at-will employment is wrong. I do believe in the right to work without joining a union, but I usually oppose right to work laws because they come with other provisions. I think the US does not have a strong enough right to strike.

I don't think collective management is always workable, and as I repeatedly said larger co-ops end up outsourcing management. Hierarchy is not a plot but an inevitable consequence of complex systems.

[mèþru]

I'll go even further and say that the complaints against capital flight in the richest countries of the world are a form of latent xenophobia and an example of lack of solidarity with third world countries, putting the interests of first-world workers ahead of the rest of the world.

[Travis B.]

The thing about capital flight is that it occurs because capitalists can exploit workers in the third world harder than they can get away with exploiting workers in the first world. I would have much fewer objections to capital flight if the workers in the third world were given the same living standards as workers here in the first world - but if this were forced on capitalists, capital flight would not occur in the first place.

[mèþru]

It's not possible to actually give the same living standards even if there were the same wages and labour conditions because first the economy needs to grow and infrastructure to develop to get all the amenities of life available in the West.

I think that if there were stronger labour laws and safety, lower wages would still attract companies. These lower wages still are higher than wages in the third world before capital flight, leading to improvement in economy and infrastructure - which in turn makes conditions where higher wages are necessary. I don't think free trade without labour protections is a good idea (and still believe there should be some level of protections for local business in the West for other economic reasons), but trade and outsourcing enriches the whole world for the same reason that imperialism doesn't - it makes the world less zero-sum while simultaneously transfering money from the richest countries to the poorer ones.

[Ares Land]

Do you have a more exact idea of how unions might be given power to prevent capital flight? Simply giving them enough representation on the board of whatever company to prevent offshoring, or something else?

Not quite unions as employee representatives, I think.
Or even taking measures to make a company more competitive, even including pay cuts if it comes to that.
Ideally worker representatives are every day on the factory floor: they probably know a lot about what makes the company less competitive.

Not that there's a miracle solution against capital flight, I'm afraid.

One thing though: restricting immigration makes the problem worse for obvious economic reasons. Our system where capital can move around, seeking for more favorable conditions, while labor cannot isn't free trade: it's a parody of free trade, and of course labor is going to get screwed.

I very much disagree with compulsory voting and compulsory union membership, compulsory union dues of non-members or only allowing one union in a single workspace. That violates the right of consenting adults to freely associate. Also, many times an employee would then be forced to pay for political activities they don't approve of, or stick to the union that protects or is ran by bullies in their workplace. But when you don't put a limit on how many unions can be in a workplace, then representing them all would be pretty much impossible. I suppose it can be done that workers representation is simultaneously done within the business through internal elections AND by unions working without being part of the company, with internal worker's rep and their pay being payed for by the company in a manner mandated by the government, but that would favour big companies and shut down small ones that can't afford to run a worker's council.

The trade union system in the US is a bit hard to understand, I'm afraid, but from what I hear I'm not eager to reproduce it!

I'd suggest just copying regular elections:
- Union membership is not required.
- Candidates can belong to an union, or not.
- Any union can be represented if they were able to present a candidate, and if that candidate is elected.

Unions would play a role sort of equivalent to political parties, though not exactly the same. One additional role they could take on is providing training in what is required of board members!
(In France we elect employee representative with a system similar to the one I described. Indeed the same system exists in several Western European countries. Their role is mostly consultative; they can get training in labor law through the unions.)

As for compulsory voting... In theory, yes, voting shouldn't be compulsory, but as I said, in France at least, people aren't very interested in professional elections. Presumably they would be more interested if employee representatives get more power; but maybe not; if we're experimenting with a stakeholder model, it'd be best to ensure a minimum of legitimacy for employee representatives.

Regarding the size of the company, of course you don't enforce the same requirements for all companies regardless of size! (In France the system for electing employee representative varies according to size, as does their role. I gather the same is true in Germany.)

BTW, I do agree that worker councils or unions also have the potential to be abusive. A stakeholder model at least provides counter-powers all around. Robust labor laws are another safeguard.

[mèþru]

That's pretty much the idea wrote about here:

I suppose it can be done that workers representation is simultaneously done within the business through internal elections AND by unions working without being part of the company, with internal worker's rep and their pay being payed for by the company in a manner mandated by the government, but that would favour big companies and shut down small ones that can't afford to run a worker's council.

I suppose the solution is that smaller companies don't have to run elections - is it really necessary to have an employee representative in a company of just 300 employees for instance?

[Ares Land]

The cutoff for employee representation as it exists now is much lower - at 11 employees.

It's not a heavy burden at all. For small companies you just need to invite an extra dude, or a few, at meetings.

[Rounin Ryuuji]

Do you have a more exact idea of how unions might be given power to prevent capital flight? Simply giving them enough representation on the board of whatever company to prevent offshoring, or something else?

Not quite unions as employee representatives, I think.
Or even taking measures to make a company more competitive, even including pay cuts if it comes to that.

If there is a pay cut to be taken, it needs, I think, as a rule, to come from the one with the highest pay first, because they can most afford it; if they can't understand why this is, then I might say they lack the moral grounding to deserve what they have regardless.

Ideally worker representatives are every day on the factory floor: they probably know a lot about what makes the company less competitive.

On which note, I also feel like the system needs to be changed so that businesses are competing for labour. Maybe a jobs guarantee compounded with punishing capital flight, in the style of an export tariff (or simply loss of privileges within the domestic market, which, in the case of the United States, is massive).

Not that there's a miracle solution against capital flight, I'm afraid.

Of course, there isn't any such thing as a magic bullet.

I very much disagree with compulsory voting and compulsory union membership, compulsory union dues of non-members or only allowing one union in a single workspace. That violates the right of consenting adults to freely associate. Also, many times an employee would then be forced to pay for political activities they don't approve of, or stick to the union that protects or is ran by bullies in their workplace. But when you don't put a limit on how many unions can be in a workplace, then representing them all would be pretty much impossible. I suppose it can be done that workers representation is simultaneously done within the business through internal elections AND by unions working without being part of the company, with internal worker's rep and their pay being payed for by the company in a manner mandated by the government, but that would favour big companies and shut down small ones that can't afford to run a worker's council.

Having experienced both, a non-union workplace is generally worse. Without any sort of representation, the managers have much, much less to keep them accountable, and when you get into things like right to work and at will, it's a clusterfuck in the ass for labour; also, if one's pay is from the business directly, one will more likely align with that business when making decisions, so I'm sceptical of having labour representation as a paid position. Unions certainly aren't perfect, but having some sort of opt-out will usually get people who just don't want to pay dues, while they benefit from collective bargaining regardless.

The part about political activity has a fairly simple fix — you can simply ban unions from engaging in it, as some organisations ought to be (notably, in my mind, churches and other religious establishments). The purpose of a union is to protect labour from the employer's greed or other attempts at maltreatment. There is no need for them to be politically active as well.

[zompist]

I very much disagree with compulsory voting and compulsory union membership, compulsory union dues of non-members or only allowing one union in a single workspace. That violates the right of consenting adults to freely associate. Also, many times an employee would then be forced to pay for political activities they don't approve of, or stick to the union that protects or is ran by bullies in their workplace. But when you don't put a limit on how many unions can be in a workplace, then representing them all would be pretty much impossible. I suppose it can be done that workers representation is simultaneously done within the business through internal elections AND by unions working without being part of the company, with internal worker's rep and their pay being payed for by the company in a manner mandated by the government, but that would favour big companies and shut down small ones that can't afford to run a worker's council.

The trade union system in the US is a bit hard to understand, I'm afraid, but from what I hear I'm not eager to reproduce it!

I'd suggest just copying regular elections:
- Union membership is not required.
- Candidates can belong to an union, or not.
- Any union can be represented if they were able to present a candidate, and if that candidate is elected.

There are reasons for things like compulsory union membership. The main one is the same reason you have to pay taxes: the free rider problem. You shouldn't get the benefits of unionizing without helping pay for it. Plus it weakens the union if it's optional, and it's well established that weakening unions increases inequality.

Now, if you're talking about worker councils or worker board membership, the question is: who is the party that negotiates with management to set wages, benefits, grievance policies, etc.? If it's the workers on the board, not the union, then sure, you could have "unions" that are really party slates.

[Ares Land]

Financing unions is a can of worms. So is financing political parties! Some form of public funding seems to me a correct solution - there are of course others.

I should add that I'm mostly speaking from a French perspective, where unions are generally discredited (and, I'm sad to report, often with good reason).

If we want some economic democracy, I'd indeed suggest having workers representative negotiate, not unions.

[mèþru]

Relevant is that a lot of my opinion about unions comes from my parents - who lived in Israel during a time when a single union planned more than half the economy. Even my father, who is pretty lefty, has a bunch of bad things to say about unions.